Calls For A Green Windfall Tax

Earlier this year, after much pressure from the left both inside and outside of the New Labour Party machine, it was announced that a windfall tax was under consideration.

Then- a short time later a windfall tax was categorically ruled out . Just one day after the French nuclear giant EDF announced it would buy the UK's creaky nuclear assets after all. I am not saying the two decisions are connected. But it is foolish to think that a Windfall Tax on profits would not necessitate a restructuring of the EDF offer. Business sense dictates that you will pay a great deal less for, or not bother buying at all, a business that's profits will be taxed, than you would for business which is entirely shareholder friendly.

Going back to at least 2006 there have been calls for a windfall tax based at least in part on Norwegian Oil Legacy programmes. Yet the debate in the UK did not explicitly mention leaving non carbon emitting energy out of the tax. Perhaps this was assumed. But it was not made clear.

A green tax of this nature would be a masterstroke. By ring-fencing carbon tax revenues the government could create a giant capital fund- the interest payments on this could presumably be directed at alleviating fuel poverty. It would also incentivise investment in green technology green energy projects. The energy companies could effectively claim tax back, and this would accordingly be directed at schemes that reduce emissions and create jobs.

That is one possibility. I'd be very interested in running it passed Hilary Benn and Ed Milliband. Given that this New Labour government has presided over one of the lowest tax regimes for the rich ever, while forcing the burden onto the working and middle classes, I won't be expecting a positive response. I'll let you know though. Interesting to note that this proposed tax would exempt nuclear fuel energy providers from paying a penny- while opening up the door for them to receive huge investment grants. Could this make it more attractive to this New Labour government? If we suppose the windfall tax was a consideration for EDF then perhaps it would.

The other possibility is my favoured one. It involves nationalising the energy companies, breaking up the US owned national grid, and encouraging community owned, and produced, green energy. Together with bringing the costs of installing solar energy panels right down- by installing them in every home, and insulating every home (with wool, a commodity we the Welsh are rich in).

This second proposal is the clearly the more radical, and in keeping with my understanding of Plaid's ethos. It is ideas like this supported throughout the grassroots that, as I said at conference this year 'makes Plaid like Plaid, not just New Labour with a red dragon on the sleeve.' However- radical proposals would only be attainable after a period of transition. So the former proposal of a green windfall tax could help facilitate the latter.

I'd be fascinated to hear your thoughts. Clearly something needs to be done. The governments current policies of going nuclear, building an expensive and inefficient Severn Barrage, and making optimistic targets for decades into the future, with no plans of how they will be reached, are failing the climate. Failing the climate is failing our future. To be honest it seems New Labour favour the soft selling of climate change, in order to avoid risking the wrath of big business. The Tories are committed ideologically to more of the same. I despair of English politics, but at least in Wales Plaid offer a green, and progressive, alternative.