Labour’s power play that might make or break the UK’s grid

Ed Miliband’s labour party conference speech last week made mention of splitting up the big 5 energy firms along with tighter regulation of the industry. And he proposed freezing energy prices for 20 months. Something which brought furious reaction from the industry and near shock horror from right leaning economists who thought we’d seen the last of government price fixing in the 1970’s.

The issue of energy is important as there has been a chronic lack of investment in the UK’s electricity grid for some time, which could lead to shortages in future. Now there is a lot of paranoia in this regard (often stirred up by energy industry lobbyists with hardware to sell). Indeed, I’ve just put up a rebuttal to the “disaster porn” that was C4’s recent program “blackout”. But certainly that’s not to say the risk isn’t real and there is a possibility of less reliable electricity and gas supplies in future.

Certainly I do agree with Miliband on one point, we can trace a good deal of the problems with the UK’s energy supply back to mistakes made during privatisation. However, I’m unsure whether his plans will work, or indeed whether they will just make the worst of a bad situation.

The energy monopoly game
Firstly it is worth reflecting on what went wrong with privatisation. As I’m regularly forced to point out to free-market types, privatisation can only work in a situation where it’s truly a free market with open competition. And the electricity market is about as far from that as North Korea. I mean it’s not as if I can get the neighbour’s cat to turn a wheel and generate power to run my house!

There is some wriggle room for customers to change suppliers. But there are only a handful of them, all of whom engage in lock step price rises anytime the wholesale price of gas goes up (yet are very slow to pass on any savings when it falls again). The spiv’s and speculators have essentially turned the UK’s energy market into a giant game of Monopoly where they can gamble with our money, heads they win, tails they win and we loose every time the quarterly bill arrives.

Unfortunately, there is very little incentive for the utilities to invest in the sort of major energy projects needed to prevent future shortages of electricity. After all, as the California energy crisis of the 2000’s showed an artificial shortage of power does not dent the spiv’s profits, indeed it can actually increase them significantly!

In other privatised industries (trains and water for example) there has similarly been a reluctance of privatised firms to commit to any major expansion projects, beyond simply ticking over and putting sticky plasters on leaking dam. This is largely because building the sort of infrastructure needed would involve the investment of hundreds of billions of pounds over many decades, which involves a considerable level of long term financial risk and essentially runs contrary to the make-a-quick-buck mentality of the current generation of city traders in control.

Energy Options
For example, the going rate for a nuclear plant for example is about £7-10 billion a reactor and we’d need 8-10 of them to just replace the plants scheduled to be decommissioned between now and the 2030…so that’s about a £100 billion to just replace existing nuclear capacity…plus a further £70 billion to decommission the existing fleet (with one assumes a similar amount to get rid of the new reactors once they reach the end of their service lives). And of course building a nuclear plant takes about 5-10 years and it’s unlikely we could build any more than 2 at a time (due to bottlenecks in the industry) which is an important consideration when you consider than all but one reactor will be shut down by 2023.

Natural Gas fired power is much cheaper to install, but there is the no-so small issue of climate change and where is the gas to run the plant going to come from? While there is considerable hype about shale gas reserves in the UK, this hype only extends as far as people who are poor at maths. As I’ve pointed out in my energy blog, the reality is that even if the protesters surrounding the rigs could be persuaded to go home (of course for quite a few, the drilling rigs will be in their back yard, therein lie the problem!), the shale gas potential of the UK (according to a Parliamentary report well supported by academic sources) amounts to, at most, 1.5 to 5.6 years of current UK natural gas consumption. Hardly the solution to the next 50 year’s worth of our energy!

Renewables are for these reasons increasingly looking like an attractive option, quite apart from the issue of climate change. The installation costs are higher than gas or coal, but lower than nuclear and you don’t have to worry about future fuel price rises.

The naysayers will often claim that a commitment towards green energy would cause bills to soar, indeed the Daily Mail mob often try to blame green energy for bills going up, as well as claiming that they are too unreliable to make up a substantial portion of the grid. Now I would counter these claims by pointing out that given that over 75% of the UK’s electricity currently comes from fossil fuels, the price of renewables are falling and the subsidy paid to them is being cut it would seem more logical to conclude that recent price rises are due to an increase in the wholesale prices of fossil fuels (or just plain price gouging by the utilities).

Indeed, it’s worth looking at other countries which have launched a comprehensive energy plan, which often rely heavily on renewables. Portugal is getting 70% of its electricity from a combination of wind, hydro and pumped storage, Denmark gets around 44% of its electricity from renewables (about 30% from wind alone) and Germany far from becoming more dependent on imports, renewables has had the opposite effect with the country increasingly exporting power. Furthermore, while energy prices did rise during the early phase of these programs, those prices are now either falling or at worst stabilising (as the utilities have a bed rock of renewables to call upon, insulating them from sudden rises in wholesale gas or coal).

And its also worth mentioning the French nuclear programme, which has also served to stabilise energy prices. Now, I’m somewhat critical of the French nuclear energy program. Notably because I’d question whether they’ve fully considered the full life cycle costs of nuclear power. But credit given where it is due, at least they have something resembling an energy plan.

The Plan? There ain’t no plan!
And that has been the problem in the UK since the 1990’s – we don’t have a plan! Successive governments, be they Tory or New Labour, have made various wishy washy speeches, issued white papers but otherwise done sod all. And without clear legislation and some sort of funding mechanism (i.e. like the sort of things the Germans or French brought in) the privatised energy industry (who are being asked to make extremely large and expensive long term bets) are essentially being asked to put themselves in a situation where they have everything to lose and nothing to gain.

