How offering false choices produces meaningless answers

Over on Political Betting yesterday, there was a post about recent polling as reported by You Gov for the Sunday Times.

PB, which has been keeping an eye on Labour’s polling fortunes since Ed Miliband’s junk status promise to enforce a 20 month price freeze for energy,  focused on one question which offered respondents a clearly biased selection of choices…

The Miliband pledge of an energy price freeze for 20 months:

Not only unworkable because it assumes wholesale market prices are static and factors that can increase or reduce price do not exists, but easy to circumvent by companies putting up energy prices before and after the period to recoup the same revenue they would have collected anyway.  It’s a false choice, a bit like the mythical ‘renegotiation’ option as an alternative to leaving the EU.

Excess profits tax on energy companies:

The key word here is ‘excess’.  Who determines what is reasonable and what isn’t?  Add to this the fact that most of the money energy companies make is from generating and selling energy to the wholesale market.  Is that what will be taxed?  They don’t say.  The profit from energy customers is around 5%.  Is that what will be taxed?  If so, is 5% profit ‘excessive’?  In any case, how does a tax help we consumers?  Will it be paid back to us, or just become another sum bundled in with general taxation for the government to fritter away as it sees fit? Anyway, we have to ask, how many companies would happily trot along working for just a 5% mark up on the cost of delivering a good or service?  Another false choice.

Reducing green taxes:

More popular than a windfall tax, but less popular than the Miliband con trick.  The obvious thing here is reducing green taxes and keeping them down will have a longer term effect on prices than a 20 month price hike holiday that only delays the inevitable.  But what this does not do is change the policy that sets a target for the percentage of renewable generated power in the energy mix.  So we still end up paying, whether through our bills or through general taxation, unless the Climate Change Act is repealed.  So this is also a false choice.

All of this shows that the polling was utter garbage.  Heads are being filled with ideas that are unworkable or non existent options that are no antidote to the problem of politically motivated rises in energy costs.

As a result the poll responses are utterly meaningless and does nothing but keep consumers in ignorance of the real reasons for much of the energy price rises.  There was no more value to it than asking people whether a phoenix, a minotaur or a winged horse should be the next 10 Downing Street pet.

5 Responses to “How offering false choices produces meaningless answers”

  1. 1 1957chev 28/10/2013 at 2:31 pm

    How about doing all three, and we, the people, make the decisions on “how much”? Of course the Climate Change Act should be repealed immediately!

  2. 2 cosmic 28/10/2013 at 3:03 pm

    There seems to be a general willingness in the meeja to deal in the surface issues and the knockabout between Cameron and Miliband (both equally culpable for the current mess), and avoid the question of why we are paying for renewables as the solution to a non-existent problem, at all.

  3. 3 Derek Buxton 28/10/2013 at 3:12 pm

    Good one AM. The only answer to the problem is as you say, dump ALL “greeny” taxes, they are wrong and hurt the wrong people faar too much. One would have thought that they would have been against tory principles in any case, but then any principles they once had, have been deep sixed!

  4. 4 EForster 28/10/2013 at 4:48 pm

    John Major’s suggestion to impose a windfall profits tax illustrates the general misconception that companies somehow pay tax. This is nonsense. Only people pay tax and it is entirely paid at the point of sale on every consumer good or service. That companies pay tax is a delusion that governments like to encourage to hide the real scale of taxation we all pay. Companies merely act as tax collection agents by passing consumers’ money onwards to HMRC in the amounts required. By this devious scheme governments assert that they are protecting hard working people from greedy firms. In fact, all taxation incurred in the production and supply of goods and services can only be paid out of consumers’ money since only the end buyer supplies the total money out of which all expenses in the supply chain are paid.
    Ironically, if companies legally avoid their tax, and other companies generally do the same, then, in a competitive market, prices will be lower than otherwise to the benefit of the consumer. So legal tax avoiders are to be applauded for their efforts to reduce our massive personal tax burden.

  5. 5 Brian H 31/10/2013 at 8:35 am

    Tough choice. None will work, so it’s also a destructive choice.

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