U.K. Needs Windfall Tax on Nuclear Plants, Coalition Party Says
The U.K. should introduce a windfall tax on existing nuclear power stations to claw back additional profits, the Liberal Democrat party said.
The party, the junior partner in David Cameron’s coalition government, passed a motion today at its annual conference in Birmingham, central England, calling for the money raised to be used to help Britain’s 5 million “fuel-poor” households.
Electricite de France SA, Britain’s largest generator with eight nuclear plants, may earn as much as 154 million pounds ($242 million) of “extra profit” as a result of a tax on carbon-dioxide emissions from 2013, Citigroup Inc. said March 25. The Treasury imposed the tax of 4.94 pounds per metric ton of emissions from fossil-fueled power stations in its budget this year. That’s had the effect of raising the price EDF can get for all the power it produces.
The so-called carbon price floor “is a great, great plan but it has one flaw, not only does it help emerging renewables, what it also does is give a lift up to old nuclear,” Liberal Democrat lawmaker Robin Teverson told delegates. “It’s wrong, it’s immoral, it’s not ethical” to use additional charges on household bills “to give new profits to old nuclear for no extra effort.”
The motion, which is not binding on Energy Secretary Chris Huhne, a Liberal Democrat, calls on the government to “introduce a windfall tax on operators of existing nuclear power stations, recovering through taxation the profits they make solely as a result of the introduction of the carbon price floor from April 2013.”
‘Low-Income Households’
It says “the proceeds of the tax should “be used to help consumers, especially those in low-income households, adapt to higher energy prices, for example through investments in improving energy efficiency.”
Britain can get about 20 percent of its power from its 10 nuclear power stations, five of which are due to shut over the next decade.
Britain’s third-biggest political party opposed nuclear power in its manifesto for last year’s election, after which it entered government with the Conservatives. The two parties agreed that Liberal Democrat lawmakers could abstain on votes on nuclear energy while the government worked to encourage it. In office, Huhne has supported efforts to build new atomic stations.
To contact the reporters on this story: Thomas Penny in Birmingham at tpenny@bloomberg.net; Catherine Airlie in London at cairlie@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net
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