And in fairness to the corporations, the UK government has often sent out very mixed and contradictory signals. In part this is due to the dangerous obsession of both Labour and the Tories towards nuclear power. For example despite the then Thatcher regime’s support for nuclear they failed to advance sufficient a subsidy and of the dozen or so reactors promised, only 1 (Sizewell B ) was actually commissioned, even despite considerable efforts to clear the path for nuclear, which effectively discouraged investment in any long term alternatives.

You have trodden on the forbidden lawn
I was once pro-nuclear myself, but have gone off it for various reasons, notably I studied engineering and realised what a significant engineering challenge building a reactor is, and that as a result it is and will likely always remain expensive energy. But also because I realised the nuclear lobby and its armchair supporters were going out of their way to kill off anything the perceived as an obstacle to nuclear power, even more practical ideas that could go a long way to solving our problems, e.g. Carbon Capture and Storage, energy efficiency, CHP, renewables, etc.

Casing point, one of the biggest lobby groups against wind energy is Countryside Guardian, which is stacked full of lobbyists for nuclear power. Its founder Bernard Ingraham, despite openly admitting that he doesn’t care much about the environment, he has all but admitted setting up the organisation to keep renewables off the forbidden lawn that is nuclear power’s turf.

As I highlighted as regards the last UK energy white paper, while it included a lot of high minded commitments towards “low carbon” energy it included no mention of how the government proposed to pay for it and involved a building schedule (in particular for nuclear) that wasn’t in any way plausible. One could be unkind and question whether it was written by a blind man living in a barrel (or perhaps nuclear lobbyists high on crack!).

One of the ways the Germans and Swedes cut winter heating bills and back up their renewables is by using CHP or district heating schemes (often using biomass or waste to energy plants). But there has, until recently, been no scheme in the UK to subsidise or promote such projects. And it took considerable arm twisting of labour in the last parliament to get them to commit to such a scheme. Consequently, the UK only has a tiny handful of such scheme’s while CHP makes up 25-45% of many European countries installed capacity. Of course this may have something to do with the fact that CHP tends to compete directly with nuclear, which may explain a reluctance to promote it.

In 2010, a proposed tidal energy project in the Severn was cancelled (again!), with then energy secretary Chris Huhne (since convicted of lying to the police), putting forth a stray man argument that a Barrage would be too expensive and that nuclear was cheaper. As I pointed out in my blog at the time, tidal energy (which unlike wind and solar power is regular and predictable) technology has moved on from a Barrage. Tidal stream turbines or tidal lagoons would be much cheaper, less of an issue for the environment and offer a pay-as-you-go option rather than an all-or-nothing barrage (indeed there are proposals to build just such systems in the Pentand Forth and a tidal lagoon in Swansea is being taken forward as we speak).

And of course nuclear was only cheaper if you believed everything the nice man from the nuclear lobby said! Real world experience in Finland (at Olkiluoto) and France (at Flamanville) suggests that nuclear energy is considerably more expensive than its lobbyists claim. A point backed up by reports from the New Economic Foundation or Citigroup bank and the position of academics in the field such Prof. Stephen Thomas from Greenwich university or Peter Bradford.

The Somerset Mafia
Ultimately the real reason why tidal power was cancelled in the Severn was to appease the “Somerset Mafia” aka to keep open a wedge on the UK’s energy grid for the future Hinkley point C and secure employment for the plant’s workers. Indeed casing point, Countryside Guardian originally opposed the construction of a wind farm not far from Hinkley crying crocodile tears over the “damage” to English heritage….yet they’ve been notably silent in their opposition to Hinkley point C being built on exactly the same site!

However, these events send yet another “trodden on the forbidden lawn” signal to many energy investors (both renewables, fossil fuels and others) who have since shown reluctance to commit to any major energy projects, given their fear that the UK government remains ideologically committed to nuclear and will just clear them out of the way for their “precious”. Consequently there has been yet more sitting on hands and waiting for the government to do something.

Reality bites
But despite all the “commitment” towards nuclear power from both labour and the Tory party, not a single reactor has been built since Sizewell B. In part this was because whenever the nuclear industry was asked if they needed subsidies they said no…then blinked three times ;D. It only dawned on the Tories last year, after the collapse of the Horizon deal (which would have built 4-5 reactors) that this blinking was the coded message that actually they do want subsidies, the industry was just reluctant to admit that (to avoid facing the thorny argument that if nuclear needs a subsidy, but wind turbines are unlikely to ever result in us glowing in the dark, why waste time with nuclear?).

The industry did come clean this year with the fact that they’d need subsidies, but they then revealed that the level of subsidy nuclear needs exceeds the overnight cost of wind energy (i.e. including the cost of back up). I would incidentally note that this is wholly consistent with what the sources I quoted earlier have been saying for over a decade (what a pity labour and the Tory’s didn’t listen too them!). The Tories have since baulked at the prospect of paying these high subsidies to nuclear, recognising that they exceed any commitment towards renewables.

And indeed my spies tell me that EDF have been laying off staff working on Hinkley point C. Although personally, I suspect that at least one of the two reactors will still go ahead (the government and EDF have simply too much to lose for either to back out now). But either way, this dithering over nuclear has again, led to more sitting on fences and little commitment to any new major energy projects by anybody.

What needs to be done
Consequently I do worry that Ed Miliband’s speech, thought well meaning, could not have been made at a worse time. My fear is that what few commitments towards new energy infrastructure the Tories and lib dem’s have managed to wriggle out of the energy industry will now get put on hold until after the next election, as they go back to a wait and see policy and fiddle while Rome burns.

Ultimately what the UK needs is not wishy washy populists speeches. It is a long term energy policy that’s actually going to work. And more importantly a policy that the industry knows is a plausible plan (i.e. one written by engineers, not lobbyists), that has cross party support (it is interesting that whoever won the German election, their present energy policy was unlikely to change) and has the necessary legislative teeth to insure it is implemented (i.e. heavy fines and a clear indication of no bailout with the utilities being taken to the cleaners if the lights do go out).

