1st April 2023
Oil and gas companies, still not paying their share
It may be 1st April but no one is being fooled that the current crisis, which is driving up the cost of survival for many working class families, is anything other than capitalism ensuring that wealth and profit goes in one direction, while penury and poverty goes in another. From today Council Tax rises kick in; water rates go up; mobile and broadband costs rise; and the government’s energy support scheme ends, meaning higher bills for many families.
The water companies will not make any losses. Foreign investment firms, private equity, pension funds and businesses lodged in tax havens own more than 70% of the water industry in England, according to research published last year by The Guardian.
At a time when calls for more control over the dumping of sewage and the run off into rivers from farming activities are increasingly being made, overseas owners are making profits from a key utility which should be publicly owned.
Mobile and broadband providers can increase prices mid contract by inflation plus an extra amount on top, resulting in some companies putting prices up by over 17%, citing their underlying operating costs going up substantially as a result of regulatory requirements, higher energy prices and increased network costs. The worst offenders are O2 and Virgin Mobile but all are hiking prices to some extent.
While warmer weather may reduce energy consumption the ending of the government’s energy support scheme will still hit working class families hard, as energy costs for most are still two or three times higher than they were just over a year ago.
In 2022 Shell increased its profits by 211% and over the same period the increase for BP was 215%, while the taxes these companies pay in Britain are extremely small, compared to the overall amount they pay globally. This is due primarily to tax breaks which the British government allows for investment in oil and gas extraction. This not only helps line the pockets of the energy company shareholders but gives the energy giants little incentive to invest in renewables and other alternatives to carbon based energy sources.
For the consumer that means being robbed today, in the form of higher prices, and the future being hijacked due to the lack of investment in alternative energy sources.
The rises in Council Tax are the inevitable consequence of central government cuts to local government services, which have been ongoing for over 30 years and were accelerated by the Tories under their austerity programmes since 2010. A tax system which tackled obscene wealth, offshore havens and super profits could put more in the Treasury coffers to support much needed local government services. However, these are not priorities within the capitalist system, which puts the drive for profit above all else and seeks to mutually support those few who make the profits from the labour of the many.
The headline rate of inflation last month, instead of falling as widely predicted, actually increased from 10.1% to 10.4% meaning that prices are going up even faster than anticipated. For those on the lowest incomes it is estimated that the real impact of inflation is much harder, as food price inflation is running at over 17% and this is where poorer families spend a higher proportion of their income.
The Bank of England continue to make optimistic noises to the effect that the rate of inflation should fall over the coming year but that will still mean price increases for struggling families, just at a reduced rate of increase, and then only if the Bank’s predictions come to pass!
Still, the Tories claim there is some light in the darkness, the minimum wage has increased by 92p per hour to £10.42 per hour! However, even this 9.7% rise is not in step with inflation so, to all intents and purposes, those on the lowest wages will still be out of pocket.
Meanwhile discussions continue with some sections of the workforce over settlements to recent disputes, which were fuelled by the accumulated impact of successive austerity drives and the Tories’ continued emphasis upon lining the pockets of their friends in the City of London. The offer to both nurses and rail workers is below their initial demands but an improvement on the original offers, demonstrating that direct action can result in concessions being won from employers.
However, junior doctors still await a realistic offer and management at Royal Mail continue to hold out against a reasonable settlement for postal workers. The desire of the Tories to put any disputes to bed before local elections in May and a forthcoming General Election still looks shaky.
The reality is that any agreements reached in the short term will have a limited shelf life as the capitalist system, based upon class antagonism, is always going to see conflict emerge in one sector or another. No amount of firefighting by the Tories will stop the working class and its organisations from making demands for better wages, terms and conditions.
Unfortunately, another step away from giving any leadership in that struggle was taken by the Labour Party this week, when the National Executive Committee (NEC) supported a motion to ban former leader, Jeremy Corbyn, from standing as a Labour candidate in his constituency of Islington North.
Labour may well be on course to win a General Election but the abandonment of the principles of working class solidarity, peace and international solidarity, all to the fore under Corbyn’s leadership, are casting a shadow over what difference a Starmer government will make to the working class.
Until it is evident that the ruling class are truly trembling at the prospect of a government which is not the Tories, the benefits for the working class of a change of furniture at 10, Downing St may be little or none at all.
If Starmer’s intention is merely the continuation of capitalism by other means, as it has been for previous Labour government’s, he is likely to find his position very precarious, very quickly. After over a decade of Tory austerity a further dose of the same medicine will not go down well and the patient, not wishing to be fooled again, may well resort to a second opinion.
Avanti Populo 