Brown in windfall tax pressure

Source: Energy Digital

Date :28/08/2008 09:32:44

The City has urged Gordon Brown to resist pressure to impose a windfall tax on energy companies.

The Prime Minister is facing a growing rebellion from backbenchers after nearly 80 Labour MPs signed a petition calling for the measure.

A Deutsche Bank analyst said the idea of an energy windfall tax was “the worst kind of populist policy”.

The energy industry is fighting a rearguard action to prevent Mr Brown from hitting it with a multi-billion pound bill in the autumn.

One energy supplier said it had invested more than it had made in profits in recent years.

But with some energy bills rocketing by as much as 30 percent this summer, the government is under pressure to act.

Companies as well as families were suffering, said Lindsay Hoyle, Labour MP for Chorley and one of the backbench rebels.

The Treasury has not ruled out a windfall tax. But its favoured option is to use the proceeds of the European Union’s emissions trading scheme to fund a £1 billion handout to low-income families.