And pressure needs to be applied from both ends, i.e. not only forcing the utilities to add more power generating and storage (preferably low carbon energy, in particular more renewables) or the radical idea of free gas and electricity to customers with smart meters and energy efficient homes at off peak times.

But also on the consumer side, promoting energy efficiency measures, or ideas like “dynamic demand” (which allows devices that are on more or less all the time like storage heaters or fridges to vary demand, demanding less from the grid at peak times, and acting to store energy at other times). It also means changing building codes to enforce stricter energy efficiency standards (a central part of Germany’s energy plan) and more distributed power generation, again notably through renewables and CHP (again central to many other countries future energy policies).

Indeed its worth mentioning that a “Green Tea” movement within the Tea Party has recently begun to promote distributed power generation via renewables as an alternative to the near monopoly like behaviour of many large US energy utilities (get big corporations off my back kind of stuff).

And as far as nuclear is concerned, there is a need for clarity here. It obvious that nuclear power is going to need significant long term financial support, not just a simple subsidy as with wind or solar power. So rather than paying a French state owned company to build the reactors, because it’s against the Tories free market religion!, I’d nationalise the entire nuclear industry and set a clear mandate. This would indicate what nuclear’s share of the grid will be, how much it was going to cost (thus if we the taxpayers think its too expensive, we can vote for a party next election who oppose such spending), when and where the reactors will be build and where the waste is going to be buried…or just cancel the whole project, as its getting in the way of other energy options that actually work!

But ultimately what the UK needs is the government to do exactly what they have failed to do for 30 years when it comes to energy – Make important long term decisions. These may be unpopular in some quarters in the short term. As obviously a commitment to building lots of power plants (of any type) is going to temporarily push up bills and installing lots of kit is going to involve digging up lots of people’s back yards. But it is in the long term interest of the nation. Read, the lights stay on, and as in other countries, eventually we would see energy prices falling.

The window of opportunity to do this is closing fast. And I worry that Miliband seems to be signalling that he is as unwilling to do anything as the Tories have been, or indeed Blair or Brown were. Ultimately if the “light go out” in 2020, I will point the finger of blame not at the utilities (they are merely following the rules set by government) but at the three main political parties and they’re wholesale lack of commitment on this subject.

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Ruinair

Ryanair, recently voted by Which? magazine as Europe’s least favourite brand, has now promised to be “nicer” to customers. Or perhaps the word they are looking for not quite as nasty towards customers and only treat them as scum rather than like sh!te :)).

Such as not throwing disabled people off the plane and leaving them stranded for them daring to show up in a wheelchair, or not charging a grieving widower a pile of cash for wanting to change his flight plans and fly home early so he could bury his family.

I purposely avoid flying Ryanair and would only use them when I can because to be honest, its just not worth saving a few quid to be treated like self-loading cargo for several hours. And furthermore, Ruinair’s policy when a flight is cancelled, which is basically to refund you’re your ticket cost and then leave you stranded in the middle of nowhere. Ultimately means any savings made by taking a Ryanair flight regularly will likely get wiped out by having to pay for an expensive regular flight/train fare at short notice or take a long taxi ride, etc.

Also, it’s annoying for me, as I have the name “Ryan” and my family is from the same Midlands town (Mullingar) as Ryanair boss Michael O’Leary, many assume I have some link to Ryanair…I don’t! So no whinging please about the time they stomped on you’re luggage and sent it to wrong airport (I mean you have my sympathies, but there’s not a lot I can do about it other than suggest flying in future with a different airline).

Ryanair claim to following the business model of US “no-frills” airlines such as Southwest. However, while the business model of other no frills airlines (such as Easyjet) is similar to Southwest, Ryanair have gone well beyond this. The US airline they resemble the most to me is a number of the smaller Airtran clones.

Now the problem there is that many of these airlines tend to have relatively short shelf life’s, largely because they tend to make lots of enemies and the instant anything goes wrong their compeditors and the regulators pretty much throw the book at them. This is exactly the problem for Ryanair, indeed O’Leary seems to positively delight in yanking the chain of BA, Aer Lingus or the various regulators.

Normally for example when an airline loses a plane (an inevitability for any airline, everyone major one save Qantas has had to deal with at least one major air accident eventually), there is some “circling of the wagons” with the regulators in the airlines country of registry, anxious not to see job loses or get egg on their face (given that it’s their job to regulate airlines registered in that country and the international community will hold them to account if the airline is found to be at fault).

However very likely the Irish regulator and media in such a scenario, far from fighting Ryanair’s corner, will be screaming for heads to roll (as after all the Irish government wants to protect Aer Lingus!). Similarly they’ve made enemies in the States (and as Ryanair fly US made planes this means the NTSB and FAA will play a role in any investigation involving a Ryanair plane), where the last thing the authorities want is Ryanair bringing there ubra-brand of market capitalism to Trans-Atlantic flights and upsetting the cosy little cartel their two US main airlines profit from.

A good example of the end result would be shown by the crash of Valuejet 592 in 1996. Personally, I would argue those most at fault for the loss of flight 592 were Sabretech, its maintenance contractors (who put faulty oxygen generators, which they had failed to handle properly in a cargo hold, where they later started a fire). Valuejet’s principle failings were more at not monitoring what this contractor were doing and then raising hell when they realised how unsafe these procedures were. But the authorities and the media, rounded on Valuejet and the airline went under.

As the saying goes, be nice to people on the way up as you’ll meet them again on the way down. And Ryanair needs to rediscover the meaning of the phrase “the customer is always right”…not “and what they feck do you want now?”

