To think that Alistair Darling was once regarded as a safe pair of business-friendly hands. The very day the CBI's chairman, Martin Broughton, accuses the Treasury of policies that “seem to have been drawn up on the back of a fag packet”, Mr Darling's officials float the idea of a windfall tax on electricity and gas suppliers.

Mr Broughton, who is also chairman of British Airways, was referring to the Chancellor's chopping and changing on capital gains tax and the tax treatment of non-domiciled UK residents. But the CBI's concerns would doubtless apply to a windfall tax on energy companies too.

There is nothing wrong with ministers and regulators taking a robust look at the energy supply industry. Given the small number of suppliers and vertical integration, it is just the kind of sector where cartel-like behaviour and anti-competitive practices might be fostered.

But the best response if there is anti-consumer abuse is to introduce measures to stimulate competition, not to tolerate an ongoing cartel but occasionally and arbitrarily clobber it with a levy. It is only a few days since the regulator, Ofgem, announced a new investigation into the gas and electricity supply markets. Windfall taxes are rarely a good idea and should be applied only to companies actually in receipt of some kind of windfall. Arguably, oil and gas explorers and producers have enjoyed a windfall from higher crude prices but companies further along the transmission chain have not. Indeed, they tend to suffer when primary energy prices rise. Nor is it at all clear power generators will make anything from the new EU emissions trading scheme.

It is the uncertainty created by these kinds of Treasury leaks that is so debilitating to businesses and investors trying to make decisions for the long term. The Chancellor is probably posturing and wants to be seen as a consumer champion. Few people really believe he has any serious intention of slapping a tax on the energy suppliers but he has left a faint doubt.

For any power company and its financiers contemplating pressing the button on billions of pounds of investment in new cleaner power stations or alternative energy sources like nuclear or wind, such a doubt can be the difference between going ahead and delaying a decision.

Taxes are disliked but tax uncertainty is hated even more. Businesses wants less kite-flying from the Treasury and more constancy.

patrick.hosking@thetimes.co.uk

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