Last week’s budget by Chancellor George Osborne was unlikely to contain much good news, given the ongoing cuts; but right-wing newspapers did their best to find some anyway. The headline-grabber was an action to “help the motorist”, possibly not the constituency most in need of help, but certainly the moaniest. “TAX ON OIL FIRMS TO HELP DRIVERS” screamed the loyally Conservative London Evening Standard (full, grovelling story here), perhaps the publication most desperate to prop up Tory support, given the proximity of next year’s mayoral elections, and the apparently precarious position of London’s right-wing (and car-loving) Mayor, Boris Johnson.
The story was a gushing tribute to Osborne’s “massive tax raid” on oil companies (actually, the £2 billion is roughly one month’s profit for BP alone). But the key point is missed entirely – given that this money will be used to reduce petrol costs at the pump, it ends up being taken from the oil companies… and in large part fed straight back to them by subsidising their own product. Oh! The pain!
Hence a government subsidy to maintain the British addiction to oil is spun by the Conservatives (and more importantly their media friends) as a victory for the little man over the beastly oil giants. And yet the oil industry will have been cracking open vintage bubbly on the announcement: not only have train and bus fares continued to rise above inflation, bolstering car usage, but the government has proved itself hostile to oil alternatives such as solar, as I wrote here last month. Rocketing crude oil prices have pushed oil profits to record levels. And on top of all this, a 2p-per-litre government subsidy to petrol. This is a great time for the UK oil industry.
The rest of us should be more worried: peak oil warnings become ever louder (though apparently the cries haven’t yet reached the ears of George Osborne) and our military seems exclusively and expensively to be used for the protection of British energy supplies. The next great depression will dawn when oil production can no longer keep track of global demand, and those nations that have made a concerted investment in weaning themselves off the stuff have a chance of emerging as the next world leaders. The US is apparently intent on hitting the wall at full speed – and it seems, so is our own moron government.