UK weighs windfall tax on big energy firms as profits swell

02 August 2008

Mumbai: The UK government is seriously considering a proposal to impose a windfall tax on some of the country's largest energy companies whose profits are soaring amidst ballooning energy prices.

The proposal is part of prime minister Gordon Brown's political fightback, which involves a series of fresh measures to address the charge that his government is facing.

Business secretary James Hutton told BBC Radio 4's Today programme that tax policy was the domain of Chancellor Alistair Darling, who would have to "weigh up some very important considerations".

"We've got to encourage very significant investment into our power generation system over the next 10 to 15 years,'' he added.

Hutton said, although a decision may be difficult, the proposal is most likely to be come up soon as Chancellor Alistair Darling looks for ways to tackle fuel poverty in the wake of soaring prices.

Rising fuel prices have already affected the poor families that have already faced a 15 per cent hike in energy prices this year and now face further rises even as Centrica, the parent company of British Gas, has made profits of almost £1 billion in the first half of this year.
 
The `Big 3' energy firms - Shell, BP and British Gas - have all recently announced multi-million-pound profits.