[Petrochemicals (OP)]

Lots of strikes around at present and it occurs to me that these are the workers that worked the way through the corona furlough scheme. You are not getting car workers or house builders joining them. Seems like the essential workers are ahead of everyone else and we will probably see more strikes in future.

[Bored chemist]

Most essential workers are paid by the government and the government at the moment is not a competent employer.
A competent employer makes sure that they bring in enough revenue to meet reasonable  pay expectations of the work force.
Instead, our government is giving the taxpayers' money to their rich friends and telling public sector workers that they deserve a pay cut.

[alancalverd]

And not only by direct methods. Fuel companies increase their prices and profits, so the government gives taxpayers' money to the consumer to give to the fuel companies. That's pure cynicism, not government.

[paul cotter]

Alancalverd, I get your point, 100%. However what would you suggest should be done to help people who cannot afford to heat their homes this winter?

[Bored chemist]

Alancalverd, I get your point, 100%. However what would you suggest should be done to help people who cannot afford to heat their homes this winter?

Why can't they afford to heat their homes?
They paid last year.
Is it because they are not being paid as much as last year- which is essentially a   government responsibility- or because the energy companies are profiteering from a war in Ukraine- which is a government responsibility?

[paul cotter]

BC, I have no doubt price gouging is occurring. Here in Ireland solid fuel( antiquated, I know ) has doubled in price in the last 8months. I can understand gas and gas produced electricity going up in price but there is no reason for solid fuels to rise so much. Markets are self regulated and the history of government meddling in markets is not good( i'm talking about Ireland here, British experience may be different ).

[Bored chemist]

Markets are self regulated

What fraction of the price of a gallon of petrol goes straight to the government as tax?

[paul cotter]

Most of it, I know.

[alancalverd]

The cost of delivering bulk petrol/diesel/AVGAS/JETA1 is less than 40p per liter, including a fair return to the manufacturer. 5 - 10p is profit to the retailer (which is why supermarkets, for whom fuel is a small part of their overall turnover, can charge less than independent garages). Everything else is tax or excess profit.

Part of the problem is that the government applies a levy based on whatever the wholesaler charges, plus, in the case of  road fuel and AVGAS, 20% VAT on the levied price. So it is not in the government's interest to force the producers to reduce the wholesale cost. Nor does it matter much to traders (like me) who just pass on the cost to our customers.

Much the same applies to gas and electricity. Thanks to privatisation there are ten times as many people as necessary drawing salaries for managing the supply, and an essential profit element to keep the shareholders happy. "Competition" was always a joke since they all bought from the same wholesalers and there was no real incentive to charge significantly less than anyone else for the retail product. Then when supplies of raw material (gas) became difficult the smaller suppliers who were charging the lowest retail rates were unable to stay afloat because the management overhead is pretty much the same for any size of business. Hence less competition and no limit on prices.

The solution? Efficient, profitable nationalised industries. Once you have a computer, smart metering, and direct debit payments, it doesn't matter whether you have ten customers or ten million, so there's no practical objection to a monopoly with minimal overheads, charging a genuinely fair price established with direct parliamentary scrutiny for whatever society considers essential.

Folk will naturally grumble about compulsory nationalisation, and knowing what a bunch of crooks we have in government right now, it would involve the taxpayer paying well above the true value for existing shares. The trick is to do it by creep: establish, say, a "national energy company" that supplies whatever at a genuinely fair price and gradually drives down the "market" price whist still showing a profit that goes to the treasury as if it were a tax. There is no statutory right for any shareholder to make a profit (it says so on your share certificate!) so nobody can complain, and if a few companies go bust, that is capitalism at its best.

[Bored chemist]

When Russia invaded Ukraine and was subject to sanctions, they cut back on gas supplies.
That meant that the wholesale price of gas went up.
But, outside Russia, the cost of producing the gas stayed the same.
So the gas companies were able to make huge profits because of the war.

Many people think that those profits should be taxed

The  government's response was that we can't tax them because that would stop the gas companies investing in future supplies.

Well, if that's true it means that the gas supply companies were depending on windfall profits from a war to finance their futures.
I don't believe that is plausible.
So we know the government is lying.

On the other hand, the evidence is consistent with a government that wants to give taxpayer money to their rich friends.
In this instance they are doing it indirectly, they give taxpayer money to householders with low incomes and they give the money to the gas suppliers.

It's said not to be a coincidence that Truss was an advisor to one of the energy companies and it was a donor to the Conservative party.
It looks pretty fishy to me.

[alancalverd]

https://www.blakemorgan.co.uk/law-in-a-time-of-crisis-how-to-stop-profiteering-from-panic/

is well worth a read. Recommend it to your Member of Parliament.

[Petrochemicals (OP)]

 

Alancalverd, I get your point, 100%. However what would you suggest should be done to help people who cannot afford to heat their homes this winter?

Occurs to me that the striking workers who worked throughout the furlough scheme could just be given a quick one off payment by the government until the turmoil over Ukraine is over, it would cost much less than the furlough scheme did and would be massively deserved, the posties the port workers the nurses and transport staff.

[Bored chemist]

Alancalverd, I get your point, 100%. However what would you suggest should be done to help people who cannot afford to heat their homes this winter?

Occurs to me that the striking workers who worked throughout the furlough scheme could just be given a quick one off payment by the government until the turmoil over Ukraine is over, it would cost much less than the furlough scheme did and would be massively deserved, the posties the port workers the nurses and transport staff.

The problem isn't the Ukraine invasion.
The problem is that the government has been cutting back public sector wages for over a decade.
Real terms salaries have fallen by about a quarter.
A one off payment won't address that.

[alancalverd]

Worse still, even if wages were brought back to par now, everyone who retired from public service in the last 10 years will have been short-changed and have a perfectly legitimate grievance with no form of recourse. The noncontributory civil service pension helps, but being underpaid for a decade means you probably accumulated unrepayable debts and mortgages. Which is of course good news for the City and the Party.   

[Petrochemicals (OP)]

Worse still, even if wages were brought back to par now, everyone who retired from public service in the last 10 years will have been short-changed and have a perfectly legitimate grievance with no form of recourse. The noncontributory civil service pension helps, but being underpaid for a decade means you probably accumulated unrepayable debts and mortgages. Which is of course good news for the City and the Party.   

Is not pention parity a wage negotiation demand?

[Bored chemist]

Worse still, even if wages were brought back to par now, everyone who retired from public service in the last 10 years will have been short-changed and have a perfectly legitimate grievance with no form of recourse. The noncontributory civil service pension helps, but being underpaid for a decade means you probably accumulated unrepayable debts and mortgages. Which is of course good news for the City and the Party.   

Is not pention parity a wage negotiation demand?

Yes, and the government has been failing to meet that too. (There's no longer a con-contributory system)
But after you retire, it's impossible to change it- what would you do? A striking pensioner is a bit meaningless.

[alancalverd]

Alancalverd, I get your point, 100%. However what would you suggest should be done to help people who cannot afford to heat their homes this winter?

Declare a state of emergency, nationalise all the energy retailers, and reduce the price. There being nowhere else to sell it, the wholesalers will have to follow suit or find themselves nationalised too.

Impossible? It worked for over 40 years until Thatcher destroyed British industry.

HM Government was quick enough to give your money to their friends when COVID arrived, and now wants to give more to their friends simply because they demand it.