The issue with windfall taxes is that it puts companies off investment, if they know that any profits are going to be taken away on the whim of government policy. I watched the Panorama programme last night and although Shell and BP have made vast profits, the programme didn’t point out that where wholesale gas prices have been at record lows over the last few years, producers have really suffered (and we wouldn’t want to subsidise them in tough times !) So if they have to take the pain when prices are low, and then get hit unexpectedly when prices are high, there’s no incentive to invest - or even to exist at all. And even Shell and BPs vast profits (this year) are small in comparison to the cost of the scheme which is estimated to be £130-£200m.
As for energy suppliers, they make less than £10 per customer per year on supply, so it’s not possible to windfall tax them. In fact, they are under huge strain from collateral requirements at present so are still struggling to survive in some cases.
Some generators/producers hedge production so aren’t making £££ (because they’ve essentially ‘fixed’ the price they are paid) - here, the banks are making the money. That’s why it’s difficult to tax electricity generators.
I think on balance it’s a good scheme to help customers at a time of need, but I think it will be repaid through future bills if prices drop, and taxes if not. I guess it will incur interest too, so will be more expensive for end consumers, and obviously it is still really important to use less. I don’t think the government can win here - but I accept people just see windfall taxes as an easy option but they really are not.
I think the government is keen to get something out quickly, maybe standing charges will be reviewed in due course…..