“The tough decision we need to make has to be to challenge the energy sector’s private profit motive from and focus on delivering for the public.”
By Beth Winter MP
The past month has shown the scale of the climate crisis hit home but despite that, also revealed the determination of entrenched profit-driven polluters to assert their private priorities over politicians and the needs of the public.
The world has just seen 21 of the 30 hottest days on record recorded in the past month. At the same time, the big oil and gas companies, Shell and Total have announced they took around £5bn in profits over the past three months, whilst BP reported around £2bn. These came on top of even larger earlier profit announcements, funded by fossil fuel extraction, which have allowed billions of pounds of dividend payments to wealthy shareholders whilst energy bills caused a cost-of-living crisis for millions.
The prioritisation of profit and payments to their wealthy investors, over responsible action on a transition to renewable energy, was demonstrated by BP Chief Executive Bernard Looney, on the announcement of their financial results, when he talked about shareholder payments being his ‘first priority’, and that, ‘our returns thresholds are sacrosanct’.
These dividend payments to a layer of wealthy individual and institutional shareholders have scandalously dwarfed investments in new renewable energy generation – starving the transition of vital investment.
Recent analysis from Commonwealth shows BPs shareholder payouts were 17 times their “low carbon” (renewable energy) investment and Shell’s shareholder payouts were 11 times their “renewable and energy solutions” investment. The failure of private profit-seekers to take the action the climate requires to reach net zero carbon emissions is stark. But it is by design. Research has suggested Government MPs have received thousands in donations from fossil fuel and polluting companies to keep the system in place.
And to demonstrate that, the pro-polluting agenda was rewarded by the Prime Minister’s confirmation on Monday that hundreds of new North Sea oil and gas licenses would be granted before the next election.
The Prime Minister’s decision shows his commitment to delivering for oil and gas conglomerates even at the expense of constituents.
The Conservative spin machine tried to claim a progressive commitment to transitioning to renewables would increase the cost of bills but research shows that renewables are significantly cheaper. Those of us on the left should not stop reminding voters, when the Conservatives want to talk about bills, that it is this Government’s oil and gas dependent energy generation that has seen household bills soar from around £1000 a year on average in 2020-21, to over £4200 a year in this year’s first quarter.
But it is not simply about the price of bills, it is the impact on the climate that is now increasingly harming food production, causing rampant wildfires, and will result in more and more people displaced from their homes if we continue to ignore what is happening in front of us.
The scale of the crisis demands tough decisions but there are concerning signs that politicians are shying away from them.
The issuing of new drilling licenses in the North Sea, so close to a general election, means it is incumbent on the left to demand they don’t go ahead and – before they can begin – say that a change of government will mean the cancellation of those licenses.
Politicians were also quick to find an excuse for the Conservatives holding on to a seat in the Uxbridge and South Ruislip by-election. They have claimed the expansion of the ultra-low emission zone by London Mayor Sadiq Khan forced voters to demonstrate environmental measures loading costs onto strapped household finances, even when it is the right thing to do for health and climate reasons.
It is undoubtedly the case that the cost-of-living crisis means all new costs are resented. But very few motorists are impacted by ULEZ, and the Mayor of London has committed to extending his scrappage scheme for cars that don’t meet pollution requirements. A Labour Government should ensure climate measures don’t unfairly burden those less able to bear the cost of the change.
The Conservatives claim their pro-fossil fuel agenda can reduce bills. This flies in the face of recent experience. But delivering on the climate crisis and cost-of-living crisis rests on the resoluteness with which Labour and the wider left sticks to a non-negotiable net zero agenda; the necessity of Labour sticking to its existing commitments of £28bn a year of green investment, whilst setting out the tangible benefits of that investment for each community to build support; and finally, by countering those false Conservative cost-of-living claims with social solutions to the real causes of the cost-of-living crisis.
That means lifting real pay, imposing controls on rampant food inflation, reducing bus and train fares, and – yes – increasing windfall taxation on an oil and gas dominated energy market to reduce unaffordably high energy bills.
In addition to that, as the scale of wasteful dividend payments to private shareholders in the energy sector is exposed, a Labour government must take urgent action to reduce energy bills and increase investment in renewables to reach net zero, building not only on the establishment of public energy generation, as Labour has proposed with GB Energy, and Ynni Cymru in Wales, but through making a priority of taking the energy providers and the energy grid into public ownership.
The tough decisions we need to make, to resolve our climate crisis and deliver affordable energy has to be to challenge the energy sector’s private profit motive from and focus on delivering for the public. Our immediate future depends on it.
- Beth Winter is the MP for Cynon Valley and a regular contributor to Labour Outlook, you can follow her on Facebook, Instagram and twitter.
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