Ofgem have suggested that a windfall tax should be imposed upon the power companies for the free money they appear to be getting from the carbon market. The principle behind carbon charging is that the money will be re-spent on carbnon schemes. In the case of the power industry this is a ticking bomb mainly because they are keen to take as much money as possible now in order to pay for pain in later years when permits will be auctioned.

Coupled with this taking money now propsect is the fact that they also must make hay when wholesale prices are high, and this again is a prudent reasonable course of action in the market conditions. However, governments and regulators argue that becase competition is limited that the price rises are too high. No one would worry about this if the economy could take this increase in price but unfortunately 2008 looks like slowdown year and so these increases will effect low income and middle income families likely to be made redundant, this effects votes and hence the response.