Rolls-Royce is discussing corporate subsidies with Keir Starmer’s Labour Party government to fund a £3bn engine to power commercial aircraft. The company already has £210 million in public funding from the people. Yet the business had underlying operating profits of £2.5 billion in 2024 at 14% margins. Why is the UK public topping up Rolls-Royce profits while chancellor Rachel Reeves announces billions in cuts to disabled people’s support?
Labour corporate welfare for Rolls-Royce
In the 2023/24 year, government subsidies to corporations totaled £32 billion. The year before, they were £53 billion because gas inflation not only increased bills but also the government increased corporate handouts to profiteering fossil fuel companies. And now Starmer has announced a further £22 billion bung to the fossil fuel sector for carbon capture projects that don’t work.
Add in Rolls-Royce and its potential subsidy, and the situation is ridiculous.
Energy isn’t the only privatised sector where we’re paying twice. 2023/24 government subsidies to the railway industry totaled £23 billion. When you take a train, remember you already paid for some of the ticket. Labour is bringing the operating network for rail into public ownership, but it is leaving the trains themselves privatised. That means we will still be renting the actual trains from the private sector as it milks us dry.
The ‘rolling stock’ companies that hoard the trains have paid dividends to shareholders at £3.6 billion since 2014/2015, according to research from We Own It.
Sustainability and aircraft
One positive thing is that Rolls-Royce is committed to making its engines compatible with Sustainable Aviation Fuel (SAF), which can reduce carbon emissions by up to 80%. SAF production needs to dramatically increase to address climate change.
The fuel could become cheaper than fossil fuels if production increases, but companies and the aviation industry are currently sleeping at the wheel. At present, one flight can emit as much Co2 as some people do in a whole year.
Another facet to Rolls-Royce is that it makes engines for military aircraft, suppling 160 customers in 103 countries. Campaign Against Arms Trade (CAAT) reports that arms total 32% of its sales.
If Rolls-Royce wants people to publicly fund it, then it should operate as a not-for-profit. Meanwhile, it’s a no brainer than energy and rail should be fully publicly owned.
Featured image via the Canary
