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MAGGIE PAGANO: Ignore fanatics’ calls for windfall taxes on energy companies

National Grid’s John Pettigrew is right when he makes proposals to levy an unexpected tax on energy giants to offset the cost of living crisis. It’s a terrible plan in the best of times and will do nothing to secure long-term energy supplies in the North Sea, ultimately at lower prices.

As the network’s chief executive says, taxing companies like BP and Shell – which are just recovering from losses during the pandemic – could now have a chilling effect on their investment plans.

They invest over decades and therefore need a stable regulatory and political environment and no ad hoc additional taxes more than any other company.

Self-destructive: Ministers are still debating whether to give in to Labor’s populist call for a one-off tax on energy giants that would raise no more than £2bn

Pettigrew also didn’t talk about his book. National Grid would not be affected by such a levy: its job is to provide the pipes that run the electricity supply and has nothing to do with buying or selling energy.

But his sensible comments could fall on deaf ears. Ministers are still debating whether to give in to Labor’s populist call for a one-off tax that would raise no more than £2bn.

Fortunately, the Prime Minister is said to be firmly opposed to such a tax. However, other ministers, who should know better, have capitulated, arguing it would be popular.

They also claim that it should not be viewed as an anticonservative tax since Margaret Thatcher and David Cameron imposed windfall taxes on banks.

That’s not enough today: the UK energy giants need to reinvest all the private capital at their disposal into investments for the future.

As the last year has shown so clearly, Britain’s energy security has been found to be lacking, in part because there is no central independent body to ensure the lights stay on.

That’s why the government’s recent decision to independently own National Grid’s Electricity System Operator (ESO) is so smart.

The 900 employees at ESO work out how many connections are required, whether the transmission network is resilient and where the energy comes from. vital stuff.

Instead of hitting the energy industry with more taxes, ministers should speed up legislation establishing the new ESO. Security of supply – and building up your own resources – is crucial. That would serve consumers best.

Plumbing to new heights

Richard Harpin, along with a colleague from P&G, raised £50,000 to start Homeserve more than 30 years ago.

It was a lot of money and life got so hard for Harpin that he had to borrow £10,000 from his mother, a loan she granted without telling his father.

But Harpin, who had been in buying and selling since he was young, was convinced that providing homes with an efficient electrical and plumbing repair service would work.

He was right. Harpin’s bravery has paid off, taking off his socks, getting up at 5am and flying helicopters between meetings: he and his wife will earn nearly £500million together after Canadian company Brookfield confirms its £4.1billion takeover bid Has.

Harpin – who I interviewed years ago at the Imperial War Museum in Duxford because it was a convenient place to land his helicopter – is excited about the deal.

The price is more than fair, he says, and investors got a 9,800x return. Now what for Harpin?

He’s not sure, but he will continue to invest his fortune in UK start-ups and continue his work to persuade government and schools to help more young people learn skills, particularly in the construction industry. This man needs to be cloned.

Schroeder’s shame

Germany’s former Chancellor Gerhard Schröder says he doesn’t do mea culpa. So it doesn’t bother him that the federal government is stripping him of his parliamentary privileges as punishment for his close ties to Russia’s Vladimir Putin.

As one of those privileges, Schröder has the use of six rooms in a building in a posh part of Berlin – near the Russian embassy – which costs German taxpayers around 407,000 euros (345,000 pounds) a year. That will be taken away from him, but he is said to receive his ex-Chancellor’s annual stipend of 8,300 euros.

Schroeder, who is still CEO of oil giant Rosneft, is unlikely to be affected by criticism from the government.

On the contrary: His connections are getting closer. He is due to be elected to Gazprom’s board of directors in next month’s elections. Schröder isn’t “guilty” himself, but at least Olaf Scholz is sharpening his claws.

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MAGGIE PAGANO: Ignore fanatics’ calls for windfall taxes on energy companies

Source link MAGGIE PAGANO: Ignore fanatics’ calls for windfall taxes on energy companies

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