By M. Javed (Workers GB Writers Group)
Energy supplier Centrica is expecting an almost eightfold increase in net profit. This at a time where 34% of adults in Britain face a choice between ‘heating or eating’ due, among other things, to a twofold increase in energy prices in the last year.
Profits and prices
The profits come as wholesale gas prices have sky-rocketed, with the costs being passed on to workers in order to preserve pre-tax profit levels that were already in excess of £750m in 2021. The £50m pledged to assist customers with their energy bills should then be understood as pocket change for the company, which is the owner of British Gas.
The mainstream media is reporting that Centrica’s increasing profits (and the corresponding squeeze on UK households) is being caused by the reduction in supplies resulting from the conflict in Ukraine. This narrative is hoping to pin on Russia (the victim of Nato encroachment into the territories of the former USSR) the ruthless profiteering of Centrica. Conveniently, at the same time as spreading this narrative (for the public) Centrica has spread a more truthful one (for investors) reporting that the increased profits have come from generating electricity and producing gas. The price hikes for household supply are a bonus.
Meanwhile, it is unclear how much windfall tax the company will pay, especially considering windfall taxes apply to only some of the company’s activities (such as extracting oil and gas) and not others (such as selling petrol and diesel).
The Workers Party calls for a redistributive tax system in which the mega rich are expected to carry their fair share of the burden whilst low and middle income workers are given much greater breathing space to afford rent, food and fuel. If you agree with us, please take the time to sign our Corona-tax petition of a one-off 5% windfall tax on wealth over £10 million, this would increase the public budget by £17 billion: Sign the Corona tax petition – Workers Party of Britain (workerspartybritain.org)