Socialist Worker

Turn up the heat on energy bosses

Fuel fat cats get £250,000 bonus. We want windfall tax on profits

Issue No. 2113

Households will soon be paying £100 a month to heat and light their homes – thanks to the decision by energy bosses to raise utility bills by over 50 percent this year so far.

Last week British Gas’s parent company Centrica put up its gas bills by 35 percent – while unveiling half-year profits of nearly £1 billion and pay outs to its shareholders this year of over £500 million.

One energy executive bleated, “We are trying to prove that we don’t eat babies for breakfast. Who is saying to Tesco, ‘Who is going to help the food poor?’ People can’t afford to eat properly, but everyone is beating up on the energy companies.”

To prove the point, British Gas bosses shared a £250,000 windfall just one day after the firm announced record-breaking price rises.

Jake Ulrich – the Centrica executive who advised people to wear a second jumper if they are struggling to pay bills – is in line to receive dividends of £116,000 on his shares.

Phil Bentley, British Gas’s managing director, picked up dividend cheques for £84,500 this year. That comes on top of his annual pay of £1.1 million.

British Gas had already put up bills by 15 percent in January. And the firm is also putting up electricity by 9 percent in the second round of price rises this year.

This latest increase means the annual dual fuel bill will rise from nearly £913 in January to £1,317.

The move came just a few days after rival EDF Energy put up gas prices by 22 percent and electricity prices by 17 percent, with other firms expected to follow suit.

Fuel poverty is defined as when a household spends more than 10 percent of its income on fuel bills.

An estimated 4.5 million households are already in fuel poverty – meaning they cannot afford to keep warm. Another one million households are set to join them after the price rises.

Amid widespread calls for a windfall tax, Gordon Brown let it be known that he is against increasing taxes on the companies.

The government is keen to emphasise commitments from the energy companies to helping those in fuel poverty.

Yet currently the industry spends less than a 0.25 percent of annual turnover on helping insulate homes or buy energy saving light bulbs.

Soon after Labour came to power in 1997, Brown made tackling fuel poverty a priority. The government made a pledge to completely eradicate it by 2016.

Yet now almost a quarter of all families are set to be in fuel poverty.

The fuel price rises are going to add 1 percentage point to the Consumer Price Index (CPI), which currently stands at 3.8 percent. The real figure is, of course, far higher.

Workers should add at least 1 percent to their wage claim just to keep up with the bill rises. At the same time the energy companies should be hit with a windfall tax and a punitive permanent tax on their profits.

All this should be the first step towards nationalisation. We should not foot the bill for the energy barons.

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Article information

Tue 5 Aug 2008, 17:37 BST
Issue No. 2113
Share this article

Mobile users! Don't forget to add Socialist Worker to your home screen.