Nationalise gas and electricity

Submitted by Anon on 12 September, 2008 - 11:49 Author: Tom Unterrainer

You don’t have to be a financial genius to understand the following rule: increase your prices and you increase your profits. Even better if your competitors do the same, then there’s no risk of you losing business. And so it is with the big three energy companies. Shell, BP and British Gas all employ legions of economists to maximise their profits but in this instance the PR people play a more important role.

Shell made £4 billion in the first quarter of 2008, up 4.6%. BP made £3.4 billion, up 6%. Centrica, the company that owns British Gas, reported profits of £992 million in the first half of 2008 after raising prices by 35%. Between 2007 and 2008 the biggest eight energy companies made profits in excess of £29 billion between them – around £500 for every person living in the UK.

So, how do the energy company’s public relations spin-doctors explain this ‘phenomenon’? How to explain away the massive increase in prices and the corresponding increase in profits? Well, you blame it all on international oil prices: “it’s out of our hands, we can’t be held responsible for the prices imposed by some foreign oil consortium”. They pass on the blame, pass on the costs and continue to increase profits whilst the low waged, unemployed and pensioners feel the pain. So extreme are the increases in the cost of gas and electricity that most workers now feel the pinch.

In response up to eighty Labour MPs have signed a petition calling for a windfall tax on energy companies initiated by Compass, the not very left-wing “left-of-centre” think tank. Tony Woodley, joint General Secretary of the new Unite union, has appeared in the press and on radio calling for such a tax. All of this is positive, but if this issue is so important why did Woodley and the Labour MPs sit on their hands over this issue at the National Policy Forum?

In any case, the response to the proposed £4.5 billion windfall tax from the energy producers has been predictably hostile. A spokesman for the Association of Electricity Producers labelled the proposal a “legalised raid” on the energy companies bank accounts. What he fails to ‘justify’ are the repeated raids on the bank accounts of those who have to buy the electricity.

The massive increases in energy prices, the enormous profits of the energy companies and their wining over a one-off windfall tax exposes these people as money-grabbing, bandit-profiteers. It looks unlikely that the government will immediately jump to the tune of Compass’s petition but even if they did, such one-off measures will do nothing to alleviate the financial crises faced by many workers, will not restrict further such super-profits or go any way to reforming the energy market and those who run it. Gas and electricity are necessities, nobody should be making a profit from them: only a workers government can solve the energy crisis by nationalising the energy companies and putting them under democratic control.

This website uses cookies, you can find out more and set your preferences here.
By continuing to use this website, you agree to our Privacy Policy and Terms & Conditions.