Excess profits look set for a levy in the autumn statement but first define ‘excess’ and for who
“It’s like entering a lottery: you know something’s coming your way, but you’ve got no idea exactly what,” says one chief executive of a large UK electricity generator about the looming windfall tax on his sector. It’s a fair comment. Government thinking on the generators – as opposed to the North Sea oil and gas producers, who already have a levy – has been spinning like a wind turbine for six months.
Back in May, then-chancellor Rishi Sunak said he was “urgently evaluating” the scale of excess profits being made by generators on the entirely sensible grounds that not all windfall profits have been made by firms producing dirty hydrocarbons. Nuclear power plants, windfarms, solar farms, hydro projects and biomass burners may also be doing very nicely thanks to a UK energy system that ties the price of electricity to the price of gas.