Right, that settles it

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.

7 thoughts on “Right, that settles it”

  1. Hang on. I should be against this windfall tax, but am caught in two minds after Patricia Hewitt criticised the proposed tax. Surely anything she says must be wrong.

  2. Just look at the comments, though. The ignorance and prejudice on display makes a pretty poor advertisement both for our education system and democracy.

  3. I like the idea of a windfall tax, and would just love to be a CEO of an energy company.

    You see, it would be a perfect as a means for punishing ignorant fuckwits who will vote for any tax as long as someone else pays it.

    I would move the company domicile outside of the UK, and then I would put my UK prices up by exactly the same amount of the tax. The bills would be printed with a line that said “total includes £xx.yy of Labour Party windfall tax”.

  4. for some reason Hattersley is mistaken for a man of gravitas, but every time he opens his mouth or writes something, vomit emerges

  5. These results are not the product of either improved efficiency or greater investment…

    So Shell isn’t investing or striving for greater efficiency?!!

    Somebody better tell the CEO of Sakhalin Energy, he’s labouring under the mistaken impression Shell have invested serious cash into the Sakhalin II project and has carried out significant de-bottlenecking works to increase efficiency.

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