Be aware of Coalition bearing gifts


Ever get the feeling when the coalition continues with their scratch record of blame Labour for everything then they come up with another gimmick of we’ve found money from some savings to the sum of £300 Million in a form of a rebate which unfortunately does not match Ed Miliband‘s speech on energy freeze for 20 months to be action after a Labour Government win in 2015.

BaVwYmlIMAE9Oh7Many people want to spread jam on their bread now and they want to see their pay packet with an increase in it but not tokenism from the coalition. Many people are sick and tired of seeing their fatcat friends profiting from us plebs whilst the coalition bankers friends enjoys the finest winery and super whilst they throw the scraps of the table for low and middle incomes.

People are feeling the hardship of this coalition in one go whilst I still maintain voters are far more better of under a Labour Government and yes they will have to make cuts but at least they won’t cut too deep than a Conservative or a coalition government I kid you not.

Recently I attended a all members meeting in the West Midlands Region organized by West Midlands Labour Party I have to say it was well attended and rather better attended than Prince William who addressed a audience in West Midlands. There I witnessed many concerns that they all wanted to air out some touched on living standards, NHS, and zero contracts and other concerns in a short space of time.

photoWhy are the many not surprised to learn about the £300 Million rebate from this coalition by thinking of dangling a few carrots will solve the problems hey after all Christmas and New Years is just around the corner so it’s in the best interest for the coalition to do a few gimmicks during the season of good will but be aware of a very nasty sting that comes with it. So the coalition and the energy companies have agreed on cutting £50 off our household bills and giving £1,000 to people buying houses towards costs like insulation, but has only said that the money will come from ‘tax avoiders’. What it actually means is that they won’t take any money from tax avoiders but actually raise our taxes, leaving us even more out of pocket. Do they think we’re that gullible? So in a nutshell be very wary of the coalition bearing gifts as it has a very nasty sting that comes with it..

photo (1)Now we all learn that ministers are to fund a £300m plan for a £12 rebate on every domestic electricity bill in the country as part of a Government effort to combat a round of inflation-busting energy price hikes.

There is no doubt  the Government is finalising plans this weekend for a series of measures ahead of next week’s autumn statement by the Chancellor, George Osborne.

The debate over energy costs has intensified in recent days as ministers have sought ways to regain the political initiative following the Labour leader Ed Miliband’s pledge to impose an energy price freeze for 20 months if Labour wins the next general election.

Big-six-energy-companiesFive of the ‘Big Six’ energy companies, including Centrica, the owner of British Gas, and Npower, have announced plans for substantial price increases in the last six weeks. The hikes have sparked a furious row in Westminster and the City about the industry’s profitability.

Insiders said on Saturday that the Government package would include an agreement between the Department of Energy and Climate Change (DECC) and a group of companies known as distribution network operators, whose charges account for approximately 20% of consumers’ energy bills.

1458648_630252693682699_673307862_nThe deal between ministers and these companies, which include National Grid, would involve restructuring their cost-profile over the 15-year period during which they have set out their investment plans.

This measure is expected to lead to an average of £5 off customers’ bills, although the precise amount will vary by region, with some parts of the country not seeing any such saving, a source said.

Details of the package of measures could be announced as early as Sunday following intense Whitehall horse-trading over what has become one of the Government’s most pressing domestic challenges.

The £300m rebate will be funded by altering the funding of the Warm Home Discount, which funds one-off electricity discounts for thousands of vulnerable customers. This is expected to be transferred to general taxation rather than being funded by the energy companies.

A Whitehall source said the £12-per-account rebate would require licence changes to be overseen by Ofgem, the energy regulator, but that this was unlikely to prove a significant obstacle.

DECC is understood to be keen for the £12 rebate to be clearly marked on consumers’ bills and is extracting assurances from the big energy suppliers that they will agree to this.

The largest cut to energy bills is expected to be generated by a roughly £40-per-household saving on a green levy called the Energy Companies Obligation (ECO), which was introduced only this year.

The cost of the ECO, which costs the major suppliers about £1.3bn annually, is to be lowered by lengthening a programme of providing home insulation to 2017.

According to a letter from the Government to energy companies cited in reports this weekend, ministers want to introduce legislation to implement the changes.

“The government intends to make changes to the ECO order with a view to extending the period over which the obligation will run and reducing the expected cost of compliance. The government will consult on detailed proposals shortly and will subsequently look to introduce the necessary legislation as soon as possible,” the letter said.

“The changes include extending ECO beyond its current March 2015 deadline. The government’s specific proposal in this respect is that a new binding target should be set for March 2017.”

