DATE OF ISSUE: FRIDAY 5th SEPTEMBER 2008
Calls for a 'windfall tax' are sure to increase following the news that the 'Big Six' energy companies hiked their shareholder dividends payouts by 19% according to new research. The suppliers paid £1.64bn in dividends in 2007, £257m more than in the year before, a study commissioned by the Local Government Association found.
While calls for a windfall tax are understandable, the Campaign for Public Ownership believes that the only long-term solution to the problem of energy company profiteering is to restore the energy companies to public ownership.
The problem lies in the ownership structure of the energy companies. All of them are Public Limited Companies, whose overriding aim is to maximise profits for shareholders. That's what PLCs do. Instead of reacting with horror to the entirely predictable news that PLCs are putting the interests of shareholders before Britain's long-suffering energy consumers, we should instead be calling for the government to take the one step that will lead to lower energy prices in the long term. Restoring the energy companies to public ownership will mean that prices can be lowered, as there will be no shareholder dividends to pay.