Major's call for an energy windfall tax offers the Tories an escape route

By rejecting Miliband's proposed price freeze and calling for an "emergency excess profits tax" on the energy companies, the former PM has pointed the way forward for the Tories.

As a former prime minister, John Major always speaks with care, which makes his intervention in the energy debate all the more striking. At a press gallery lunch this afternoon, he attacked the energy companies for price rises that were "not acceptable" and called for the government to impose an "emergency excess profits tax" on them (citing the cost of increased Winter Fuel Payments). He said:

"Sod’s Law is that we will probably have a very cold winter and it is not acceptable to me, and it ought not be acceptable to anyone, that many people are going to have choose between keeping warm and eating. That is not acceptable.

"And so if we get this cold spell, the government will have to intervene and if they do intervene and it is costly, I for one would regard it as perfectly acceptable for them subsequently to levy an excess profits tax on the energy companies and claw that money back to the Exchequer where their primary job is to get the economy working and back to work."

While he dismissed Ed Miliband's proposed energy price freeze ("a good heart but his head has gone walkabout"), his words help legitimate the Labour leader's crusade against the "big six" and encourage the impression that the government is standing idly by. In an echo of Miliband's recent rhetoric, Major warned that many people would have to choose between "keeping warm and eating" this winter. 

The question now is how the Tories will respond. Ahead of the Autumn Statement on 4 December, George Osborne was surely already considering a windfall tax as a riposte to Labour's price freeze (several Tories have mentioned the idea to me), but Major's intervention removes the element of surprise that the Chancellor craves (although it's worth asking whether this is a calculated act of kite-flying).

Despite this, Osborne could still do far worse than simply embrace the former PM's proposal. A windfall tax would be viewed as less interventionist than a price freeze (helpfully rejected by Major) and could be justified pragmatically on fiscal grounds. Labour, which imposed its own windfall tax in 1997 (ironically attacked by Major at the time), would argue that a price freeze is superior, but would struggle to oppose an emergency levy. On this occasion, Osborne should follow Oscar Wilde's advice and remember that "talent borrows, genius steals".

Update: No. 10 has issued the following statement on Major's comments: "This is a very interesting contribution to the debate. But we have no plans for a windfall tax." 

In response, it's worth noting that the Tories similarly claimed that they had "no plans" to raise VAT before the last general election (before doing just that). Downing Street could have rejected the idea of a windfall tax entirely. Instead, it has kept it in play. 

John Major warned that many people would have to choose between "heating and eating". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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