Does Gordon Brown really want the oil price to fall? He certainly says he does. And this week he even went as far as to make his way down the PR trail to Scotland to ask North Sea oil producers to think of new ways to supply us all with more oil.
But think about this for a minute. The high oil price is one thing Gordon Brown can’t really be blamed for. As long as it is hogging the headlines, the news about his appalling management of our public finances – the filthy, germ-ridden pit that is the NHS, the collapse in the nation’s disposable incomes, the implosion of the housing bubble, the rising unemployment in the construction and retail sectors, and so on – is not.
And that means that he can continue with his thoroughly dishonest strategy of pretending that “hard working families” are being squeezed not by Government policies or by problems specific to the UK economy, but by “global imbalances” of one sort or another.
Then think of the money. Sure, high fuel prices might be crippling the budget of the average man in the street, but they are pretty much the only thing keeping the Brown government afloat. First the Treasury is raking in piles of cash from taxes on North Sea oil. Then there’ll be the tax revenues from the extra profits big oil makes in Britain (£826m so far, apparently). And finally, there is fuel tax. This is one of my least favourite taxes – not because I have a particular view on whether it should be heavily taxed or not, but because I really object to the way it forces us to pay tax on tax.
Each litre of petrol sold in Britain comes with a whopping great flat tax of 53.65p. But that’s not all. We also pay VAT when we buy fuel and not (this is the really outrageous bit) just on the cost of the fuel. No, we pay VAT on the tax too. Tax on tax! And, of course, we are paying out of income that has already been taxed (income tax and the stupidly mistitled National Insurance). It’s not double taxation. It’s triple taxation. And it has pulled in an extra £188m for the Treasury since 12 March. Overall, says the Evening Standard, Brown has already made well over an extra £1bn from the soaring oil price.
This is money that he badly needs. The public finances are in a parlous state and borrowing at frightening levels; growth is virtually guaranteed to be nothing like the 2%-plus Alistair Darling insists on continuing to forecast. There are moves afoot in other countries to try and find a way to force the oil price back down (Germany has said it wants to have a go – however futile it may be – at banning speculation, for example). Gordon Brown joined in this week, saying that he would be lobbying for a global strategy to tackle rising oil prices to be put at the top of the agenda of the next meeting of the G8 group of industrialised countries. I bet he doesn’t mean it. He needs high oil prices.