Centrica and Shell’s obscene profits are a line in the sand

Bumper profits for energy giants while millions are in fuel poverty shows the system is broken — it is clearly time to renationalise these industries and we must support all those who are fighting for this goal, writes KEN LIVINGSTONE

HIS WEEK it was announced that Shell made record profits of nearly £10 billion between April and June and promised to give shareholders payouts worth £6.5bn.

It made adjusted profits of £9.5bn during the second quarter of the year, beating its previous high — set only between January and March earlier this year — by 26 per cent.

British Gas owner Centrica meanwhile this week announced bumper operating profits of £1.3bn during the first half of 2022.

These obscene profits are more than double the same period in 2021 and the fortunes of the likes of Centrica and Shell couldn’t be more different from those of more and more people who are being dragged into fuel poverty by the ever-deepening cost-of-living crisis, with energy prices at 40-year highs.

Shell investors on the other hand received $7.4bn in the first quarter of 2022 and will receive another $6bn in a share buyback and $1.8bn in dividends announced this week, while Centrica’s dividend payment will be worth about £58m to shareholders.

Under the Tories, whatever the rhetoric, it is clear that the rich get richer and the poor get poorer.

Government figures from 2019 showed over three million households living in fuel poverty, but this number is widely thought to be much higher now, with household energy bills increasing by 54 per cent in April 2022, which was a record increase as regulator Ofgem increased the maximum energy companies can charge.

The monthly rise in both gas and electricity prices was by far the largest recorded since 1988, but are expected to be further surpassed in the autumn and again early next year.

If fuel prices rise by another 40 per cent when Ofgem raises the energy price cap again in October, this would mean that a typical household would pay around £2,800 on energy bills alone each year.

As I have written in the Morning Star before, like so many problems facing the of people of this country, the roots of the current fiasco can be found in the Thatcherite privatisation frenzy: with British Gas, the National Grid, Scottish Power and 12 regional energy companies in England and Wales all falling victim to the “great Tory sell-off.”

Far from this encouraging competition that would mean better deals on offer to consumers, as was claimed at the time, households have faced a series of intense price hikes — with average annual gas bills virtually doubling between 2004 and 2014.

Of course, this isn’t just the case with energy. Rail fares are a complete rip-off and set to get worse, while our water system is far better at providing bumper profits for shareholders than being the affordable public service people (and our environment) need.

And with the Tory leadership contest well under way, it is also worth reflecting on how the lack of any serious action on the issue of fuel bills is both an illustration of the government’s failure to protect people during the cost-of-living crisis — and a clear example of how hollow the claims of Boris Johnson to champion the interests of those “left behind” by the last 40 years of Britain’s economic model are.

Extending public ownership — and ending the great privatisation and outsourcing rip-off for good — will not be on the to-do list of either Liz Truss or Rishi Sunak if they get to Downing Street, but should be central to Labour’s offer at the next general election.

However, despite the fact that public ownership of energy, water, transport and more is absolutely essential for the economy — and extremely popular — Labour’s Keir Starmer and Rachel Reeves have used recent public and media appearances to distance themselves from the commitments to public ownership that were in the 2019 manifesto and indeed Starmer’s now infamous 10 leadership pledges.

An opinion poll found that 53 per cent of voters expressed support for renationalisation of energy, with just 15 per cent opposed. Labour should do what the people want and say now is the time for public ownership.

And while the Tory offensive on living standards continues it is also vital that we support the campaigning work of organisations like We Own It and numerous trade unions in exposing the failures of outsourcing and privatisation and campaigning to end privatisation for good.

It is time to put public need before corporate greed.

This article originally appeared in The Morning Star