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Editorial: BP's bumper profits make the case for nationalisation stronger than ever

IT DOESN'T take a genius to link the obscene profits posted today by BP — and last week by Shell and Centrica — with energy bills predicted to soar to over £3,600 a year this winter.

The cost of extracting oil and gas has not risen. The huge increase in energy bills is simply enriching shareholders in the fossil fuel industry at everyone else’s expense.

And at what expense: £3,600 a year is more than a 10th of the median household income. Millions will be pushed into debt. This winter, thousands more will die because they cannot afford to put the heating on.

Oil and gas prices are the key driver of inflation. Not just because the rise in their own prices means energy bills are rising faster than any other expense for most families but because energy is used in the production of everything else.

Politicians try to blame outside factors for the crippling increases — most notably the Russian invasion of Ukraine. This has indeed driven prices higher on international markets. 

But few British politicians will spell out the role sanctions on Russian exports have played in this, let alone the way these have entirely backfired, swelling Russian state revenues as its exports fetch higher prices while disrupting energy flows to Europe, driving Germany in particular into a worsening economic crisis.

Fewer still will note that oil and gas from Russia accounts for just 4 per cent of British fuel imports. Half our gas comes from fields in British North Sea waters.

To acknowledge these truths would expose the reality that our government could do something about rocketing energy bills — if it wanted to.

As chancellor, Rishi Sunak did — under pressure from Labour — introduce a windfall tax on energy firms, though the relief this will provide to most households is nowhere near enough to make up for the impact of bill increases.

Liz Truss, now favourite to succeed Boris Johnson as prime minister, rules out a repeat, arguing that it would put off companies like Shell from “investing” in Britain — by which she presumably means securing contracts to extract and sell fossil fuels on our territory.

This is unsurprising. The Tories are the party of the oligarchs creaming it at our expense. Bumper profits for BP, Shell and Centrica are, for them, a success story, even if they strike the rest of us as an insult.

It is more disappointing that Labour is failing to call for nationalisation. Its existing policy is to nationalise energy. It promised to do so at the two last elections.

But last week shadow chancellor Rachel Reeves uses the party’s poor performance at the 2019 election to argue that it should jettison that promise.

She ignores several salient points. One, that the party's massively increased vote in 2017 suggests the nationalisation programme common to both manifestos was not the cause of its unpopularity in — the second referendum on EU membership that Reeves supported did rather more to scupper Labour’s chances.

Two, that Labour’s current leader was elected promising to maintain support for common ownership of rail, mail, energy and water.

Three, that delegates at Labour’s most recent conference voted to support nationalisation of energy.

And four, that polls have shown for years that public ownership of energy enjoys majority support. That support will be higher than ever when it could be used to bring bills down — as it has already been used in France, where the government has capped bill increases at 4 per cent.

Labour squanders this opportunity not because nationalisation is unrealistic or expensive.

It does so because it refuses to challenge the profiteering monopolies who are rinsing us.

There is no common interest between the household paying £3,600 a year for energy and the fat cats posting ever bigger profits. Their gain is our loss.

It is time to take back control.

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