Stupid Policy

The fuel thing in the budget. It’s stupid. It’s stupid for at least three reasons:

1. Basically, in exchange for  a trivial cut in fuel tax this year, we get TWO rounds of fuel tax rises next year. What will have changed by next year?

2. Fuel costs won’t be cut anyway. It’s paid for by taxing the oil companies based on the high price of oil – the higher it is, the bigger the tax, and if it drops below a certain amount the companies get money back. The idea is to stabilise the price and cut into corporate profits. But it’s stupid. Because it’s linked to the price of oil, not to pump prices. So we’re going to take £2bn from the oil companies… who will then increase the price they sell at to compensate! It’s not like some rogue international petroleum distributer’s going to set up a rival network to undercut the big companies, after all. If we increase the costs of the companies, they will increase prices to maintain profits. Even assuming that the whole bargain (money from corps to pay for tax cut) is 100% efficient, that’s still a net 0% change in fuel costs. More likely, it will actually produce a rise.

3. The justification is that high fuel prices are hurting families. That’s the whole point! For years everyone’s been saying we need to encourage people onto public transport by steadily increasing the cost of… oh wait, that process HURTS people? god no, we can’t do that! Likewise air travel. Turns out that taxes on air travel designed to encourage people to take fewer flights are actually hurting families who take lots of flights… dear heavens-to-betsy, we didn’t anticipate THAT!

The BBC were interviewing a guy from a road freight company who said that high petrol prices were hurting his business. Well, they increase his costs. So he should increase his prices. If people won’t accept those higher prices, then one of two things is happening: a) suppliers are routing their produce by trains instead of lorries, or b) there’s less long-distance freighting going on, and people are having to use more local produce. Except that a) reducing road traffic and shifting the burden onto the greener rail network is a stated aim of almost everyone, and b) encouraging people to consume more local produce and reduce the amount of long-distance transport of goods is a stated aim of almost everyone. But unfortunately, all politicians also state that they don’t want to hurt small businesses, including road freight companies. So what sort of coherent government is possible?

 

Politicians no longer seem to take politics seriously. It’s just a procession of vacuous demagogic stunts without even the veneer of reason or ideology.

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