More Barmy UKIP stuff

The UK Tea Party (aka-UKIP) held their party conference this week, and predictably ended up make a tit of themselves. Of course, as anyone who follows the antics of UKIP would know, there’s nothing odd about this. But the problem for them this year is that their electoral success puts them right in the spot light and is now deemed newsworthy by the mainstream media.

Firstly there was the story of Nigel Farage and his behaviour back at school with accusations of him being “a bully and a fascist”, with stories of Farage marching around local villages at night singing Hitler youth songs. Now he’s tried to put a brave face on it, claiming, oh it’s the sort of things kids always get up to…well maybe at the private school he went to. Cos in the school I went to the only kid who behaved like that was the sort of “special needs” psycho type who ultimately dropped out (in order to avoid being expelled) and is likely either living in a council flat right now or in prison.

The there was the Godfrey Bloom’s (of Bongo, Bongo land fame), the Party’s chief whip who sits on a committee regarding equality who made his “slutgate” speech. When I first heard this story, I thought it was a miss communication, some Daily Mirror journalists taking things too far, but nope he did say it.

And this isn’t even the worse of it. Other recent gaffes include members being caught out making racists comments, facists gestures, or posting images of themselves dressed up as nazi’s or calling for compulsory abortions for babies with Down’s syndrome or spina bifida.

Ultimately this is the problem with UKIP, as I’ve discussed in prior posts they represent a lunatic fringe of the Tory party. And if anything the best thing the tories can do is quietly encourage the lunatics who are Tory in name only to leave the party and join UKIP, as the chances of them ever playing a significant role in any government are fairly slim.

Indeed there is a need for the conservatives to avoid the sort of corrosive lurch to the right that the US Republican party went through, as inevitably this led to the lunatics taking over the GOP asylum.

Take this clip, from back in 2010, from Bill Maher (a well-known US lefty) and his programme “Real time”. He actually praises David Cameron, despite him being a conservative for leading a party that can be conservative “but they’re allowed to be sane”. Or “only in this country [The US] do we waste time debating about evolution or climate change or whether its okay to leave sick people dying in the street” “conservatives in England don’t care about the 3G’s: god, guns and gays which tilt so many US elections”.

There is a lesson in there for anyone with vaguely conservative views. The best case scenario for Miliband and Labour is for the sort of barmy antics of UKIP to now spread to the Tory party and wreck any chance they have of re-election.

A Veiled Matter

I’m not usually one to go along with the Tories (or the Daily Mail), but they may have a point with the issue of the wearing of veils by public service employees.

Firstly, there is the practical measures. Seeing someone’s face is important. Facial expressions are an important part of communication. Furthermore you’ve issues with muffled voices from behind a veil, a problem for people with hearing problems particularly as some rely on lip reading. I’m quite sure Elf N’Safety would have something to say about that, particularly in a hospital where a miss-communication could mean the difference between life and death.

Obviously, in my trade (engineering) such clothing would be out of the question (restricted vision? rotating machinery? high voltage electricity? Do I need to go on?). Personally, I also use facial expressions as a cue as to whether or not the students are actually paying attention, or if I’ve completely lost them (admittedly, I’m not always good at reading this, but I’d be even worse if I couldn’t see faces!).

Secondly, I would also highlight the other impracticalities of dressing up like this in the UK. I mean we’re a cold damp climate, I can’t think of anything worse to do than go around in a large piece of cotton, you may as well sit in a bath full of ice cubes come winter! And I once saw a woman with a veil trying to eat with it on in a restaurant, it was clearly impractical, as she ended up getting half of it all over herself! Indeed, even Oman has banned women wearing full length veils from driving on health and safety grounds (due to the restricted vision).

Thirdly, there is the issue of secular government. If a Catholic manager of a NHS hospital introduced a policy requiring a halt to all activity at noon for the angelus, I think we can guess the reaction. Or if we brought back morning prayers and bible studies in state schools? What would Muslims say about that? The state has to be, not only secular and neutral on the nature of religion, but they need to be seen to be so. And that means if you want to practice a religion, good for you, but do it in your own time.

Now Muslims will say, oh but it’s our religious tradition…is it? The evidence is that the veil actually predates Islam. There is a difference of opinion as to whether the practice originated in the Assyrian Harems (intended to stop pleb’s gopping at his lordship’s totty!) or within the (Christian) Byzantium aristocracy (it was practiced by both, but which is closer to its adoption in Islam is disputed). Indeed there are references to the veil within the Christian bible, which of course predates Islam by several centuries.

The practice of wearing full face coverings in Islamic countries is uncommon throughout history, save a small number of cultures notably in the Arabian Peninsula and even then mostly among the upper classes. Working class Islamic women historically didn’t wear the veil. As naturally enough it wasn’t a practical mode of dress, in the days before we invented running water or electric ovens, and they had to roll up their sleeves and do physical labour, often alongside the men out in the fields.

Indeed veil wearing has only seen a significant upsurge in the last few decades. And mostly this has been driven by the Wahabbai movement, a slightly crazy, xenophobic, luddite sect within Islam who have, as one commentator put it, “sought to ban everything invented since the 18th century, save the AK-47”.

So I would argue that it is not beyond reason for the government to bring in restrictions on such practices, particularly in certain working environments. And perhaps the wider point here is that religion, or for that matter politics, cannot be used as an excuse to ignore all the practical issues and rules. If we start down that road what’s to stop me joining the religion of the dude and start coming into work in my dressing gown?

Furthermore “faith” is not an excuse to turn off your brain and ignore any facts to the contrary. As in, do people actually believe that god/Allah/Jehovah/Thatcher :)) will ignore the mass slaughter in Syria, the inequalities in our society, the unchristian/unislamic behaviour of the financial markets (which anyone with a bank account in the West is indirectly part of and thus culpable), climate change and the destruction of the environment…but will instead choose to punish women for their dress sense? (I have this vision now of Allah as this metrosexual Gok Wang type :)) !)

