A stark warning that Britain’s worsening economy will cause “difficult social issues” heaped fresh pressure on Gordon Brown yesterday, as more members of his Government broke ranks to demand a windfall tax.
The Prime Minister faces the prospect of the resignation of at least one ministerial aide if he fails to impose a new levy on energy companies’ profits, The Times has learnt.
There are just so many things wrong with this, I can't be sure I'll get them all:
1. What did the government expect to happen to energy prices in their quest for green-ness? The whole idea of their green taxes are to make energy more expensive so that people use less of it. So why moan when the price goes up? What did they expect was going to happen?
2. The government has already already netted more than £1 billion in extra taxes due to the increase prices. It seems a bit fucking churlish to demand some more.
3. The windfall taxes will steal from the businesses' capacity for investment in other things that might help energy costs, such as research into alternative energy sources, exploratory drilling, etc., etc.
4. Windfall taxes damage business confidence overall. Why would I execute on this brilliant new business strategy when all it's going to do is wind up getting the arse taxed off it?
5. The "outrageous profits" are not really outrageous at all. As a Return on Investment percentage, they're pretty shit, really. It's only because there are so many consumers that the number looks big. The costs are commensurately eyewatering, indeed, more so.
6. The government already takes more tax out of the energy companies than the energy companies take profits. If it were at all possible, I'd be looking to move my business elsewhere, where the tax regime was sane.
I swear, these people really do seem to think there is never an unintended consequence and there is also an infinite supply of cash for their latest wizard wheeze. Bunch of wizard's sleeves, more like.
2 comments:
Agreed, but where does your £1 billion extra tax figure come from?
My magic fag packet says that had oil & gas prices stayed as high as they were a month or two ago, the annualised figure (VAT, corporation tax, North Sea surcharges etc) would be anything up to £12 billion a year, now that prices are down, maybe the annualised figure is half that (= £250 per household).
Ought I amend my post?
@Mark: I read it somewhere, it was over 1 billion at the time of writing for my original source ... but I can't find it anywhere now. Probably the Telegraph or the Times.
It's probably a LOT more than I said, I probably need to rephrase my argument.
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