David Prosser: The Chancellor's tale of two windfall taxes

Click to follow
The Independent Online

Outlook Mr Osborne is part of a Government that professes itself to be determinedly pro-business, but it is striking that the Coalition hascomprehensively outdone the Labour administration that took office in 1997 when it comes to raising tax from corporations.

Tony Blair's government managed just one windfall tax, on the energy companies, and it applied for one year only. The current administration, by contrast, has targeted both bank and oil companies with special levies, and they are payable throughout this Parliament (and presumably beyond). Both industries face bills in excess of £10bn before the next election.

It will be interesting to see now whether companies such as Statoil, which said yesterday that the £2bn tax on North Sea oil production announced last week had forced it to put at least one major project on hold, get a more sympathetic hearing than the banking sector, whose members are prone to hinting they might quit the UK in the face of the banking levy.

After all, while the oil industry has plenty of detractors, it hardly played the same role as the financial services sector in the crisis that caused the recession for which the bill is now landing. Why should it be singled out as a sector that should pay more than its fair share of that bill?

Comments