I've recently blogged on this issue and since posting it I've had some time to consider my opinion further. After visiting the statement-not-substance facebook group to ask for clarification about what the aims are of Compass, and those that support a windfall tax on energy and oil companies, also asking in several other blogs for a greater idea of the figures and strategy, I've come to the conclusion this is a very dangerous proposition to be supporting.

The reasons for this conclusion? Firstly, the figures...they don't add up, especially when you consider how little Compass and other supporters of this windfall tax actually talk about figures other than taking corporate profits completely out of context. Secondly, mixed messages. The call for a windfall tax is a catch-all political statement rather than a real solution, much like the everything to every person Lib Dem transport policy. And finally time-scales, if this truly is some level of mass altruism based upon a belief that only Labour (or the left) can solve the world's problems then it's missing the point of who is really going to benefit from this move at this time.

The figures

When it comes to figures I'm normally one of the first to say that it is not the place of the public to try and come up with a magic figure, and I stick by that. However if you're an organisation such as Compass, being backed by one of the biggest papers in the country, then you need to provide at least some idea of direction for the finances of any windfall tax and just how much you're aiming to syphon off from the companies involved. So far no-one has been able to even be courteous enough to reasonably acknowledge this point.

It is often being shouted about how the evil oil and energy companies are making £1000 every second, and no doubt they are also raping children and eating kittens too, but what does this actually mean? In the UK you're talking about profits from the big oil and energy companies, collectively, of around £30bn right now. These are profits that may be rising for oil companies but are falling and will be falling for the energy providers. Compare this profit figure to the level of renewable energy Compass make us aware of the UK wishing to achieve by 2020, a level of 15% from an alleged current 2%.

So how much money is needed here? A recent example of a wind-farm that would provide 1% of our energy nationally costs £2bn to make. To make up the 13% increase in renewable energy we're talking about the need for a £26bn investment. This is a figure that is clearly in the region of 90-100% of all the profits the companies would make in a whole year, highly unrealistic. So what is acceptable? 10% Windfall tax to secure a measly 1-2% energy security? 20%, 30%? Why do we not seemingly have any concrete call on just how much Compass believes these companies should be providing for the country through enforced investment?

This isn't the only place that it doesn't make much sense to concentrate on the creation of renewable energy sources, and encroaches slightly on the whole "mixed messages" aspect I will come on to. Spending £2bn on a wind-farm secures 1% of our energy in the UK. This will not, arguably, bring prices down for anyone at this stage. I'm happy to hear some debate on this issue but I know economists are somewhat split on just how useful wind-power is to helping us as consumers rather than us as citizens of a cleaner earth. Even if it did bring down prices significantly for 1% of all of the UK, there is no guarantee that the 1% affected will actually be the poor without stricter regulation. And finally even if it did affect the poor you're talking about (and be aware my figures are roughshod) a method of helping the fuel poor in a method which is somewhere around 3 times less efficient at saving needy people the money they can't afford.

This all assumes, of course, that the government isn't meeting it's targets along with energy companies, that the renewable contribution isn't the 8% that the industry claims (rather than 2% that Compass claims) and that no money from this windfall tax is spent at all on helping the poor with their energy bills.

The direction?

So, as the discussion over figures suggests above, there is a conflict here about exactly what it is this windfall tax is meant to achieve and indeed who is meant to benefit. Is the statement purposefully vague to allow both environmentalists and those passionate about social welfare to jump on the same bandwagon? It's such a shame then that one party at least will end up disappointed even if the tax does happen.

On one hand the aim is to take money away from the energy companies and to put it in to renewables...but...who exactly is going to be contracted to construct, maintain and run these power facilities? The best case scenario is the companies you've just taxed, in a sense taking their money to perform a political handstand while at the same time giving it back to them. In fact, it'd only be to one or two of them so it would be state interference in profit redistribution through a one off regulation. Who would win or lose, whichever company bowed down the most to providing pittance financial gestures in the future no doubt.

That is if any UK companies even get the contract, in the past US firms have been handed the opportunity to make profit from UK residents like you and me, so the idea that these wind farms are some kind of UK asset that we all benefit from is a little wide of the mark. Either way you're simply shifting money around amongst the people already causing the issues.

Perhaps this is where the other part of the message comes in, regarding programmes for energy efficiency in the home. Here is where the movement makes a little more sense as changes to the way we maintain our homes is possibly the most efficient usage of any such money when it comes to social welfare. However it does ignore that there are houses that simply are not built to retain heat, and that the people living in those houses are usually the most poor paying through the nose on pre-payment meters. I'd not stand in the way of some kind of increase in the government initiatives already existing but there are much better ways to fund this, for instance by scrapping the current practice of taking over £200m of rental income from council housing and taking it AWAY from those that have provided the profit.

But then off the side of this there is all the talk of people in fuel poverty, and indeed a windfall tax of a substantial margin (33%) could actually lift every household out of fuel poverty...for one year. Hardly a long term solution, but then you have to wonder how many are joining support for this taxation because they are simply disgruntled that some companies make so much profit legitimately and would welcome a simple larger tax every year?

The message is wishy washy, the main front seems to be a push for renewables in what is ultimately a limited positive outcome situation, especially when you consider who the winners would really be from such plans, yet even the more accessible parts of any windfall tax plan are limited in scope or time-scale.

The wind-fallout

Despite any of the above issues, even if the windfall tax was implemented successfully as Compass wish...

Therefore much of the money raised should be used to kick-start a national programme of home energy efficiency and installing renewable energy

You're talking about kick starting a programme of changes that will roughly take three years to complete even first stages (for installing infrastructure) and is unlikely to affect anyone, through home efficiency programmes, that isn't traditionally a Labour supporter before a general election. The real winners from any windfall tax is actually the Tories, they get all the benefits of a government spending money from various corporations while at the same time being able to turn around to those same businesses and say "shit, sorry mates, wouldn't have happened on our watch...here have some tax breaks!"

There have been those that have said this is a political statement, not one grounded in actually trying to make economic changes to benefit this country. I completely agree, but also absolutely can't believe how short sighted and almost defeatist such a political stance is. No doubt Compass do feel they will change the world, spurred on by Obama-esque policy demands, but it is simply misguided.

Compass and the supporters of this movement think they'll be promoting social equality, left wing power and a socialist warm feeling to all...in reality they'll be painting Labour in to a corner in an attempt to tempt out the more left leaning leaders to take charge of a dying party, while at the same time handing power to a group I'd say is distinctly on the opposite of their aims.

The politics don't make any sense beyond the surface of appealing to the public's innate wish for a "fairer" financial situation; the direction is muddled and unclear, the strategy is non-existent and the end product hasn't been considered. Support a windfall tax at your peril, at best you'll be simply forcing companies to do what they're already doing and change nothing, at worst you'll achieve everything you want and hand the Tories a second term on a platter as bills fall.