How Blair’s Blunders Sold Us to the Russians
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Garry White’s in a fightin’ mood today. Just check out this quote from today’s Smart Commodities: “Blair didn’t have the balls to make essential decisions that would have secured our energy future”.
Or how about this one:
“When the government actually did something about getting our nuclear strategy on track, it got it so utterly wrong that Greenpeace took it to court on a technicality!”
Angry Garry’s been warning about Britain’s dreadful energy strategy for a long time now. As he explains today, he’s worried our energy needs will ultimately be dictated by Moscow.
And something happened last night that has Garry even more worried.
Find out why Garry believes we’re now on the road to an energy nightmare!
Will the lorries force Brown into U-turn?
Why does the Government tax fuel? Is it to raise revenue? Or is it an environmental measure? Either way, it seems the latest little hike in fuel duty — the 2p increase — won’t be going ahead. And quite right too.
British hauliers are feeling the squeeze. Yesterday, many of them converged on London, parked on the A40, and delivered a petition to Downing Street. They want the Government to scrap the 2p increase.
Gordon Brown first proposed this latest 2p hike — due to come into effect this autumn — over a year ago, while still Chancellor. Since then, the price of crude oil has gone through the roof.
This, in turn, has sent prices at the pump soaring. According to petrolprices.com, the average cost of a litre of unleaded petrol is 115p. For diesel it’s 128p.
If the Government’s plan was to price cars off the road to help the environment, it can stop worrying. By going up so much, the oil price has already done more than this extra tax would have done had oil prices stayed the same.
Even in the car-crazy US, the high oil price has finally fed through to a reduction in car usage, as Bill Bonner notes below in today’s Daily Reckoning.
If the purpose of the 2p hike was to raise revenue (as I suspect it was), then things are a bit trickier. Only a bit, mind.
Yes, the Treasury will have budgeted for the extra revenue. But then again, higher fuel prices will have affected consumer behaviour. If Britons drive less, that in itself will impact the Treasury’s fuel duty income.
Not only that, but the higher oil price has boosted the state’s North Sea revenues. And besides, it wouldn’t be the first time this year the Treasury has had to do the sums again.
I’ve had a pop at the Government here before (If I’m honest with myself, that last sentence felt like a bit of a ‘mini-pop’). I’m sure I will again.
But if the Government changes its mind on this one, let’s not just blithely label it a U-turn, in the manner of some newspapers this morning.
Pressing ahead with the 2p increase would be the wrong policy, at the wrong time and hitting the wrong people. As one protester pointed out yesterday, we still need lorries to take goods from place to place.
If domestic hauliers go bust, foreign firms will do the job instead — and the Treasury will receive even less revenue. Not to mention the fact that allowing the industry to wither would be another step on the road to the so-called “backrub economy” — a society in which everyone derives their employment from the service sector.
Much has changed since the 2p hike was first proposed. At the time, crude oil was around $60 a barrel. Now it’s more than double that. In all likelihood, then, the Government will change its policy. And they’ll be right.
It’s just common sense, really.
Brasil! Brasil!
Ever since my days playing capoeira, I’ve liked to spell ‘Brasil’ with an ‘s’. It makes me feel cultural.
“It’s Brazil with a ‘z’,” says my down-to-earth colleague Manraaj Singh. “Now stop it.”
Brazil, you’ll be aware, is one of the hottest economies in the world right now. Manraaj tells me growth this year is expected to be close to 5%. Strong in oil, sugar, and with a buoyant service sector, Brazil is the place to be for many investors.
Leading the Fleet Street charge is our man Manraaj, who today shows us why the stock market there is rapidly outgrowing São Paulo…
Fleet Street Research presents: 3 firms hoping to escape the UK consumer gloom
I don’t know what it’s like where you are, but outside my office window the weather’s pretty grim. I don’t think it’s raining… but it may do soon.
A bit like the economy then (I know! Seamless!)
Tenuous links aside, the UK economy is in wobbly health. The canniest UK firms have protected themselves, and now make a significant amount of their money well away from these shores.
I’ve asked our research department to take a look at some such companies. There’s still work to be done (our boys are thorough, and wouldn’t dream of issuing a recommendation without doing the necessary prodding and poking).
But my colleague Theo has agreed to give you a sneak preview of some of the companies he’s been looking at.
Remember, these are NOT recommendations (happy Theo?). This is just to give you an idea of the kind of opportunities we’re looking at right now.
Until tomorrow
Ben Traynor
Source: How Blair’s Blunders Sold Us to the Russians
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