The UK is worldbeating
We keep on being told how the UK is worldbeating. Or that the cost of living crisis is a Europe wide thing, nothing too do with brexit or Tory party policy. Well they are wrong….but also right!
The inflation rate in the UK is much higher than it is in Europe or any other G7 country. And the graph above reflects average figures from a few months ago. The inflation rate is actually stabilising in parts of Europe and in the US, while in the UK its forecast to go up to 22%. Admittedly there are outliers regarding certain individual countries in the EU and certain products (notably anything dependant on gas), but for what should be obvious reasons. Not to mention inflation is effectively higher the poorer you are. Meanwhile the energy price rises in the UK are well ahead of those in Europe by some margin (again there are some outliers), at +200%.
So the Tories are right, the UK is worldbeating….just for all of the wrong reasons! Not that the media will dare report this.
Uk energy options some black coffee analysis
I was talking to some people who work in finance about the options available to the UK to end the energy crisis. As I mentioned in my last post we are looking at an extra cost burden of between £100 to £167 billion a year (according to Carbon brief). Long story short, a lot of the more populist options simply won’t be effective. In fact, with the Tories in charge, they could actually be counter productive.
For example, nationalising the energy industry. On the one hand with the industry under government control we can set the price of energy at any level we want and just run the industry at a loss. This is basically what the French are doing, which explains why their bills are only going up 4%. However, that would still require a significant government subsidy, in the order of tens of billions of pounds per year, so it won’t be cheap.
In fact buying the industry in the first place would be cripplingly expensive. An estimate from the centre for policy studies put the cost of nationalising the energy industry at between £55-185 billion. And a lot of that fiddle factor boils down to what exactly you are nationalising (everything down to the electricity meters, or just the power stations?) as well as the debts the various energy firms will have run up over the years. In short, buying out the energy industry and subsidising bills could cost more than the UK spends on health per year.
Also the key benefit of nationalisation is the ability to set policy and undertake the much needed investment the energy industry hasn’t been undertaking while privatised. However, with the Tories in charge, it seems doubtful they will do that (nor spend tens of billions subsidising bills). A more likely outcome is they put one of their mates in charge, and use government money to fund fracking and coal mining ventures that never seem to yield any actual results (like the PPE contracts during covid).
Starmer’s plan (likely to be Dizzie Lizzie’s too, as she can hardly be expect to come up with something intelligent) is for a price freeze and subsidising bills. This seems more sensible. The devil however, is in the detail. i.e. how do you make sure that the energy industry will implement it? And you’re still talking a figure of between £29 billion for 6 months and £100 billion for a year in costs to the UK taxpayer. Where’s that money going to come from? And cutting taxes too (as Truss proposes, I mean she’s got to give the rich some sugar as a reward for backing here), would add another £40 billion to this bill. That level of annual spending could easily trigger a sovereign debt crisis….right about 2024 when the Tories lose the next election (this could be their plan, elect a pea-brained simpleton, knowing she’ll crash and burn, then deliberately run the country into the ground (while enriching themselves) and blame labour for the mess).
A windfall tax could be one option (just this time without lots of loopholes). However, that isn’t going to yield as much as people think. If you hit the energy industry with a heavy tax on their profits, they just won’t declare any profits. They’ll invest the money in infrastructure, or pay off some of their debts, or buy back shares from shareholders. Now while some of those actions are what we want them to do (it won’t produce lower bills today, but it might mean do so tomorrow), its not going to yield as much as people assume. And the Tories sure as hell aren’t going to do it (those loopholes are there for a reason….to give the illusion they are doing something when in fact they are doing nothing).
One other option would be low/zero interest loans to the energy industry to cover the costs of the current price rise, which are then gradually repaid over several years (essentially spreading the costs of this winter’s bill out over several years). However, the trouble is getting the energy industry to stick to their side of the bargain. They could just wait for this to blow over, keep bills high and put the money in their pocket, not bothering to pay of the loans (which would make it harder for them to be re-nationalised by a future labour government, making it a sort of poisoned pill).
Ultimately the reason why we are having an energy crisis is because of the Tories. And with the fox in charge of the hen house there’s no real measures that can be taken that will be effective.
From Russia with flare towers
So the Russians have finally done it and turned off the gas. Firstly, I won’t believe any excuses they are coming out with about a faulty turbine and an oil leak (normal protocol is to have a backup system, so there should be another turbine ready to go next to the faulty one, plus the two for North stream 2 up the road). Clearly this is just them trolling the EU, as well as avoiding the risk of lawsuits later.
Now the Kremlin will probably think that this will work out okay for them, but I believe they’ve made a fatal error. The one bargaining chip they had to limit NATO & EU support for Ukraine was gas supplies. Now there is no reason for the EU to hold back as it is now in their interests to see the war ends as quickly as possible with a favourable outcome for Ukraine.
