|The News Line: Editorial
Friday, 18 January 2019
British capitalism so bankrupt it can’t provide for energy demands
THE ANNOUNCEMENT yesterday that the Japanese company Hitachi is pulling the plug on plans to build a nuclear power station in Wales has blown a massive hole in the Tories energy strategy.
The giant Japanese conglomerate took over the contract to build up to six UK nuclear plants six years ago from the private German utilities company E.ON who had previously been contracted to build them.
At the time, the then Tory prime minister David Cameron hailed the contract with Hitachi as a ‘multi-billion pound vote of confidence in the UK that will contribute vital new infrastructure to power our economy’ and he boasted that these plants would provide 14 million homes with electricity for 60 years.
Six years on and the reality of the bankruptcy of British capitalism has struck home, with Hitachi becoming the second firm in two months to pull out of major UK nuclear projects triggering what is being described as a ‘full-blown crisis’ for Britain’s future energy supplies along with Tory dreams of attracting huge amounts of investments from foreign companies.
Behind Hitachi’s decision to take a £2 billion hit on money already spent on the £16 billion plant at Wylfa on Anglesey rather than carry on with the project was the breakdown of negotiations between the company and the Tories on the amount of taxpayers’ money the government was prepared to give Hitachi to underwrite the scheme.
According to Tory business secretary Greg Clark, they had offered a ‘generous and significant’ amount of money in addition to a whole package of support. This involved providing Hitachi with a debt facility, taking a one third stake in the company Horizon Nuclear Power set up by Hitachi to build the plant and guaranteeing the price of the electricity produced up to £75 per megawatt hour for the next 35 years.
All this money would naturally come from the taxpayer while every energy user would see their bills reflect the price guarantee to Hitachi over the next 35 years. Even this wasn’t enough for the company’s profit margins and they followed another Japanese company Toshiba who scrapped the plan to build power stations in Cumbria last November. Toshiba’s decision to pull out and leave the UK government high and dry as regards its energy strategy came as no surprise.
This private company was forced into a near meltdown last year when its wholly owned Westinghouse was driven into bankruptcy in the US over the overrun costs of building nuclear reactors in America. The entire business strategy of not just these private nuclear plant construction industries but of all these giant infrastructure contraction companies has been to bid low, demand huge subsidies from governments and dump any increased costs back on the working class through exorbitant charges.
If they decide that they cannot make the vast profits they demand then, like Hitachi and Toshiba, they will simply walk away. This leaves the working class to pick up the tab in the form of the hundreds of jobs that will immediately go in Wales along with thousands more in the supply chain. At the same time it leaves the entire country facing an energy crisis in the very near future.
What is clear from this is that private companies, no matter how large or multi-national, driven solely by the demand for profit cannot fulfil the most basic needs of people. We are seeing the fruits of the Tory campaign started by Margaret Thatcher in the 1980s to destroy British industry and end publicly owned vital infrastructure services like energy and hand them over to the privateers.
The answer to this crisis is to put an end to a bankrupt capitalist system through socialist revolution. These companies and every public service privatised must be taken over and placed under the management of the working class – with the bosses along with the bankers expropriated as part of a planned socialist economy. Only by expropriating the capitalist class can the wealth of society be used to provide for all the needs for affordable energy to be guaranteed.
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