Gas: Excess Supply but Retail Prices Still Rise.

I picked up an interesting little snippet from Reuters today on Yahoo  see This Link

Looks like that in Europe there is a 10% oversupply of natural gas. Meanwhile the Utilities are still hiking their prices to the consumer.

[quote]
At projected import, domestic production and consumption levels, the EU's gas market will have 50 billion cubic metres (bcm) more excess supply in 2011 than it did last year, and the system is likely to remain similarly long in 2012,
This compares to an EU consumption of 492.5 bcm in 2010, according to BP, and to more than France's annual gas consumption of 47 bcm, and only slightly less than Britain's 57 bcm production in 2010.
This year and next year are likely to see an import and domestic production excess above consumption of just over 60 bcm.
[unquote]


Every single per-centage rise in energy prices pushes another 40,000 households into fuel poverty. Most of those households will be pensioners and the poor.

So why did the utilities successfully get away with their recent price hikes?

Because they could.

Why didn't the regulator (Ofgem) veto these rises?

Because it is a self-serving, toothless bureaucracy, incapable of regulating a bag of sherbet let alone a greedy cartel.

Why didn't the Government act?

Oh Come On. Get a grip and don't be silly. The government is part of the cartel. They want prices to rise.

In any normal market an over supply means prices should fall.

So are you expecting your bill to drop as quickly as it went up?

Don't hold your breath.

And particularly don't expect Huhne or any of the other buffoons to do anything about it.

Despots versus the Deserving

OK my grubby little Englanders, here are a couple of very happy individuals, possibly celebrating some of the few billions you have shovelled their way.

Now, while the one on the left has recently spent a great deal of time sat on the toilet thinking up excuses for the rape, torture and murder he has inflicted on his own people, there are several other equally vile despots queuing up to take his place on the world stage.

All of these despots are gleefully massaging the ego of  the UK governmental "Ship Of Fools" who promote the  prevailing "vision" of the UK being a [sic] (or is that sick) foreign aid "Super-power".

The other smiling bastard in the picture needs no introduction.

While Mugabe is regarded as a bit of a bad boy by the foreign office, that has not stopped them in the past giving him everything from gold plated Mercedes limos to jet fighters.

Oh, So much better value than spending it on hip replacements for old ladies.

Needless to say all the money, aid, skill and sheer hard work that has been squandered on these so called "World Leaders" has effectively gone down the drain.

Now have a look at this bunch.

Billothewisp along with about 30 other folk, each lent them the princely sum of $25.00.

It is being repaid, on time and to the penny.

Or this group.

I blogged about these guys earlier Here (if you adore guinea pigs - look away now!)

Again, like the African group, they are normal, average, honest people who need a hand up, not a hand out. They also have met all their re-payments in full.

The loan was set up by an organisation called Kiva (Here).

I do have some issues with Kiva. But compared to traditional foreign aid and "charity" they are shiny white virgin saints.

Our government can continue to stroke its political ego. It can continue fuelling the despots of this world by giving them massive hand outs.

Or it can promote personal responsibility. Enable honest people, who are willing to lend relatively small amounts, to directly help other honest people wanting to borrow.

A hand up not a hand out.

If Cameron wants to install some "moral" imperative, maybe he should facilitate individuals doing their own "foreign aid". Cut the appallingly wasteful foreign aid budget and give tax breaks to the average person. Encourage them to lend on a person to person or Peer to Peer basis.

Cut the Mugabes and Gadaffis out of  the loop.

Am I dreaming?

Naive?

Is this wishful thinking?

Possibly.

But it cannot be worse than the current foreign aid debacle which swindles the UK tax-payer, fuels depravity and gains little or nothing for those who simply need a hand up.

Taxing Empty Containers

OK my bankrupt and poverty stricken English compatiots. As you may know Billothewisp is no fan of taxation. But today he has obviously had a little too much sun (or cider, or both) and he wishes to suggest a shiny new tax to help out our financially deprived exchequer.

While I can see some of our control freakery ruling classes jumping up and down in excitement on the possibility of stiffing the average Joe Bloggs for a bit more of his hard earned dosh, they may not like it so much after they have read what it is.

There are, of course, brethren who will despair at the mere thought of yet another tax. They can give me a good kicking later. The cider will ensure I don't feel a thing. But I digress, back to Taxing containers.