Similarly, the likes of creationists who will counter anyone pointing to the mass of evidence in support of evolution (and that the earth being billions of years old) with the line “oh it’s my faith”. Then your “faith” leads you believe that god is some sort of practical joker who is deliberately trying to fool us into believing in evolution, given the wealth of evidence he’s gone around creating to support it. And lets not get started on Catholics and their views on contraception…as parodied on Monty Python.

In short, if there is a god, one assumes he gave us brains to think with for a reason.

The need for land access in Ireland

One way to help recover the Irish economy would be to take advantage of Ireland’s wealth of historic monuments and scenery to boost the tourist industry. In Ireland, look at any OS map and you’re practically tripping over historic monuments of one sort or another. I felt the urge to go visit a couple of the Tower houses in my part of Cork and I was not short of ones to choose from. There are an estimated 2,000 tower houses across the country, along with hundreds of stone circles and megalithic monuments. This handy wee tool should give you a feel for what I’m talking about.

However, the problem in Ireland is that we have no right to roam as in Scotland, nor even the basic land access (designated rights of way) in England. This is largely a throw back to the days when Ireland was ruled by the UK and much of the land owned by absentee British landlords. They made every effort to keep the Irish in their place, which meant not giving them any sort of rights, if it could be avoided.

In the lead up to independence and immediately afterwards, efforts were made to allow those on the land in Ireland to buy it, often at a significant discount, with little thought given to sorting out issues such as access rights first.

Consequently as the castles I was seeking to visit were on private land, I had to take a long stealthy detour to get near some of them. As unfortunately many farmers are reluctant to grant access to their land. This can result in some tourists telling right old horror stories about Ireland, which hardly does the tourist industry any favours.

Again, this doesn’t universally apply. Some farmers don’t just allow access but encourage it. For example one of the best starting points up Carrauntoohil (Ireland’s highest peak) is “Cronin’s Yard”, where Mr Cronin (a local farmer) has long allowed people to park in his farm yard and change afterwards in his barn, for a small fee (2 euro last time I was there).

But, at the other end of the scale, there are those that put up “no trespassing” signs and bluntly cut off access…or have threatened and intimidated walkers to the point that they’ve since been jailed. In part this is motivated by the usual towny v’s country prejudice (us with our mobile phones and DVD’s! ;D) as well as the mercenary attitude taken by some of the better off farmers (who seem to want a subsidy from someone to do anything). However it sometimes occurs out of genuine legal concerns.

The legal limboland that exists as far as private farmland in Ireland means that essentially it affords the opportunity for judges and ambulance chasing lawyers to make up laws as they go along. Now in theory landowners should have nothing to fear, as they should be exempt under a law passed in 1995. However there are so many contradictory clauses from other laws, that its difficult to be sure as the whole matter has only been tested a handful of times (but that said on every single occasion the case was struck down).

Ultimately the solution would be a new law that would firstly guarantee farmers have nothing to fear in terms of being sued and would require respect for the countryside code as a condition for access. Although I would note that most hillwalking and climbing clubs already have such a provision for that in the club rules, as well as a requirement for third party insurance for all club members. In return the law would open up access to land for recreational purposes. Just such a law is being debated in the Irish Parliament as we speak.

However the major road block is a combination of two things – money and politics. Like I said some of the farmers (not all, generally a few of the wealthier ones) are a bunch of crafty cute hoors. They have become quite apt at wriggling subsidies out of the Irish or EU governments. I described in a previous post the scandal of the “slipper farmers” who are paid subsidies for essentially doing no farming. Some Irish farmers (not all, often the more affluent ones, this is the very problem) get up to 71% of their income from subsidies. So ultimately this access issue boils down to someone paying the farmers for access and the sums they seem to think they should be paid are not small.

Now this would be the point where the government would step in and apply the national interest (i.e. the bulk of people want access to farm land, even among farmers, it would benefit the tourist industry, etc.), drive the law through and tosh a few coin the way of the farmers for a couple of stiles (to insure they don’t need to worry about people climbing over fences). Unfortunately, the Irish farmers lobby is too powerful for either of the main parties in Ireland to risk offending. Hence the stand off continues to the determent of the country.

Ten years for benefits fraud, but for tax fraud…..?

The government has just announced a proposal to give benefits fraudsters a jail term of up to ten years. Now while I certainly see the need to clap down on the small number of professional criminals who do defraud the system. However I worry that it might frighten away genuine benefits claimants who need the cash but are reluctant to “make a fuss” or worry that the might get caught out (e.g. they claim for benefits, their circumstances change and they don’t inform the council quickly enough) and are forced to endure poverty as a result.

I would also put this in the context that the job seekers allowance and housing benefit (the two that the Daily Mail brigade protest the most about) is less than 3% of public spending, indeed the bulk of the benefits bill goes as working tax credits to working families…of course this means that Middle class families who’ve maybe gotten their claims wrong could go to jail (love to see Cameron try selling that on door steps in a years time!).

But what I find odd, is that the maximum penalty for tax fraud in the UK is only seven years. And while councils are spending millions trying to catch out people claiming the odd few quid a week more than they should the government is making little or no effort to catch people defrauding the exchequer out of tens of billions a year, more than the entire welfare budget!….although that might have something to do with the fact that some of them are sitting around the cabinet table!

Indeed a BBC episode of Panorama, How to Dodge Tax, showed last night that while the coalition might well talk the talk about getting tough on tax avoidance, they are not walking the walk . Indeed far from closing loop holes they’ve been opening them and advising businesses on how to take advantage of them. And the beeb even caught an advisor to the government on tax giving a £1000 a day session of tips and pointers on tax avoidance!

If the penalty for benefits fraud is going to be that severe, then judicial equality requires that anyone found guilty of tax evasion should be even more severe again, a lengthy jail term and an unlimited fine.

