Comments on: Windfall taxes are only the answer if you ask a silly question.

By: The Lakelander

The Lakelander — Tue, 29 Jul 2008 18:43:17 +0000

As a matter of interest, what did BP pay in tax in the UK last year?

"Windfall tax" may grab headlines, but surely a statement by companies like BP, clarifying what they already pay in tax, might add some balance to the debate.

By: DennisA

DennisA — Tue, 29 Jul 2008 11:40:21 +0000

The government of course, are currently enjoying massive windfall taxation on fuel.

By: David morris

David morris — Tue, 29 Jul 2008 10:57:02 +0000

That's the problem with New Labour, most of the government have never had a proper job, nor had to survive in the real world, and are still playing student politics, except it's the rest of us who have to pick up the completed unconsidered consequences.

By: Matthew Reynolds

Matthew Reynolds — Mon, 28 Jul 2008 19:42:50 +0000

As I never tire of saying if you end the Â£19 billion a year poverty creation scheme called tax credits & put an end to the Â£100 billion QUANGO madness then you can spend lots of cash on raising the basic personal allowance to Â£14,000 a year for all taxpayers while giving OAP's a winter fuel payment to stop higher utility bills distressing pensioners . Not rocket science is it ?

By: Iain

Iain — Mon, 28 Jul 2008 19:30:03 +0000

Question is has the Conservative front bench worked out a line of attack to oppose a winfall tax, for with Brown politically drowning he is going to attempt to grasp hold any populist measure?

The obvious response is going to be the fact that a windfall tax is going to suck billions out an industry which we are going to need to build the next generation of power stations etc, but a better response I would suggest is to say that if the power generation companies are making excessive profits then the problem is with the market, and then question what labour have done to make the market so ineffectual, which would question the vertical integration they have permitted, as well as allowing British generation companies to be bought out by foreign concerns, and question if its wise, when the market isn't functioning properly to allow the French Government owned EDF, who already has a sizeable chunk of our market to take a majority holding in another 25% of the market when acquiring British Energy.

By: Stuart Fairney

Stuart Fairney — Mon, 28 Jul 2008 19:14:49 +0000

Are you seriously telling me that there is this great socialist train of 'thought' which says the answer is to make banks LESS liquid at the moment?

Because really, if you were a teacher and some fourteen year old kid proposed this in GCSE economics, you'd have to wonder if he really had a grasp of the subject!

It honestly makes me weep when I hear the government come out with palpable nonsense like this.

By: Acorn

Acorn — Mon, 28 Jul 2008 18:14:06 +0000

They just don't understand how the world works. Windfall taxes always come back as higher prices, for exactly the reasons JR stated above.

Take EDF, a big player in our energy market nowadays. If you look at their 2007 group accounts, you will see that they made an operating margin (EBIT/Sales) of around 9.6% in the UK. They made a op' margin of 13.3% in the rest of the EU. The EDF group, as a whole, made an op' margin worldwide of 16.7%. These are the sort of margins you would expect from a well run energy sector company, in the 07 market. You will not find a reason to apply a windfall tax to the UK earnings of this company. Keep in mind that EDF is still 85% owned by the French government. Sarkosy could get upset and insist we join the Euro!!!!

By: Matthew

Matthew — Mon, 28 Jul 2008 17:43:41 +0000

This is a sensible point – one of the most bizarre bits in Mrs Thatcher's autobiography is when she claims the 1980 windfall tax was a good thing (on banks) as their profits were due to government policy not 'increased efficiency' or 'better service'.

By: mikestallard

mikestallard — Mon, 28 Jul 2008 17:17:38 +0000

Just as to you – and indeed to most bloggers on this site – cutting government spending and reducing taxation is the obvious answer to the credit crunch; to the TUs, the Labour grassroots and indeed the Mail today, the obvious answer is to skin the rich.
The Labour Party is deep in debt and the country is sinking fast into debt. What better way to get it out of its troubles, painlessly, than to soak the "rich"? (Always excepting Carol Vorderman).
What, of course, will happen, is that – as ever – the taxes will be deflected to hurt the poor even further. and that will exercise the Unions and that will cause strikes and that will cause, if allowed, runaway 1970s inflation.
So you – we – were right in the first place; cut government spending fast.

Reply: Yes, the left always overestimate how many rich there are, and underestimate how good they are at moving put of the UK or buying good tax advice.