Roy Hattersley is in favour of a windfall tax.
Clearly it\’s an absurd idea that we can safely reject then.
Two facts should dominate ministers\’ consideration. The first is the size of energy company profits. For Shell, they amounted to £13.9bn in 2007-08 and £4bn in the second quarter of this year, a 4.6% improvement on 2007.
Eh? Big company, employing hundreds of thousands of people and hundreds of billions of capital makes big profit? That\’s a justification?
Centrica, the owner of British Gas, is expected to make a record profit of £1.9bn this year – a 50% year-on-year improvement, a month after raising average prices by 15%.
They already have the highest tax rate in the FTSE 100, they already pay 75% tax on North Sea gas profits. How much do you bloddy want? Come on, we all know the Laffer Curve exists, the only argument is at what rate.
These results are not the product of either improved efficiency or greater investment, but are largely the results of the idiosyncratic way in which energy tariffs are calculated.
Idiosyncratic? A market? Sheesh!
Still, whatever the paucity of his arguments at least one thing is settled. As he\’s in favour we know it\’s a bad idea.