Certainly I would argue we could eliminate much tax evasion and avoidance by adopting two rules.
Firstly applying a fine of ten times the amount avoided (plus interest, back dated to the year that it first started) to any accounting firm and the client for any errors they made in a tax return. Secondly, apply heavier prison sentences for outright tax evasion. These would instantly make tax avoidance and evasion a fairly risky business financially (one small typo on a ledger and a billionaire is could be looking at tens of millions in fines, a spell in prison and his accountant winds up bankrupt) and my suspicion is many will decide it’s not worth it.

But clearly, this story just goes to show how out of touch the present government has become. And how beholden they are to upholding right wing myths. If the Tories keep this up, they’ll be burning benefits claimants at the stake pretty soon, or making them go around in orange jump suits.

Ireland’s Hidden Pension Crisis

While back in Ireland a couple of weeks back, I caught a documentary about Ireland’s hidden pension crisis. The financial crisis affected many people in many ways but pensioners (or indeed anyone working in Ireland who plans to retire some day!) took a bit of a serious hit.

In the middle of the boom, many in Ireland built up large debts, often in the form of mortgages either with the goal of putting a roof over their head or as part of a pension plan that involved bricks and mortar (build or buy a few apartments or office units and rent them out to fund retirement).

However when the crash hit, it meant many found themselves squeezed from multiple directions. The drop in house prices left many in negative equity, while at the same time the financial crisis either left millions out of work, or facing a significant cut in their income (less trade in the doors of shops, etc.) To make matters worse the rental market in Ireland, in particular the business rents have taken a hammering (so anyone relying on tenants to pay the mortgage was soon in trouble).

Furthermore in response to pressure on the government’s finances Ireland, like many countries has raised the retirement age. This created serious problems for anyone forced into early retirement, or whose contract required them to retire at a certain age (meaning their forced to live hand to mouth for the next few years as they aren’t yet elible to draw on the state pension, nor claim jobseekers allowance!).

Meanwhile there’s many others who would like to retire, but simply can’t for financial reasons. They interviewed a 70 year old taxi driver, who is still driving his car, simply because he can’t afford to retire and pay off his mortgage on his megre pension. Or a shop keeper who also can’t retire and is working well past the day when its healthy for him to be lifting heavy crates, as that would mean his business collapsing (largely due to mortgage related debts) and him and the wive likely out on the street.

Of course I for one would argue that this is always the danger with property. It looks like a safe bet, but its ultimately unhedged commodities speculation, which as any market trader will tell you is pretty much the most financially risky thing you can do. However, this was always the problem with the build-up to the financial crisis, politicians, in Ireland as elsewhere failed in their job to listen to the warnings (notably those from Economists Morgan Kelly) and they didn’t take away the punch bowl as the sub-prime party got rowdy. But most ordinary folk, who clearly didn’t understand the risks they were taking, just went along with the band wagon.

And now the country is paying the price and with Ireland, like most countries, facing up to the demographics imposed by the baby boom of the 1940’s and 50’s (which means a huge acceleration in retirements) it can only get worse. Consequently while the Irish economy has recovered a good deal by now, most people will tell you that business is still slow as people are still being very careful with their spending.

Quantitative Easing
Meanwhile, the head of the IMF Christine Lagarde urged the UK and US not to be too hasty in ending quantitative easing and implied that Europe should consider a similar policy. I would note however, that while I supported the idea of QE in the Eurozone at the height of the crisis (more to scare off the spiv’s and speculators circling around Greece or Ireland), bringing it in now would be a case of shutting the stable door after the horse has bolted.

In fact quantitative easing had a nasty effect on the situation for Irish pensioners. Scared by the complete lack of action during the crisis within the Eurozone and the apparent possibility that the Germans might actually let Greece or Ireland leave, many Irish (and people in other Eurozone countries) began moving money abroad, notably to UK bank accounts.

Now if you read the Daily Fail, you’d think the Euro was doing badly v’s sterling or the Dollar. Actually since 2007 (when QE started) the Euro has gained in value relative to the pound by about 25%. Hence if you had moved you’re money from a UK account and even if you’d stuffed it under a rug in Euro’s in Ireland, you’d have gained the equivalent of 5% on its value per year, as good as you’d get from a high interest savings account (and of course putting it in a Euro savings account would have netted you more via interest).

However many Irish savers, including many pensioners did the opposite, move money into the Sterling or dollar areas, which means they automatically lost 25% of their savings value due to the UK policy of QE (a price British with UK savings accounts are paying as well I might add!).

The wrong bailout
Ultimately however we can trace the woes of many Irish pensioners and workers back to a faithful decision at the start of the sub-prime crisis in America, when the US government, under G. W. Bush decided to bailout Fannie Mae and Freedy Mac. Ironically, the reaction of many on the left, notably Naomi Klein, was to oppose this act of overt socialism by G. W. Bush and suggest that Fanny and Freedy (sounds like the lead characters in a horror film!) should be allowed to go to the wall. With instead governments focusing on bailing out deposit holders or mortgage holders rather than the Wall street firms themselves.

Now granted it would have been a ballsy strategy. As the implication would have been that the entire banking system in the Western World could have potentially unravelled. While this happened in Iceland and, contrary to what you’ll read in the Wall Street Journal Iceland, didn’t explode and sink into the Atlantic. But that’s a country of a few hundred thousand people, there’s no guarantee that would have worked for the whole western economy and indeed the collapse of Lehman Brothers suggests it could have made the crisis worse.

However, certainly the only reason for rescuing the banks was to rescue Main Street. This fact seems to have gotten lost, either in the way the likes of Fred Godwin (or as I prefer to call him Scottish Holder of Indebted Titles ;D) held onto his pension and the fact that the bosses at anglo or the others in the rogues gallery of bank bosses are not presently in prison.

