Gordon Brown has ruled out a handout to help people with winter fuel payments a few days after his office was insisting that he definitely wasn’t. Add those two together and you have the possibility of a windfall tax which will only be used to reduce the PSBR. Since this would almost certainly be total insanity, I think we can safely say that the windfall tax won’t be happening no matter how hard Labour backbenchers stamp their feet.
I agree with Nick Clegg: there shouldn’t be a windfall tax but utility companies need to do much more to help people insulate their homes and tackle fuel poverty. Slooshing the money in and out of government coffers would be pointless even if it wasn’t likely to end up getting held up to pay for something else.
What interests me about this story though is how upfront Compass have been about pressuring Brown and Darling on the specific issue of a windfall tax. Superficially I can see why it ticks all their boxes; Compass has gone a long way from its original founding statement (pdf). This was steeped in liberalism. Since then, they have literally leapt into bed with the Tribunite left (the very thing that Lawson et al were denouncing in the 90s) and shown that when it comes to liberty, they are very fair weather friends.
They are very good on coming up with ‘solutions’ while Progress and whingers like Charles Clarke are notably silent when it boils down to specifics. But that doesn’t mean they are the right answers. Worse, the demand for a windfall tax has left Brown in a no-win situation. Either he refuses their demands and faces a backbench rebellion or he capitulates and looks weaker than ever. Frankly, given the parlous situation he’s in, I’m amazed that Compass think that Brown will ever conclude that the latter is the lesser of two evils. If he were to give in, after giving earlier this year on income tax and raising duty on petrol, his authority would be shot to pieces.
It’s weird, because I didn’t see it coming, but Labour is now tearing itself apart in a remarkably similar way to how the Tories destroyed themselves in the mid-90s. At least with the Tories it was over fundamental points of principle; with Labour at the moment it is more steeped in tactical judgement. There certainly are differences of principle, but that debate isn’t really getting a chance to get going while this agonising dispute about tactics and process rages.
All Charles Clarke provides us with is another frustrated ex-minister. Nothing new there. Compass offer Labour something far worse: an alternative power base. In the longer term that may be in Labour’s interests: a bit of ideological purity might be the only thing that holds the party together in the upcoming wilderness years. But at the same time, let’s not kid ourselves, it is helping to secure a Tory victory.