Helen Pattison, Socialist Party Executive Committee
The economic impact of the US-Israel war with Iran has begun to be felt around the world. Oil prices rose to a four-year high of over $120 a barrel and fluctuates hour by hour as the war goes on.
Keir Starmer is clearly worried that rising inflation will make his government even more unpopular as families struggle with the cost of living. Just minutes into a recent press conference about the war with Iran, he was already talking about the cost of living in the UK. Chancellor Rachel Reeves was also forced over the last few days to meet with petrol company bosses and warn them against potential “price gouging”.
But Starmer and Reeves have been in office since 2024, since then their government has forced though sweeping austerity, determined to make the working class pay for the crisis rather than the bosses. This latest crisis of oil prices will be no different.
The £53 million scheme being put in place for people who use oil for heating, who have been hardest hit by price increases, is welcome for those who will be impacted. But it essentially means the government will continue to prop up the profits of the energy companies, by subsidising the cost to consumers.
It is clear when Reeves and Starmer talk about ‘price gouging’ they only mean very limited circumstances, such as reports of heating oil suppliers cancelling orders to boost prices or petrol prices being increased far beyond wholesale prices. In general though, both Starmer and Reeves accept that prices must rise during this war and subsequent economic shocks, and their government will fight to defend the profits of British capitalism.
What they don’t talk about is the huge transfer of wealth from the poorest to richest which continues today. Particularly the surge in profits garnered by the energy companies. Since 2020, the energy giants have made £125 billion in profits from the UK alone. Unite the Union’s research found that the UK’s biggest 350 companies reported 73% higher profits in 2022 than in 2019, before the pandemic.
Starmer’s other policy is that we move to being more “self sufficient”, producing energy with nuclear power and renewables in the UK. That way, energy costs wouldn’t be as hard hit by global markets. But even today, electricity prices are set by the global cost of gas, despite the fact that electricity is increasingly producing by renewables. Simply moving production to the UK while leaving energy in the hands of private companies won’t stop them chasing the highest possible profits.
Instead, we call for the energy companies and their vast profits to be nationalised as the only way to drastically bring down bills, with compensation paid only to those with genuine proven need. Instead of being siphoned away, their profits could be used to massively increase investment in safe and clean energy production. Democratic workers’ control and management of production could offer people genuine security and lower all our bills.
