This governmentâ€™s answer to every problem is to make it dearer and blame someone else. Only the rich can afford to live under Labour.
Today we have the ultimate irony, that they now think the way to deal with food price inflation is to make it dearer, by appealing to the supermarkets to remove the two for three and the one for two offers! You could not write parody better than they write it themselves. It’s the Bogof answer to the struggles of the family budget.
Just look at the list of things that they want to sort out by making them dearer and by interfering with the supermarkets, dedicated to making things cheaper:
1. Some people binge drinking â€“ government answer: cancel cheap drink for everyone at the supermarket, remove promotional offers, and abandon happy hours in the pubs and clubs. Only the rich can then afford lots of drink.
2. Too few roads for too many cars â€“ government answer: congestion charges, so only the rich can drive in central London during the week. This answer will be rolled out elsewhere given half a chance.
3. Too much CO2 from vehicles â€“ government answer: ever higher fuel duties, Vehicle Excise Duty and VAT â€“ so only the rich can drive a car regularly
4. Rising food prices â€“ government answer: get rid of the supermarket cheap offers to reduce consumption! Only the rich can eat well.
5. Too much packaging â€“ government answer: get the supermarkets to charge for bags
Whilst I agree with the general point that governments cannot alone solve all the problems, and what each one of us does is in aggregate important, I do get fed up with a government which never wants to tackle its own contribution to problems, and which sees dearer prices and higher taxes as the way ahead in every case. Part of the reason we are adopting a more inflationary psychology in this country today is because the government is generating so much inflation of its own.
What I would like Gordon Brown to say and do at the Summit goes something like this:
â€œToday we face the twin problems of energy and food shortage, driving the world prices of both higher. This is damaging the prospects of recovery for the rich western economies trying to overcome the Credit Crunch. It is far worse for the poorer countries, where more will be forced into undernourishment and greater poverty by the surge in prices of these basics. We had planned at this summit to concentrate on the response to global warming and African poverty. We need today to concentrate on African poverty, and to see that any attempt to ease this requires us to grapple more successfully with the world shortages of energy and food than we have managed over the last few years. We cannot solve the African problem unless we can resume faster growth in the West and supply them with better market opportunities for their goods. We cannot resume faster growth in the West unless we can get on top of scarcity and inflation in the prices of the basics. We cannot help Africa by expanding ourselves if we drive the relative prices of the basics so high they cut Africaâ€™s effective income further whilst raising our own overall.
The cases of food and energy are different. The West needs to change its approach to food production and trading dramatically to be fair to the rest of the world. I will be pressing to dismantle the Common Agricultural Policy, which prevents poorer countries selling us as much as they would like at the same time as restricting our domestic output by encouraging set aside and non productive use of land. At current world market prices â€“ and at lower ones than now â€“ we should abandon managed prices and assume world prices within the EU, allow the free movement of overseas produce into our market (subject to health and safety checks) and remove incentives to keep land idle. The USA too needs to tackle its agricultural protection. I will also encourage entrepreneurs and financiers in the UK to look at possible commercial and investment ventures in lower income countries in the agricultural sector.
The West has chosen to levy very high taxes on certain forms of energy, especially penalising its use for road transport whilst favouring it for other kinds of transport and some forms of space heating. When I pressed the Arabs to produce more oil they not unreasonably said I should also look at the UK governmentâ€™s contribution to high fuel prices. I now do so, and accept that levying more than 60% of the retail price of petrol as tax is too high in current circumstances. I will cut the duty and VAT so I am only collecting this year the budgeted amount. I trust Middle Eastern producers and governments will as a result look favourably on further short term increases in production.
In the medium term many governments of oil producing areas need to encourage more production. I appreciate I have taxed the UK North Sea too highly at the margin, putting off the new exploration and investment we need. I am announcing today cuts in North Sea taxation geared to encourage money into exploration and into increasing production from enhanced recovery in existing fields. I urge governments in other oil provinces from the USA to Russia via the Middle East to do something similar.
Finally, I am conscious that we need to do more to find alternatives to oil based energy for the longer term. I will be going ahead with a much larger programme of permits for renewable and nuclear power in the UK, and will be exploring with industry how we could speed up carbon capture, oil from coal and clean coal technology. The UK has large coal deposits, and we need to find a way of bringing them back into use, meeting modern expectations of cleanliness and working conditions.â€