British Politics’s Blog

The ravings of an individual, UK voter frustrated with our politicians

Posts Tagged ‘political opinion

Should the UK government impose a windfall tax on energy companies?

with 5 comments

The government is under pressure to impose a windfall tax on energy companies including UK based domestic fuel suppliers as well as international petroleum businesses based in the UK. This is a risky strategy given many of the companies have no particular need to remain in the UK for tax purposes and no longer to we have a favourable business tax system as an incentive to stay. Hence the reason some companies have been moving to places such as southern Ireland because of a better tax regime.

This would not be the first time the government has imposed a windfall tax on energy companies, but the last time, the tax regime was favourable and no doubt many of the companies decided to be pragmatic. But a second raid may be the last straw. I am not advocating that no action should be taken against these companies, only that it must not be quite so blatant as a windfall tax, instead the government could look at the carbon credit scheme, because many energy companies benefitted disproportionatly when the trading scheme was introduced. Some energy companies have clearly taken advantage of the current crisis to boost their own profits and this must be looked at, but simply appearing to ‘punish’ business in such a penal way as a windfall tax smacks of short-termism and desparation. See my recent article here: Windfall tax on the energy companies is not the answer.

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