In an article on The Guardian newspaper’s website on 7 August 2008, Chuka Umunna, Labour’s Parliamentary Candidate for Streatham, wrote:
“Shell, BP and Centrica (which owns British Gas) reportedly made £1,000 every second of the day for the first six months of this year. To put this in context, what BP presently makes in profit every month is roughly equivalent to what my local council, Lambeth, spends on running local services every year.”
Every 10% increase in energy prices leads to an extra 400,000 people joining the 2.5 million already living in fuel poverty in Britain today. In the piece, Umunna wrote:
“People living in communities like mine in Streatham, containing some of the most deprived wards in the country, are struggling to cope in the face of these price hikes - they are being clobbered.”
In addition, there is a lack of investment in securing renewable energy to help Britain become energy independent and more carbon neutral. By 2020 the UK wants 15% of all energy to be from renewable sources - this is currently only 2%.
Umunna has therefore called on the government to levy a windfall tax on the energy companies. Commenting on the move today, Umunna said:
“I am in the business of politics because I want to build a fairer, more equal, democratic and sustainable world for people here - I think this necessitates, amongst other things, government intervention where appropriate, which is I am calling for this measure.”
“The point is not to punish the energy companies – the winners in this situation - for their unearned fruits, or even that the increase in global fuel prices is their fault; the point is that those fruits should be spread more widely to relieve the burden on the many residents in Streatham, Brixton, Clapham, Tulse Hill and beyond who, faced with these huge price rises, are the loosers here.”
“Revenues from this tax should, in the short term, be ring-fenced to immediately help those struggling with rising fuel bills and to ensure every home is insulated and energy efficient to the highest standards; long term, the proceeds could also be invested in renewable energy production.”
Umunna is a signatory to a statement published in The Guardian on 6 August 2008 calling on the government to introduce such a windfall tax. The number of signatories continues to increase and includes fellow London Labour politicians, Jon Cruddas MP, the former Labour deputy leadership candidate, Diane Abbott, MP for Hackney North and former deputy mayor of London, Nicky Gavron AM.
Umunna’s call for the windfall tax has won support from local residents. Charlene Smith, a resident of Streatham Hill, said: “It’s affecting my family because it’s adding to the rise in prices with inflation. Companies with lots of money can help. It’s a good idea to give some back to people.”
Janet Chambers, a resident of Clapham Common, said: “I think the companies who make mega profits should be part of helping people who are struggling.”
Keith Lillis, another resident of Streatham Hill, said: “Shareholders and managing directors need to be prepared to see some of their extra profits come back to people who need it. A windfall tax is a good thing if this happens.”