Barack Obama's attacks on BP hurting British pensioners

Is President Barack Obama jeopardising the pensions of millions with his "excessive" criticism of the energy company following the Gulf of Mexico oil spill, asks the Telegraph?

Before the accident on April 20, BP was Britain's biggest company, with a stock market value of £122 billion (about $178 billion); since then, £49 billion (about $71.5 billion) has been wiped off its value.

On Wednesday, BP's share price fell a further $25.31 to $571.38 – representing a 40 per cent drop on the $956 price of a share two months ago.

Experts have said that the clean-up costs of the oil spill will run to between £10 billion (about $14.5 billion) and £20 billion (about $29 billion) but the biggest cost to the company is from investors dumping stock for fear of BP being further punished by the U.S. government.

Those fears have been heightened by Obama's increasingly aggressive rhetoric towards BP, which some investors see as an attempt to deflect criticism of his own handling of the crisis. Last month, a White House spokesman said the President's job was to keep his "boot on the throat" of the company.

In the past week, Obama, who insists on referring to BP by its former name British Petroleum, has suggested that its chief executive, Tony Hayward, would have been sacked if he worked for him.

BP's position at the top of the London Stock Exchange and its previous reliability have made it a bedrock of almost every pension fund in the country, meaning its value is crucial to millions of workers. The firm's dividend payments, which amount to more than £7 billion (about $10.2 billion) a year, account for £1 (about $1.45) in every £6 (about $8.76) paid out in dividends to British pension pots, says the Telegraph.

Source: Louise Armitstead and Myra Butterworth, Barack Obama's attacks on BP hurting British pensioners, Telegraph, June 9, 2010.

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First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 15 June 2010
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