THE obscene profits reported today in the banking and energy sectors expose how broken our economy is and the urgency of fundamental restructure.

While pensioners are freezing in their homes due to the winter fuel allowance being cut, and working people have experienced the worst cost of living crisis in a generation, energy giant Centrica has made more than £300 profit per household.

These out-of-control profits are not the result of investment or technological innovation. They are not the result of the development of new sources of green energy. They are money taken directly from the pockets of working people through unrestrained price rises.

The super-profits made by energy companies and supermarkets in particular throughout the cost-of-living crisis show the parasitic nature of these giant monopolies, and a lack of political will from the mainstream political parties to do anything to address this very real crisis.

Similarly, the failure to implement even a one-off windfall tax on record banking profits of over £45 billion, while our schools are underfunded and children go hungry due to the two-child benefit cap plunging ever more families into poverty, shows a fundamentally broken economic and political system.

According to research by the NEU, 76 per cent of primary schools and 94 per cent of secondary schools face real-terms cuts next year and the government is proposing that teacher pay awards are unfunded, putting further strain on school budgets. According to campaigners, a windfall tax on banking profits would have raised almost £15bn, which could address this funding gap. This is five times the amount needed to scrap the two-child benefit cap five times over.

The questions this raises are very clear. Is it more important to feed hungry children and lift families out of poverty or to increase banking profits? 

This may sound simplistic, but the reality is that the choice is that stark.

In modern capitalist Britain, the state plays a huge role in our economy. The question is should that role be in the interests of people or of profits?

If we believe the latter, then we need to be calling for immediate measures to rebalance and restructure our economy. These should include redistributive measures such as windfall taxes on profits, reform of the tax system and putting more resources behind challenging corporate tax avoidance and evasion.

However, they must also include real measures to strengthen workers’ rights, as envisaged in the original New Deal for Workers. A massive wave of insourcing and the introduction of sectoral collective bargaining across the economy, combined with strong militant workplace organisation, would make the single biggest difference to inequality and low pay across our Britain.

We also need to tackle the question of super-profits based on unsustainable price rises themselves. Price caps on food, energy and other essentials must be immediate demands of our movement, to crack down on super-profits at the expense of working people’s living standards.

Finally, this must be combined with investment in our productive economy, which has suffered 45 years of deindustrialisation and cuts, leaving it weak, unproductive, and vulnerable to economic crisis.

In proposing these measures, we should be clear about our aims. Our intention should not be to stabilise capitalism, or establish a temporary equilibrium between wages and profits.

We should fight for the imposition of economic measures by popular demand, not as an attempt to tame capitalism but as a first step in dismantling it and replacing our broken economy with one based on production for social need, with an end to private ownership of the means of production.