In a nutshell, rather than using tax cuts or energy subsidies or windfall taxes on energy companies to compensate for the massive increase in energy prices here is my alternative suggestion:
Firstly, I understand that almost 50% of the U.K.’s energy needs are supplied by renewables including wind power and 15% supplied by UK-based nuclear reactors. These sources of energy are UK based and owned mainly by private shareholders some of whom (wind farms?) may have received government subsidies. Along with energy imports these sources are now charging market prices for energy which has not increased in production cost! They will be charging up to 5 times the price at the beginning of 2022 without any matching production costs. Making perhaps 10 x net profits!
Secondly, I would mention that whilst I am not normally in favour of price controls, there is no reason that these two sources of energy should be allowed to charge the full global market price which will soon be five times that at the beginning of this year.
I am therefore suggesting that a price cap is immediately imposed on these two sources of energy rather than a windfall tax or any other subsidy provided to consumers and businesses. The price control limit/benchmark would be based upon the prevailing UK energy wholesale prices at the beginning of 2022.
Otherwise , we will see over the next 2 to 3 years a potential massive transfer of wealth of up to around £200bn from millions of taxpayers to a very small number of investors who will all become millionaires and some billionaires!
— These rewards are more appropriate for venture capitalists — not for risk averse investors in steady earning and relatively risk free blue chip companies, ie renewable and nuclear energy producers.
The energy price rise crisis is so desperate, that desperate measures as above are required.
Why burden the UK government with massive amounts of debt and the UK taxpayer with massive amounts of future tax paying requirements to pay off any tax cuts and subsidies as are being proposed?
Tax cuts will still be needed to help with the general UK cost-of-living crisis of course, but we should not be using these financial strategies to largely subsidise hugely profitable UK energy companies.
it seems that almost every business that uses energy will be unable to continue and survive and consumers will still be unable to pay unless something dramatic is put in place.
We have the answer:
— Price control of All UK energy suppliers, with even nationalisation considered or proposed if necessary.
Lastly…
The Times today:
“ Liz Truss is expected to make an announcement imminently about a support package to deal with rising energy bills, which is expected to include a price freeze that may *well cost more than the Covid furlough scheme.”
*By performing the price freeze in the way I have described above will not cost the government or the taxpayers anything.
Saving the government, future taxpayers and energy consumers from an unnecessary £££billions funded price freeze with a price control and cap instead.
PS. Also this Telegraph article this afternoon in support:
https://www.telegraph.co.uk/business/2022/09/05/war-shameful-profiteering-energy-market-justifies-radical-intervention/
