Brown faces rebellion over windfall tax on energy firms

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Gordon Brown faces an embarrassing defeat at next month's Labour Party conference over the Government's refusal to impose a windfall tax on the energy companies.

Supporters of a one-off raid on energy firms to fund help for people paying soaring fuel bills are planning to force a vote on the issue at Labour's Manchester conference, which opens on 20 September. They claim strong and growing support for the idea among trade unions and Labour constituency parties – which each have half of the votes at the conference. And the TUC conference, which begins on 8 September, is expected to endorse a call by the Unite union for "a windfall tax on the huge profits of energy companies," which have been accused of exploiting the rise in oil prices.

Although government sources say a windfall tax is under consideration, cabinet ministers fear thatenergy firms would pass on the cost to consumers. John Hutton, the Secretary of State for Business, suggested yesterday that such a tax could scupper hopes that £100bn would be invested in nuclear power, renewable energy and "clean coal" over the next 10 years. He said: "What we shouldn't do is create a climate that makes it harder to attract new investment."

Compass, a pressure group based on the left of the Labour Party, has won the backing of 93 Labour MPs for a petition calling for a windfall tax. It is to circulate to local parties a draft resolution calling for action on fuel poverty at the Labour conference .

The group plans to press ahead even if the Government announces a scaled-down version of a windfall tax before the conference.

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