|Montréal, 16 septembre 2000 / No 67||
by Ralph Maddocks
Increasingly, throughout the world, we are seeing dissatisfaction with governments and their activities. Even though we may elect them quite democratically, very often they do not respond by doing the things that the electors thought that they were electing them to do in the first place.
of the world, unite!
This week there were protests, marked by police violence, in Sydney against the World Economic Forum. Next week we shall undoubtedly see the Australian aborigines protesting at the Olympic games. France has been plagued recently with blockades by farmers, taxi and truck drivers, all upset with soaring oil prices, most especially with their high tax content. The French government, within a day or two, settled their complaints by caving in to their demands. Until this week, the British press and their politicians had been counting their blessings and seemed thankful that their readers and constituents were not behaving like those undisciplined inhabitants of France.
Apart from a few murmurs in the Canadian press and on TV, it seems that rising fuel prices, while not exactly being welcomed by the plaudits of the multitude, have not yet incited revolt. Canadian heating oil costs have already jumped by 40% when compared to last year, so when the realisation of what this means strikes home in mid-winter, we too may see some agitation.
UK politicians, like all governing parties with large political majorities felt that they could afford to be smug about their neighbours' behaviour. When the fuel protest phenomenon spread to Britain, oil refineries and storage depots were blockaded for four days. The British Prime Minister, Tony Blair, or Tiny Blur as some call him rather unkindly, trying to appear Churchillian, blamed the oil companies and pontificated about democratic government, the maintenance of law and order and told the oil company executives to deliver the oil anyway.
This resulted in some fuel trucks leaving the depots under police escort, even though no tankers had actually been stopped by the blockade. In a remarkable show of unity, the oil companies' tanker drivers themselves were in support of the blockade, which explains the apparent lack of violence. As Britain slowly came to a standstill it became obvious that the strikers were not very impressed by
As I write, this matter has reached some sort of compromise. The strikers have withdrawn, gasoline is being delivered again and both sides are claiming victory. The Chancellor of the Exchequer (Finance Minister), Gordon Brown, mumbled something about considering freezing or cutting duty on gasoline in his next Budget and that he would listen to people's concerns about the level of taxes when next considering fuel duty levels. During all this, in spite of a bigger problem developing in the EU countries where their major highways are blocked with vehicles of all kinds, the EU introduced new transport taxes. Taxes that were supported by British Labour MEPs and which will apply VAT to tolls, and introduce new energy and transport taxes. Such duplicity at that moment can only indicate the monumental arrogance of the British Labour government.
However, the strikers made it clear that if matters are not resolved within sixty days trouble may again be expected. If nothing is done, a likely possibility based on Mr. Blair's previous record, then things are likely to become a great deal more unpleasant.
The New Labour government, with spin-doctors in attendance, may have been elected by the democratic will of most of the people but I am sure that they never imagined that they would ever be in their present position. Unlike previous protests, this one was not being conducted by a large pressure group like the miners. The blockaders ranged from truckers, farmers and fishermen to Old Age pensioners. It was not a minority either, it was a group, which the government cannot easily identify and demonise because most people in the country are motorists. A group, which has finally realised that the government has turned them into the most highly – taxed motorists anywhere. A country where a litre of gas costs over $2.00 CAN, of which the government gets $1.50.
The left wing press in Britain accuses the strikers of being a small, tightly knit group of politically motivated men. They point to the farmers who have been blockading supermarkets over the falling price of milk – hardly a popular cause – but who then found out that gasoline hits the target. Diesel for farm tractors is taxed at just 3p a litre ($0.06 CAN) while ordinary diesel is taxed at 48p a litre ($1.03 CAN), so it is hard to understand why this issue interests them. The farmers seem unmindful too of the fact that they receive $6.5Bn CAN a year from the welfare state while producing about 1% of GDP. Their real grudge is ideological, and they are against New Labour for having threatened their way of life by banning fox hunting, so in a sense their motivation is purely opportunistic.
As for the truckers, they too seem to be selective when comparing fuel taxes with the rest of Europe. The Road Haulage Association (RHA) has complained about unfair competition from French trucks, made worse once M. Jospin had cut their fuel tax rates for them. According to the RHA, a French truck can fill up in Calais, unload in Scotland, pick up a few small jobs from British firms on the way back to France and get home, all on one tankful. One might question too if these British companies really want full tax harmonisation with the French. They may like the idea of paying French fuel taxes, but would they enthusiastically accept French income and corporation taxes at the same time?
