• Contact
  • About
DONATE
NEWSLETTER SIGN UP
  • Login
North East Bylines
  • Home
  • News
    • All
    • Brexit
    • Education
    • Environment
    • European News
    • Health
    • Politics
    • Science
    • UK News
    • World News
    man looking anxious

    Never assume: honesty and mental health

    Flood in York in 2022. Climate change brings about more floods and not just heatwaves and wildfires

    The Tories’ climate change policy does not add up

    A sign with the "not equal" symbol is held in a crowd

    Inequality and development: from global to local

    South Tyneside's only black electric taxi

    A sustainable policy for Tyneside taxis

    Ben Houchen by Scott Hunter

    Alleged National Audit Office review of Teesworks

    Child poverty protestor

    Child poverty: enough is enough

    Boys with kite in Kabul

    One year since the fall of Afghanistan

    North East for Europe at an earlier London march

    The North East in London for National Rejoin March

    Tyne Bridge

    Newcastle shortlisted for Eurovision 2023

    Trending Tags

    • Ukraine
  • Culture
    • All
    • Animation
    • Books
    • Illustrations & More
    • Music
    • Performance
    • Poetry
    • Social Media
    • Theatre
    • TV & Radio
    The Rock Showman

    Hardwick Festival is down with the kids

    Witty Look

    All aboard the festival bus for Hardwick this weekend

    Boys with kite in Kabul

    One year since the fall of Afghanistan

    Eurovision sign

    The North East could host Eurovision in 2023

  • Lifestyle
    • All
    • Fashion
    • Food & Drink
    • Health & Fitness
    Master Chef of Great Britain

    Master Chef of Great Britain at Lumley

    Prezzo

    Discovering the new summer menu at Prezzo

    Chef and son

    MasterChef’s’ Posh Street Food chef’s own summer of entertainment

    Scottish highlands

    The beauty of the Scottish Highlands

    Kleo Tabuku

    Top chef to open Newcastle restaurant, Lovage

    Pop up park

    Pop up to the park in Sunderland

    The Blackbird Inn, Ponteland

    The Blackbird Inn flies high with its new summer menu

    gymnast

    Culture of fear in British gymnastics uncovered by the Whyte Review

    Kennedy and Rhind

    Kennedy and Rhind: more time to enjoy a North East favourite

    Trending Tags

    • Business
      • All
      • Economy
      • Rural
      • Technology
      • Trade
      • Voluntary Sector
      Liz Truss

      Tory leadership election: Liz Truss should look at how economies work

      Ben Houchen by Scott Hunter

      Alleged National Audit Office review of Teesworks

      Fishing protest

      Dead crustaceans on North East coast: the next chapter

      Scottish highlands

      The beauty of the Scottish Highlands

      loo

      A room with a loo

      Newcastle quayside

      Newcastle named as one of the best cities for graduates

      Brexit economics

      New research shows the economic effect of Brexit

      Wetherspoons pub

      Wetherspoons sparkle: has it gone flat?

      Leon Fussell rehearsing

      Unsung Heroes at Queen’s Hall, Hexham

      Trending Tags

      • Region
        • All
        • Co. Durham
        • North East
        • Northumberland
        • Teesside
        • Tyneside
        • Wearside
        Fire in Gosforth

        Firefighters praised for life-saving response to Gosforth arson attack

        A sign with the "not equal" symbol is held in a crowd

        Inequality and development: from global to local

        South Tyneside's only black electric taxi

        A sustainable policy for Tyneside taxis

        Ben Houchen by Scott Hunter

        Alleged National Audit Office review of Teesworks

        Child poverty protestor

        Child poverty: enough is enough

        Tyne Bridge

        Newcastle shortlisted for Eurovision 2023

        Wildfire at Witherwack

        “Busier than Bonfire Night” as wildfire rages for over 20 hours

        Fishing protest

        Dead crustaceans on North East coast: the next chapter

        NUFC foodbank

        Howay the lads and lasses: the new football foodbank season ‘22/23

        Trending Tags

        • Opinion
          Titanic coming out of Southampton

          The 110th anniversary of the Titanic’s departure

          There is an England

          There is an England

          Prime Minister Boris Johnson signs the Withdrawal Agreement with the European Union"

