Vir Cantium

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British Industry is Still Alive, So The Left Call for Its Head

Somehow I never fail to be both astounded and depressed at the scale of economic illiteracy in the country.

Today saw another successful British company announce some decent quarterly results (pdf 183K). The BP group announced profits before tax for the second quarter of some $15bn.

Inevitably, then, we have heard the bile-laden spiteful calls for a “windfall tax” on BP and other energy companies. So, rather than applaud BP, noting the benefits to many of our pension funds, the extra investment that the company will be able to make as a result of those profits, we try to do down the company that provides a livelihood for thousands of British employees.

BP and other oil producers have been facing calls from unions for a windfall tax on their profits to help those struggling to cope with higher energy costs.

“A windfall tax now would ensure that the money was there to help the old and vulnerable through these tough times,” said Unite general secretary Tony Woodley.

“Tax the fuel companies now so that those who helped to create these mega-profits get their rightful share of them.”

Quite how a 13% net profit counts as “mega” is unexplained, but then again if Mr Woodley actually understood business then presumably he wouldn’t be a union leader.

He also makes the rather odd connection between (a) a tax and (b) something which will “help the old and vulnerable” and getting the “rightful share” of those profits to “those who helped to create” them (rather than something which will simply get lost in servicing government debt, or bribing the voters in the next by-election, or channelled into the unions’ own coffers).

He also conveniently forgets the $5bn of tax which BP will be paying on these profits. Indeed “BP insists that it is already one of the UK’s largest taxpayers. A company spokesperson told the BBC that the company paid $14.5bn in taxes worldwide last year, including $2.3bn in the UK.”

Depressingly, we can expect the same lesson in how to create a hostile environment for business on Thursday when Centrica (British Gas) announces their latest results.


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