Environmentally sound crisis
The origins of this crisis do lie in Downing Street though, but not at Number 10 – although its inhabitant must continue to be in agreement with the measure – but in Number 11 where the Chancellor of the Exchequer resides. In 1993, the then Tory chancellor, Kenneth Clarke, brought in the
The current occupant of Number 11, the above mentioned Gordon Brown, or Greedy Gordon as he is popularly known, is now under attack. An attack that carries some weight. The price rise from $10 to $34 US a barrel in just 18 months will produce a windfall in extra value added taxes on fuel and additional revenues from North Sea oil. Estimates range from $2.5 billion Canadian to $10 billion Canadian. What that final number will be is hard to guess because if people are spending more on petrol, they may well be spending less on other things, so other tax revenues will drop as company profits fall.
Next, rather ingenuously, Mr. Blair blamed the Arab oil sheikhs for his troubles. But are they to blame? Does the responsibility lie entirely with the Arab oil sheikhs, as they deliberately restrict production and limit supply? Or should the finger be pointed at governments in the major industrial nations, because of their high and rising taxes on fuel? Quite obviously the OPEC cartel hasn't been pumping enough oil to satisfy world demand. They only increased output in response to pressure from President Clinton who presumably knows that an extra million or so barrels of oil a day added to the world's stocks would provide some relief from the upward pressures on oil prices.
There doesn't seem to be much new in any of this, we have been living with OPEC for thirty years now and during that time prices have ranged from less than $5 US to more than $50 US a barrel (at today's prices). Looking back, OPEC hasn't always been very successful as a cartel either, often because regional and political interests stopped them working cohesively. They have only been able to work together when world demand is very high, as it is today when the non-OPEC suppliers cannot increase production enough to meet demand either. The previous oil
What will they do?
All this presents an interesting problem for Mr. Blair and his ilk. If they do cut taxes it will then most likely stimulate demand, further perpetuating the problem by increasing consumer spending power. Much will depend on what use he and other governments make of the windfall taxes pouring into their coffers from this economic boom. Will they cut taxes or keep spending under control? After all, this windfall will be of a temporary nature, economic booms don't last for ever however much we would like them to do. It will also be interesting to see what happens after the US presidential election, because there is talk of tax cuts by one candidate and of increased government spending by the other. Either approach is likely to result in maintaining economic buoyancy, increasing inflation and increased energy demand.
The only way to reduce oil prices must lie in reducing usage. Other energy forms must be exploited. Although this is necessarily a long term project, in the meantime governments will have to find some way of balancing interest rates, taxes and especially of reducing their own profligate spending.
To return to the situation in Britain, Mr. Blair is being seen increasingly as leading the worst government in that country's history. His government has been systematically demolishing liberty if not national identity. It has been removing from office all those in the judiciary, police, armed forces and civil service who object to its politically correct order of business. It has expanded the powers of the security services, it is now attempting to intercept and monitor the contents of Internet traffic and it spies upon groups that it does not like. It has modified its electoral laws so that it can manipulate any local issue to its own advantage, and in addition it is filling the above institutions with its own friends. Its membership of the European Union is leading rapidly towards the abolition of those age-old symbols of British justice; trial by jury and common law. It is also beginning to send its soldiers to fight in countries where it has no conceivable interest, a move which our southern neighbours know can lead to a great deal of trouble.
The bitterness in Britain will not go away, even though the blockades have been removed. There is still too much residual resentment and the new technologies of dissent, the Internet, mobile telephones and e-mail will only make it easier to organise the next protest. The main opposition party, the Conservative Party under William Hague, is not yet perceived to be a credible alternative, and it too dare not offer to reduce fuel taxes if only because they implemented them first. With the blockades worsening across Europe itself, one recalls the activities of the CIA in Allende's Chile some thirty years ago. They too organised truckers' strikes because they knew that the resultant paralysis of the roads and disruption of food supplies would make the government look incompetent and create civil unrest.
The UK strikers promised a sixty day breathing space and it occurs to me that sixty days from now will bring us close to the discussions over the EU Treaty of Nice which is expected to cap
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