          The parody of disinformation: Boris Johnson on Ukraine and Brexit

          Boris Johnson’s comments on Ukraine and Brexit are an insult

          TV Agency staff jumping in the air

          The TV Agency celebrates 10th anniversary with global success

          North East of County Dublin

          North East of England and North East of County Dublin: Compare and contrast

          North Sea oil rig

          Copping out of COP: Ukraine, fossil fuels and nuclear fusion

          Placard with Boris Johnson as a clown

          Dictators, media and mobility: erosion of identity, sustenance and safety

          close up on a child's eye

          Racism and misogyny where there should have been safeguarding and security

        AUDIO
        No Result
        View All Result
        • Home
        • News
          • All
          • Brexit
          • Education
          • Environment
          • European News
          • Health
          • Politics
          • Science
          • UK News
          • World News
          man looking anxious

          Never assume: honesty and mental health

          Flood in York in 2022. Climate change brings about more floods and not just heatwaves and wildfires

          The Tories’ climate change policy does not add up

          A sign with the "not equal" symbol is held in a crowd

          Inequality and development: from global to local

          South Tyneside's only black electric taxi

          A sustainable policy for Tyneside taxis

          Ben Houchen by Scott Hunter

          Alleged National Audit Office review of Teesworks

          Child poverty protestor

          Child poverty: enough is enough

          Boys with kite in Kabul

          One year since the fall of Afghanistan

          North East for Europe at an earlier London march

          The North East in London for National Rejoin March

          Tyne Bridge

          Newcastle shortlisted for Eurovision 2023

          Trending Tags

          • Ukraine
        • Culture
          • All
          • Animation
          • Books
          • Illustrations & More
          • Music
          • Performance
          • Poetry
          • Social Media
          • Theatre
          • TV & Radio
          The Rock Showman

          Hardwick Festival is down with the kids

          Witty Look

          All aboard the festival bus for Hardwick this weekend

          Boys with kite in Kabul

          One year since the fall of Afghanistan

          Eurovision sign

          The North East could host Eurovision in 2023

        • Lifestyle
          • All
          • Fashion
          • Food & Drink
          • Health & Fitness
          Master Chef of Great Britain

          Master Chef of Great Britain at Lumley

          Prezzo

          Discovering the new summer menu at Prezzo

          Chef and son

          MasterChef’s’ Posh Street Food chef’s own summer of entertainment

          Scottish highlands

          The beauty of the Scottish Highlands

          Kleo Tabuku

          Top chef to open Newcastle restaurant, Lovage

          Pop up park

          Pop up to the park in Sunderland

          The Blackbird Inn, Ponteland

          The Blackbird Inn flies high with its new summer menu

          gymnast

          Culture of fear in British gymnastics uncovered by the Whyte Review

          Kennedy and Rhind

          Kennedy and Rhind: more time to enjoy a North East favourite

          Trending Tags

          • Business
            • All
            • Economy
            • Rural
            • Technology
            • Trade
            • Voluntary Sector
            Liz Truss

            Tory leadership election: Liz Truss should look at how economies work

            Ben Houchen by Scott Hunter

            Alleged National Audit Office review of Teesworks

            Fishing protest

            Dead crustaceans on North East coast: the next chapter

            Scottish highlands

            The beauty of the Scottish Highlands

            loo

            A room with a loo

            Newcastle quayside

            Newcastle named as one of the best cities for graduates

            Brexit economics

            New research shows the economic effect of Brexit

            Wetherspoons pub

            Wetherspoons sparkle: has it gone flat?

            Leon Fussell rehearsing

            Unsung Heroes at Queen’s Hall, Hexham

            Trending Tags

            • Region
              • All
              • Co. Durham
              • North East
              • Northumberland
              • Teesside
              • Tyneside
              • Wearside
              Fire in Gosforth

