Birmingham University Labour Students

Compass are leading a campaign calling for a one-off windfall tax on the oil and gas companies benefiting from the global rise in energy prices.

“As precedent a similar windfall tax was levied when Labour came to power in 1997 on the unearned profits of the newly privatised utilities and raised £4.5 billion. Similarly in 1981 the Conservative government levied a windfall tax on the main clearing banks - justified on the grounds that increased interest rates led to substantial unearned profits. In 2008 the spike in the price of oil has today lead to substantial unearned profits for the main oil and energy companies - we therefore call on the government to levy a windfall tax.”

A windfall tax on the profits of energy companies has been a long-standing demand of Compass and it is encouraging to see so many Labour MPs backing the campaign. The increasing number of people in fuel poverty (every 10% increase in energy prices mean an extra 400,000 people go into fuel poverty) has demonstrated the limitations of the market and the need for radical action. Compass propose that the revenue from this tax should be ring-fenced to help those in fuel poverty with particular effort made to improve fuel efficiency.

This policy would help those ‘core voters’ many believe Labour needs to reconnect with while not being offensive to the middle class, without whose support this government would in all likelihood loose the next election. 

You can always join the facebook group here.

UPDATE: Check out this interesting piece by Chuka Umunna in the Guardian on a windfall tax.