TAKE BACK CONTROL

Until the 1980’s when the utilities were privatised by Margaret Thatcher they were in the Public Sector. And what a success privatisation has been. It has created dozens of millionaires paid for by the general public through higher gas, electricity and water bills!

The half-yearly profits of the utilities and their Chief Executive’s pay are obscene.

COMPANY?????????????????HALF YEAR PROFITS 2022??????????CHIEF EXECUTIVE’S PAY

EON????????????????????????????????????????￡3.4bn?????????????????????????????????????????￡1m

National Grid???????????????????????????￡3.4bn?????????????????????????????????????????￡6.5m

RWE????????????????????????????????????????￡2.2bn????????????????????????????????????????￡3.6m

Orsted?????????????????????????????????????￡1.5bn????????????????????????????????????????￡1.7m

Centrica??????????????????????????????????￡1.3bn????????????????????????????????????????￡4.5m

SSE????????????????????????????????????????￡1.2bn?????????????????????????????????????????￡4.5m

Uniper?????????????????????????????????????￡1bn???????????????????????????????????????????￡1.6m

Scottish Power????????????????????????￡925m????????????????????????????????????????￡1.15m

Drax????????????????????????????????????????￡225m?????????????????????????????????????????￡2.7m

EDF???????????????????????????????????????(￡225m) loss????????????????????????????????￡1m

Lightsource???did not attend the meeting with the Prime Minister and their figures are not available.

The total disclosed half yearly profits are ￡14.9bn: which will be in excess of ￡30bn in the full year.

It should be remembered that the majority of these are billing companies, they do not produce any gas or lay or repair any pipes. And even “wholesale” prices have been inflated as only 7% of the UK’s gas comes from the Ukraine and the majority of the UK’s electricity is generated in the UK.

Instead of considering a windfall tax on these excessive profits (as has also been considered in respect of petrol) to provide help to those least able to afford their gas and electricity bills, if the gas and electricity companies were taken back into in public ownership these profits and the cost of excessive salaries could be used to reduce the bills for everyone. Instead of many Chief Executives and senior managers earning between ￡1m and ￡6.5 million per year there would be just two Chief Executives, one for gas and one for electricity, paid on public sector rather than private sector pay scales earning around ￡200,000 each. (the Chief Executive of Birmingham City Council gets ￡186,000 for, arguably, greater and certainly wider responsibility) To quote Charles Handy from the “Age of Unreason” “The leader must remember that it is the work of others.?The vision remains a dream without the work of others”.?What must it do to the morale and motivation of a low paid worker at the National Grid to know his / her Chief Executive is paid ￡6.5M? Such high salaries may prove counter-productive in making the job that much harder and the organisation less, rather than more, productive.

So just how bad is the situation?

According to a report in The Guardian 2/3rds of UK households will be trapped in fuel poverty by January meaning their fuel costs will be 10% or more of their income. 18m families, or approximately 45m people, will be struggling to make ends meet. 86.4% of retired people and 90.4% of single parent families with two or more children will fall into fuel poverty.

This comes at the end of a decade during which the rich have got richer whilst the majority, subject to austerity, have got poorer. According to a report by the Paris-based World Inequality Lab, 2020 saw the steepest increase in billionaires’ wealth on record. In contrast 100m additional people, worldwide, sank into extreme poverty.

A consequence of this widening inequality is that, prior to the recent cost of living crisis, there were 3.9 million children living in poverty in the?UK. The Government had focused on making work pay, but two in three children who were in poverty had a parent who was in work. These parents were no more able to do anything to help their children than are older people who have no earning capacity or borrowing power, many of whom prior to the abolition of the “default retirement age” had been forced into retirement and condemned to spending the rest of their lives in poverty.

?Children brought up in poverty are less likely to do well at school, more likely to have health problems, making a demand upon the NHS, and have a shorter life expectancy. ?

?Prior to the current cost of living crisis there were two million older people living in poverty in Britain, With the known correlation between income and demand upon the NHS it is not surprising, that 4/5th of the expenditure of the NHS went on older people. Britain has one of the lowest State Pensions in the western world and yet during the current year the government reneged on the “triple lock” and discontinued free television licences effectively reducing pensions still further.

According to Philip Alston, special rapporteur on extreme poverty to the UN, who visited the UK the year before the pandemic, Government Ministers were in a "state of denial" about poverty. He said that despite being in one of the world's richest countries he had encountered "misery". Quoting figures from the Joseph Rowntree Foundation, he said that more than 1.5 million people were destitute at some point in 2017, meaning they lived on less than ￡70 a week or went without essentials such as housing, food, clothing or heating. A fifth of the population, amounting to 14 million people, were living in poverty, Prof Alston said. And the situation is now far worse.

How has this come about?

No matter what excuses are given, and who so ever one tries to blame, the current crisis is due to the unacceptable face of capitalism, greed and profiteering as the rich exploit the poor to line their own pockets. If one takes petrol, as an example, consumption has not dropped despite the increased price which would suggest there is no shortage and it is not a matter of rationing, or supply and demand, but sheer profiteering. Shell doubled its profits in one year to ￡9.4bn. And BP announced profits of ￡6.95bn between April and June.

Since the privatisation of water, by Margaret Thatcher in the 1980s, bills have gone up by 40%, ￡72bn has been paid out to shareholders and the bosses have received ￡58m in the last five years alone. This has not led to improved efficiency either, with 3bn litres of water lost through leaks every single day; not to mention the illegal discharge of affluent into our rivers, lakes and sea.

What would be the payback from public ownership?

There are 27.8m households in Great Britain whose average fuel bill in the first half of 2022 was ￡1,971 per year – projected to rise to ￡4,200 per year by January next year. Domestic consumption accounts for 29% of gas and electricity use with the majority in the commercial sector. If the ￡30b profits were shared pro rata between the sectors, ￡10b would represent ￡359 off the average household bill. However, this reduction is based upon the first half of 2022 and as the Price Cap is raised profits will soar making the reductions, which would also apply to the commercial sector, greater. And there would be other savings to be made on the number of Chief Executives and other senior staff and the salaries paid reducing bills further.

And instead of considering stigmatising “handouts” to the least well off why not charge a reduced tariff for the first 12,000 kWh of gas, the first 1,900 kWh of electricity and first 127 litres of water (or even make them free) with the cost shared between increased charges for consumption above this level and taxation in that income tax is the most equitable way of paying for public services. It would benefit everyone but more particularly the less well off and small businesses through universal provision. This would also save millions on debt collection and court costs etc and improve mental health and the physical consequences reducing demand upon the NHS.

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Chris Perry is a former Director of Social Services for South Glamorgan County Council, a former Management Consultant, a former Non-Executive Director of the Winchester and Eastleigh Healthcare NHS Trust, a former Director of Age Concern Hampshire and a former presenter of a weekly current affairs programme on Express FM. Now retired.