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Mark Drakeford dismisses call for power to tax energy firms to be held in Wales

16 Feb 2022 4 minutes Read
Adam Price picture by Plaid Cymru. First Minister Mark Drakeford AM. Mark Hawkins / Alamy Stock Photo.

Mark Drakeford has dismissed a suggestion that the power to tax and regulate energy firms should be held in Wales.

The First Minister was asked about the subject by Plaid Cymru leader Adam Price, amid a stark rise in energy bills for households in the UK.

During a session of First Minister’s Questions, Price argued that if that power was held in the Senedd instead of Westminster, energy firms could be slapped with a slapped with a hefty “windfall tax”.

But in response, Drakeford suggested that whether Wales has the power to do that “is not the central question”, and argued that “it’s simply a matter that we need a Government in Westminster prepared to do the right thing.”

The UK’s energy sector regulator, Ofgem, said on Thursday that its price cap would be raised by 54%, an eyewatering as well as record-breaking increase.

The average household’s annual energy bill is currently between £1,277 and £1,370. The increase in the price cap means many households could see their energy bills rise by around £700 a year.

Tessa Khan, an international climate change and human rights lawyer and founder of anti-poverty campaign group Uplift recently described the profits of oil producers as “obscene”.

This was in response to the news that oil giants BP and Shell are on course to make a combined profit of almost £40bn this year from the rocketing price of petrol and gas.

Adam Price said: “Many people will have seen Andy Davies of Channel 4’s sobering film of his visit to Penrhys last week—a community already struggling now perched on the precipice of poverty the likes of which we certainly haven’t seen since the 1980s.

“Last week, the House of Commons voted in favour of a windfall tax on energy companies. The UK Government has said that it will ignore that Parliament in the same way that it does this. Spain has cut VAT on energy, but the UK Government will not, despite Johnson and Gove’s pledge to do so post Brexit. France has capped the rise in energy bills to 4 per cent, while in the UK they will rise in April by 54 per cent.

“Do you think the powers to tax and regulate the energy sector, to set a windfall tax, to cut VAT, to set a price cap, and, if necessary, to restore public ownership, should reside here in Wales where we can use them, or lie in Westminster where they won’t?”

‘Not the central question’ 

Mark Drakeford said: “Well, Llywydd, for me, that is not the central question. I agree very much with what the leader of Plaid Cymru said in the first part of his question, that there is a wide range of actions that the current UK Government should and ought to take to deal with the Tory cost-of-living crisis.

“It’s the policy of my party that there should be a windfall tax on the gross profits that are being made by energy companies who profiteer from the rise in prices, just as people in Penrhys and other parts of Wales suffer from them.

“My colleague Julie James wrote to the Minister in the Department for Business, Energy and Industrial Strategy back in January, setting out five separate practical courses of action that could be taken in order to alleviate the impact of fuel and other price rises on households in Wales.

“That did include reductions in VAT, it did include a differential cap on price rises to protect the lowest income households, it talked about changes to the help that is available through the Westminster Government, it made suggestions about the way in which people who owe money already to fuel companies could have those debts dealt with.

“For me, it’s not a choice between whether the power should be in Wales and exercised here, it’s simply a matter that we need a Government in Westminster prepared to do the right thing.”

In a statement on Thursday, Jonathan Brearley, CEO of Ofgem, said: “The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.

“Ofgem is working to stabilize the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”


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Richard Jenkins
Richard Jenkins
3 months ago

Pathetic! No other words can describe this lickspittle abdication of responsibility for our welfare. He happy to see the people suffer rising bills & gut wrenching heat or eat choices than to question his political masters in Westminster! Tories have won 20 of last 28 GEs. He wants to sacrifice Cymru to the U.K. Labour Party forlorn hopes of being & staying power in England.

GW Atkinson
GW Atkinson
3 months ago

Coward and a weakling. He isn’t prepared to work in our favour and wants to leave it to a government that won’t ever do this. He has just shafted us and doesn’t care that this will affect everyone in Wales. Worm.

Gareth
Gareth
3 months ago

Protect the union at not just all cost, but in particular our cost. Just as with the Jo Stevens article, the union trumps Wales at every turn in Labour thinking, for those in a position to help overturn it.

Quornby
Quornby
3 months ago

Mark…. Have you learned nothing…. Governments in Westminster NEVER do the right thing as far as Wales is concerned. It’s time for an autonomous, self funding, Indy supporting Welsh Labour party. Anyone expecting Starmer to “do the right thing” is courting bitter disappointment….. Remember the Aberfan fund theft? I do.

