Blackmail is an Ugly Word

The energy companies have responded to the faint possibility of a windfall tax from Gordon's little Darling by warning that it would "undermine investment in green power projects and other measures to combat climate change". British Gas, which has made such massive sacrifices to keep its call centres going, observed that a "stable, predictable investment climate" - whereby money flows into the corporate coffers regardless of such extraneous factors as the quality of service provided - is vital if energy companies are to continue putting pictures of windmills and so forth in their marketing brochures. "A surprise or shock tax is very destabilising for the industry when making long-term investments," said the chief executive of Drax, the well-known James Bond villain which owns the largest single carbon producer in the country and says it is aiming to generate a whopping ten per cent of its energy from plant biomass. Plant biomass is "seen", presumably by Drax, "as less damaging to the climate than coal," which is jolly reassuring. But if Gordon's little Darling goes and imposes a nasty, regulating, price-fixing, investment-environmentally destabilising windfall tax, that ten per cent could be in danger. Self-evidently, there is nothing anyone can do about it. A windfall tax was imposed on North Sea operators three years ago, which "led to a slump in drilling activity that ultimately cut tax revenues" without any apparent intervention by the operators themselves.