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November 1, 2013 / politicsbitesize

A profit is what you seek

BrandStatesmanLast week, Russell Brand hit the headlines when he appeared on BBC’s Newsnight programme (22 October) to defend his position as a guest editor of the New Statesman (24 October).  In his interview with Jeremy Paxman he made his political viewpoint clear when he stated that he thinks, ‘the very concept of profit should be very much reduced because wherever there is profit there is also deficit. This system currently doesn’t address these ideas.’

When pressed, the comedian turned revolutionary said he would only vote for, ‘a socialist egalitarian system based on the massive redistribution of wealth, heavy taxation of corporations and massive responsibilities for energy companies exploiting the environment.’ Brand, who has never voted, suggests that the majority of people are turned off politics because the parties cannot be trusted to do what they say they will and all appear to help and defend only the richest in society.

Whilst Politics:bitesize disagrees wholeheartedly with Mr Brand’s notion that we shouldn’t bother to vote, his idea of a cap on profits is an attractive one.  On Tuesday 29 October the Big Six energy companies were hauled in front of the Commons Energy Select Committee in order to defend the spate of recent price hikes, despite record profits being made last year.

Representatives from British Gas, EDF, RWE npower, SSE, E.ON and ScottishPower were summoned to appear before the committee to answer charges that they are acting like a cartel.  According to the Institute for Public Policy Research (IPPR) report, Keeping energy affordable, energy bills are being inflated due to the lack of competition in the supply market.  Will Straw, an associate director of IPPR, said:

The key question for the Big Six is why profits of 5 to 6 per cent are acceptable in a competitive market. In 1998, as the market was liberalised, the regulator believed 1.5 per cent was an adequate margin for energy suppliers. Profits in other sectors like supermarkets are as low as 2 per cent.’

The Independent this week provided a breakdown of the profits of the Big Six and it makes for sickening reading.  British Gas recorded £606m, EDF reached a whopping £1.7bn, RWE npower came in with £390m, SSE’s profit was £410m, E.ON only managed £235m and ScottishPower raked in £712m.  Surely the profit that these companies make could be used to offset the increase in wholesale prices?  A profit should only be made after a company’s overheads have been met.  It seems, then, that the energy giants are asking consumers to pay to keep their profits high rather than for the service that they provide and that is unacceptable.

Politics:bitesize agrees with Russell Brand’s declaration that there is a revolution coming and the momentum of the forthcoming demonstration by the People’s Assembly on 5th November is a testament to that.  The people need to formulate an idea of what they want as a replacement for the current system, and perhaps Brand’s involvement in this process is helpful in that it might switch more people on to politics.

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