Tag Archives: monopoly

France has public ownership of energy. Why can’t the UK have that too?

The problem: energy prices are set to have quadrupled within a year and the Tory government is doing nothing about it.

Controversial as he may be in many respects, Owen Jones makes a lot of good points in this short clip from an appearance on Jeremy Vine’s show.

Firstly, because the energy firms are private companies, their shareholders have received £200 billion in dividends since 2010 – money that could have been used to reduce bills instead, or to free the UK from dependence on fossil fuels provided by foreign suppliers (this would have eliminated the price shock that has sent our bills skyrocketing today).

We’ve been told profits have increased fourfold because of the price increases – and very little of that is likely to go into energy independence; 60 per cent of these new profits will go to shareholders.

The energy industry is a natural monopoly which should never have been privatised. The solution to the price problem is to re-nationalise the industry and impose stern pricing controls on bills sent to the public. Windfall taxes on the companies are not enough.

See/hear for yourself:

Sadly, nobody in any position to affect the energy crisis is even thinking of re-nationalisation, despite the example of France, where price increases are pinned at an affordable four per cent.

Even Labour leader Keir Starmer thinks the energy firms should remain in the hands of billionaires – a position that sets him against the vast majority of his party’s members.

But then, who cares about that? Starmer’s party “reforms” have ensured that the opinions of Labour members won’t have any impact on party policy in the future. The membership exists to service the desires of the party’s elite MPs, candidates and other high-level representatives.

Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.

https://www.crowdjustice.com/case/mike-sivier-libel-fight/


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Osborne-created tax loophole diddles the UK out of hundreds of millions

A tax avoidance loophole specially created by George Osborne, the UK Chancellor, last year means that water companies have played the system to reduce their tax bills to a trickle.

Some people just don’t know when it’s time to do the right thing.

Look at the three water companies that are paying practically no tax on their huge profits, while yanking up prices every year according to the retail price index and enjoying a monopoly in their areas – according to today’s report in The Observer.

Thames Water avoids tax by offsetting the interest payments on its debts against its tax liability and delaying it by claiming allowances on capital project spending. The company is seeking government support for a £4.1bn project to build a new “super sewer” under the Thames.

Anglian lent £1,609.1m to a subsidiary company in the Cayman Islands tax haven in 2002. This year it was able to pay £478.1m in equity dividends to investors, including its subsidiary in the tax haven.

Yorkshire Water also increased the debt on its books recently, which offsets tax payments.

In other words, all three were able to exploit a new tax loophole, created by George Osborne last year – that’s right, the Chancellor who is supposedly trying to stop tax avoidance has actually been creating more ways for big business to achieve it – to pay as little tax as possible.

In my article last Monday, I highlighted changes to the tax laws, brought in by Gideon, I mean Mr 0, that mean companies in the UK pay nothing at all on money made by their foreign branches and may claim the expense of funding those foreign branches against tax paid in the UK. That is exactly what Anglian and Yorkshire are doing, according to the Observer report.

Without knowing where the Thames debt is based, it’s hard to say for certain whether it falls into this category of tax avoidance.

Thames made an operating profit of £650 million last year, and Anglia’s was £492, while Yorkshire’s was £303 million. With Corporation Tax at 26 per cent (they should all pay the higher rate), this means the Treasury failed to collect nearly £376 million from the three companies.

The amount lost to the Treasury from these three companies alone would pay off three-quarters of what the government hopes to take away from people currently on council tax benefit, when local authorities implement their new council tax relief schemes – the ‘Pickles Poll Tax’ – in accordance with Eric Pickles’ Localism Act, next April.

Both Thames and Anglian told The Observer their tax was merely being deferred, and they would have to pay it in full at a later date. Yorkshire declined to comment.

My problem with this is that the UK is in deficit difficulties NOW. We need everybody’s tax money NOW. Not later. By exploiting a loophole in the tax system that the Chancellor irresponsibly created, they – AND HE – are extending the problem.

The absence of any significant tax bills means Thames and Anglian were able to pay out dividends totalling £1.5881 billion. I don’t have the figures for Yorkshire. Ask yourself how many of those shareholders have tax avoidance schemes of their own.

Meanwhile, those of us on PAYE have to pay the full amounts of our tax bills – and our utility bills – no matter what harm they do to our household finances. There can be no deferrals for the working-class citizen!

And what help do our bloated water companies give us?

A drop in the ocean.