EU calls for money to be clawed back from energy firms, saying profits must go ‘to those who need it most’ – politics live | Politics

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As my colleague Denis Campbell reports, a review of measures intended to stop people eating too much junk food ordered by Liz Truss could result in the governing scrapping its entire anti-obesity strategy.

Polly Mackenzie, who was Nick Clegg’s policy adviser when he was the Lib Dem deputy prime minister in the coalition government, says Truss cannot abandon regulation that reduces obesity, and keep taxes low, and fund a health service able to deal with the consequences of obesity all at the same time.

Here’s the thing:

You can have a low regulation society in which people and businesses are allowed to create harms like obesity, workplace stress, air pollution.

But your health costs are going to be massive. So you need high taxes to pay for low regulation…

— Polly Mackenzie (@pollymackenzie) September 14, 2022

Now – regulation is cost, just applied differently. So people will disagree about which is better:

Tax to pay for the externalities people/businesses create – leaving more freedom for innovation.

Regulate to reduce the externalities – lowering taxes but curtailing freedom…

— Polly Mackenzie (@pollymackenzie) September 14, 2022

What you shouldn’t do (but everyone seems to pretend you can)…

Is claim it’s possible to have low tax AND low regulation AND affordable public services.

You can only have two.

— Polly Mackenzie (@pollymackenzie) September 14, 2022

Sharon Graham, the Unite general secretary, says the UK is facing a “crisis of income”. She says workers should get a better share of corporate profits.

Rocketing #inflation may have been eased last month but that won’t last. Current levels continue to threaten the living standards of millions of workers. This is now a crisis of income. 1/2

— Sharon Graham (@UniteSharon) September 14, 2022

Only the rich and powerful are protected. It’s time for the rest of us to organise into trade unions and take back our share of the corporate profits we create. #JoinAUnion 2/2

— Sharon Graham (@UniteSharon) September 14, 2022

This has parallels with the point Ursula von der Leyen was making about profits in her speech this morning (see 9.35am), although von der Leyen, a German Christian Democrat who has little in common with Graham, was just talking about the energy sector.

Government fails to deny reports businesses may have to wait until November until help with energy bills becomes available

When Liz Truss announced her “energy price guarantee” last week, households were relatively clear about what they would receive, but the promise of help for businesses was much more vague. Companies and corporate groups are still very nervous, and yesterday one trade association said its members were “at the end of their tether” not knowing if they would survive this winter.

According to a report in the Financial Times today, corporate Britain is right to be worried. Daniel Thomas, Jim Pickard and Nathalie Thomas say the support scheme promised by Truss may not be operational until November. In their report they say:

Executives have been told in recent meetings with the government of the risk the scheme may not be ready until November, although officials said they still hoped the scheme would go live next month.

“It is not worked through yet,” said one government official. “I don’t know whether it will come in before November. There’s some debate about whether it can be brought forward and happen before then.”

Truss said last week that unit prices for households would be capped, so that a typical household will pay no more than £2,500 a year on energy bills for the next year. She said businesses would get “equivalent support”. But businesses are not covered by the Ofgem price cap that applies to consumers, and the FT says “with no existing mechanism in place, ministers and officials are still struggling to work out how to limit companies’ energy bills.” The report goes on:

The government would provide energy suppliers with the difference between a new lower price and what energy retailers would otherwise charge business customers.

But while ministers have outlined this broad framework, they have yet to decide on the precise system for implementing it.

The government has not denied that the scheme may not be ready until November. A government spokesperson said officials were working “at pace” to deliver the support scheme for businesses and that details of the scheme, and timings for when it would start, would be announced as soon as possible.

EU calls for money to be clawed back from energy firms, saying profits must go ‘to those who need it most’

Good morning. There is very little public politics taking place in Britain right now (although the events following the death of the Queen are political in a broader sense, and anyone familiar with how a political campaign operates will have been watching what King Charles has been doing in recent days, no doubt with sympathy, but also immense admiration for his professionalism.) But in Brussels normal politics continues, and this morning Ursula von der Leyen, the European Commission president, has just delivered her state of the union speech to the European parliament.

There was a lot in it, particularly about Ukraine, and I will post a full summary later, but for readers in the UK what she said about energy was particularly interesting – because it was so different from what the British government is saying.

  • Von der Leyen proposed recouping money from energy companies, saying “profits must be channelled to those who need it most”. She said there should be a cap on profits for companies making energy from renewables, and she said fossil fuel companies should also make a bigger contribution during the crisis. She said:

Millions of Europeans need support.

EU member states have already invested billions of euros to assist vulnerable households.

But we know this will not be enough.

This is why we are proposing a cap on the revenues of companies that produce electricity at a low cost.

These companies are making revenues they never accounted for, they never even dreamed of.

In our social market economy, profits are good.

But in these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers.

In these times, profits must be shared and channelled to those who need it the most.

Our proposal will raise more than €140bn for member states to cushion the blow directly.

And because we are in a fossil fuel crisis, the fossil fuel industry has a special duty, too.

Major oil, gas and coal companies are also making huge profits. So they have to pay a fair share – they have to give a crisis contribution.

These are all emergency and temporary measures we are working on, including our discussions on price caps.

Although Liz Truss, the new UK prime minister, is not reversing the windfall tax on energy companies announced early this year when Boris Johnson was in No 10, in her first PMQs last week she firmly stated her opposition to windfall taxes on principle.

Think of the workers in … factories in central Italy who have decided to move their shifts to the early morning to benefit from the lower energy prices.

And just imagine the mothers and fathers among those workers having to leave home early when the kids are still sleeping because of the war they have not chosen.

This is one example in a million of examples of Europeans adapting to the new reality.

I want our union to take example from its people. So reducing demand during peak hours will make supply last longer and it will bring prices down.

This is why we’re putting forward measures for member states to reduce the overall electricity consumption.

Again, this is a contrast with the UK, where the government has been reluctant to encourage people to use less energy, or to promote anything that might smack of energy rationing.

I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.

Alternatively, you can email me at [email protected]

Ursula von der Leyen delivering her state of the union speech to the European parliament in Strasbourg
Ursula von der Leyen delivering her state of the union speech to the European parliament in Strasbourg Photograph: Frederick Florin/AFP/Getty Images

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