June 2nd 2008, by Ken Livingstone
Boris Johnson’s cancellation of London’s oil agreement with Venezuela is a piece of rightwing dogmatism that is equally costly to the people of London and Caracas. The agreement was that Londoners on income support received half-price bus travel, subsidised via cheap Venezuelan oil, in return for London providing transport, planning and other expertise to Venezuela.
The basic principle of London-Caracas agreement was simple, reasonable and indeed a rather textbook illustration of relative advantage in foreign trade. Each side provided the other with that in which they are rich, and which for them is therefore relatively cheap – oil, on one hand, and the expertise in managing a modern advanced city on the other – in return for something which was scarce, and therefore relatively expensive, for the other side.
The benefits to the poorest people in London were evident – over 130,000 have benefited to date from half-price bus travel.
The benefits to Venezuela were equally great. The accumulated expertise acquired by long developed cities and companies is one of their most valuable assets. For Venezuela to develop this purely internally would take a very long time and be extremely expensive, while to purchase it from international consulting companies would cost many times that paid to London.
London gained immediately and both parties agreed from the outset that London should focus on assisting Venezuela in developing plans to bring about long-term improvements in areas such as transport, city planning and the environment.
Short-term projects were scheduled for completion before the agreement’s renewal in August such as traffic enforcement, improving traffic signals engineering to reduce congestion, and improving transport interchanges.
The longer-term projects of urban management and planning were of a structural nature – for example development of a transport strategy for Caracas, an urban development plan and the elaboration of an air quality strategy for the entire country. These longer-term projects could not be delivered in a period of months in London itself and this was still less possible in Caracas. Nevertheless, significant momentum was developed – all those involved were confident that clear progress would be achieved by the time of the renewal of the agreement.
Venezuela cannot make major progress in improving the quality of life of its people without such projects and therefore both London and Caracas were gaining.
Any suggestion that the decision to end the agreement was motivated by concern about poverty in Venezuela, as Johnson claimed, is entirely refuted by the fact that London’s new Conservative administration has immediately cancelled planned delegations of transport and environment experts from London to take forward this work.
If Johnson abolishes the half-price travel for those on income support on London buses, as he appeared to state on May 25, that is an attack on the poorest Londoners. A statement to Guardian contributor Dave Hill, from City Hall, then appeared to retreat from this saying Johnson: “Has asked officials from Transport for London to consider whether there may be alternative ways of providing this support.”
However “to consider” is not a pledge to continue and while Londoners must press to ensure that half-price bus travel for those on income support continues, this subsidy will then be paid by Londoners – bad value considering the alternative. Because the original deal was good for both London and Venezuela, cancelling it is bad for both.