Morning:
8°c
Windfall tax to help poor is still on cards, Labour warns energy companies
Paul Waugh, Evening Standard26 Aug 2008
Britain's energy firms face a windfall tax unless they help the Government keep down bills for millions of homeowners, it emerged today.
Gordon Brown and Chancellor Alistair Darling are looking at plans to get the big electricity and gas companies to stump up funds to help those hit hardest by fuel price rises.
Government sources said today that the idea of a windfall tax was "still on the table" as Mr Darling prepared his pre-Budget report due to be unveiled this autumn.
But the Chancellor and the Prime Minister are wary of doing anything that would add to consumers' costs and are concerned that energy firms would simply increase their bills to pay for a new tax.
One alternative is to get the firms to fund schemes to help the poorest and elderly with their bills. Another is to get the companies to pay £500million more for carbon credits under the EU's emissions trading scheme.
A Treasury source told the Evening Standard: "There is a very extensive search to find out which would be the most helpful measures and the most effective way to help consumers with their costs. A windfall tax is still on the table. Nothing has been eliminated or embraced yet."
Other government sources said every option was still open although six ministerial aides - Rob Marris, Derek Wyatt, Mark Lazarowicz, Stephen Pound, John Robertson and Mary Creagh - are publicly supporting calls for a windfall tax. Another six are privately backing the move.
Today, Downing Street made clear that it would not be dictated to by junior members of the Government. "They are not ministers. What matters is the view that is taken by Treasury ministers."
However, pressure mounted on Mr Brown and Mr Darling as town hall chiefs from all three main parties today urged an annual charge to be levied on energy firms to fund a national home insulation programme.
The leaders of the Conservative, Labour, Liberal Democrat and Independent groups at the Local Government Association argued the move would lift 500,000 people out of fuel poverty, cut £200 off 10million households' energy bills and reduce domestic carbon emissions by 20 per cent.
Paul Bettison, chairman of the LGA Environment Board, said: "One-off payments to deal with rising energy bills will be of help to many households but will do little to tackle the root causes of fuel poverty. A national home insulation programme would be the best long-term solution."
Earlier today Mr Brown saw his hopes for a "Beijing bounce" destroyed as a new poll showed that most Britons blamed the Government for the economic downturn.
The Prime Minister, who arrived back from the Olympics last night, was hit by an FT/Harris poll that showed more than three quarters of voters felt ministers bore at least some of the responsibility for the country's economic woes.
A further 63 per cent felt handling of the slowdown had been "bad" or "terrible". Worse still, more than a quarter of people who had always voted for Labour said they were less likely to do so in the future.
The poll followed a stark warning from the Bank of England that the economic bad news would "drag on for some considerable further time yet".
Mr Brown, working at home in Scotland today, is preparing his "autumn fightback" campaign.
The threat of a Cabinet reshuff le is being kept in reserve but some Brown allies have urged Mr Brown to make Foreign Secretary David Miliband his Chancellor.
• There was embarrassment for Gordon Brown today as Mikheil Saakashvili revealed the Prime Minister had phoned him only once since the conflict with Russia began.
The Georgian president had spoken to the US President nine times and the French president 20 times.
But he had praise for David Cameron, who visited Tbilisi last weekend, and foreign secretary David Miliband. "David Cameron has been very good. He really understands things," he said.
Reader views (5)
A windfall tax is theft. It may well win the support of many who vote labour, thieving from those who justifiably have more is bound to be popular among some groups, but lets be straight, it is theft, promoted by thieves.
- Trevor Davies, Bromley Kent, 27/08/2008 01:26
Report abuse
A windfall tax will just "rob peter to pay paul" resulting in the energy companies increasing prices still further to cover this tax.
- John, dundee, 26/08/2008 15:21
Report abuse
What a surprise - Brown's only strategy is to raise more taxes and make Britain an even less competitive place to do business.
Has he considered reducing taxes so people have more of their own money to spend? Or has he considered cutting red tape to allow our money to be spent more efficiently? Of course not: tax and spend is the only thing Labour know how to do.
- Ian, London, 26/08/2008 14:31
Report abuse
How many more days can Gordon cling to power?
- Phil Jones, London UK, 26/08/2008 12:07
Report abuse
Lets face it Mr Brown is weak, he looks weak, he talks weak and is just plain weak.
- Mr.S.Port, London, 26/08/2008 11:18
Report abuse
