Energy policy and why no windfall tax

It would be safe to say that the government's energy announcements yesterday have not set the world alight.The main issues being that first of all this is going to take time to implement,some estimates are saying that less than 150,000 are going to be able to take up the insulation schemes that may reduce bills by up to £300 a year.
Secondly it is becoming that the energy companies may simply be passing this cost onto the consumer.

The Independent this morning reports that

David Porter, chief executive of the Association of Electricity Producers, warned that whenever costs were imposed on an industry "the bill to some extent always ends up with the customer". Mr Porter, whose members include E.ON, Centrica, EDF, Scottish and Southern Energy and RWE Npower, said: "In the end, somebody has got to pay for this." Electricity suppliers "will try to contain this because they have to, but it remains to be seen just how much of it ends up on the customer's bill in the longer run".

Undoubtedly the question will arise as to why the government did not revert to the tactics of the windfall tax.

Writing in this morning's FT,Ed Crooks concludes that even though

Gordon Brown began hatching his plan to drag more money out of energy suppliers to help with fuel bills even before he was prime minister, in autumn 2006.

That he has ended with a programme that falls well short of many Labour supporters’ ambitions is a testament to the vigour with which the energy companies have fought their corner, and to the formidable administrative difficulties involved in making them pay.

As I have written before,the policy is an example of some medium term thinking as opposed to short term headline hitting measures.
Brown now has to be on his guard against a cold winter and deaths of old people.The headlines will be cutting and savage if that happens