Tuesday, May 27, 2008


A windfall tax on excess energy-industry profits. There's a good environmental case for it.

It has a powerful backer. And it solves the same political problem that less satisfactory rival proposals aim to address.

Roy thinks it's a political winner for Gordon Brown*.

What's wrong with the idea?

(*Fair warning: All comments along the lines of 'if Hattersley is advocating it, it's a bad idea'
will be deleted instantly)


Will said...

Wot about school vouchers?

You haven't mentioned them have you?

In favour or against?

Tim Worstall said...

Well, it is an idiotic idea but not only because Roy is backing it.
What we actually want is more people to invest in finding and producing energy so that a higher supply of it brings prices back down.

1) The people most likely to do this are the cuurently extant energy firms and they do this with the profits they make from their current operations. So taking this future investment away to pay for outreach workers instead is stupid.
2) For those who might think of starting or investing in a new company (yes, this does happen all the time in the oil and gas business) the message that if you're successful we'll tax you at a punitive rate is also stupid. We're actually telling them that they'd be better off investing their money somewhere else.

So, a windfall profit tax would keep prices higher than they would be without such a tax.

In fact, it's not just stupid, it's insane. And yes, Roy is supporting it and no, that doesn't surprise me.

The Plump said...

If Hattersley is backing it ...

Just testing