Over 70 MPs back utilities windfall tax

More than 70 MPs have signed a petition asking for a windfall tax on utility companies as household bills continue to rise.

Pressure group Compass has organised a petition to levy a one-off tax on utilities, which would be used to help poor households.

British Gas, EDF and Scottish and Southern Energy have all put their gas and electricity prices up recently, while record profits from oil companies BP and Shell led to calls for a windfall tax from trade unions.

However, chancellor Alistair Darling is opposed as it could harm investment in the energy sector.

Energy firms are also, unsurprisingly, against the proposition.

David Porter, chief executive of the Association of Electricity Producers, said: "'Windfall' taxes are not a measure that should be associated with a G8 country.

"Retrospective penalties like that send out a dreadful signal about investment in the UK. Every million pounds squeezed out of the electricity industry is a million pounds that is not available for investment in new power stations."

Gordon Brown is said to prefer charging for 'emissions permits' as a way of raising capital from the firms, rather than a tax.

The permits, created as part of the EU's carbon trading scheme, were initially free but ministers intend to auction seven per cent of them.

In a statement, Compass said: "We believe the moment is right for the government to levy a sensible one-off windfall tax to guarantee social and environmental justice both now and in the future."

Revenues could be used to pay for improving insulation in British homes and investing in renewable energy, the left-wing lobbyist said.