David Cameron and Nick Clegg are understood to have been discussing the publication of a joint article in a Sunday newspaper to announce the moves, although it is unclear whether that plan will go ahead.

Ed Davey, the energy and climate change secretary, has informed the energy industry of the full package of proposals in recent days although sources insisted that they were not yet finalised.

The Big Six are expected to announce price cuts or reductions to their planned price increases as soon as the Government’s proposals are unveiled.

The overhaul of the ECO will represent something of a u-turn by the Government. The levy places legal obligations on the larger energy suppliers to deliver energy-efficiency measures to domestic energy customers.

It operates alongside the Green Deal and is designed to help people make energy efficiency improvements to buildings by allowing them to pay the costs through their energy bills rather than up-front.

On Friday, Downing Street denied a report that it was pressing the Big Six to agree to freeze prices until after the next election, underlining Mr Cameron’s sensitivity about Labour’s recent eye-catching policies.

In a statement, Jonathan Reynolds MP, the Shadow Energy and Climate Change Minister, said:

“The Energy Company Obligation is David Cameron’s scheme. He only introduced it this year and a few months ago he was even boasting that it was bigger than previous energy efficiency schemes.

“Labour has consistently said that ECO should be reformed to make it better value for money and targeted at those in fuel poverty. But what the public really needs is a Labour government implementing a price freeze until 2017 and resetting the energy market so that it works for the long term.”

A Downing Street spokeswoman declined to comment while the Treasury could not be reached on Saturday.

A DECC spokeswoman said: “Government is looking closely at the impact of green levies on consumer bills and how the measures they support are paid for. Details of this review will be announced by the autumn statement.”

However Chancellor George Osborne said the government would pay for some measures currently included in people’s bills, and the cost of insulating homes would be spread over a longer period.

This would “help families” and firms would comply with the changes, he said. In actual fact the plans remedied less than half of this year’s £120 increase.

Rising energy bills have become a major political issue in recent months, as the main political parties look to offer policies to reduce the squeeze on people’s standard of living in the run-up to the next general election.

I’m sure many may have watched the Speaking on Andrew Marr Show, George Osborne said of his own proposal, to be set out in detail in Thursday’s Autumn Statement: “This will help families… We’ve been in discussions with the energy companies.”

He added: “There’s going to be an average of £50 off people’s bills… We are absolutely insistent that this is going to be brought in.”

Mr Osborne said the change would be part-funded by extra tax money from cracking down on tax avoidance. That would reduce annual bills by approximately £12.

Asked whether the energy firms would pass cost savings on to customers, Mr Osborne said: “I don’t want to pre-empt what they are going to say in the next few days, but I’m clear that it’s going to happen.”

He attacked Labour leader Ed Miliband’s promise of a price freeze as a “con”, adding that the coalition had the “right approach” to cutting bills

Intriguingly Prime Minister David Cameron and his deputy Nick Clegg also confirmed that the cost to energy firms of insulating homes, “apart from in the worst-off homes,” would be spread over four years instead of two.

They said these proposed changes to the “energy company obligation”, and would reduce bills, but did not specify by how much.

Mr Cameron and Mr Clegg also said the government would pay for new incentives for people to insulate their homes.

But, for Labour, shadow chancellor Ed Balls, also appearing on the Andrew Marr Show, said the government was simply “shifting” costs “from energy bills to the taxpayer”.

“That’s not a help. It’s just a shifting of the burden,” he said.

“They are the government. They need to get a grip. Why are David Cameron and George Osborne running scared?”

He added: “Anything they do is better than nothing. Shifting, though, from bills to taxes is giving with one hand and taking with the other.”

The Association for Conservation of Energy (ACE), which represents the insulation industry, said the government’s scheme amounted to halving large parts of the budget for insulation, previously projected by government to run at £1.3bn a year to 2022.

The main casualty would be the expensive help for insulating solid-walled homes that is currently offered to householders to save on their bills and cut carbon emissions. The primary focus will now be on the cheapest measures to achieve energy efficiency, such as roof and cavity wall insulation, ACE added.

The organisation estimates that the changes will cost 10,000 jobs in the insulation industry, mostly in small firms, although its numbers are uncertain until full details of the policy become clear.

In addition, landlords would be offered cash incentives to insulate their least energy-efficient properties between old tenants leaving and new ones moving in.

Spokesman Andrew Warren said: “It beggars belief that the government is trying to cut energy bills by delaying a scheme that itself cuts energy bills.

