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MPs call for energy windfall tax MPs call for energy windfall tax
(about 1 hour later)
More than 80 Labour MPs have signed a petition calling for a one-off windfall tax to be imposed on energy firms who have recently recorded huge profits. Prime Minister Gordon Brown is facing mounting pressure from Labour MPs for a one-off windfall tax on energy firms who have recorded huge profits.
The MPs, including several ministerial aides, want the government to use the money generated to help poorer families who are struggling to pay their bills. More than 80, including some ministerial aides, have urged him to use the money generated to help poorer families struggling to pay their bills.
Pressure group Compass, which organised the petition, said it expected more MPs to sign after the summer recess. Pressure group Compass expects more MPs to sign its petition after the recess.
The government says it is "looking at" all options to tackle the issue. The government has played down the idea. Energy firms say a profits "raid" could jeopardise investment.
'Big three' The government has said it is "looking at" all options to tackle the issue but, while a windfall tax has not been ruled out, it is understood the prime minister is looking at an alternative levy on carbon emissions.
While a windfall tax has not been ruled out, it is understood the prime minister is looking at an alternative levy on carbon emissions. 'Astronomical' increases
Earlier this month, Business Secretary John Hutton said the Chancellor Alistair Darling had some "very difficult calls" to make. Labour MP Clive Betts, who is among those who have signed the petition, told BBC Radio 4's Today programme there was "overwhelming" support for a one-off tax among his parliamentary colleagues and the public.
He said companies were looking at more than 30% increases in their profits, adding: "They are simply going to make much more money for doing absolutely nothing."
Every £1m you take out of each company through this legalised raid is £1m they have to raise elsewhere David PorterAssociation of Electricity Producers
"I think it's reasonable for people to say 'Why should the wages and salaries and bonuses of the executives of these companies, which will be linked to their profits and their share prices, go up astronomically while the ordinary person in the street is seeing their wages go up by 2% ... and their energy bills going up by 30%?'"
Earlier this month, Business Secretary John Hutton said Chancellor Alistair Darling had some "very difficult calls" to make.
But he said the UK must be wary of any "fiscal" or "regulatory" changes to the energy sector that could prompt investors to go elsewhere.But he said the UK must be wary of any "fiscal" or "regulatory" changes to the energy sector that could prompt investors to go elsewhere.
David Porter, chief executive of the Association of Electricity Producers, said a windfall tax on firms' profits could break the trust between government and industry and mean more investors head abroad.
He said firms were not making "excessive" profits, only putting prices up when they had to, and had to invest £100bn in new power stations over the next 11 years .
"A legalised raid on the company's bank accounts - that would be very unhelpful because it would scare off investors and also could make the cost of investment much higher and, in the end, that would end up on the customers' bills," he said.
"Every £1m you take out of each company through this legalised raid is £1m they have to raise elsewhere."
The "big three" energy firms - Shell, BP and British Gas - have recently posted substantial profits.The "big three" energy firms - Shell, BP and British Gas - have recently posted substantial profits.
Shell made £4bn in the second quarter of this year, up 4.6% from 2007, while BP made £3.4bn, a rise of 6%.Shell made £4bn in the second quarter of this year, up 4.6% from 2007, while BP made £3.4bn, a rise of 6%.
Centrica, which owns British Gas, made £992m in the first half of this year, while raising prices for customers by 35%.Centrica, which owns British Gas, made £992m in the first half of this year, while raising prices for customers by 35%.
The government imposed a windfall tax on the profits of recently privatised utility companies in 1997.The government imposed a windfall tax on the profits of recently privatised utility companies in 1997.
On Sunday, a YouGov poll for The Observer newspaper of just over 2,000 people found that 67% supported a windfall tax.On Sunday, a YouGov poll for The Observer newspaper of just over 2,000 people found that 67% supported a windfall tax.