One of the main avenues ruthless globalists are using to stiff our economy is via the use of sweat shop labour in poor foreign countries. In these countries their ruling elites or "Great, Good and Extremely Well Fed" get ever richer while the slaves employees get paid a pittance. But the goods produced by these globalists are priced too highly or are inappropriate for local population.

We end up in the bizarre situation where our own people are on the dole because no business can compete with the sweat shops. But in the countries involved in this sweat shop labour there is a shortage of economical goods for the local population. This because the fat cats can make much more money out of shipping it to the UK than they can by doing the right thing and supporting their own people.

This abuse is made even worse due to the containerisation revolution that has taken place in the shipping industry. As an example, it is considerably cheaper to ship a television to the UK from China than it is to ship that same television 100 miles up the motorway from the port to the supply depot.

We need to level the playing field. One way of doing this would be to place an tax on each container coming into the country full and leaving empty. This would also help our exporters by inducing a market where shippers actually competed to fill their containers. At the moment most cannot be bothered. If a container leaves the country full of goods then the tax would be neutral for the shipper. If a container comes in empty (unheard of) no tax is paid and VAT is waived if it leaves full. At the moment most containers come in full and then simply ship fresh air out of our ports.

There are approximately 5.5 million TEU (Twenty Foot Equivalent Unit) deep sea (i.e. non European) container traffic movements a year. If you assume that 4.5 million of those are shipping air back to their point of origin and you charged a £500 tax per empty deep sea container leaving the country, you would bring in £2.25 Billion. It would also incentivise shippers to get UK goods shipped out cheaply.

Just an idea. Now let the kicking start.

The Trouble with VAT

Cast your mind back my despised little Englander mates. To when the last group of "Those Who Should Be Obeyed", panicked and adopted the ludicrous concept of dropping VAT by 2.5%.

As if that was ever going to make people stampede to the shops.

It did though cost a shedful of money. Not only that, it had no positive effect on employment within the small businesses.

Now of course the latest group of "Great Good and Extremely Well Fed" plan to raise VAT to 20%.

Granted, it is an easy hit. A way of raising a considerable amount of money in a short time. "As is" this rate increase will probably also have little effect on employment levels.

But VAT does have a big affect on employment. Especially within the small business sector. But this is due to the VAT Registration Threshold.

The VAT Threshold is based on the turnover of a business. If a business has a turnover of £70K or more it must register for VAT. This means that any bill the business issues will be inflated by 20% (i.e. the VAT). However this will be off-set by the business being able to reclaim VAT it has paid to its suppliers.

So how does this effect employment in small businesses?

Take a plumber working as a sole trader. Say his turnover (that's not profit... that's everything) is £68K. He does not have to register for VAT. No VAT registration means he has to absorb the VAT on the goods he supplies but does not have to charge 20% on his labour. As his labour will account for probably 2/3rds of the final turnover, he can charge less (or make more profit) than another plumber with a turnover of £71K.

There is a distinct disincentive to go through the VAT threshold. If you are going to breach it then you need to do it in style (aka turnover £150K etc.).

Now let us assume that our plumber decides to expand and wants to employ a labourer. Automatically the plumbers turnover inflates by the wages paid to the additional employee. The plumber goes through the VAT threshold and now (as well as paying the labourers wages) has to increase his bills by 20%.

The labourer will have to bring in a great deal more work to make his employment viable. In essence it make much more sense for the plumber to leave the labourer on the dole and to take a holiday when his turnover gets too close to the VAT threshold.

This could be fixed by raising the registration threshold to (say) £100K. It would encourage small enterprises (like our plumber) to expand and to do that he would then require the labourer to help him. Multiply that by (say) 300,000 small businesses across the country and you see the affect.

In the cash straitened time the big question is how much would this cost the exchequer? I think the answer is very little. One of the big savings is the labourer is no longer on the dole (and he is paying taxes) also there is the enterprise affect. As he has expanded once, maybe our plumber will hire more people and risk going go through the VAT threshold. But now it won't hurt so much. Relative to his expanded business, the hiring of extra staff is not so monumental.

So raising the VAT threshold could possibly take 300,000 people off the dole maybe more.

Seems like a good idea to me.