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In times of crisis, energy companies’ excess profits are a moral failure




When a business is solely run for profit, it must die, for it no longer has a reason to exist – Henry Ford

When a business is solely run for profit, it must die, for it no longer has a reason to exist – Henry Ford

When a business is solely run for profit, it must die, for it no longer has a reason to exist – Henry Ford

The late American business mogul Lee Iacocca believed all business operations can be reduced to three words: people, product and profits. Even the hard-bitten motor industry magnate recognised it all begins with and comes back to people.

It was a view shared, strangely enough, by another famously tough titan of the automotive world – Henry Ford also insisted business must be run at a profit. However, he made one important distinction.

“When anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence,” he said.

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

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

She pointed out how the bloc is facing not only a security threat from Russia’s invasion of Ukraine, but a broader war.

“It is a war on our energy. It is a war on our economy. It’s a war on our values. It’s a war on our future,” she said, adding that the bloc’s electricity market is “not fit for purpose any more”.

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

Tánaiste Leo Varadkar agreed, saying it is “right and proper” that the Government should take back some of the big profits energy companies are making.

But it is also “right and proper” that any measures that can bring down bills must be vigorously pursued.

Taoiseach Micheál Martin acknowledged the Government is the shareholder on behalf of the Irish people in the ESB.

“I think the Government can look forward to a much higher dividend than would have been the case prior to the [energy] crisis,” he said.

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Brussels expects each EU member state to calculate its own figures when assessing what windfall tax it should charge energy suppliers. As EU Financial Stability Commissioner Mairéad McGuinness said: “The idea is that when consumers are really suffering with astronomical energy bills and those companies who are producing energy renewables are making significant and unexpected profits … it is time to redistribute.”

They say poverty is the only load heavier the more there are to assist in bearing it. Those in need should have to bear as little as possible.

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