University of Bath: Rising energy prices and the prospects for a windfall tax – expert available
Professor Christopher Martin, economics expert at the University of Bath, can be available for media interviews in relation to rising energy prices and the proposals from Labour and the Lib Dems for a ‘windfall tax’ on energy companies.
Chris, who is experienced at doing broadcast interviews, can provide balanced reflections on the consequences of imposing such a tax for consumers, as well as the potential effects in relation to investment in renewals and knock-on impacts for pension funds.
Commenting from Bath he said: “The steep rise in energy costs for UK households has coincided with sharply increased profits reported by large energy companies. This highlights the uncomfortable fact that high energy prices benefit energy companies but make life difficult for many households.
“Unlike UK households, the rise in energy prices for French households will be much lower. Commentators have highlighted the fact that French energy companies are largely state-owned, and heated political debate has erupted around the idea of using a windfall tax on UK energy firms to reduce the bills of UK households.
“Some economists argue that the state should not interfere since market forces will lead to the best outcome. But the UK energy sector is far from being a free market: it is dominated by monopolists and is heavily regulated; many economists would argue that a windfall tax is justified because of this.
“However, there are other factors to consider. Many pension funds have invested heavily in the energy sector; a windfall tax would reduce the income of these pension funds, many of whom are already struggling to meet the commitments. Energy companies argue that a windfall tax would make it harder for them to make the investments needed for a green transformation of the energy sector. Sceptics argue that, to date, energy companies have not shown much willingness to do this and that further regulation will be needed. The debate will rage on for some time.”