Sunday, 3 August 2008

Why Our Energy Does Not Need Another Tax!

If reports in this weekends newspapers are to be believed, we should expect a windfall tax on our energy companies in the very near future.

While the need to help those who will not be able to heat their houses this winter due to the price increases announced by our utility companies is not in doubt, the method of helping those most in need is something our Labour Government must ensure does not leave the rest of society paying dearly for.

Any windfall tax on gas and electricity companies will, over time, be borne by those of us who pay their bills. This may not appear as an immediate burden in our bills but we can all be assured that over time these companies will find ways to pass the burden of their taxation onto us all.

With so many people already being forced into fuel poverty by government inaction in the face of international commodity price rises the answer is surely not to lift people in fuel poverty out of this categorisation only to put those just above the current measure into fuel poverty as gas and electricity prices rise to pay for their windfall tax!
The two simple and easy ways for Government to help control energy prices in the UK are to introduce a fuel price escalator, as already proposed by Shadow Chancellor George Osborne, and to work with the energy industry on long term energy security for the UK in order that our gas and electricity companies can depreciate their capital projects over the medium to long terms - enabling them to reduce this cost to their balance sheet and in turn the price we pay them today.

So my message to Gordon Brown and his government is don't make the same mistake you made with the pensions industry, which ruined a UK industry once considered the best in the world, by introducing a windfall tax on our energy companies. Instead make it clear that our gas and electricity companies are vital to the UK's strategic national interest and will be supported by government with a view to energy security for an island nation currently reliant on massive imports of material and energy to survive.

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