UK Government: Painted into a Corner. No Immediate Relief for the Poor.

If you are poor and struggling, don't expect any help from government. 

I know you're used to an almost instantaneous response when the left start clamouring for support and "windfall Taxes", but alas, this time you won't get it.

You will have to sort out the situation yourself.

The reason being is the problems are unfixable. A windfall tax on energy companies is an idiotic move considering they themselves are struggling to survive, because thanks to the energy cap introduced by the government, the energy companies are selling energy cheaper than they are buying it in. They are losing vast amounts on money. Adding a windfall tax would add insult to injury. The proponents of the windfall tax on the left must have very short memories. They've conveniently already forgotten the energy companies going to the wall around Christmas.

What about the oil companies? I her you shout. Well, they are only selling at the current wholesale price. 

Thanks to Globalism we do very little refining of retail oil products in the UK. We buy in ready-refined products like Diesel. 

Annnnd... guess where the bulk of the Diesel comes from? Go to the top of the class if you said Mother Russia...or just .. Russia. So any sanctions we put on Russian products just shoots ourselves in the foot. We cut off our main supply of Diesel. That's why the price of small, economical PETROL cars continues to rise. The upwards pressure was already there thanks to various ULEZ schemes across the country that require newer Diesel cars compared to Petrol, but also the impending loss of Diesel in the New Year. 

Yes, I said loss of Diesel. Along with the countries of the EU we've given ourselves until the end of December to completely cut off supplies of energy from Russia. Ostensibly this is to give us time to find alternative sources of supply, but realistically the West hops the war is resolved by then and everything can go back to normal. But what it means in practice as every country in the West scrabbles for the same sources of supply is a huge increase in price and limited supplies. 

So if you run a diesel vehicle, either put up with not being able to source fuel in the New Year, or pray the war in Ukraine is over, or buy a petrol engine car. 

Anyway, again there is nothing the government can do to provide instant relief. Taxing the fuel companies more will only reduce profits and investment in alternative sources of supply.

How about borrowing the money to tide us over this rocky period? Er, unfortunately the government ran up huge amounts of debt during the pandemic, to pay for all those furlough workers. So any further borrowing will be at a higher rate of interest. Servicing that debt will put pressure on the government to raise taxes to pay back the debt at a time when increased taxes just adds to the misery.

So the government are really in a tricky situation. They are very limited on the options available. 

You are just going to have to ride it out as best you can using your own resources. The government really aren't joking when they say take a second job.

Of course there are options: I've long advocated ending the ability of corporations to pay corporation tax offshore. I maintain that if they earned the money here in the UK, then they should pay it in the UK at the UK rate. I don't see any reason why money earned in this country shouldn't be taxed in this country. We are now outside the EU and are autonomous. We have the ability to set legislation however we want. So why don't we end the offshoring of tax liabilities?

The big tech companies that set up shop in Luxembourg, or Ireland (traditional low corporation tax countries) should be forced to pay their corporation tax here. End the legislative loophole that allows it. Earn the money here, pay the tax here should be the mantra of any UK government.

That should bring more money into the treasury without affecting punters. Yes, Amazon may earn a few billions less, but it doesn't affect the poor. And if they put up their charges and fewer people use them and rely on the high street instead, well that's another plus.

Oh, and before anyone starts bleating about "Brexit dunnit", unfortunately that's not the case. America have exactly the same inflationary pressures caused by the end of cheap Chinese imports alone. We've had the cheap labour tap turned off, but the bright sparks in the government are fast tracking Ukrainian refugees as fast as they can and are giving them work permits so we'll have a supply of cheap workers to try and dodge that bullet. Just in case you wondered why the Ukrainians were getting special treatment and being allowed to work while being refugees.