In case there was any doubt that economic inequality is out of control, oil giants BP and Shell recently announced record profits while millions of people in the UK struggle to afford their energy bills and make the choice between eating or heating.
The cost of living crisis is international but has hit the UK hardest among the world’s richer countries, with the IMF estimating that Britain is set to be the only major economy to shrink in 2023.
Inflation has hit heights not seen in decades. Prices are, on average, 10 per cent higher than they were a year ago and the cost of many cheaper food products has risen even faster. For energy bills it’s even worse, as the energy price cap set by regulator Ofgem doubled in the space of a year and was set to be even higher without government intervention. The impact on people and communities has been devastating.
Which is why record profits for companies is so jarring for so many. Among the more printable reactions, shadow environment secretary Ed Miliband called the profits “outrageous”, researchers at think tank IPPR labelled them “scandalous”.
”While bill-payers across the UK are struggling with soaring costs, BP’s shareholders are reaping enormous payouts,” said IPPR researcher Joseph Evans. “After the oil giant made record profits in 2022 it passed an extraordinary £9.35 billion directly back to shareholders through share buybacks.
“That’s a scandalous use of surplus cash which could have been used to lower bills, or invested in the green transition. America and Canada are already taking action on excessive shareholder payouts: it’s long overdue for the government to follow suit by introducing a tax on share buyback schemes.”