City attacks Brown on windfall tax

The City of London has launched a campaign against Gordon Brown in order to convince him that introducing a windfall tax on energy companies should be avoided.

The City of London has launched a campaign against Gordon Brown in order to convince him that introducing a windfall tax on energy companies should be avoided.

The campaign is being stepped up after 80 Labour MPs signed a petition arguing for the introduction of a windfall tax, following Centrica's billion-pound half year profit results, amid record price hikes.

Speaking about the issue, John Cridland, deputy director-general of the CBI employers' organisation, said that the windfall tax would simply lead to further high prices for consumers, but would also turn investors off of British energy companies.

"The energy industry is one where profits are very volatile from one year to the next, so it’s important the UK is seen as a stable, fair and predictable place to do business," he argued.

However, with the prime minister looking worse than ever in the polls, it is likely the fact that the legislation has been dubbed ''populist'' is going to be seen as a reason to do introduce it, rather than a reason to shy away from it, for Mr Brown.

The government has already recently suggested more investment should be made by energy companies to provide insulation to homes of the poor, who cannot afford higher utility bills.