Windfall taxes

I’ve pointed out that if there are to be windfall taxes on energy companies then they should be on energy companies. Note the if near the start there. But if horrible Big Oil is to be hammered then so should Big Wind, Big Solar and Big Biomass.

The argument against having a windfall tax at all is in this morning’s stock market. Drax is down 13% on the mere rumour of a windfall tax, Centrica 7%.

Quick slide rule peer at suggests that the losses to investors are larger than the revenue which might – recall, it’s still only might – be collected. Which means that we’ve a tax here with a greater than 100% deadweight. The losses are greater than the revenue collected.

That’s just insane. It’s a very bad tax indeed.

26 thoughts on “Windfall taxes”

  1. Golden rule of tax (one of the three) it’s only ever an individual who foots the bill, no matter the name on the top. In this case, it’s all those nasty rich investor people, ha ha ha ha.

    What’s that you say? Some of my pension is invested in Drax, Centrica, Shell, BP etc. etc…NOOOOO!!!!!!!

  2. Tim we live in Clown World.

    Since when did something being insane stop them from doing it ?

    Look at the ruins of our civilisation.

  3. ‘ I’ve pointed out that if there are to be windfall taxes on energy companies then they should be on [ALL] energy companies.’

    Didn’t you miss out ‘all’, otherwise the sentence makes no point?

  4. We’ve had over a decade of the Tories saying when challenged “yes, OK, this particular policy is economically stupid and we’ve only done it because we’ll get a few good headlines out of it, but we’re still the party that understands economics and prosperity really”.

    They aren’t. They never were. Thatcher was an aberration, who was a rank outsider to become Tory leader, and only got through at a time when the country faced total collapse. The Tories are the party of Macmillan, Heath, Cameron and Osborne. Which would be fine in a way; one stupid party may not be so bad. We’ve had two of them taking turns for a century now, and though there’s an awful lot of ruin in a nation, a hundred years is an awfully long time.

  5. Since Boris’s policy making is driven by a combination of his ego vis a vis the latest twitter trend and his gonads vis a vis the latest whim of nut nuts he will probably consider it a very good tax indeed.

  6. If we had more nuclear sites rather than ones like Drax, then the country wouldn’t be so tied into the demands of the unions. But will ministers realise that?

  7. SadButMadLad. I suspect the unions at least know this. At least their kill-the-nukes strategy seems to imply it.

  8. Dave Ward: ‘after warnings of their limited sticks of biomass’
    What you did there, it is seen 🙂

  9. I can’t for the life of me understand why taxing the energy firms is supposed to make the cost of living cheaper. What’s the mechanism here? If it’s just proposed “then the government can give that money back to consumers” somehow, then the government should just do that. But it won’t make much odds, the amount people seem to be talking about for the windfall tax is one or two billion pounds, which works out about £15-£30 per person. Obviously you could target that at certain groups.

    But the government always tries to avoid hypothecation of taxes for certain projects, and any serious attempt to subsidise people out of crisis – and to be clear there are people that this inflation is putting into really dire straights, so it does look like some cash will get splashed – is going to cost far more than a billion or two. So it wouldn’t all be coming out of the windfall tax anyway, and the scheme is an irrelevance. There’s no need to signal to global investors that this country will impose retrospective taxation on them if they happen to do well here, just for the sake of a billion or two that could be relatively easily afforded anyway.

  10. “Energy costs are too high and driving inflation”
    “Something must be done”

    Let’s put a new tax on energy, on top of all the other taxes on energy, that’ll do it!

    Bojo the clown is fool enough to do this, Rishi is evil enough to want to.
    What does Princess Nut Nuts say?

  11. As I posted last week, average bill = £1880, VAT = £94, green boondoggle taxes = £150+, energy company profit = £35. Yes, let’s nail those greedy bastard energy companies……..

    And don’t forget the ‘subsidy’ already being given to the bill payer by the government: VAT should be levied at 20% not 5% and should therefore be = £372.

  12. What Nick at 1047hr said. They’ve been running this “we have the keys to future prosperity” schtick for decades and getting away with it. The Mad Monkey of Downing Street’s contribution is to plumb depths of economic and social horror even Macmillan might have recoiled from.

    That’s why I’m a former Tory. It’s got past just “the alternative is worse” – it is, in all likelihood – but now, arses need to be kicked, reputations ruined, and even perhaps certain necks feeling the rough certainty of the hempen rope. These people will doom an entire nation.

  13. “As I posted last week, average bill = £1880, ”

    Not for long, price cap is going up to £2800 in October. Which is a bigger rise (in cash terms) than has just happened in April. So whatever squeals of pain we are hearing now its going to go mental when that kicks in. The UK public are going to get what they’ve been voting for (higher energy prices via assorted green bollocks), good and hard, and serve them right I say. For once something is happening that the State can’t solve, other than at the very margin. It can’t make everyone’s energy bill go back to what it was. However much people scream and scream its physically impossible. People are going to have to solve the problem themselves, one way or another. Maybe it will be a learning moment for the nation.

  14. Jim, I saw that this morning. Peeps’ll have to resort to burning stuff – Politicians and other assorted green bollocks parasites hopefully. I do have empathy for the people who are going to suffer though. As with covid, they have been sold a bill of fare (net zero, stop global warming, renewables are cheaper than fossil etc) by the ‘experts’ but not informed of the actual cost of what they were signing up to. Some are not sharp enough to get this or able to research and challenge what they are being told and those are the people I sincerely feel sorry for – they rely on ‘the powers that be’ to do what is best, but I also know too many people who ARE smart enough to look, but chose not too. As you say, I hope they get what they voted for good and hard.

