price cap and windfall tax - Page 2

edwardmk · 26th May 2022, 19:47

These kind of discussions are always polarising. Corbyn et al held out Venezuela as a good example of how the state should spend the 'peoples' oil profits'. Note how well that turned out with 6 million and counting leaving the country in a desperate search to earn a crust!
All taxation is parasitical on enterprise. We need a public/private sector balance for sure, but will probably never agree on what the correct balance is. When the parasitic element gets too big, the host dies or moves elsewhere. See 95% supertax imposed by labour in the 70's and the resultant exodus of high profit enterprises. Actual tax take from a 95% tax was almost zero. Governments always rob the Peters to pay the Pauls. When the Pauls become the majority, the Peters become an endangered species (and will leave that jurisdiction and set up elsewhere if feasible).
When a government has to issue rebates to large numbers of people, that indicates that taxes are too high imho. I'd love to see all governments of all stripes being legally required to balance their books like the rest of us. Never going to happen though. They rely on creating inflation to pay back the debts incurred in overpromising to the Pauls. Prices are not going up. It is the value of the various major currencies going down in lockstep worldwide. Britain alone created over £400 billion to deal with the plandemic. That is currency devaluation and inflation on a grand scale. Then to appease the green lobby we are witholding licences on our vast reserves of fuel. Less production fought over by more issued currency equals higher prices. Add in loss of Russian gas/oiletc, we have the perfect storm. Monkey pox for another plandemic anyone?

richw · 26th May 2022, 20:42

Very true!

What problems can we think of where the solution has been provided by the government? And how many where they create or increase problems?

I cannot support windfall (retrospective) taxation.

If the government cared one iota about our energy struggles they would remove all taxation and levies from it tomorrow.

macafee2 · 27th May 2022, 07:03

Quote:

Originally Posted by another_clean_sheet

So what is your understanding then. How do you think it is calculated.

It is a value "someone" decides is going to be the maximum price per unit an energy company can charge. The more units of energy you use, the more you pay. It is supposedly connected to the price per unit an energy company has to pay for a unit of energy. What I do not know, is how much be it money or % the energy company can charge on top of the purchase cost to cover running costs such as wages and profit. If energy companies are making so much money the government feel able to apply a windfall tax, is the price cap to high?

macafee2

another_clean_sheet · 27th May 2022, 07:09

Quote:

Originally Posted by macafee2

It is a value "someone" decides is going to be the maximum price per unit an energy company can charge. The more units of energy you use, the more you pay. It is supposedly connected to the price per unit an energy company has to pay for a unit of energy. What I do not know, is how much be it money or % the energy company can charge on top of the purchase cost to cover running costs such as wages and profit. If energy companies are making so much money the government feel able to apply a windfall tax, is the price cap to high?

macafee2

What you describe is how they calculate the unit price of energy and it will include network costs, marketing costs etc. That is not the Cap. The cap is calculated as I described earlier which is based on the unit cost of electricity and gas and what they decide is the maximum daily standing charge.

wraymond · 27th May 2022, 09:18

Just a brief observation, 'the price' in question is very largely an opportunistic grab while the going is good.

The manufactured state of panic, and the gullibility of the paying public, are symptomatic of the principle of maximising profits, and therefore managers/directors huge rewards.

The only thing apart from that is the balance sheet. That is a miracle of financial wizardry and misdirection that could have been written by Enid Blyton.

.

MSS · 27th May 2022, 10:33

Quote:

Originally Posted by another_clean_sheet

The cap is maximum price and is based on the usage of an average user. So one can pay more or lies depending on you usage. If you look back in history you will find the cap has gone down as well as up.
In terms of figures the profit looks large. However as a percentage of turnover it is quite small. If you were investing your own money would you be happy with that return on your capital?

I agree re the percentage return.

Windfall taxes are a vote-winning/bad-news deflection tool.

The real answer lies in nationalisation of utilities and energy production as well as making the cost of energy high enough that the population has to reduce consumption of non-essential goods and services. Then all profits will by definition be a windfall for the population.

grivas · 27th May 2022, 12:54

Quote:

Originally Posted by macafee2

price cap, I thought a price cap was the maximum energy companies can charge for gas and electric.

windfall tax, government proposes windfall tax on energy companies profits.

my conclusion, price cap to high, government are trying to look good by taking money from energy companies while still allowing energy companies to keep a massive profit, to give back to us instead of lowering price cap and energy bills and reducing amount of profit energy companies can make.

Is my conclusion wrong?

As energy is a problem why don't the government mandate all new builds should have solar panels?

macafee2

What else would you expect from a government in disarray and chaos, led by a compulsive liar, elected on a campaign based on lies, lies and more lies, now caught with their trousers down, what else can they do, NOT the dissent thing and resign but plunder through, and pretend nothing is happening, when everyone knows they have lost the trust of the people.

