British Petroleum recently reported record profits for the last quarter in the context of rapidly rising energy prices and many in the UK facing a cost of living crisis.
This has led some UK politicians, cheered on by some sections of the press to suggest that we should impost a windfall tax on on these companies....
They theory behind this is that it's just wrong for energy companies to enjoy record profits (potentially paying out huge dividends to a handful of share holders) while millions struggle to pay to heat their houses and pay for fuel for their cars.
BP has responded by saying that it managed to profit out some 'clever trading' on the energy markets (fair enough) and that it won't pay increased dividends this year, rather it will invest the money back into its operations in the UK, funding more green energy initiatives for example.
Is a windfall tax enough?
Global events have led to a situation where energy prices have risen, rapidly, Global energy corporations have had to respond to these events along with nation states and the peoples within them.
However, unlike Nation States and the vast majority of the peoples living in them, TNCs are much better positioned to take advantage of economic crises, like rapid increases in energy prices.
These companies have no commitment to any people in any country, they are globally mobile, their capital and profits theirs and free floating, besides a little tax paid here and there to whichever country they choose to base themselves 'nominally'.
They have masses of capital which they can use to ride out or benefit from crashes and spikes in the prices of global commodities.
And this is precisely what BP has done, is doing..... and as far as BP is concerned the fact that the people of Britain, or at least some of them, are facing a cost of living crisis is almost nothing to do with them, as they see it.
Britain is just ONE country BP operates in, from it's perspective its registration there is just nominal, it doesn't signify a commitment to 'Britishness'.
The UK government and other nation states have helped set up the global energy system that allows TNCs to be as free as they are, and profit as much as they have done over the last decades....
Oil Companies have been extracting and polluting for decades, we in Britain have benefited mainly because of health and safety/ environmental protection laws, other countries haven't been so lucky, other countries haven't benefitted from their profits anywhere near as much as the UK.
A windfall tax on BP isn't too draconian IMO, but it does seem a bit out of sync with several decades of policy which have allowed the corporation to be free-floating.
What we need instead of a one-off one-country approach to the cost of living crises is a much more globally co-ordinated approach to energy supply and usage.
The problem is that's difficult, a windfall tax is relatively easy!
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