Cost-of-living crisis justifies one-off windfall tax on energy companies – Brian Wilson

The scale of a crisis, created for millions by rising energy bills, has become inescapable with the announcement of a 54 per cent increase in the price cap.

BP chief executive Bernard Looney described the company as a 'cash machine' in November last year (Picture: Daniel Leal/AFP via Getty Images)
BP chief executive Bernard Looney described the company as a 'cash machine' in November last year (Picture: Daniel Leal/AFP via Getty Images)

This is an exceptional event which will cause immense hardship in many forms. The choice between heating and eating is no mere play on words. It is daily reality which will become much, much more widespread.

Implications for the vulnerable elderly, for child poverty, for mental health, for under-heated housing stock… the list goes on and all of these will carry future costs for the public purse. Much better to face up to that now.

No single measure is going to address this issue and the focus has to be on those whose needs are greatest. The measures announced by the Chancellor, from which Scotland will gain Barnett consequentials, are welcome but insufficient.

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There is an overwhelming case for a windfall tax on energy companies which are profiting mightily from increased prices.

As the chief executive of BP, Bernard Looney, gleefully put it last November, they are a “cash machine” for shareholders. Now, just a little, it is pay-back time.

In 1997, the incoming Labour government imposed a windfall tax on the “cash machine” privatised utilities. They squealed like pigs but paid up and survived very comfortably.

A windfall tax is, by definition, a one-off. It would buy time to come up with something better and protect millions of Mr Looney’s fellow citizens. Nobody now doubts the suffering ahead, so acting decisively to pre-empt it should not be too difficult.

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