The energy windfall tax will harm net zero

There’s no pleasing some people. Back when the government still believed windfall taxes were a terrible idea, the Scottish National Party was insisting one be imposed to help tackle the cost of living.

In March, the SNP’s Stephen Flynn asked in the Commons: ‘Is it right that those who have benefitted from the pandemic… are able to benefit while our constituents are struggling? Absolutely not.’ The previous month, Nicola Sturgeon tentatively voiced support, arguing oil and gas firms should ‘absolutely’ be asked to pay more to alleviate the crisis. How unexpected, then, to see the SNP’s work and pensions spokesperson Kirsty Blackman launch repeated attacks on the levy in the days after the Chancellor announced it would be introduced.

Perhaps any criticism of the policy should be welcomed. Though they might play well to some parts of the electorate, windfall taxes are damaging and inefficient. They distort investment and send a message to businesses that government will reserve the right to impose a retrospective and arbitrary tax whenever they feel the urge.