But more significantly, the bailout of the banks has not included any provision for them to go easy on ordinary people who got in way over their heads during the boom. Consequently these individuals are struggling, not spending or investing (even those with some cash floating around), economies are stagnating and as none of the serious structural changes that should have been implemented on the banks were performed, they’re likely off again building another bubble (most likely I suspect one founded on Shale Gas fracking). For as the LIBOR scandal shows, they’ve learnt nothing since the crisis, its business as usual for them.

Consequently there is a need for governments to revisit their strategies. Far from selling shares in banks, I’d argue for them to be re-structured (and broken down into smaller firms) and providing relief to ordinary borrowers given priority. I’d also look at bringing in new laws with hefty fines and long prison sentences for financial crimes. The best way of preventing another financial crisis is to ensure that whoever is responsible for the next crisis knows they’ll do more time inside that Myra Hindley. For as things stand, the end result is just going to be economic stagnation until the next crisis hits and then we’ll know what a real depression feels like!

Dead Cat Bounce

The chancellor, seems to think the economy is recovering and has been going around like a little spoiled kid, claiming that he in fact was right all along. Naturally the usual suspects in the right wing elements of the media have jumped straight in with both feet, lapping it up like a cat on speed.

Now they could be right, it could be signs of recovery. After all it’s been 6 years and even after this much time back in the dark days of the great depression some sort of upward movement had begun within three years. Althought with an unprecedented number of households in the UK now dependant on food banks and even the UN condemning the Tory bedroom tax (how soon before unemployed brits are seek asylum in France on grounds of “political oppression” by the Tories). So it’s a little early to say we’re out of the woods.

And of course, whether said “growth” is due to the chancellors policies (it’s kind of like the high priests on top of a Mayan pyramid claiming that the rainy season starting was due to them sacrificed dozens of people…rather than due to this think called “the weather”) or due to external factors (the recovery in Europe and the US). i.e. the economy is recovering despite the Tories not because of them. Indeed, any recovery might well be down to the fact the Tories aren’t hacking away at the budget as much as they’d originally planned.

..or here’s another theory, it could be what economists call “a dead cat bounce”. It is unfortunately a known phenomenon that an otherwise collapsing stock or economy will not obey an otherwise constant downward trend. As economists put it, even a dead cat will bounce if thrown from a great height, but that doesn’t mean the cat’s showing signs of life.

This phenomenon can be explained by human nature. Those who held onto their shares in a company in the forlorn hope of a recovery, eventually come to their senses, start cutting and running and selling their shares for whatever price they can get. Enough people do it at once and you can see a temporary apparent “recovery” but eventually nature takes its course and the price falls again.

The same thing can effect economies, and we’ve seen a couple of such “bounces” across the world from time to time over the last few years. Often this is as a result of people realising that the recession isn’t going to be the “temporary” blip they had hoped. For example, a company realises that they aren’t going to get a loan to finance that big expansion they’ve long planned and decide to abandon these plans and instead hire some contractors to convert some empty offices into storage space. Or a home owner realises that the next rung of the property ladder will be out of reach for some time to come, decides to stay put and adds an extension to his house instead. Or a faith group, swamped by people seeking to use its food bank and guidance centre end up expanding their premises to cope. All of these sorts of decisions can lead to a temporary boost in economic activity and again enough people do it at the same time, it can create the illusion of a recovery. But that’s it.

And of course we’ve been here before. Back in the bad old days of the last big recession, under the Tory government of John Major, the chancellor Norman Lamont went through this cycle where every few weeks he’d announce that the recession was over and the green shoots of recovery were visible, only to go on Newsnight a few days later and be called a pillock by Jeremy Paxman when it was obvious that he was seeing things (with hindsight one had to wonder whether he was smoking some green shoots at the time!). Towards the end it got to stage that if a yuppie who’d jumped from his office window landed in from of Lamont, he’d begin interpreting it as a sign of recovery, given that London was now literally raining investors.

So Osborne and “call me dave” will excuse me when I say that I’ll reserve judgement on whether the recession is over until all the facts are in. And I’ll leave the question as to whether their policies extended and deepened the recession, or did have a positive effect to historians.

Not the Boss of him – don’t mention the war!

Professional loud mouth prat, Russell Brand :crazy: got himself thrown out of some celeb bash the other week after he made the mistake of doing a bit of a tribute act to Fawlty Towers “the Germans” by bringing up the Nazi past of Hugo Boss at a fashion event that they were sponsoring.

Horribly insensitive of him, everything we’ve come to expect from the likes of Russell Brand…and entirely true I might add!

Inevitably the Daily Mail, aka the newspaper that supported the third reich, were quick to leap to Hugo Boss defense (perhaps they got confused and heard “Boss” and thought he’d be criticising their “leader” :no:). As they quickly brought out an article that attempted to gloss over Hugo Boss’s crimes…the lady doth protest too much me thinks!

According to the Daily Mail he only joined the nazi party so he could get a couple of orders for a few shirts…so according to them he was literally “just obeying orders” ;D. Of course the records show he joined the nazi party by at least 1931 (i.e. before they got into power and still back when they were a minor fringe in German politics). By 1933 he was advertising for the sale of nazi uniforms. He is also alleged to have had a photograph of himself with Hitler in his office and was known as a great admirer. His factories may well have also used (so it is alleged by Jewish groups) slave labour during the war.

During the process of post-war “denazification” it was concluded (by a German court) that he was “an activist” and a “supporter and beneficiary of National Socialism“.

Indeed this isn’t even controversial as Hugo Boss has acknowledged as much…although I suspect they’re not exactly happy when people bring the matter up, particularly at a celeb bash where they’re buying the booze!

