A windfall for social & environmental justice

Just thought I'd post this from Compass, the left-wing think tank, who are campaigning for a Windfall tax to help alleviate fuel poverty. Please feel free to sign the petition at the bottom of the page.

http://www.compassonline.org.uk/campaigns/campaign.asp?n=2773

We believe that the moment is right for the government to levy a sensible one off windfall tax to guarantee social and environmental justice both now and in the future. This is why.

The average annual spend on domestic energy per household has now breached £1200. Since 2000 we have faced gas price rises of 100% and electricity price rises of 61% - with further increases including British Gas raising its gas bills by a record 35%. Simultaneously the main energy providers have seen their profits rise from £557 million in 2003 to now over £3 billion. This alongside the recent news of profits made by oil companies - BP is now making £37 million a day with a 23% increase in profits to £6.7 billion for the first 6 months of 2008. The current spike in the price of oil means these companies are receiving unearned and undeserved windfall profits that are damaging to the rest of society, not least because the unprecedented price rises are fuelling inflation and therefore the cost of borrowing and repaying mortgages.

The government estimates that 2.5 million families are living in fuel poverty, whilst Energywatch puts the figure at over 4 million. Yet despite the billions made in profits, the energy industry spends just £50 million a year combating fuel poverty and has only agreed to raise this to £150 million a year by 2010. But every 10% increase in energy prices mean an extra 400,000 people go into fuel poverty.

As precedent a similar windfall tax was levied when Labour came to power in 1997 on the unearned profits of the newly privatised utilities and raised £4.5 billion. Similarly in 1981 the Conservative government levied a windfall tax on the main clearing banks - justified on the grounds that increased interest rates led to substantial unearned profits. In 2008 the spike in the price of oil has today lead to substantial unearned profits for the main oil and energy companies - we therefore call on the government to levy a windfall tax.

Even though I don't expect Labour to come round to this we can only live in hope.