“The government has been hoodwinked by the big six energy firms, who don’t want to insulate people’s homes because it means less profits for them.”

E.On – the only one of the big six energy companies in the UK that has not yet announced an increase in its tariffs this autumn – said it would wait for a formal statement from the government before commenting, “but we are pleased that steps seem to be being taken that will ultimately benefit our customers”.

EDF welcomed the plans and indicated it was not now likely to hike prices again before 2015.

It said its “decision to hold back the full impact of rising costs” earlier this month by implementing a lower rise than competitors had been “validated by the confirmation that the government will take action on energy charges”.

“Customers should expect other energy suppliers to follow EDF Energy’s lead by significantly lowering their prices,” a spokesman said. And Scottish Power issued a statement saying: “We are pleased the government has recognised the impact of levies and we have worked collaboratively with them to identify a number of new individual savings. “Once implemented, these will lead to real savings in 2014.”

I’m amazed that individuals now owe a total of £1.43 trillion, including mortgage debt, slightly above the previous high.

The previous record was set in September 2008, just before the effects of the financial crisis and the recession began to bite.

But the government said that relative to household income, debt had actually fallen.

The rise may reflect the willingness of consumers to borrow more, as a recovery comes into sight.

However, the figures may also show that families are having to borrow to deal with the higher cost of living, and to pay household bills.

The precise amount of total household debt is £1,429,624,000,000. That compares with the previous high of £1,429,595,000,000 five years ago, a difference of just £29m.

On average, that means each adult in the UK owes £28,489, including any home loans.

Indeed most of the debt is in mortgages, which have been rising steadily. So some of the increase reflects the recent recovery in house prices.

Unsecured lending – on credit cards or with bank overdrafts – has also started to recover since the recession.

However, the figures show that unsecured borrowing actually fell in October, from £158.8bn to £158.6bn.

The news of the record debt level may increase concerns that the UK’s recovery is based on increased borrowing, rather than growth sustained by rising incomes.

However, the total debt figure is not adjusted for inflation, and the Bank of England has pointed out that – relative to income – debt levels have been falling.

The ratio of debt to household income has fallen from 167% at the start of the financial crisis, to 140% now.

The government said debt has also fallen in relation to disposable income, and as a share of economic output.

Samuel Tombs, of Capital Economics, said the UK’s recovery was not purely based on increased borrowing.

“Investment picked up in the latest GDP figures, and manufacturing is growing strongly”.

“Consumer spending and recovery in the housing market are also supported by higher employment,” he added.

Like many people who are on the poverty line I’m glad that Ed Miliband is to accuse ministers of using “smoke and mirrors” over its plan to cut the cost of energy bills by an average of £50 a year.

Chancellor George Osborne has said he will spread the cost of insulating homes and that government will take on some of the burden faced by customers.

But Mr Miliband will insist in a speech on Monday that a “cosy deal” with firms will not keep bills down.

The government will outline its plans in full in Thursday’s Autumn Statement.

Rising energy bills have become a major political issue in recent months, as the main political parties look to offer policies to reduce the squeeze on people’s standard of living in the run-up to the next general election.

The chancellor told the BBC on Sunday that £50 could be saved on bills by measures including spreading the cost of insulating homes over a longer period and the state paying some improvement costs with money raised from tax avoiders.

Labour says it will freeze gas and electricity bills for 20 months if it wins the next general election, but the Conservatives and Liberal Democrats argue this is unrealistic because of the varying and unpredictable international costs of gas and other fuels.

In a speech on today 2 December 2013, Mr Miliband will tell staff at the VW National Training Centre in Milton Keynes: “A lot of people think that David Cameron and George Osborne are trying to catch up with One Nation Labour on the cost-of-living crisis: from payday lending to energy bills.

But the truth is they are struggling to catch up with the British people who live at the sharp end of an economy where the link between the wealth of our nation and family finances has been broken. That is the cost-of-living crisis that is happening in our country today.

“That is how this government and any government will be judged. And it is how the Autumn Statement will be judged.”

The Labour leader will argue that “the costs of essentials” such as gas, electricity and train fares are “higher than can be justified”.

He will add that the Autumn Statement should feature “not smoke and mirrors on electricity and gas bills or cosy deals with the Big Six (energy suppliers) that mean bills still rise this winter, but a real price freeze and action to reset the market to stop them overcharging again in the future”.

But Mr Osborne told BBC One’s Andrew Marr Show his plans would “help families… We’ve been in discussions with the energy companies.”

He added: “There’s going to be an average of £50 off people’s bills… We are absolutely insistent that this is going to be brought in.”

