Tame the fat cats

Alex Doherty — Wed, 27 Aug 2008 18:25:15 +0000

The surge of support for a one-off windfall tax on energy firms’ obscenely excessive profits may be on the point of becoming irresistible.

When even those on the fringes of government, such as Rob Marris and Steven Pound, feel emboldened to nail their colours to the mast, it is fair to say that times are changing.

To some extent, this is because of the perceived weakness of the dead man walking in Downing Street, but it is also because increasing numbers of the parliamentary Labour party can see the dole queue beckoning.

They realise that something must be done to show that the Labour Party is reconnecting with its grass-roots supporters or, currently, non-supporters.

And there are few fat cats as brazen as the energy bosses, apart from, say, the water and rail privateers.

But even the parasites presently living in luxury on the basis of our plundered railways and water services would find it difficult to compete in the daylight robbery stakes with the gas and electricity companies that have already put up prices twice this year and are returning for a third bite.

The so-called energy regulator Ofgem ought to be prosecuted for taking money under false premises, smiling benignly as the big six companies have imposed double-digit price rises.

Every shoddy justification for this blatant profiteering is nodded through by Ofgem, including the lie that prices to consumers have to rise because wholesale prices have gone up.

Wholesale prices were lower this month and last, but still the oligopoly pushes up domestic prices.

The big six also blame suppliers in Europe for overcharging us, but it is the companies themselves that neglected to build adequate storage facilities, in contrast to publicly controlled companies in other parts of Europe.

And there is also a false dichotomy between wholesale and retail companies.

Most gas suppliers are also gas producers, pushing up prices to their subsidiaries to be passed on to consumers and taking a double bite of profits on the way.

And these super-profits that they make are not, despite corporate propaganda, being ploughed into investment in new resources. Nearly half of their £4.3 billion profits last year were paid out as dividends, £1,813 million worth of them, to the financial institutions that dominate shareholdings.

Association of Electricity Producers chief executive David Porter tried to coax water out of a glass eye with his sob story that every £1 million taken by government from company profits would have to be raised elsewhere.

Rubbish – this implied threat of passing on the cost to consumers could be countered by a legal price freeze. Let the shareholders take the pressure for once instead of working people.

And as for his warning that a windfall tax would scare off investors, let them go. They are not investors. They are ponces on the energy wealth created by government investment.

The energy companies, including the oil transnational companies, have become too used to a sweetheart relationship with new Labour. It’s time to tame these fat cats.

Justice cries out for an immediate substantial windfall tax on the super-profits and, indeed the return to public ownership of the energy sector.

energy companies | ukwatch.net

Tame the fat cats