But first, a word from our sponsors…

Indeed, since we’re talking about it Hitler had many corporate sponsors and admirers, Henry Ford, Siemens as well as BASF & Bayer, or as they were known back then IG Farben, makers of Zyklon B (strange but true, far from trying to avoid the label “makers of the gas for the Holocaust” the successor firms to IG Farben fought a battle to trademark the gas, as it was also used as an insecticide and they wanted to keep making the stuff! :??:).

Others in the hall of shame include IBM and Coca-Cola (fun fact, they developed Fanta as a substitute for coke in Germany during the war when they couldn’t get ingredients from overseas, making it the (un)official soft drink of the third reich! U-( ). I could go on, but the list is rather long, as you can imagine, but here’s a couple more of them.

As for the nazi uniforms you do have to wonder, as David Mitchell ponders in one of his sketches, how long it took the SS guys wearing these uniforms to realise that they had pictures of skulls on their hats. I mean the good guys don’t exactly go around dressed in black with pictures of skulls on they’re uniforms do they? At what point did they work out that they might be the baddies?

Dance for your Job

A graduate has received an apology from Curry’s over him being asked to dance at a job interview. An act that proves that there are indeed plenty of David Brent type managers out there. As well as proving that that BBC programme “The Call Centre” wasn’t fiction. :crazy:

It’s difficult to know where to start with this one. But there is firstly the issue of discrimination. Some people, e.g. those with disabilities (either physical or mental health issues) might be unable to comply with such requests or it might make them deeply uncomfortable. Within certain cultures and religions dancing in front of complete strangers (particularly of the opposite sex) is a complete no-no. In short you couldn’t get more un-PC if you joined UKIP.

It is unfortunately all too familiar with the process of job hunting, which these days seems to be becoming ever more soul destroying and demeaning (as if IDS and his “Welfare Chain Gangs” weren’t bad enough!). For those who haven’t had to change jobs recently, these days your expected to fill out endless “application forms” and “equality monitoring” forms, some of which will increasingly ask you abstract and pointless questions.

Then if you get an interview, you diligently go and do some research about the employer, as this fellow did regarding Curry’s, only to arrive there and find some office psycho’s turned it into some sort of sick game, where you can be asked all sorts of silly questions that will have nothing to do with ones ability to do the job… or indeed simply asked to dance!

And interview expenses? Don’t even ask these days! best way not to get the job! Indeed here we see the effect of another Tory cut, they’ve stopped a scheme that paid for interview travel expenses in situations where hard up job-seekers were unlikely to get them.

Granted part of the problem here is that we have a large volume of people out of work and management often find themselves swamped with applicants, many of whom are often vastly overqualified, seeking work. Another employer recently complained about getting swamped with offers from all over the country for a job paying just £8 an hour. Ironically none of those she shortlisted for interview showed up (probably because they realised they weren’t going to get expenses paid, so why spend a hundred quid on a train ticket for a job you’ve little hope of getting!).

Of course this has to lead one too question the professionalism of companies who engage in such “unconventional” interview practices. Do you want to put your faith in a company, and the services it provides, if it judges future employees on how well they dance (or make up bullshit!) rather than on merit?

Or let me put in this way, if British Airways started selecting its pilots on the basis of how well they can sing, as opposed to how good they are at keep the big metal tubey thing up in the air, would you ever want to fly BA again? I certainly won’t be shopping in Curry’s for some time, if this how they select staff.

Middle management from hell

However, I would also pin the blame on the modern system of middle management. As Lucy Kellaway recently pointed out in her history of the modern office, there are now five million “managers” of some form or another in the UK, that’s 1 in 5 of the total UK workforce. And that is just an overall average figure. I’ve sat in project meetings and counted more “managers” around a table (talking about “mission statements” and “strategy”) than actual engineers and technical people there to do the actual project work!

I mean take the army, a good example of how a chain of command is supposed to work. The lowest ranking “manager”, a corporal is typically in charge of 10 troops. And strictly speaking he’s not really “the boss” of those ten, just the guy who does the shouting when the Sergeant (1 squad or 20 men) isn’t in ear shot. And even a sergeant (quite literally!) takes his marching orders from the Lieutenant (platoon leader) or Captain (a company or 4 platoons). And in most armies all officers of captain rank or below are typically field commissions. i.e. they are expected to be down in the trenches in the thick of the fighting alongside the rest of the troops.

…Or to put that in terms of the modern office, all but the most senior officers are expected to roll up their sleeves and do some of the actual work, not hiding away in an office drawing up organisational charts and drinking coffee. I mean how well would the British Army fare if, say, during an Argy invasion of the Falklands, with an officer corps ratio at 1 in 5, all the officers fecked off mid-battle to go on a three day retreat to discuss corporate branding? In short if the army was run like many UK companies you’d likely end up with scenes like this, or this :P.

The Dilbert Principle

The end result of all of this is that it is my observation that many middle management types have worked their way into a tidy and comfortable little rut which involves doing very little actual work. However their priority is often now in keeping that job to the point where they’ve develop survival instincts that would put a rat or cockroach to shame. A situation not helped by the fact that a large proportion of managers are likely to be psychopaths (as I discussed in a prior post). Consequently they’re goal when hiring is merely to hire someone who will further their little empire, not further the goals of the firm. This is how we end up with ridiculous “Elf N’ Safety” dictates banning conkers or cake sales….or as I prefer to call it SAPS (Save Ass Policy Schemes).

Hence they will sooner hire some moron who clearly shows a willingness to be the bosses minion (e.g. the guy who willingly dances around with his trousers around his ankles at interview if asked too) rather than someone competent who can do the job well and (god forbid) will be looking for said managers job in a couple of years time. In short this incident is further proof of the reality of the so-called “Dilbert Principle”.

To me the solution is very simple, sack a couple of rows of middle management. But who to sack? How about a dance off judged by the general workforce :))