Leigh Richardss
Leigh Richardss
3 months ago

“We need a Government in Westminster prepared to do the right thing” says Mark Drakeford, in which case we’ll be waiting forever – when has Westminster ever done the right thing for Wales? Being locked in a abusive realationship and not being able to see it is known as Stockholm syndrone. In view of comments by Mark Drakeford and Jo Stevens this week it’s clear that in spite of promising noises about Welsh indy recently from the likes of Beth Winter the Welsh labour party is still suffering from a severe case of Stockholm Syndrome ☹️

Last edited 3 months ago by Leigh Richardss
Cynan
Cynan
3 months ago

I like MD. He got us through Covid when the clot next door was gambling with people’s lives to save his majority.

But he is wrong on this. “What we need is a central government which will do the right thing”. WE DON’T HAVE THAT THOUGH. So we need to act on where we are, not where we want to be. Take ownership of taxation on companies in Cymru

I.Humphrys
I.Humphrys
3 months ago

Back to ” Doormat Drakeford” again, pity. We must now get real and push Yes Cymru and Plaid, Gwlad whoever to get Independence. Good luck to Labour for Indy, but the rest of us have to regard Labour as foot draggers who are prepared to see poverty, which has always brought them votes in Cymru. It’s a type of moral corruption. I am more inclined to Gwlad right now, as Adam looks weak, even against Doormat?

Last edited 3 months ago by I.Humphrys
G Horton-Jones
G Horton-Jones
3 months ago

Mark
Devolution means simply the we in Wales back our own people first and last
Much as you must be conflicted re the wider Labour Party of the past we in Wales have to distance ourselves from English Labour who have their own countries interests at heart and not ours

Kerry Davies
Kerry Davies
3 months ago

I want to move Wales toward Independence but until that inevitable time a little more thought than knee-jerk reaction would be useful. Adam threw out a political red herring about some fantasy Wales suddenly gaining the power to levy windfall taxes on companies who pay none here in the first place. Mark responded by saying that first off we need to get our elected government in Westminster to do their job. He, and Wales, are already shouldering much of the burden that rightfully belongs in Westminster. Be that pandemic costs, rail investment or cost of living funding. I can see… Read more »

I.Humphrys
I.Humphrys
3 months ago
Reply to  Kerry Davies

Surely it’s Utopia to trust the lying Tory foreigners?

Ernie The Smallholder
Ernie The Smallholder
3 months ago

Wales should have the power to raise our own taxation, corporation taxes, income tax, decide on our method of local taxation etc. The only problem here is that most oil & energy companies are multi-nationals. They pay taxes in their country of residence. Yes, levy a tax on excessive profits on trade done within our country. Help could be given to all as a UBI (Universal Basic Income), but this is only a first stage solution. There needs to be a real redistribution of wealth and power. A redistribution of wealth using UBI alone wouldn’t work unless the Welsh public… Read more »

Padi Phillips
Padi Phillips
3 months ago

I don’t somehow think that capitalism is the answer. The energy companies need to be socialised and turned over to the workers and any operating surpluses used for the betterment of the people.

Gareth W
Gareth W
3 months ago

Let’s be honest Drakeford doesn’t want too much responsibility, he’d prefer a quiet life

Llywelyn ein Llyw Nesaf
Llywelyn ein Llyw Nesaf
3 months ago

All together now with Drakeford…

Now I’m a union man
Amazed at what I am
I say what I think
That indy stinks
Yes I’m a union man.

Oh you don’t get me I’m part of the union
You don’t get me I’m part of the union
You don’t get me I’m part of the union
Till the day I die, till the day I die.

Dai Rob
Dai Rob
3 months ago

“it’s simply a matter that we need a Government in Westminster prepared to do the right thing.”
AINT. GONNA. HAPPEN.

Non DAVIES
Non DAVIES
3 months ago

Time to smell the apathy. We need a Government in Wales prepared to do the right thing! Plaid should be challenging the direction and lack of scrutiny of the Future Wales Plan 2040 which enables multi national venture capitalists to bypass local democracy and place 250 metre high turbines within 700 metres of homes, scarring landscapes, individuals and communities. Energy and money flowing from Wales.

Mawkernewek
2 months ago

“it’s simply a matter that we need a Government in Westminster prepared to do the right thing.”

Seeing devolution as Wales being a supplicant to an indifferent or hostile Westminster is still Mark Drakeford’s worldview, despite all the talk about Welsh Labour going over to a soft Welsh Nash position?

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