British Labour Party leader Ed Miliband proposed more state interventionism in an interview with the BBC’s Andrew Marr on Sunday, calling for energy price cuts and higher taxes on the rich.
The socialist complained falling oil prices had yet to benefit consumers and proposed to give the state regulator “the power to cut prices to bring immediate relief.”
We see wholesale costs go down 20 percent in gas prices over the last year and no reduction in bills.
Prices have actually come down. Petrol is at its lowest since March 2010.
Moreover, with tax comprising over 70 percent of petrol prices, falling oil prices can only affect prices at the pump so much.
Miliband did not propose to reduce gasoline taxes. He did previously say he would freeze energy rates for two years if his party comes to power after May’s election and also threatened to confiscate private lands if developers did not build more homes.
Prime Minister David Cameron, who leads the ruling Conservative Party, described those proposals as “nuts”.
The liberal Adam Smith Institute’s Victoria Freeman wondered at the time how energy companies would remain solvent if Labour prevents them from passing increased costs onto consumers.
It could come down to a choice between cutting investment, returns to investors or staffing costs. Given that energy companies’ largest shareholders include [British] pension funds, none of these options are appealing.
The Telegraph‘s Janet Daley also warned that cutting energy companies’ profits “would reduce the amount of tax revenue they produce for a government drowning in debt.” She cautioned, “The new Miliband revivalism brings back the threat of nationalization and state seizure that did so much to wreck the prospects of postwar British industry.”
In his Sunday interview, the Labour leader also defended his plan to tax expensive homes and high incomes even if estimates show neither would raise much revenue. Labour’s “mansion tax” would probably raise no more than £1.6 billion — total revenue this year is £648 billion — while its proposed 50 percent income tax rate for high earners would raise nothing.
“These stunts don’t work,” argues The Spectator‘s Fraser Nelson, “but Miliband isn’t interested in what works. He’s interested in what focus groups like the sound of, which is why he’s a fundamentally unserious politician.”
Labour is nevertheless virtually tied with the Conservatives in opinion polls. Because Britain’s electoral system benefits the left, chances are it will win a plurality, but not a majority, of the seats in Parliament.