Windfall tax: a weak capitalist solution to a big capitalist problem

Adam Harmsworth, Coventry Socialist Party

Pressure is growing on the government to act on soaring energy bills which risk throwing 40% of UK households into fuel poverty.

The Tory response has been predictably inadequate. They’ve announced a mandatory £200 loan in our bills, and a £150 council tax rebate [the Scottish government have also cut council tax bills by £150, for those in council tax bands A to D], which the Resolution Foundation think tank has shown won’t reach an eighth of low-income households. That does little to help with the £693 average rise just this year.

While millions face fuel poverty, the energy giants are raking it in. BP’s underlying profit in the first quarter of this year alone was £4.9 billion, while Shell took £3.1 billion – its biggest ever quarterly profit.

Polls consistently show a majority of the public backing nationalisation of energy, but politicians are steering clear of that idea, trying desperately to leave it in the Corbyn era.

The headline proposal in the media to deal with gigantic fuel costs is a ‘windfall tax’ – a one-off levy usually targeting companies that have made big profits. Labour’s proposal is an extra 10% on corporation tax for companies drilling in the North Sea.

Labour’s plan could apparently raise £2 billion, £71 per household, leaving many in fuel poverty and barely touching the energy companies’ wealth. [Similarly, the SNP in Scotland are calling for a tax on ‘excessive’ profits of major companies, including energy]

No wonder it is starting to receive the backing of the capitalist class: Tesco’s chairman, the Lib Dem leader, and some Tory MPs have expressed support. Sunak and Johnson themselves seem to be retreating from opposing the tax to considering it an option.

Other sections of the capitalist class object to the pitiful windfall tax, fearing that taxes on the rich could popularise the idea that their money can be seized for public use. BP and Shell are among those trying to defeat the idea by promising more investment, while also threatening to withhold investment if the tax goes ahead.

If the Johnson government implements a windfall tax or a similar measure, it would amount to a U-turn, forced by the pressure of growing working-class anger at the rising cost of living. A fighting lead from the trade unions would enormously amplify this pressure.

But a windfall tax, or any half-measure to take from the bosses, would not deal with the core problem. While capitalists own and control our utilities and so much wealth, they will continue to act in their own interests, even when their profit-hoarding causes poverty and death.

Nationalising the energy industry under democratic workers’ control as part of a socialist plan of production would mean that the bosses’ hoarded cash could be put to use.

Socialist nationalisation could end fuel poverty immediately, could cut or even end energy bills, with costs absorbed into government spending. A socialist planned economy in Britain, linking with others across Europe and the world, could bring an end to rocketing prices and the chaos of the capitalist market.

We have to fight for nationalisation, because the best offer from the capitalists is a slightly smaller increase in fuel poverty. We cannot go on like that.

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We say:

Pay, benefits, pensions

• An immediate above-inflation pay rise for workers to restore wages after over a decade of pay freezes and below-inflation rises
• Regular pay increases for all, linked to trade-union agreed measures of inflation
• Raise the minimum wage to £15 an hour, without exemptions
• Restore the pension triple lock
• Restore the additional £20-a-week Universal Credit payment. End the benefit cap
• Living benefits and pensions for all who need them, rising with the cost of living

Housing

• Freeze council and social housing rents
• Rent controls to cap rents – decided by elected bodies of tenants, housing workers and trade union representatives

Make the rich pay, not the workers

• No rise in national insurance or council tax, scrap student debt
• No worker should be made to pay more tax, raise tax thresholds in line with inflation
• Take the wealth off the super-rich, nationalise the top 150 companies and banks to be run under democratic working-class control and management, with compensation only on the basis of proven need

Price rises

• Reverse the rise in the energy price cap. Nationalise energy and other utilities under democratic workers’ control and management to reduce bills by removing the profit motive
• No increase in public transport fares. Return transport into public hands, to guarantee a fully funded, free, environmentally friendly, sustainable transport system
• Stop price rises, end bosses’ profiteering. Open the books of big retailers to inspection by trade unions. Nationalise the big retailers under democratic workers’ control to be run to meet need, not for profit

Trade union struggle

• For a trade union-led struggle against the cost-of-living crisis
• The TUC-organised demonstration on 18 June must be used as a stepping stone towards coordinated strike action, uniting workers’ struggles for pay rises
• For fighting, democratic leaderships of the trade unions

New workers’ party

• No trust in Starmer’s Labour or the SNP/Greens to fight in our interests. For a new mass workers’ party based on trade union and workers’ struggle

Socialism

• End the chaos of the capitalist market. For a socialist plan of production, based on the needs of the overwhelming majority, not for profit