Comment: Labour can't separate the utility sheep from goats

'Airports cannot be defined as a utility, Sir John Egan argues, nor does BAA have a monopoly. So where are the transatlantic jumbos meant to land: Biggin Hill?'

When is a utility not a utility? Come to think of it, when is a monopoly not a monopoly? When there's a windfall profits tax in prospect seems to be the answer. Sir Iain Vallance's extraordinary assertion yesterday that he would not have voted Labour had he realised it might try and hit BT with its proposed windfall tax on the excess profits of privatised utilities rather begs the question of why he thought he was going to escape it in the first place.

The answer he gave yesterday was that BT is neither a utility nor a monopoly, an argument which intriguingly is also used by Sir John Egan of BAA (the former British Airports Authority). To Sir Iain's mind, running a public telephone network is apparently not the same thing as running a utility. Nor does having 90 per cent of all domestic telephone subscribers add up to being a monopoly. Mmmm. Sir John uses much the same fuzzy logic. Airports cannot be defined as a utility, he argues, nor does BAA have a monopoly. So where are the transatlantic jumbos meant to land: Biggin Hill?

Leaving aside this slightly unreal debate in semantics, there's more than a chance that the real source of Sir Iain's misinformation was the horse's mouth itself - Tony Blair. Mr Blair is temperamentally against the tax, which he rightly sees as arbitrary and oppressive. But the money for welfare to work has to come from somewhere, so he accepts it as a necessary evil. However, to Mr Blair's mind there are good utilities and bad ones; BT falls into the former category, for it operates in a competitive market place and is a company Britain can justifiably be proud of.

At the genesis of the windfall tax policy, then, there was a good chance of BT being excluded. Mr Blair even hinted at it in his various public pronouncements on the tax. Then along came the problem of definition - how to distinguish the privatised companies Labour does want to hit, without actually naming them, from those it does not. It proved an impossible task. Furthermore, Labour has been subjected to a furious lobbying campaign from those who always were going to be hit to spread the net as widely as possible.

The upshot is that Mr Blair has lost the argument to Gordon Brown and BT is now very definitely to be included. What this will do to the love affair between BT and New Labour is anyone's guess. Sir Iain insisted yesterday that despite the possibility of taking legal action against the Government, he wouldn't be taking his ball away. He still wished to establish a close working partnership with the new administration.

The damage has nonetheless been done. In terms of public relations, it really wasn't a smart move for Sir Iain to come over all indignant about the windfall tax on the day the company announced a pounds 3bn profit. Indeed his comments could reasonably be described, as they were by Government sources yesterday, as politically naive. Other utilities are choosing stoically to swallow their medicine in public while complaining loudly in private. Given that there is absolutely nothing anyone can now do to stop the tax, that would rather seem to be the more mature and fruitful approach.

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
News
i100
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
Sport
Lionel Messi looks on at the end of the final
football
Extras
indybest
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments