A Windfall Tax on Energy Profits for Social and Environmental Justice
“A windfall tax proposes to use the 3 billion in profit reported by the energy sector to help 4 million households in fuel poverty”
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2. How does it fit with Compass’ core beliefs of equality, solidarity, democracy, freedom, sustainability and well being?
It directly increases the freedom and well being of 4 million households in the UK suffering from fuel poverty. It will make a huge contribution to making the UK a socially just and equal society by tackling exclusion and it is informed by a philosophy of solidarity that says we are all part of the same society and therefore share the right to benefit from it and have a duty to help the disadvantaged.
3. How does it build the institutions of social democracy, like social groups and collective and cooperative forms of ownership and control?
In the first instance the policy is essentially redistributive. However, through the sustained investment in green housing, prioritising household who suffer from fuel poverty, it creates a collective form of control over investments.
4. How much will it cost or raise and where will any cost come from?
This depends on how ambitious the plans to eliminate fuel poverty and create sustainable housing are. Ring-fenced revenues from tax would be used to both combat fuel poverty immediately and initiate a long term national programme for sustainable housing
5. Which groups in the electorate are likely to support or oppose this measure? Is there any polling evidence you have on this?
The energy sector will oppose this measure.People suffering from fuel poverty will strongly support the windfall tax and welcome investment in their homes. All those who are annoyed by the fact that the fall in the prices of fuel has not proportionally translated into a reduction in the cost of services will support this measure.
6. Is there a place or country where it’s worked? Please provide some information.
In 1997 New Labour levied a windfall tax to capitalise on the unearned profits on privatised utilities and in 1981 the conservatice government implemented a windfall tax on the main clearing banks.
7. What are the three main arguments in favour/against it?
Will eliminate fuel poverty
Will kick start a move towards sustainable housing accross the UK
Will tackle social exclusion
Will reduce profit margins of energy sector
May sdiscourage private investment in UK energy sector
May cause conflict over how to use raised funds
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