Sharon Graham, general secretary of Unite
UK Power Networks, the National Grid power distributor made £1.3bn pre-tax profit. Billions in profit, bonanzas for the executives and shareholders, while there are only real pay cuts on offer for workers.
The profiteering crisis isn’t just a few “bad apples” like UK Power Networks: it’s systemic. In the first half of 2022, FTSE 350 companies saw their margins up by an average of 89% on the same period in 2019.
In 2021, Tesco, Sainsbury’s and Asda doubled their combined profits compared with 2019 to £3.2bn. Likewise, big brand food manufacturers such as Nestlé and Unilever have seen their corporate profits soar. From energy to food, hikes in our bills are seen in these soaring profits.
2021 saw the four giant agribusiness corporations, ADM, Bunge, Cargill and Louis Dreyfus, reaping profits of $10.4bn(£8.6bn) – up on pre-pandemic levels by an astonishing 255%. In petrol pump supply chains, refineries and oil companies are smashing corporate profit records. Last year, BP recorded the biggest profits in the company’s history – £23bn.
Between 2019 and 2022, the container industry boosted its profits from $7bn to $210bn (£5.8bn to £174bn). 2022 is set for an even bigger bonanza. Port owners, such as DP World and CK Hutchison, have also seen huge profiteering gains, and the biggest road freight operators were on the same page as their profits zoomed by 149%.
Market pricing systems have allowed some companies, such as energy firms, to reap massive windfalls while their real production costs haven’t changed. State-licensed monopolies have handed historic profits to North Sea oil extractors, electricity grids, privatised water operators and transport companies.
Big retailers or suppliers have exploited their “market power” to push up prices in circumstances of high demand and a limited supply of products. But we have also seen “price gouging” when crises create opportunities for what amounts to price fixing across sectors.
We are confronted by this cost of profiteering because of the stark inequalities in wealth and power that govern Britain. Capital, boosted by favourable governments, has managed to win enormous power that in turn allows it to set the rules of the economy and reap the rewards accordingly.
The system isn’t only broken, it is rigged.