UK Cabinet Minister - ignorant or deceitful?

I took this picture of Hazel Blears in March 2007 Rathfelder 23:21, 15 April 2007 (UTC)Image via WikipediaWatching the BBC's Question Time programme last night, I was almost moved to scream at the TV in annoyance as the UK Government's Communities Minister, Hazel Blears answered questions on fuel prices.

One assumes that people promoted into senior positions have a basic understanding of politics and economics. Sadly, Ms Blears demonstrated neither as she insisted

(a) "that the "Monopoly on Oil" needed to be broken up and the UK was leading efforts on this"

The geographic location of oil sources is not something one can change, so incumbent producers can't be closed down. Moreover, we are talking about sovereign nations that control the bulk of the oil supply of which the OPEC countries, who act as an oligopoly, account for only 40% of world reserves. Sadly, Ms Blears sound-bite was lacking on details regarding the means by which the UK would achieve this.

(b) "the UK was taking steps to get oil producers to increase supply"

The trend in oil prices is being attributed to many factors, but one of which is the concern that we have reached "peak oil". New oil finds are insufficient to replace existing consumption and current demand is outstripping the available supply, which is seen as a long-term scenario. Moreover, increasing production is not a quick exercise with infrastructure projects involving many years. Hence, price is providing an immediate rationing mechanism as well as prompting investment in oil production infrastructure and alternate energy.

Meanwhile, oil producing countries which sit on ever diminishing oil reserves and who have an obligation to their own citizens to maximise national wealth, are dramatically benefiting from the current price levels. They clearly have little incentive to push prices lower, especially when demand is so strong even at current prices.

(c) "it was the fault of global oil prices that the price at the pumps was going up and the UK Govt could do nothing to ease that"

About 65% of the pump price in the UK is tax with the consequence that any increase in the price of oil is thus materially amplified by excise duties. If the Government wanted an instant answer to the problem of how to dampen/reduce fuel prices it could choose to temporarily reduce fuel duty. However, we have the perverse situation whereby the Government revenues are actually benefiting enormously from an oil price rise. This is supplemented by higher taxable profits by UK oil companies. As such, at a time when tax revenues and borrowing capacity is under great strain, the Government is loathe to cut-off a source of funds.

Whilst politicians will always try to spin a story for their own ends, based on her performance last night, Ms Blears is either ignorant or seeking to deliberately mislead the public, neither of which is an endearing trait for a cabinet minister.

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posted by John Wilson @ 10:39 AM Permanent Link newsvine reddit


At 2:00 PM, Blogger Hawkeye said...

On the basis of the evidence of having watched Hazel Blears on a number of occasions on Question Time as well as other TV programmes I am of the opinion that we should just assume she is ignorant although ignorance is something that could be changed and perhaps we should just accept that she is intellectually challenged rather than ignorant.


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