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Britain mulls windfall tax on oil firms

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Lindsay Hoyle, an MP behind the petition, concedes that companies should have a right to make a profit. "But these are excessive profits and immoral wages being paid to chief executives," he says. A windfall tax is necessary, he says, because "what we are talking about is whether people can have their heating on as we go into winter."

He argues that even though oil prices have retreated sharply from peaks above $140 a barrel, utility companies are still raising prices. Key providers have recently told customers that prices will rise by a third or more as winter approaches.

"There is a credit crunch and we all have to tighten our belts, but [firms] are tightening other people's belts."

The energy industry is protesting that the move would unjustly penalise companies, discourage investors at a time when billions are needed to upgrade energy infrastructure, and unfairly intervene in the normal risk-reward capitalist paradigm.

"The impact of higher energy bills is a problem, but, in today's volatile political environment, we need to think more carefully about how we solve it," says David Porter, chief executive of the Association of Electricity Producers. "A windfall tax would be neither just, nor sensible. It would also send out a very negative signal to investors."

The issue drives at the heart of a fundamental question about capitalist democracies: To whom is a company answerable? The answer is normally those who underwrite its risk – the shareholders. And indeed, if a retailer or restaurant chain suddenly landed in good times with profits soaring, few would call for a windfall tax on them.

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