              Firefighters praised for life-saving response to Gosforth arson attack

              A sign with the "not equal" symbol is held in a crowd

              Inequality and development: from global to local

              South Tyneside's only black electric taxi

              A sustainable policy for Tyneside taxis

              Ben Houchen by Scott Hunter

              Alleged National Audit Office review of Teesworks

              Child poverty protestor

              Child poverty: enough is enough

              Tyne Bridge

              Newcastle shortlisted for Eurovision 2023

              Wildfire at Witherwack

              “Busier than Bonfire Night” as wildfire rages for over 20 hours

              Fishing protest

              Dead crustaceans on North East coast: the next chapter

              NUFC foodbank

              Howay the lads and lasses: the new football foodbank season ‘22/23

              Trending Tags

              • Opinion
                Titanic coming out of Southampton

                The 110th anniversary of the Titanic’s departure

                There is an England

                There is an England

                Prime Minister Boris Johnson signs the Withdrawal Agreement with the European Union"

                The parody of disinformation: Boris Johnson on Ukraine and Brexit

                Boris Johnson’s comments on Ukraine and Brexit are an insult

                TV Agency staff jumping in the air

                The TV Agency celebrates 10th anniversary with global success

                North East of County Dublin

                North East of England and North East of County Dublin: Compare and contrast

                North Sea oil rig

                Copping out of COP: Ukraine, fossil fuels and nuclear fusion

                Placard with Boris Johnson as a clown

                Dictators, media and mobility: erosion of identity, sustenance and safety

                close up on a child's eye

                Racism and misogyny where there should have been safeguarding and security

              No Result
              View All Result
              North East Bylines
              No Result
              View All Result
              Home Business

              Rishi Sunak’s £15 billion cost of living package and windfall tax: four experts respond

              Four experts respond to Sunak's package of supporting households with energy bills.

              Jonquil Lowe, Adi Imsirovic, Alan Shipman and Keith BakerbyJonquil Lowe, Adi Imsirovic, Alan Shipman and Keith Baker
              29-05-2022 17:25
              in Business, Economy, Politics
              Rishi Sunak

              Photo by Ministry of Housing, Communities and Local Government  CC BY-ND 2.0 

              Share on FacebookShare on Twitter
              ADVERTISEMENT

              Jonquil Lowe, The Open University; Adi Imsirovic, University of Surrey; Alan Shipman, The Open University, and Keith Baker, Glasgow Caledonian University

              Rishi Sunak, the UK chancellor of the exchequer, has unveiled a £15 billion package of measures to help households with the cost of living, after energy watchdog Ofgem announced it would probably be increasing the price cap on energy bills by over £800 a year to £2,800 in October. Picking up part of the tab are oil and gas companies, with a temporary windfall tax that is expected to bring in about £5 billion. We asked four experts what they made of the announcement.

              Cost of living crisis

              Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University

              The chancellor’s pledge to give £15 billion to help households with the cost of living crisis finally targets help where it is needed the most.

              The package of measures, partially funded by a windfall tax on oil and gas companies, includes a series of one-off payments. There will be £650 each for the 8 million lowest income families, £300 for pensioner households and £150 for households who get non-means-tested disability benefits.

              Local authorities will also be given an additional £500 million to provide discretionary help to low-income households, while all households in the UK will receive £400 (they were already set to receive half of this as a loan later this year, but will no longer need to pay it back).

              The chancellor claims that the new package of measures will provide the most vulnerable households with £1,200 to help with living costs – broadly equal to the expected total rise in household energy bills over this year. This takes into account that the price cap, which sets a maximum limit on household energy bills and soared by 54% (£693) in April, is expected to rise by a further £830 in October.

              But energy bills are only part of the pain facing UK households. Food prices are currently rising at an annual rate of 5.9%, and could go much higher. So even with these payments, households on the lowest incomes are still likely to struggle.

              The universal payment of £400 to every household will also go to many households who could manage without it. As the Institute for Fiscal Studies has noted, this risks adding extra spending to the economy which could add to the pressure on inflation.

              The fear is that the Bank of England might then put up interest rates even further, increasing the cost of mortgages and other debts. Despite these reservations, the new measures are to be welcomed. At the second attempt, Rishi Sunak has targeted government support more wisely.

              Energy prices

              Keith Baker, Research Fellow in Fuel Poverty and Energy Policy, Glasgow Caledonian University

              With 12 million households expected to be in fuel poverty when Ofgem raises the energy price cap in October, the UK government has decided to give out paltry sums of money, with just 8 million of the poorest to receive the maximum amount. It is not enough, given how much further energy prices are expected to rise this year – far beyond the amounts being offered.

