7 January 2011

No Stabilisation without Escalation

Here's something unusual: an opportunity to agree with the Tories. Media discussion has returned to the issue of the damaging results of volatility in the fuel price, a problem which affects citizens as well as businesses. Back in 2008, the Conservatives published a consultation paper on the question of using fuel taxation to stabilise the price, rather than raise revenue.

More surprisingly, the paper made reference to the need for 'stabilising the price of carbon'. This was the time when the Conservatives had changed their torch of enlightenment to a tree of sustainability and were trying to persuade us they would be the greenest government ever. Now that they are the government the link between stable fuel prices and sustainability appears to have been severed.

As I have already argued, in a long-term perspective, government would help business most by establishing a clear upward trajectory for fuel prices, making the direction of travel towards low-energy production and renewable sources of supply clear, and pushing managers towards building this in to their organisational planning.

Abandoning the link between stable fuel prices and the transition to a low-carbon economy is an example of the threadbare nature of the Tories' green clothes. But more seriously it demonstrates their failure to understand where the global economy is going. Far be it from me to provide business advice to capitalist corporations, but it doesn't take much insight to realise that relying on fossil fuels in the era of peak oil and climate change is a recipe for business failure.

1 comment:

  1. I think the problem here is the phrase 'long term perspective', which is just not something corporations (whether they be selling petroleum or credit default swaps) are able to countenance, especially in the middle of major capitalist crisis (even if they should be forced to do by the state).
    Another issue greens and progressive in general could agree with the Tories is the rise in VAT. Until recently I had assumed that lower earners were hit disproportionately as they spend a higher percentage of their earnings on consumables than upper income groups. However I recently saw a graph (I believe it was on Left Foot Forward) which highlighted that those in the £50,000 region are worst hit.
    John Kenneth Galbraith argued that increasing sales taxes such as VAT could be a positive move. First off it generally gets support from conservatives (who generally support it over the income tax) and it can function to tax private consumption (often on goods we don't particularly need) and the income generated can be pumped into public goods (health, transport, education). The only problem with the second part is that it assumes that governments such as our own would use the proceeds on public services as opposed to recycling it into the private sector through PFI schemes or bailing out financial capital when the time comes.

    Although slightly off-topic, your thoughts on the VAT issue would be greatly appreciated.