it will be the PCT probably, not the GP themselves that has banned or restricted the prescritions of Oilatum. When i was a teenager 20 years ago the GP would not prescribe it as it was an over the counter medicine i could buy myself, so i don't think it's a new thing about the GP's not prescribing it.
If £5 doesn't seem very much out of a prescribing budget, then it's not very much for the parents either.
PS the prescribing budget for my PCT area (which covers 1/2 a county, approx 500 000 people) is over £60million a year. That's a hell of a lot of money for taxpayers to spend, and it doesn't seem unreasonable to me to expect parents to spend around £60 a year for their baby's comfort. Most people have no idea what drugs actually cost, and moan about the prescription charge not realising it represents a very small fraction of what the drugs actually cost.