Windfall tax on oil and gas will not help the poor - Bill Carmichael

They invariably apply the hammer to the nail and come up with a seemingly simple answer: higher taxes.

Whatever the problem, the formula is always the same.

Global warming – higher taxes! NHS backlog – higher taxes! Inner city congestion – higher taxes! Adult social care crisis – higher taxes!

Of course, if higher taxes did solve all our problems, then all our problems would have been solved many decades ago. But clearly that hasn’t happened.

This is true regardless of political affiliation. Despite a wealth of evidence demonstrating that low tax, high growth policies result in economic growth, the creation of jobs and prosperity for everyone, including the poor, the consensus among our political elites is that the solution for everything is to tax people until the pips squeak, and that is true whether you support Labour, the Conservatives, the Lib Dems or the Greens.

At least the Labour Party is consistent – they have always been a high tax party. But the Conservatives were elected in 2019 promising low taxes. But once in power they have delivered precisely the opposite, imposing the highest tax burden for 70 years and strangling any nascent growth at birth.

If you want to vote for a low tax, high growth party in the next general election, then you are going to have to look way beyond the mainstream parties.

The latest problem on the horizon is the massive increases in energy prices that will plunge many families into destitution this spring.

Politicians have come up with an entirely predictable solution that should surprise absolutely no one, because it consists of – yes you guessed it – higher taxes!

Labour, supported by the Lib Dems and Greens, have devised a plan to support domestic customers with subsidies funded by a “windfall tax” on the oil and gas companies.

On the surface this seems a reasonable idea. Customers are facing energy price increases of over 50 per cent, while this week Shell announced profits

of £14bn, and BP of £9.5bn.

What is wrong with taking some of this massive profit to help the poor?

OK, but let us first answer the question, who will pay this tax? I am afraid the image of the rapacious capitalist, complete with top hat and spats, gobbling up money while throwing another orphan on the fire, is nothing more than an infantile left-wing myth.

No, if you want to know who will pay the tax, then take a look in the mirror. Because you will pay this tax, either through higher prices, which completely negates the idea of the windfall tax, or in reduced dividends to shareholders.

But all shareholders are filthy rich Tories! I am afraid that is yet another left-wing myth. If you have a pension, savings or insurance policies, the chances are that they are invested in oil and gas companies and a reduction in dividends will hit you, and many ordinary people, in the pocket.

Oil and gas companies already pay a higher rate of corporation tax than companies outside that sector, 30 per cent as opposed to 19 per cent.

And the rise of gas and oil prices is already likely to result in a massive bonanza for the UK Treasury of around £3bn by April 2023.

The other point to note is that we are currently undergoing a massive transformation in our energy industry to move away from fossil fuels to lower carbon technologies. A windfall tax will reduce the amount of cash the oil and gas industry has available for investment in low carbon and renewable technologies.

So maybe the solution to this problem – whisper it quietly – is not to increase taxes but to reduce them!

The current problems with rocketing energy prices have been caused by idiotic environmental policies, such as green taxes, that have artificially raised the price of energy and led directly to the deaths of tens of thousands of poor and vulnerable people who cannot afford to heat their homes properly.

We have run down coal, without ramping up nuclear and fracked gas, leaving us reliant on volatile imported gas and unreliable renewables.

Here’s an idea: get rid of regressive green taxes, get rid of VAT, invest in renewables, nuclear and fracking, and stop persecuting people for being poor.