              When we talk about fuel poverty we often hear about the decision families have to make over whether to “heat or eat”. But with ever-rising energy and food prices, despite these payments, this coming winter there will be large numbers of people who struggle to do either.

              The new windfall tax comes with a sunset clause that says it will be removed once oil and gas prices fall. But instead of this, the industry should have to pay long-term taxation on their historical profits from contributing to the climate crisis. Then, if we are to have any hope of averting the crisis, we need national and international plans to manage the decline of the industry and completely eliminate it by 2050.

              Let’s not forget that the fossil fuel industry has spent billions on lobbying against measures to tackle climate change and stymieing the growth of renewable energy. Its successes will cost the people and governments of this planet huge sums of money as they are forced to rectify and adapt to the damage they have done.

              Windfall tax

              Adi Imsirovic, Senior Research Fellow, Oxford Institute for Energy Studies, University of Surrey

              As an economist, I think windfall taxes in a competitive market environment are a terrible idea. On the one hand, Chancellor Rishi Sunak wants the oil companies to invest more money in the North Sea. On the other hand, when they make money, they are taxed extra.

              A lot of the profit from companies like Shell and BP is coming from the refining side just now. Refineries were losing money for years, and throughout Europe, they have been closing, raising serious concerns about energy security. As soon as they start making money, we tax them extra. I don’t see the logic in that.

              The reason the refineries are making money, apart from the Ukraine war, is that oil companies haven’t been investing in new capacity for fear that the net zero agenda will prevent them from making a return. In the last couple of years we’ve lost around 4 million barrels of daily capacity from the global oil supply.

              I strongly disagree with the argument that the windfall tax is a way of getting us to net zero faster. The energy transition has to be managed from the supply and demand point of view. The easy buttons for governments to press have always been on the supply side, but they are not doing anything to discourage demand.

              If anything they are subsidising it – such as charging only 5% VAT on heating in the UK, which lets rich people heat big houses at lower costs. Curbing supply while letting demand flourish means higher prices. This is what the windfall tax will do, by further discouraging investment.

              But the reality is that, during the process of energy transition to cleaner fuels, we still need fossil fuels to serve the demand for energy. To change that situation, you have to tackle both supply and demand at the same time. One way to balance these policies is to implement a carbon tax.

              Also, why single out the oil and gas industry with this windfall tax? Why don’t they impose one on law firms, which have been making a fortune in the last couple of years? Or internet companies like Google and Twitter?

              Public finances

              Alan Shipman, Senior Lecturer in Economics, The Open University

              The restrictions early in the pandemic meant that the UK general government deficit increased to almost 13% of GDP almost immediately after Rishi Sunak became chancellor in 2020. The fact that the deficit has since more than halved and is expected to head still lower in 2022-23 has given him unusual room for fiscal manoeuvre. The chancellor is able to raise public spending, above the budget plans that fed those borrowing projections, while still keeping deficits and debt falling as a percentage of GDP.

              Having used the public health emergency to raise taxes in his first budget, Sunak was able to hand some of this back via tax cuts in March’s spring statement, and still have £30 billion headroom for more spending if households’ difficulties deepened. It’s from this additional “fiscal space” that the extra energy relief will be drawn.

              But if low investment and the squeeze on consumer spending stall GDP growth this year – something already flagged by first-quarter data – the deficit may already have stopped falling as projected. Extra spending could widen it again, causing the headroom to vanish unexpectedly fast.

              While extra borrowing was costless when interest rates were close to zero, the bill is rising now that rates are going up, with financial markets already looking more closely at governments’ capacity for additional debt service.

              Higher inflation is the way governments traditionally shrink the real value of debt if they have difficulty paying it down. But if inflation stays long around the 10% peak the Bank of England is now forecasting – partly fuelled by the boost to demand from public borrowing – then the additional help with fuel bills might not do enough to ease the cost-of-living crisis.

              Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University; Adi Imsirovic, Senior Research Fellow, Oxford Institute for Energy Studies, University of Surrey; Alan Shipman, Senior Lecturer in Economics, The Open University, and Keith Baker, Research Fellow in Fuel Poverty and Energy Policy, Built Environment Asset Management (BEAM) Centre, Glasgow Caledonian University

              This article is republished from The Conversation under a Creative Commons license. Read the original article.

