A system run for fat cats

Yesterday, British Gas announced the biggest ever increase in domestic gas prices – a staggering 35% hike. Electricity bills are set to rise by 9%.

Phil Bentley, Managing Director of British Gas, is reported as saying, ‘We very much regret that we have had to make this decision at a time when many household budgets are already under pressure’.

Maybe he doesn’t regret it quite as much as he suggests. Centrica, parent company of British Gas, announced its profits today. Centrica is already making £5 million a day – over £1 billion a year. The price hike will send profits soaring even higher. The maths around this are quite simple. Around 16 million gas customers pay a load more money; British Gas share holders get to be a whole load richer.

Centrica said the results were ‘good’. Age Concern said that one in three pensioners will face fuel poverty this winter. The BBC story is here.

EDF Energy announced a 22% rise in gas prices last week. The remaining four major energy companies are expected to follow suit. It’s set to be a long cold winter for a lot of pensioners, and a lot of low paid workers.

Is the Labour Government bothered? Probably not too much. Energy Minister Malcolm Wicks told the BBC, ‘I’m not going to play a populist card saying profits are wrong when I know that profits are needed to invest in energy in the future to keep our lights on’. Maybe renationalisation is in order here, Malcolm?

Against this background, the three year deal imposed on health workers looks laughable. A pay rise of 2.75% this year gives a health worker on the top of Band 1 a total increase of £572, for example. How can this pay for massive price increases in gas and electricity, food, and petrol?

There are two conclusions to be drawn here.

One is that Unite is absolutely right to be fighting for a decent pay increase for our members in Health. We’re set to ballot on industrial action in September. It’s essential that our Union leadership puts our interests ahead of a woolly minded ‘Let’s not rock the boat for Gordon Brown’ stance.

The second conclusion is a maybe a longer term one. The profits made by Centrica highlight the insanity of a system that’s run in order that the fat cats get fatter – while the rest of us go without. Socialism has never seemed more attractive.

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