In times of crisis, the superprofits of energy companies are a moral failure


The late American business magnate Lee Iacocca believed that all business operations could be reduced to three words: people, product and profit. Even the auto industry tycoon acknowledged that it all starts and comes down to people.

It was a view shared, oddly enough, by another famous titan of the automotive world – Henry Ford also insisted that business should be run profitably. However, he made an important distinction.

“When someone tries to run a business purely for profit, the business must also die, because it no longer has a purpose,” he said.

Such thoughts take on new relevance with crippling energy costs worrying people and ESB’s announcement that its half-year results show a profit – after tax and exceptional items – of 390 million euros. This is three times the profit of 128 million euros that it generated in the same period last year.

Speaking this week in Brussels, European Commission President Ursula von der Leyen said: “In these times, it is wrong to receive extraordinary record profits benefiting from war and on the backs of consumers.”

She highlighted how the bloc faces not just a security threat from Russia’s invasion of Ukraine, but a wider war.

“It’s a war on our energy. It is a war against our economy. It is a war against our values. It’s a war on our future,” she said, adding that the bloc’s electricity market was “no longer fit for purpose”.

The urgency of decoupling gas prices from the cost of electricity could not be greater.

Tánaiste Leo Varadkar agreed, saying it was “fair and appropriate” for the government to take back some of the big profits the energy companies make.

But it is also “fair and proper” that all measures that could lower bills should be vigorously pursued.

Taoiseach Micheál Martin has acknowledged that the government is the shareholder on behalf of the Irish people of BSE.

“I think the government can expect a much higher dividend than it would have been before the [energy] crisis,” he said.

Brussels expects each EU member state to calculate its own figures when assessing the exceptional tax it should charge energy suppliers. As EU Financial Stability Commissioner Mairéad McGuinness said: “The idea is that when consumers are really suffering from astronomical energy bills and companies that produce renewable energy are making big windfall profits… it’s time to redistribute”.

They say poverty is the only burden that gets heavier the more help there is to bear it. Those in need should bear as little as possible.


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