              ADVERTISEMENT
              Previous Post

              The magic of The Secret Garden comes to the North East

              Next Post

              Geordie commuters to Switzerland post Brexit

              Jonquil Lowe, Adi Imsirovic, Alan Shipman and Keith Baker

              Jonquil Lowe, Adi Imsirovic, Alan Shipman and Keith Baker

              Related Posts

              Liz Truss
              Economy

              Tory leadership election: Liz Truss should look at how economies work

              byDavid Taylor-Gooby
              August 18, 2022
              Flood in York in 2022. Climate change brings about more floods and not just heatwaves and wildfires
              Environment

              The Tories’ climate change policy does not add up

              byGiuseppe Bignardi
              August 18, 2022
              A sign with the "not equal" symbol is held in a crowd
              North East

              Inequality and development: from global to local

              bySophie Lively
              August 17, 2022
              Ben Houchen by Scott Hunter
              Business

              Alleged National Audit Office review of Teesworks

              byScott Hunter
              August 16, 2022
              Child poverty protestor
              North East

              Child poverty: enough is enough

              byPeter Benson
              August 15, 2022
              Next Post
              woman at airport

              Geordie commuters to Switzerland post Brexit

              Want to support us?

              Can you help North East Bylines to grow and become more sustainable with a regular donation, no matter how small?  

              DONATE

              Sign up to our newsletter

              If you would like to receive the North East Bylines regular newsletter, straight talking direct to your inbox, click the button below.

              NEWSLETTER

              LATEST

              Liz Truss

              Tory leadership election: Liz Truss should look at how economies work

              August 18, 2022
              Fire in Gosforth

              Firefighters praised for life-saving response to Gosforth arson attack

              August 18, 2022
              man looking anxious

              Never assume: honesty and mental health

              August 18, 2022
              Flood in York in 2022. Climate change brings about more floods and not just heatwaves and wildfires

              The Tories’ climate change policy does not add up

              August 18, 2022
              A sign with the "not equal" symbol is held in a crowd

              Inequality and development: from global to local

              August 17, 2022
              South Tyneside's only black electric taxi

              A sustainable policy for Tyneside taxis

              August 17, 2022

              MOST READ

              Liz Truss

              Tory leadership election: Liz Truss should look at how economies work

              August 18, 2022
              Fire in Gosforth

              Firefighters praised for life-saving response to Gosforth arson attack

              August 18, 2022
              man looking anxious

              Never assume: honesty and mental health

              August 18, 2022
              Flood in York in 2022. Climate change brings about more floods and not just heatwaves and wildfires

              The Tories’ climate change policy does not add up

              August 18, 2022

              BROWSE BY TAGS

              Audio Beach Brexit Business castle leazes climate activism Co. Durham cost of living crisis Culture defra democracy ducklings Economy Education Environment fire and rescue firefighter Food & Drink food poverty Health Health & Care Home Affairs just stop oil Lifestyle Local Lockdown Northumberland Peace Performance Politics pride month refugee rescue Science Social Media Teesside TV & Radio Tynemouth Tyneside Ukraine volunteer Wearside

              We are a not-for-profit citizen journalism publication. Our aim is to publish well-written, fact-based articles and opinion pieces on subjects that are of interest to people in the North East and beyond.

              North East Bylines is a trading brand of Bylines Network Limited, which is a sister organisation to Byline Times.

              Learn more about us

              No Result
              View All Result
              • Contact
              • About
              • Letters
              • Donate
              • Privacy
              • Bylines network
              • Shop

              © 2022 North East Bylines. Citizen Journalism | Local & Internationalist

              No Result
              View All Result
              • Home
              • News
                • Brexit
                • Education
                • Environment
                • UK News
                • Transport
                • World News
              • Politics
              • Opinion
              • Lifestyle
                • Culture
                • Music
                • Poetry
              • Business
                • Economy
                • Technology
                • Trade
              • Donate
              • Newsletter sign up
              • Boriiis Cartoons
              • Authors
              • Audio

              © 2022 North East Bylines. Citizen Journalism | Local & Internationalist

              Welcome Back!

              Login to your account below

              Forgotten Password?

              Retrieve your password

              Please enter your username or email address to reset your password.

              Log In