And while Europe’s going to have to undergo some hardships in breaking their addiction to natural gas, in the long term if they succeed, this is a vital source of revenue that the Russia has just lost. Fossil fuel production is 30% of the Russian economy, with fossil fuel exports making up 70% of their export revenues. As the joke goes, take away oil and gas and all the Russians have left are Kalashnikov’s, Vodka, Caviar and suicidal novelists…and the Polish Vodka is better! Along side their declining population, its a recipe for a declining economy to go with it. A permanent Brezhnev style slide into oblivion.
But can’t they just sell the oil and gas to developing world nations, or China/India. Well yes and no. The pipeline infrastructure to allow this level of export doesn’t yet exist. And they will face direct competition from central Asian states (who aren’t trying to fund a war and thus can afford to undercut them on price). And, as I noted in my last post, developing world nations are much more sensitive to price. If gas prices go too high that can’t simply absorb those costs like Europeans can. This effectively puts a ceiling on the gas price and limits the profitability of such operations. And longer term, the lower the price the less of Russia’s oil and gas is actually economic and will be produced. So in effect they’re proven reserves will now be reduced, meaning they’ll eventually run out of gas much more quickly.
Now for sure the Chinese (and Indians) will buy gas off the Russians, if they can get a favourable deal and a good price. But, given that the Chinese aren’t stupid enough to get addicted to Russian gas (unlike us in Europe!), they’ll probably want certain concessions. Seats on the board, or that Chinese firms can invest in or conduct future drilling. That creates a problem for Putin’s mafia state. Because while he can intimidate the Oligarchs by have them arrested, or arrange for them to fall out of a hospital window (in Putin’s Russia health insurance drops you!), that’s not going to work on the Chinese. In short, he could be getting more than he bargained for.
Indeed its worth remembering that while China and Russia might seem natural allies, that’s not always been the case. They had a serious falling out during the cold war and actually fought proxy wars against one another. And you can bet the US / CIA will be in there like a shot stirring up trouble.
China in your hands
And speaking of China, Dizzie Lizzy was talking about designating China as “an enemy” of the UK. She also said she wasn’t sure if France was an ally or an enemy. Where to start.
Well firstly, even suggesting that France isn’t an ally will have Putin rubbing his hands with glee. After all, the whole reason why he wanted brexit was to sow discord within the NATO alliance. Imagine if Corbyn had said something similar. The Tory press would have claimed it disqualifies him from high office. But when a Tory says it, ya stick it to the snail eaters!
As for China, well she ain’t going to be opening pork markets in Shanghai with that sort of attitude. Inevitably the Chinese will retaliate, likely by restricting trade. And we’ve got enough economic problems as it is (she’s also taking about blowing up the northern Ireland protocol and starting a trade war with Brussels).
It also feeds directly into Chinese propaganda, which is quick to remind everyone about Britain’s colonial past. And in particular the lead up to the Opium wars (when Britain became a drug cartel). So to say its counter productive is an understatement. But it probably sets the tone for what we can expect from this new ERG Puppet PM….who was elected by 0.12% of the population.
Maitlis no mates
Emily Maitlis recently confirmed what we all knew – that the BBC has become less the bastion of balanced media and little more than the Brexit Broadcasting Corporation. She highlighted how the BBC before the referendum failed to provide a balanced argument. For example, practically every economist was saying that brexit would be disastrous for the UK economy (and they’ve largely been proved right). But instead of putting a panel of economists on to talk about it, they’d put one (often moderate) economist on against some crackpot, whose various lies and half truths would then not be challenged.
And after the referendum the BBC began to self censor. The many lies of the Tories went unchallenged and were reported as fact. When Maitlis broke the news about Cumming’s little jolly to Barnard’s castle, the BBC issued an apology simply because he’d denied it happened. And they didn’t even consult with her first (in fact she was off air for 2 months). Yes, they took the word of a man whose known to be a compulsive liar over one of their own journalists.
And if anything it looks like its going to get worse. They are talking about major changes to BBC news that will eliminate most of the local news teams. Which suits the Tories, as its often those local reporters who dig up the stories that show how Tory policy is failing at the local level, not to mention various scandals which have brought down politicians. It also makes it easier for the Tories to disseminate their propaganda without facing awkward questions.
They’ve also been cracking down on political satire, cutting popular shows like Mock the week and the Mash report. The reaction to some fairly mild satire about Liz Truss from Joe Lycett on the BBC the other day, just goes to show how far the BBC have slid. An inability of a country’s leadership to be able to take a joke is the sort of thing we associate with tin pot dictatorships.
And while alternative media on the internet might well report these stories (as well as newspapers such as the Independent and the Guardian) they don’t have the same audience figures as the BBC. Its all very dystopian.
