Here's another difficult question for you, Stan.

The Early Day Motion proposed by Fabian Hamilton on this subject includes the following - "energy providers' profits have risen from £557 million in 2003 to over £5,000 million today".

Now we are talking about an industry which has not grown by one iota in terms of provision of product during the period from 2003 to now, and yet whose profit has increased by NINE HUNDRED PERCENT.

Would you care to explain or justify that ? I mean, we're talking about an accumulated INCREASE in profit over the period of about TEN BILLION POUNDS !!!!! Straight out of our pockets and into theirs - the directors and the shareholders.

"Windfall profits relate to income when the price of oil is high."

Oh right, and what does that actually mean? What is the precise revenue-cost relationship and how do windfall profits, in economic terms, relate to other different but equally precise revenue-cost relationships?

"Hence, with a large investment programme to finance you cannot expect them to pass on the FULL drop in the oil price, only part of it, which they are doing and will be increasingly doing as they do their sums on what is affordable from an investment point of view (for those who don't understand how business works investment is financed from profits as well as from raising finance in the market, which is rather difficult to do at the moment)."

Oh right, and what does this actually mean as well? The energy comanies take it off the top here, the bottom there, negotiate the transfer prices and the tax scams, do sums, loans and borrowing as well as the bankers did, spin to the media a lot, and screw their customers as much as possible always, and their suppliers sometimes when they think they can get away with it, and something, which may or may be fictitious but ends up on the books, remains as evidence of the abuse of local monopolies and national oligopolies which bleed the real economy. I paraphrased your arguments and made them as apropriate to the real world as best I can from the weak starting point you gave me, Stan.

Interestingy, in today's Evening Standard, I see that Jim O'Neill, one of Goldman Sachs' Rooseveltian malefactors of great wealth, has adopted Salfordgal's strategy to create a reliably financed state bank to create a utility which will get savings and loans moving again to to small businesses and domestic borrowers. One down..., as we say.

Stan, you really are talking rubbish.

"Windfall profits relate to income when the price of oil is high"

Noooo, windfall "profits" relate to "profits" not "income". Windfall profits are made when an increase in the source commodity results in excessive profits made by increasing prices correspondingly, without any other increase in costs. In this case, not only have the energy companies, in a purely predatory manner, increased their prices as oil costs have increased, they have increased them at roughly THREE TIMES the rate of oil price increases, and then (just to prove how predatory they really are) NOT REDUCED their prices a month after those oil prices have reduced by 70% ... that's SEVENTY PERCENT, Stan, in case you missed it. Now I would accept an argument from you that those aren't just WINDFALL profits, and that in fact they are monopolistic and usurous - in fact the banks aren't allowed to make profits at these obscene levels under the laws of usury - but for you to defend their practices is nothing short of astonishing.

"... with a large investment programme to finance you cannot expect them to pass on the FULL drop in the oil price, only part of it, which they are doing and will be increasingly doing "

Oh, so you obviously have some evidence that the energy companies ARE reducing their prices. Care to share this with us ? Something quite simple like the name of the company which has dropped its prices will do. And you have some evidence that they are going to "increasingly" do this ? I assume that you work for one of these companies and have inside information ?

"The fact that the energy companies haven't invested sufficiently in renewables in the past is a red herring. Times have changed and the need for renewables is much more apparent these days. The energy companies will now certainly be taking this on, with appropriate government support."

But wait a minute, Stan. You just said that the energy companies have needed what I call "excessive" profits so that they can invest. Now you say that they haven't invested because the need has not previously been apparent. You said in your previous post that they need these "excessive" profits to enable them to raise funding for investment, and now you say that they don't need funding because they're going to put their profits to this use. So which of these convoluted lines of argument would you now like to stick with ? Or does sticking to one argument make it too difficult for you to answer questions ?

"But this will definitely not happen if a windfall tax is introduced ...at the very point that profits are likely to fall as a result of the recession."

So your Theory of Recessive Economies is that in a recession companies should make MORE profit to enable them to invest ? Brilliant! Makes me wonder why Alastair Darling hasn't drafted you inot his team. Or has he ?

MY brother who has his own house has bough the first coal for thirty years, a company is now delivering coal again, with a brand new lorry and the local garage sold out after an hour of having coal delivered. I saw people cutting logs and then the police said they were looking for people who had cut down two tree's. my home is now central heated but it's off because I cannot afford to heat the house, both my grand kids are off school with sickness.

