Thread
1/ Watching James 'Not so' Cleverly on Sky. discussing energy prices and home heating bills.
As usual he has totally ignored or missed the bigger picture. Not only will people face paying almost double for their energy, everything they buy is about to increase in price.
2/ Businesses will have massive increases in their energy costs, both in the UK and in every country where products are manufactured. They have also seen huge increases in the price of raw materials, including cardboard for packaging, silicone, plastics, electronics etc..
3/ There are several key reasons for this, energy costs are only one.
COVID lockdowns world wide have meant a reduction in availability of raw materials, shortages of labour to produce finished goods and thousands of factories turned over to the production of PPE.
4/ Government financial policies in the US especially, meant it paid more to stay at home than to work! So low income jobs such as timber cutting, resulted in increasing costs for all wood based items incl. paper and packaging etc.
5/ And thats not all, shipping prices have dramatically increased, not only due to increases in fuel, but also due to profiteering. Pent up demand by consumers has resulted in higher demand for shipping containers and the freight companies can simply name their price.
6/ A 40 foot container 2 years ago cost on average £4000 to ship from china to the UK. It now costs £15,000 plus another £1500 just for handling.
7/ All these increased costs to manufacturers mean they will have no choice but to increase the price of their products. Where retailers had leverage to force pricing down, they now have none. Manufacturers can't sell products at a loss and survive.
8/ It's worth pointing out here that businesses aren't the big bad enemy of the people, they are employers of the people. If they lose money they will cut costs, in order to survive. One of their costs is us, the people!
10/ All this means that prices are going up and will be increasing dramatically over the next 12 months. That means the average household not only has to find the money for a doubling in home energy bills, but for every product and service they need.
11/ They will see increases in all discretionary and non discretionary purchasing, from food to school uniforms, from bus fare to school lunches, from hair cuts to washing powder.
And then there's that NI tax increase to add to the mix.
12/ Meaning they will have even less money to spend on other products and services, which will have a knock on effect on the businesses, who need consumers to continue to buy their products and services, to stay in business and to keep employing people. See where this is going?
13/ And then the Bank of England will increase interest rates. They do this to keep prices from rising, but you can't stop price rises when the costs of manufacturing have increased. The squeeze from both ends will simply serve to bring the economy to a halt!
14/ If the economy stalls, unemployment and business failures will increase, which means less tax revenue for the government, which means less money to invest in public services and helping poorer households. Everybody hurts.
12/ This cycle of spiralling cost increases and then interest rate rises will cripple households and employers, who on top of all those extra costs will then see their mortgages and rents increase.
13/ So when this government talks about helping the poorest households with their heating bills, that will do fuck all to help the economic carnage about to hit this country, if things don't change in a hurry.
14/ The government would be wiser to:
▪️Remove ALL green taxes immediately
▪️Stop any interest rate rises
▪️Cancel the NI tax increase
▪️Lower corporation tax
Probably for at least the next 3 years, until all countries have had a chance to get work forces back to normal.
15/ The government would also do well to remember the energy crisis is a geo political and domestic policy nightmare of their own making. If they don't look at this in the round and understand the wider implications, they will drive us into recession. And then we are fucked.
END.
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