Windfall tax won't ease utilities pain

Given the extent to which millions of households are struggling to meet rising utilities commitments, it would likely be difficult to find many consumers who are not in support of the ongoing calls for a windfall tax to be imposed upon supplier.

Having already won the support of 80 MPs, with many more expected to join in once the summer parliamentary recess ends, the Compass campaign argues that the better-than-expected profits posted by a number of energy and gas firms over recent weeks should be subjected to a sizeable one-off tax so as to help out the most vulnerable in society.

According to campaigners, such a step would be vital in ensuring that millions of pensioners and households on low incomes don't fall into the 'fuel poverty' trap, whereby ten per cent or more of their monthly income goes on paying for gas and electricity.

As yet, neither Downing Street nor the Treasury have moved to quash speculation that a windfall tax will be passed for the first time since the utilities industry was privatised many years ago.

However, business secretary John Hutton as now made clear his view: a windfall tax would be damaging to the UK economy and, perhaps more pressingly, would do little to help those having a tough time coping with soaring bills.

Indeed, in an interview with the Daily Telegraph, the minister warned that things may even get tougher, claiming that the days of cheap energy are now well and truly over.

"There is genuine concern about the difficulties that people will face paying their heating bills over the coming winter and we are looking at extra support," Mr Hutton acknowledged.

He added, however: "What we shouldn't do is create a climate that makes it harder to attract new investment: The new nuclear investment, the new renewables investment, the new investment in clean coal and gas."

As before, Mr Hutton confirmed that some £100 billion is due to be spent on the UK energy industry in a bid to cope with rising demand as well as cut back on reliance on overseas sources and environmental impact.

While this is encouraging for the long-term, it would appear that, for now, consumers will have to look after themselves, and one of the most important steps to take is shopping around and signing up to the best gas or electricity tariff.

Should the government give in to calls for a windfall tax, this should be seen as a bonus for consumers.

As things stand, Britons would be well-placed to plan for the worst and switch to the cheapest utilities supplier rather than hold out any hope for a financial helping hand anytime soon.