The Communist Party political commission has issued a warning to workers that the summer months will come to an abrupt and deadly end when the price cap on energy prices is further relaxed. The price cap did not need to be lifted: profits of energy companies are not sacrosanct. Even if you accept that action had to be taken to avoid catastrophic losses in the energy supply industry, the wider economy provides alternative solutions that do not entail the impoverishment of millions, see below.
In effect, price capping is dead. It was always an aberration in a capitalism which relies on profits over and above all else. Prices will be allowed to rise even if a proportion of customers die as a result of not being able to switch on their heating in the winter months. Remember, the elderly and unwell tend to need their heating on more and for longer than other citizens.
If the price cap is now redundant (what meaningful cap could allow such deadly price increases?) then we need another economics and ethos to run the industry. The communists propose nationalisation. Our form of public ownership is in its first phase, state owned industry where profits are returned for reinvestment. But we also call for a industry structure which allows all major decisions, strategy on research, pricing policy, investment, interrelationship with other sectors, wage arrangements and health, safety and environment considerations to be taken away from the shareholders and monopoly owners and passed to a commission made up of representatives of the workforce and consumers. In this way scientists and economists can work directly with trade union, consumer and environment groups to plan for the immediate and long term.
As a part of this transition we believe that the following immediate measures should be taken to deal with the effective breakdown of the price cap.
In October the cap will rise by another £830 on top of the £693 announced in April. The combined cost of these two increases across 22 million households will be around £33.5 billion. The price increases will impoverish millions, lead to thousands of deaths and will have seriously damaging effects on many businesses that could provoke recession. Prices should be cut back and frozen at pre-April price cap increase levels. The following shows how that freeze could be paid for without inflicting damage on the poorest in society.
Govt. figures suggest the north sea oil giants could make as much as £19.5 billion this year, £13.6 billion in excess of the £5.9 billion profit averaged in the last decade. Tax that excess at 80% giving revenues of £10.9 billion.
End Sunak’s capital-allowance ‘Super Deduction’ scheme; the OBR admits that this will be exploited by corporates looking to evade tax and currently forecast its basic cost to be £10.6 billion this tax year. Scrap it now and save around £9 billion.
The big four banks are estimated to have paid out bonuses of around £4 billion this year. Introduce a special tax on the banks equal to that amount, the country rescued them in 2008 when their incompetent greed nearly destroyed the world economy, this is a small payback. Money raised: £4 billion.
Corporate Welfare Watch estimates the value of corporate grants, subsidies, tax breaks, procurement, wage subsidies and other forms of corporate welfare amount to over £90 billion per year. Their research reveals that the biggest companies make the largest claims.
Cut this by 7.5% with emphases on making it more difficult for the big firms to pay, this will raise £6.75 billion.
This comes to £30.65 billion. Tell the energy companies to take the hit on the remaining £2.85 billion to make the £33.5 billion needed. They have made enough money out of the British public over the last few decades. Government ministers will bleat about ‘the impact on their share price.’ The Big Six have given away 82% of their profits to shareholders over the last five years, weep no tears.
These figures, like the profits of banks and energy companies, are not sacrosanct: other percentages and sources of income can be applied. They are to indicate that another way is possible, the poor do not have to pay. Detailed proposals on the the energy industry are contained in a Communist Party policy pamphlet, The Great Energy Rip Off which you can purchase via our Shop.communistparty.org.uk