I suppose all will be forgiven and forgotten in due course, when lashings and lashings of knighthoods etc are being served up for 'services' to the country etc etc.
No wonder the rest of the world think the British political system is a running comedy, the Americans apparently, tune in to watch PM's question time because they think its a soap opera!.

mbev51 · 27th May 2022, 13:34

It is a soap opera! Unfortunately the british people were conned at the referendum and also the last election. Sadly Brexit was never a good idea, slowly but surely this realization will become apparant to the majority . BoJo was actually more of a european than a brexiteer, he only latched onto it as a vehicle to become PM. If only that statement referring £350m on the bus was true, the nhs is on its knees as i am finding out at the moment.The Union will be lucky to survive the next ten years. How the Tory party is going to survive being take over by this rabble of brexiteers, i dont know, i almost feel sorry for them.

MSS · 27th May 2022, 13:34

Quote:

Originally Posted by grivas

........the Americans apparently, tune in to watch PM's question time because they think its a soap opera!.

I think that may be because most of their own alternatives are even worse!

If you want to see what I am talking about, watch this. https://www.youtube.com/watch?v=DRBfM709Yqc

another_clean_sheet · 27th May 2022, 15:51

Quote:

Originally Posted by macafee2

price cap, I thought a price cap was the maximum energy companies can charge for gas and electric.

windfall tax, government proposes windfall tax on energy companies profits
macafee2

Price cap applies to energy companies who consumers purchase their gas and electricity from.
Windfall tax applies to oil and gas producers. In the main they are different ftrom energy companies though their are exceptions e.g. Shell.
Reducing the price cap hits the wrong companies as it reduces the selling cost of fuel but not the wholesale price.

27th May 2022, 09:18	#15
wraymond This is my second home 75 Auto 2.5 SE Join Date: Feb 2010 Location: Westcliff on Sea Posts: 5,193 Thanks: 423 Thanked 1,680 Times in 1,014 Posts	Just a brief observation, 'the price' in question is very largely an opportunistic grab while the going is good. The manufactured state of panic, and the gullibility of the paying public, are symptomatic of the principle of maximising profits, and therefore managers/directors huge rewards. The only thing apart from that is the balance sheet. That is a miracle of financial wizardry and misdirection that could have been written by Enid Blyton. . __________________ member no. 235

26th May 2022, 19:47	#11
edwardmk Gets stuck in MG ZT 260, Rover 75 Connie SE auto Join Date: Feb 2013 Location: Redruth Posts: 984 Thanks: 1,324 Thanked 399 Times in 271 Posts	These kind of discussions are always polarising. Corbyn et al held out Venezuela as a good example of how the state should spend the 'peoples' oil profits'. Note how well that turned out with 6 million and counting leaving the country in a desperate search to earn a crust! All taxation is parasitical on enterprise. We need a public/private sector balance for sure, but will probably never agree on what the correct balance is. When the parasitic element gets too big, the host dies or moves elsewhere. See 95% supertax imposed by labour in the 70's and the resultant exodus of high profit enterprises. Actual tax take from a 95% tax was almost zero. Governments always rob the Peters to pay the Pauls. When the Pauls become the majority, the Peters become an endangered species (and will leave that jurisdiction and set up elsewhere if feasible). When a government has to issue rebates to large numbers of people, that indicates that taxes are too high imho. I'd love to see all governments of all stripes being legally required to balance their books like the rest of us. Never going to happen though. They rely on creating inflation to pay back the debts incurred in overpromising to the Pauls. Prices are not going up. It is the value of the various major currencies going down in lockstep worldwide. Britain alone created over £400 billion to deal with the plandemic. That is currency devaluation and inflation on a grand scale. Then to appease the green lobby we are witholding licences on our vast reserves of fuel. Less production fought over by more issued currency equals higher prices. Add in loss of Russian gas/oiletc, we have the perfect storm. Monkey pox for another plandemic anyone?

26th May 2022, 20:42	#12
richw Avid contributor Rover 75 Saloon Join Date: Sep 2017 Location: Stockton-on-Tees Posts: 243 Thanks: 6 Thanked 64 Times in 49 Posts	Very true! What problems can we think of where the solution has been provided by the government? And how many where they create or increase problems? I cannot support windfall (retrospective) taxation. If the government cared one iota about our energy struggles they would remove all taxation and levies from it tomorrow.

27th May 2022, 13:34	#18
mbev51 Banned Removed Join Date: Dec 2013 Location: Removed Posts: 1,343 Thanks: 171 Thanked 315 Times in 223 Posts	It is a soap opera! Unfortunately the british people were conned at the referendum and also the last election. Sadly Brexit was never a good idea, slowly but surely this realization will become apparant to the majority . BoJo was actually more of a european than a brexiteer, he only latched onto it as a vehicle to become PM. If only that statement referring £350m on the bus was true, the nhs is on its knees as i am finding out at the moment.The Union will be lucky to survive the next ten years. How the Tory party is going to survive being take over by this rabble of brexiteers, i dont know, i almost feel sorry for them.