SO for me the Price of fuel is way to high whether a wind fall tax will work it depends what Labour spend it on, but the fact is why are the price of gas and electricity still so high.

If ever we should nationalize anything it has to be power and water it's the two areas in which we the people should have at a reasonable price.

As usual, the responses to my comment do not stand up to analysis.

Windfall profits relate to income when the price of oil is high. Profits come down to a more normal level when the price drops and can become less than normal when the price falls sharply, as it is doing now. Energy firms must plan for the lows as well as the highs, building up a surplus in good times to allow for defecits in bad times.

Hence, with a large investment programme to finance you cannot expect them to pass on the FULL drop in the oil price, only part of it, which they are doing and will be increasingly doing as they do their sums on what is affordable from an investment point of view (for those who don't understand how business works investment is financed from profits as well as from raising finance in the market, which is rather difficult to do at the moment).

The fact that the energy companies haven't invested sufficiently in renewables in the past is a red herring. Times have changed and the need for renewables is much more apparent these days. The energy companies will now certainly be taking this on, with appropriate government support. But this will definitely not happen if a windfall tax is introduced as a punishment for not passing on the full drop in the oil price (thus diminishing the amount available for investment) at the very point that profits are likely to fall as a result of the recession.

Get real!

I agree with Salfordgal and Martyn on this one! The LGA investigation over the summer concluded that they are not using the profits to invest more, but to boost dividends to shareholders. Because crude oil has now come down so dramatically (by over $100 since the summer) it also means that energy companies profit margins will simply expand even further in the coming months. Also isn't it strange how energy prices go up over the winter and then when it comes round to the warmer months in the spring/summer they slash their prices. Also they're not investing anywhere near enough into renewables - which we really need. So just like the banks we need government to intervene, like financial services, energy is something we fundamentally need to live our daily lives, so if the energy market isn't functioning, it's time for the government to act. If Barack Obama can do it so can we.

"I'm afraid that Compass have missed the boat in this one. Fuel prices are dropping sharply as a result of the downturn, cancelling out any windfall effect."

That's Alice in Wonderland, Stan.

Oil prices have dropped, whilst retail energy prices remain at the same price. That results in greater profit for energy retailers. And you're saying that the "windfall effect has been cancelled" (whatever that means) whilst in fact the scale of windfall profits has increased by about 200%. "Twas brillig and the slithy toves did ...."

Incidentally, perhaps you could expound on your classic red herring of the energy companies "raising funds for investment in renewables".

How much has either Southern Gas or nPower invested in renewables in the last 10 years ? How much funding have they sought and/or achieved for this purpose in the last 10 years ? And how do you project that those numbers would be affected by a windfall tax ?

"Fuel prices are dropping sharply as a result of the downturn, cancelling out any windfall effect."

Bad economics and a shaky understanding of the basic principles governing a timeline, Stan. Realistically, windfall profits will only be cancelled out by a tax levied for that purpose.

And why do we want the existing energy companies to invest in renewables? New Labour's well established passion for oligopoly? Surely one purpose of a windfall tax should be to encourage new businesses to enter the energy sector, and it will be for the best if some, if not all, of these businesses are owned and developed by local authoritie in England and the three national governments in the remainder of the UK and the windfall tax could fund some of the start up costs.

Stan, the fact that Compass are returning to the issue of a windfall tax does not mean it has missed the boat. In fact the need for a windfall tax is even stronger.

As it stands the UK is threatened with an economic downturn based principally on the reduction of credit to allow consumers to consume. Because of excessive energy price increases from a failing market, consumer's are spending massive amounts of income on their gas and electricity bills, whilst Centrica, E.on, EDF, SSE, Scottish Power and RWE are making even greater profits. These very companies are again failing to act in reducing their prices as well as letting customers know when the falls in energy prices will be passed on. That is the very least they can do, and in failing to do that Compass have merely acted, with the support of MPs and much of the press.

The issue of energy prices remains as long as they are as high.

I'm afraid that Compass have missed the boat in this one. Fuel prices are dropping sharply as a result of the downturn, cancelling out any windfall effect. Indeed such a tax at this time,coupled with the credit crunch, would simply make it even more difficult for the energy companies to raise the funds required for investing in renewables, which we must do for the sake of creating more jobs and meeting our future energy needs.