Shell shocked

Please, I beg of you – forgive me for that pun. I am so sorry. So very very sorry.

By way of apology, here is The Morning Star editorial:

The power of oligopoly

(Thursday 31 January 2008)

SHELL and its apologists are wriggling as usual in their attempts to pass off £13.9 billion profits as entirely reasonable.

They deny that it is motorists in Britain who contribute, through previously unseen forecourt petrol prices, to this level of profits, insisting that half of their bonanza comes from extracting the oil, and selling it on the wholesale market.

Maybe it does, but 25 per cent of it comes from refining, distribution and retail, which is a not inconsiderable slice of the cake.

In any case, the oil transnational companies’ ploy of dividing up their operations into the various stages from exploration to the petrol pump is simply a means of obfuscating the obscene level of their profits.

It is similar to the game played by the gas and electricity privateers, which blame the price that they are forced to charge on the upstream costs that they have to bear.

They don’t mention that each company has its own wholesale operation which maximises its profits by charging the ultimate price to the parent company’s subsidiary further down the line.

It’s almost like value added tax, with every single transaction bringing an additional cost.

But, whereas VAT ends up in the exchequer, the ratcheted-up costs of the gas, electricity and oil companies pour a profits stream of flood-like proportions into the pockets of shareholders.

Those who claim that energy markets are highly competitive are living in another world.

These markets are dominated by an oligopoly, into which it is virtually impossible for new companies to break.

Even if they give the impression of challenging each other for contracts, their commanding positions in the marketplace guarantee their continued, very profitable domination.

Nor is it true that Shell and the other oil majors have to have this level of profits to either search for new oil fields or to diversify into renewables.

Shell is, in fact, investing less in exploration than previously and it has retreated from its fine words on renewables of a decade ago to concentrate on environmentally damaging projects such as the exploitation of Canada’s oil sands.

Disregard the cuddly, nice-to-be-with sunshine adverts of the oil transnationals.

They are all as single-minded as ever to control the globe’s scarce hydrocarbon reserves, even if it takes invasions of sovereign states, as in Iraq, and their sole priority is the well-being of shareholders.

As Unite joint general secretary Tony Woodley intimates, that should not be acceptable to the people of this country or to its government.

New Labour has been too soft by half on big business, holding down its share of taxation, slashing corporation tax and refusing to increase income tax on the super-rich who benefit disproportionately from the profits bonanza.

And this at a time when Gordon Brown and his cloned Chancellor Alistair Darling miss no opportunity to impose below-inflation pay settlements on public-service staff and to lecture low-paid workers on the need to rein in their demands.

An immediate windfall tax on Shell’s obscene profits could help to plug the yawning gap in the government’s tax income, but the only long-term solution to this problem is to bring these oligopolies into public ownership.

Democracy is too dangerous, ex-generals warn

No kidding.

Parliament should rubber-stamp all decisions on war rather than actually take the decisions? I am surprised the government wants to change this one – they’re not exactly fans of democracy themselves.

The power to declare war currently lies with the PM

Four former chiefs of the defence staff have attacked the prime minister’s plans to let Parliament have the final say on sending troops to war.

The ex-armed forces heads told the House of Lords that the proposal was “too academic” and “devoid of realism”.

But the government said that in a democratic society it was right that elected MPs should decide.

Earlier, the MoD denied reports that training could be cut for 1,000 new recruits to meet personnel shortages.

‘Offensive wars’

Just days after he entered 10 Downing Street, Mr Brown announced proposals to reform the constitution – including giving MPs, rather than the prime minister alone, the right to decide on whether the UK declares war.

Under the government’s plans, parliament would always have to be consulted in advance unless there “is not time” to get its consent or “there is a need for covert or secret operations”, such as in rescue missions.

Parliament’s stamp of approval is important, but parliament mustn’t run the risk of hazarding the lives of service men and women General Lord Guthrie Former chief of the defence staff

But the prime minister would be held accountable to MPs afterwards when “he had committed armed forces under exceptional circumstances”.

One former chief of the defence staff, Lord Brammall, said he was enthusiastic about the idea, saying it would be in the “best interests of the country”.

But General Lord Guthrie of Craigiebank – who was head of the forces under Tony Blair – said “secrecy, security and surprise” were critical to many military operations.

“Parliament’s stamp of approval is important but parliament mustn’t run the risk of hazarding the lives of service men and women,” he said.

Field Marshal Lord Inge warned that it would be difficult for Parliament to be consulted when there was a need for speed – as there had been in Sierra Leone.

He said he was strongly in favour of the Commons debating any military deployments, but that if “there is any delay in it giving support to the armed forces, it is bound to affect planning and their morale.”

Marshall of the RAF Lord Craig of Radley said that conflicts such as Iraq, where there is time for debate before launching military action, may not occur in future.

He asked: “How often in future are we going to embark on offensive wars of choice? Have we not had enough of them?”

Field Marshal Lord Vincent of Coleshill, said he understand how the invasion of Iraq had led to some “relevant concerns”.

“But in today’s less clear cut security environment this can be an immensely complicated matter which needs to be considered further before we completely abandon the royal prerogative or something equivalent,” he added.

Lord Hunt of Kings Heath, for the government, said ministers would have to strike a balance to guarantee flexibility and forces’ morale.

He said: “It seems axiomatic that in a democracy rooted in parliament, parliament should have the final say.

Under strength

Earlier, the Times reported that training for some new Army recruits might drop from a minimum of 26 weeks to 14 weeks, to free up them for deployments earlier.

It added that the move was being considered because the battalions due to replace 52 Brigade in Afghanistan are at least 100 personnel short.

But the MoD said no-one was deployed on operations without the right training.

It added that it had no plans to change training for regular forces, but it was reviewing reserve forces’ training.

The BBC’s Caroline Wyatt said that the UK’s military commitment to Afghanistan was not in any doubt, but that the forces are under-strength and increasingly stretched.