Energy companies may be one step closer to windfall tax

Gordon Brown is facing the prospect of a major defeat over the government's reluctance to impose a windfall tax on energy companies, it has been reported.

Gordon Brown is facing the prospect of a major defeat over the government's reluctance to impose a windfall tax on energy companies, it has been reported.

The prime minister will be challenged by trade unions and constituency MPs alike, who are pressing the Labour leader to announce a vote on the issue at the Labour Party's conference in Manchester next month.

Yet Mr Brown has already had his ear bent this week by members of the City of London, who have argued that a windfall tax would simply lead to further higher prices and would not benefit the poor.

Business secretary John Hutton has already voiced his opinion that the government should not impose a windfall tax, arguing that such a move would scare investors away from the UK energy market.

"What we shouldn't do is create a climate that makes it harder to attract new investment," he suggested.

The TUC has its conference on September 8, which could add further pressure to the government to call a vote on the issue, which would no doubt lead to a windfall tax.