  15. Bloke in North Dorset

    For once something is happening that the State can’t solve, other than at the very margin. It can’t make everyone’s energy bill go back to what it was. However much people scream and scream its physically impossible. People are going to have to solve the problem themselves, one way or another.

    I’d like to think so, but I can’t see it happening. The man on the proverbial Clapham omnibus watched the government cave to calls from the public, aided and abetted by the usual suspects on the left, for lockdowns and paying people 80% of their wages to sit at home. Now there’s a threat to their comfortable lifestyle why can’t the government “do something” they’re crying, aided and abetted by the usual suspects on the left.

    This lot haven’t got the balls not to cave and we’ll see all sorts of “do somethings” involving more debt that will be way to the left of Labour in a bid to stay in power.

  16. The calls for lockdown were from the media and “experts” to whom the media liked to talk. The population at large were told what to think on this occasion. If the govt and its advisors had had the spine to say “These people are wrong, this our plan and we will stick with it.” It would have been so different.

    By the looks of things lockdown should be an all-or-nothing policy.
    Personally I’d prefer the nothing.
    The media. Pols and medics must never be allowed to forget the utter balls up that they have inflicted on us.

  17. @TtC

    Beautiful

    @Addolff

    Green Tax is ~25% plus other nefrarious hidden green subsidies

    Capped bill = £1880, VAT = £94, green boondoggle taxes = £470+

    The poor, pensioners receive about x2:
    Ofgen: £2,800 annual energy bills:
    Unemployment benefit
    – under 25 up to £61.05pw = £3,174.6 pa leaving £7.20 pw for all other expenses
    £1 per day to live on

    – 25 and over up to £77.00pw = £4,004 pa leaving £23.15 pw for all other expenses
    £3 per day to live on

    Lord Golddigger and Lady Nikki Startled: £325 pd each for snoozing in Parliament

    @BiND
    Yes. Media and Public demanded lockdown and more lockdown, Boris gave them what they wanted even though he knew Covid was not a threat. MSM now doing ame fear promotion over nothingburger Monkeypox
    https://www.youtube.com/watch?v=SPrPVeEz_LA

    @Ottokring
    Gov’t did do as you say they should have, See BBC QT 12 March 2020. Pressure increased and they weakly caved.

  18. Pcar

    I don’t agree that they caved. The Government was fully complicit whatever re-writing / excuses they like to present. Because when you say the public wanted it – sure, but that’s because they were being brainwashed into wanting it, and the Government was an active part (throughout) of that brainwashing process. Daily prayer sessions, with all the appropriate surrounds, inviting fuckwit journalists to ask panic inducing questions (rather than a range of reassuring scientists), all specifically designed to create fear and terror. This all complemented what the media was similarly presenting rather than seriously challenge it.

    If you doubt this, and I know we say this all the time, look at Sweden. Tegnell was in charge of that, a quite different process. Hence, notwithstanding all that was going on in the world’s media, the broad mentality outcome was subtly different.

    (screwed up the e-mail, try again)

  19. @PF up until Ferguson taking his model prophesies to msm (not Gov’t), Gov’t was playing it down and proting natural herd immunity. Then they surredered to appease msm and public and went full lockdown

    They never believed it was necessary as party & beergate, Newsome, Pelosi, G7, Drakeford, SNP Health minister… demonstrated.

    Did you agree with lockdowns?

  20. ” Now there’s a threat to their comfortable lifestyle why can’t the government “do something” they’re crying, aided and abetted by the usual suspects on the left.
    This lot haven’t got the balls not to cave and we’ll see all sorts of “do somethings” involving more debt that will be way to the left of Labour in a bid to stay in power.”

    What can the State do to reduce the bills of 30m households by about £1500 (which is what it would have to do to put energy prices back to pre-April levels)? Thats £45bn. If they start borrowing that sort of money the markets will have a fit and borrowing rates will hit the roof. The BoE is tapering its stock of gilts so isn’t in the market any more. With inflation pushing double digits the State’s room for manoeuvre is extremely limited. Hence my point – people are going to get what they voted for, with no way for it to be undone. Eventually reality bites.

  21. > Pcar

    In theory? Because I saw evidence that stuff (lockdown messaging for example) had already been planned (even firm contracts in place) quite a bit earlier. And it wouldn’t have hurt Boris politically to play along with the “pressured to do it, not in my instincts” approach? Pass, I guess we’ll know one day.

    Did you agree with lockdowns?

    LOL – what do you think?

    I called the worthless twat a shitty Nazi (or similar) back on the evening of 23rd March 2020. And I’m pretty certain my language on here (in reference to him) hasn’t improved at all since. Crumbs, I didn’t realise that I had been ambiguous about it.

    > Jim,

    the bills of 30m households by about £1500

    Agreed. There are all sorts of reasons why this lot deserve everything they get (at the ballot box), but I doubt that this will be easily forgotten in a couple of years time – it’ll still be raw every time someone goes to adjust their thermostat.

  22. @PF

    Thanks & sorry. What with all the PF, PJF, Johns etc it can be difficult to remember. Do you have a link to “stuff”

    I’m with @LR’s “Regarding the lockdowns, it is difficult to find words that accurately convey my visceral loathing for those responsible. If I had my way, they would be boiled alive in vats of their own piss”

    I posted here in late Feb & early March 2020 : Nothngburger, like Flu, Keep Calm and Carry on as Normal. Most agreed thankfully. Sensible chaps here

  23. Pcar

    Re LDs/LR – Indeed…

    Re links, I should have filed (for easy/quick access) all sorts throughout the last two years, but mostly haven’t (and search engines increasingly don’t help as they ever more try to prioritise non-contentious over Sceptic/TCW type sites). If I come across one again (that I saw earlier), I’ll flag it up. Sorry about that.

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