Criticism of British Petroleum (BP) is coming thick and fast from all side of the political spectrum following the announcement that it made £6.4 billion profits in the financial third quarter. You would think we would hear the collective sigh of relief from the mouths of politicians at the rare sight of some positive news; but alas, no. Instead, populist diatribe is the order of the day.
Unite’s reaction is unsurprising, but those in Westminster should know better. Prime Minister Brown is calling on BP to lower its prices while across the House, Shadow Chancellor George Osborne has said: "BP have absolutely no excuse for not passing on any fuel price falls to customers. It would be a scandal if they do not."
John McDonnell, Labour MP for Hayes and Harlington, has stated, “At a time when many people are struggling to cope with high fuel costs just to keep warm this winter, this is grotesquely obscene profiteering by BP". Going on to call for the introduction of a windfall tax.
In truth, BP is the single biggest taxpayer in the country, while its dividend payout was more than 10% of the total dividend income paid to pension funds by FTSE-100 companies. And as well as making big profits, they are also investing huge sums in new technologies – something the government purports to be encouraging. As such politicians should leave them well alone. Instead, the likes of John McDougal are calling for the “public ownership and control of irresponsible energy companies".
If he really cares about the cost of fuel, McDougal should instead be looking into ways the government can convince OPEC to break its cartel, persuade Saudi Arabia and Russian to privatize the government controlled oil companies Aramco and Gazprom, and get the EU to liberalise its energy market. More simply, he could just support lowering UK fuel taxes.
Winston Churchill once said that “It is a socialist idea that making profits is a vice; I consider the real vice is making losses". Quite right.