Tax on UK energy company profits 'perfectly acceptable' - Major
LONDON (Reuters) - Britain should tax energy firms' "excess profits" if a cold winter forces the government to increase fuel subsidies to support the elderly, former Conservative Prime Minister John Major said on Tuesday.
Major's intervention comes after three of Britain's 'big six' energy firms, RWE npower , Centrica and SSE , hiked prices by more than three times inflation.
Prime Minister David Cameron's Conservatives and the opposition Labour party are battling for the upper hand on energy policy - an issue shown by polls to be a high priority for voters heading into a 2015 general election.
Major said a cold winter could force the government to increase subsidies like the winter fuel payment, currently given to those over 60 years old and worth 100 to 300 pounds per year. A tax on profits would enable the government to claw that money back.
"I for one would regard it as perfectly acceptable for them then subsequently to levy an excess profits tax on the energy companies and claw that money back to the exchequer," said Major, who served as Prime Minister between 1990 and 1997.
"It is not acceptable to me, and ought not to be acceptable to anyone, that many people are going to have to choose between keeping warm and eating," he said.
Cameron's official spokesman described Major's plan as an "interesting contribution" but added that the government currently had no plans for such a move.
Last month, Labour leader Ed Miliband announced his party would freeze energy bills for 20 months if they won the next election, wiping a combined 2.7 billion pounds ($4.34 billion) in market value off SSE and Centrica, the two Britain-focused suppliers, in two days.
(Reporting by William James and Joshua Franklin; editing by Kate Holton)