Crap on the beach
And one of those stories the Tories have been trying to hide is the literal crap washing up on beaches. This is due to the fact that post-brexit its harder for the water companies to get their hands on the chemicals they need to treat sewage. Plus they know that with the Tories in charge, nobody in government literally gives a crap anyways, so why should the water companies? I mean its not like they are going to get in trouble over it!
Which raises the question, how come if you let your dog poo on the street and don’t clean it up you can get fined. While if a water company does it, they don’t get fined. Can dog owners set up their own water company?
UK flagship grounds itself
A rather embarrassing event saw one of the UK’s aircraft carriers ground itself and damage its propeller as it left port recently. If they can’t even steer a ship out of their own harbour how much of a threat do they pose to the Russians (or Chinese). That was a few billion of taxpayers money well spent.
Well there’s a bit more to this story. Firstly they are using a Dutch yard to do the repairs (those damn European allies helping out when we are trying to be mad at them for brexit!). Secondly how the grounding occurred. There are a couple of possibilities.
One is simply poor seaman’s ship on the part of the navigator or helmsman. They made a mistake and ran over a sandbank. However, I won’t rush to blame any sailors (presumably they’ll be punished by being put in a long boat until sober, or shaving their belly with a rusty razor….early in the morning). Ports, particularly those in estuaries, are prone to filling up with sediment and thus require regular dredging to keep a channel clear for ships. If the dredging wasn’t being down, possibly due to Tory cutbacks, then this could be the reason for the grounding.
Also given the low water levels (thanks to climate change) and the fact that we now have literally crap floating down river, this could also be a factor. Essentially the dredgers went and did the usual job, failing to account for the lower water levels and increased sediment. And as smaller vessels would have passed back and forth without issue, the problem won’t have been apparent. So we’ll have to wait and see what the outcome of any investigation is….if they actually report it of course!
Pyongyang on the Thames
The Tories like to claim that post-brexit they want to turn the UK into Europe’s Singapore. Well firstly this ignores the fact that the “fine” city of Singapore (fine, as in you can be fined for practically any little thing) is fairly authoritarian (even talking politics with a taxi driver has been banned on occasions!). It has a ruling party that’s been in office for decades, with virtually no serious opposition and most of the industry is state owned.
However, I’ve long noted that if there’s any Asian regime the Tories are most similar too it would be North Korea. As one is an authoritarian xenophobic regime that constantly breaks international law, has cut itself off from world trade and survives on the back of propaganda and myths…..And the other is in Asia 🙂 .
And we have yet another example of this in the form of a brain fart from Transport secretary Grant Shapps. He talked about making it compulsory for bikes to all have number plates. I’ve talked about this before and pointed out it would be impractical (what if I only cycle off road? What if I’m carrying or walking with the bike rather pedalling it? What about a children’s tricycle?) and authoritarian (as to be effective you’d also have to issue ID cards to everyone in the country and make carrying them compulsory).
But there is one country in the world who does have a requirement that bicycles have number plates – north Korea. Why is it that the Tory party, the supposed party of small government, has a dangerous habit of emulating the policies of authoritarian regimes? Or is this just the Tories trying to open a front on the culture wars, rather than doing something useful.
Quiet quitting
A new term has come along what CEO’s call “quiet quitting”. This is where an employee just does the bare minimum of work needed to fulfil their job requirements. They don’t check their emails after work hours, out at five and don’t come in at weekends. Several bosses were arguing that this is a sign of laziness and they are within their rights to fire employees who do so.
Well there is another definition for this “doing your job”. Yes there are times in many jobs where you might have to put in some extra work at busy times or burn the midnight oil. E.g. you work on an oil rig and a gas leak starts a few minutes before knocking off time. That’s sort of something that needs to get sorted asap, it can’t wait till tomorrow (unless you work on a Russian oil rig of course). In other jobs you might need to keep your phone on throughout the night in case of a sudden emergency that demands your input.
But these sort of incidents should be the exception rather than the rule. If something needs to get done at midnight on Tuesday, won’t it have been sensible to bring this up Tuesday morning so the staff could sort it out during work hours? Whose fault is that, the staff? Or the boss? And if it keeps happening all the time, maybe the boss should consider hiring more staff to cover the night shift?
I think the problem here is that, since the decline of unions, bosses have gotten used to treating employees as a commodity, rather than an employee. They expect you to devote yourself completely to the job, yet still get paid peanuts by a company who will fire you when you’ve exceeded your usefulness. Employees were more loyal in “the good old days” but that’s because it was a two way street e.g. an ex-BA pilot once told me that basically if you worked for BA, the company owned you. They told you at short notice that you were flying a jumbo to Sydney, well I guess its going to be Fosters & Kangaroo burgers for dinner. On the other hand they looked after their own, all the crew got put up in a nice hotel, free flights, good pension.
If modern bosses aren’t loyal to staff and aren’t willing to put in that extra effort, can they really be surprised when the staff reciprocate?
daryanblog 
You must be logged in to post a comment.