Mr Osborne said the change would be part-funded by cracking down on tax avoidance. That would reduce annual bills by approximately £12, the BBC understands.

Asked whether the energy firms would pass cost savings on to customers, Mr Osborne said: “I don’t want to pre-empt what they are going to say in the next few days, but I’m clear that it’s going to happen.”

Come on George Osbourne stop playing the scratch record by attacking Labour leader Ed Miliband’s promise of a price freeze as a “con”, adding that the coalition had the “right approach” to cutting bills

In response, E.On – the only one of the big six energy companies in the UK that has not yet announced an increase in its tariffs this autumn – said it would wait for a formal statement from the government before commenting, “but we are pleased that steps seem to be being taken that will ultimately benefit our customers”.

EDF welcomed the plans and indicated it was not now likely to hike prices again before 2015.

Centrica said: “We will pass on any cost reduction in full to customers as a result of any of these changes.”

And SSE added that it too was “committed to passing on any savings resulting from changes to government policy directly back to customers”.

It’s hardly surprising that Three in four people on low wages in 2002 failed to escape from Britain’s “low pay trap” over the next 10 years, according to a report published today.

According to Resolution Foundation think-tank, 1.3 million (27 per cent) of the 4.7 million workers on low pay in 2002 remained in the bottom bracket for the next 10 years.

A further 2.2 million (46 per cent) moved in and out of low wages but failed to break free of them for good by the end of the decade.

The findings will fuel the growing concern about the lack of social mobility in the UK and the heated political debate about the “cost of  living crisis”.

In a Commons debate today, Labour will highlight figures showing that average earnings have fallen in real terms in every part of the UK since 2010.

Labour will claim that the Coalition has failed to meet the goals it set itself on living standards, economic growth and the deficit.

Only 800,000 (18 per cent) moved up the earnings ladder for a sustained period without slipping back into low pay.  A further 400,000 (9 per  cent) retired or left the labour market. Low pay was defined as two-thirds of median hourly earnings – £7.32 and £10.98 respectively at today’s prices.

Alex Hurrell, senior analyst at the foundation and author of the report, said: “For many people, low pay is not a first rung on the ladder – it’s a long-term or even permanent reality. Identifying those who are least likely to escape low pay is the first step in targeting policies to help them get on.”

Researchers found women were much more likely to be stuck on low pay than men.

Some 900,000 women (33 per cent) on low wages in 2012 had been there for the previous 10 years, compared to 400,000 men (21 per cent).

The North-east was the region where workers were most likely to be trapped on low earnings. One in three  (34 per cent) in this category in 2012 had been there for  a decade.

The East Midlands, Yorkshire and Humberside and Wales (31 per cent) were the next worst affected. London and the South-east were the least affected, although 23 per cent of the low paid in 2012 had been stuck for 10 years.

Half of all the workers trapped for the decade were aged between 41 and 60, which means they spent up to 10 of their “peak earning years” on low pay. Some may remain stuck for their entire careers, the foundation said.

Public-sector workers were more likely to escape low pay than those in the private sector. Women, manual workers, administrators and staff of firms with fewer than 10 staff were least likely to escape.

The sectors where people were most likely to be stuck included retail, hospitality, sales, customer services, manufacturing and care. The foundation said more must be done to help workers progress.

Only one in six women (15 per cent) working in the retail sector in 2002 escaped low pay during the decade.

Gavin Kelly, the think-tank’s chief executive, said: “Living on low pay in 2013 is tough, but being stuck on it for years on end is harder still.

“This report shines a light on the persistent nature of low pay for millions of workers and shows that women, those in regions such as the North-east, the East Midlands and Wales, and people working in sectors like administration are far likelier to be stuck in low pay than others.

“It also highlights the large numbers who cycle in and out of low pay over time.

“Limited earnings mobility is a long-running problem in our economy which spans a number of decades and has occurred under governments of different complexions.”

Chris Leslie, the shadow Chief Treasury Secretary, said: “On every economic test David Cameron and George Osborne set themselves three years ago they have failed.

“Far from delivering rising living standards, working  people are now over £1,600  a year worse off under this Government.”

In the debate today, ministers will point out that the problems of low pay pre-date the Coalition coming to power in 2010 and will accuse the previous Labour government of failing to tackle it.

 

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One response to “Be aware of Coalition bearing gifts

  1. Of course if they hadn’t allowed the eussr to demand they sell off the vital utilities in the first place, we wouldn’t be in the position of people unable to afford power because of greedy shareholders wanting a huge profit.

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