John Major Calls For 'Excess Profits Tax' On Energy Companies, Praises Ed Miliband

Former Prime Minister John Major at the Aquatics Centre, London.
Former Prime Minister John Major at the Aquatics Centre, London.

In a dramatic intervention, former Conservative prime minister Sir John Major has called for George Osborne to impose a windfall tax on energy firms to "claw back" some of the profits they would make as a result of a cold winter.

Speaking to journalists in Westminster on Tuesday, Sir John said the recent decision by some of the big energy firms, including British Gas and npower, to increase prices was "not acceptable" given the strain on family's budgets and praised Ed Miliband for having his "heart" in the right place.

"At the moment I do see how it can be in any way acceptable that with energy prices rising by 4% broadly that the costs to the consumer should rise by 9% or 10%," he said. "I do not regard that as acceptable at all."

He said if people were forced to choose between "keeping warm and eating" then ministers must step in to provide emergency relief in the form of winter fuel payments - which could then be clawed back by hiking taxes on the energy firms.

"When the private sector goes wrong or behaves badly I think it's entirely right to make changes. Government should exist to protect people not institutions," he said.

"Sod's law being what it is, we will probably have a very cold winter and it is not acceptable to me and ought not to be acceptable to anyone that many people are going to have to chose between keeping warm and eating.

"The government, I think, will have to intervene. And if they do intervene I for one would regard it as perfectly acceptable for them then to subsequently levy and excess profits tax on energy companies and claw back money to the exchequer where their primary goal is to get the economy working."

Sir John's intervention comes amid a political battle between David Cameron and Miliband over the high cost of living and fuel bills. The prime minister has attacked the Labour leader's proposal to freeze energy Bills as a "con" - while Miliband has accused Cameron of having no solution to the "crisis".

And Sir John said while he thought Miliband's particular solution would not work, he praised the Labour leader for focusing on the issue and that people should not face the prospect of going "cold and hungry"

"His heart was in the right place, his head had gone walkabout," Sir John said. "But he did touch on an issue thats very important."

The former prime minister, who served in Downing Street between 1990 and 1997, said it was wrong that politicians feared backing ideas generated by the Opposition. "It isn't the case that any one political party has the monopoly on wisdom," he said.