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Comment: No windfall tax for Britain
Evening Standard05.09.08
There will be none of the hoped-for payments to soften the impact of gas and electricity price rises, the Prime Minister admitted yesterday in his Scottish CBI speech.
Instead, the long-awaited fuel poverty package will prompt suppliers to encourage energy efficiency. It is arguably better, and greener, to reward energy saving on a permanent basis than to produce a one-off handout but it will be a lot less popular. Details are due next week.
It is already clear, however, that, just as the measures to help homeowners were dismissed as a damp squib, so the energy deal has fallen short of MPs' expectations, leaving Mr Brown's autumn relaunch in tatters.
Angry at the energy companies for failing to help consumers, some backbenchers are talking again about hitting them with a windfall tax, thinking Mr Brown might get away with it as he did with a £5 billion raid in 1997. Then, however, the incoming Labour Government enjoyed the goodwill of the City.
Now, it would be seen as a politically motivated tax grab, undermining Britain's attractions to investors just as rows over capital gains tax changes and the treatment of non-domiciled residents did earlier this year. The companies successfully fought off the plans for a fuel voucher by threatening to cut green initiatives or to pass on costs of the measure to other customers.
At a time when some big companies have left Britain, complaining that it has become business-unfriendly, a windfall tax would make this country look like a place where the Government launches surprise assaults on unpopular companies to get itself out of a political hole. That would be damaging indeed.
