Call for energy windfall tax to tackle fuel poverty
Energy companies in the UK are pleading poverty. Their profits are being slashed, they tell us, as wholesale prices of gas and oil increase. They must, therefore, increase the price at which they are selling fuel to us. But when these corporations are still making billions it’s difficult to feel sorry for them. That is why leading figures from the fields of politics, journalism and academia are joining forces to urge the government to act now and implement a windfall tax.
“After the Glasgow East byelection defeat the government said they were listening. We need to send a loud and clear message that action can be taken now to reduce fuel poverty and help save the environment,” said Gavin Hayes, in an email to Compass members.
The campaign, organised by Compass and backed by host of prominent figures states that: ‘Rising energy and fuel prices are affecting everyone but it's the poorest and those on fixed incomes who are paying the heaviest price.
‘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.
‘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 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.
‘At the same time there is a lack of investment in securing renewable energy to help Britain become energy independent and more carbon neutral. By 2020 the UK wants 15% of all energy to be from renewable sources, this is currently only 2%. Increased investment is urgently needed if the government is to meet its target.
‘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.
‘Revenues from the tax should be ring-fenced to deliver social and environmental justice for all. Part of the money raised should be used to immediately help those struggling with rising fuel bills and should be particularly targeted at families in or facing fuel poverty. However the best strategy to eliminate fuel poverty forever is to ensure every home is insulated and energy efficient to the highest standards. Therefore much of the money raised should be used to kick-start a national programme of home energy efficiency and installing renewable energy, starting with the homes of the fuel poor.
‘Used in the right way this could benefit the UK economy as a whole - just as the New Deal in 1997 created new jobs for the long term unemployed, such an investment could see the creation of hundreds of thousands of new jobs in renewable energy production, insulation, building renovation and other sectors.’
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