Bishop Hill No hope, no change
Dec 9, 2013 Climate: Parliament Economics Energy: grid 
The foolhardiness of the current government's energy policy need hardly be reiterated, but word is getting round the political and economic mainstream that Labour is potentially just as bad. Last week Liberum Capital put out a briefing note estimating the damage done to the UK economy by the party's proposed price freeze:
The heightened political risk faced by the UK utility sector following the announcement of the Labour Party’s price freeze has materially impacted on the valuation of the sector and reversed the five year utility sector trade of Long UK / Short Europe. Total shareholder value lost so far amounts to between £7bn to £11bn. In our view, if the UK government is successful in politically neutralising Labour’s price freeze policy then some of this loss, but probably not all, could be regained. Some of the loss is likely to be permanent in our view because it is now apparent that UK politicians (like those in Europe) are unwilling to stand by the logic of their own energy policy and enforce the higher costs onto consumers that naturally follow from their de-carbonisation strategy.
Today, these remarks have been echoed by the OECD no less, which has damned the Miliband plan in no uncertain terms:
If you freeze the price of energy and the international price of energy rises, it means there's going to be a very big difference to pay," he said. "Who's going to pay the difference? Well, are you going to ask the investors to take the difference? Well, you know they'll probably go bankrupt. How are you going to get people to come in and invest to get their money back in 30, 40 years' time, when you are saying there's going to be a freeze? I think this is simply not consistent, not economically objective.
Reader Comments (52)
It's what you expect when our 'great leaders' are qualified in PPE. They obviously forgot to attend the E bit of the course though - far too technical for them.
What else would you expect from the man who was Minister of Energy and Climate Change and got an environmental activist to draft the Climate Change Act.
He is a true CAGW believer who has not understanding of the science. He is an armchair socialist who has no experience of real life.
If he ever becomes PM, we will have a completely destroyed economy!
Unfortunately, no mainstream political party with seats in the UK parliament has the desire to reverse energy policy dramatically. However, the chickens are hastily going to their roosts on this one and an energy minister in the last Labour administration ( I forget his name) said that politicians tend to react to public unrest and that was why the lights had to stay on and energy remain affordable. Unfortunately, the generation of politicians which came from a background of having worked is fading fast, and we are now really being run by the nerds who populated the Student Union in my day,. I have always been on the left of politics but I pray that Miliband does not fool the public on this one, because he is an extremely ruthless demagogue beneath that nerdy exterior. One question Mr Miliband - how do we replace the 40% of energy produced by coal by 2030? Ask the Germans they are building 10 new ones!!
If...................
If it could get any worse than the dogs dinner it has become, energy policy UK has just turned down a blind alley to nowhere and blackouts. Indeed it piles inertia and stupidity on what can only be described as a deliberate attempt to finish off British industry while at the same time dooming the domestic energy consumer to days, maybe even weeks without power and years of intermittent supply.
You can't play it both ways.
Miliband, never understood market forces and still refuses to do so.
Ed the RED has, is attempting the art of the politically impossible, paying lip service to strict adherence to 'green emissions' targets and obligations thereof but playing to the gallery by promising an energy price freeze and thus he will hamstring the energy suppliers, the other lot, a coagulation of yellow and pink - Ed Davey in charge [stop laughing at the back] aren't doing much better either.
What it does promise, is the worst of all worlds and a guarantee of a rather large energy shortfall in the immediate future, look - most of the British energy suppliers are foreign owned - thus investors simply put will not stand the loses for long and will if they haven't started already - pull out of the UK energy market.
Energy supply.
Cut the "green crap"!
It could be easily be resolved but it would take a PM with some real determination and to be in possession of a 'pair' to re-switch the energy market back to fossil fuel technology - ie new build coal fired generating plant - yikes!
No! That would be much too easy and obvious.
Perhaps when the civil service see the drop in value of their pension funds (presumably some is invested in the energy companies seeing the fall in value) they might sit up and take note. They may have been feeling comfortable knowing that they were going to retire before the proverbial hits the fan, but might be a bit more concerned that the value of their pension funds might impact on their retirement plans (provided the rest of us don't have to make up the shortfall, Mr Osborne please take note).
Both Labour and LibDem MPs are virtually 100 percent CAGW believers. However, scepticism seems to be growing among Tory backbenchers. One can only hope that these sceptics will work on their colleagues and sense will prevail. Only then is there any hope of Cameron and his cabinet being swayed. But, I'm certainly not holding my breath.
Does the civil service have a pension fund or are their pensions paid for by the Ponzi scheme?
i suspect the latter.
Tom Crotty, Ineos Group director said sharing services (at Grangemouth) was one way to keep down rocketing UK energy bills for big industries, hit particularly hard in Britain by environmental taxes. “The Government needs to wake up to the damage high energy costs are causing companies in Britain,”
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10504104/Ineos-plans-to-share-out-Grangemouth-site.html
We hear pleas from industry and the energy suppliers to review these environmental taxes flowing from the Climate Change Act and the EU, but the politicians are just not listening. They exist in a different and unreal world.
Miliband's promise is a corrupt, cynical and murderous lie. It is the exact opposite of the statement he previously made about increasing electricity prices as a result of his "Climate Change" Act.
He is therefore, by definition, a corrupt, cynical and murderous person.
On the other hand the ConDems are unable to say this because they are almost equally so.
Hacked telephone conversation between Ed Davey and his Chief Scientific Advisor, Prof David MacKay:
Central Planning. How great is that? And Brits used to be so pratical - inventors even. Price freeze, however, is simply something the Lake Poets would have loved given how "freeze" and "froze" is great imagery for people dying from frost, sheep frozen in place.
Well, the picture of "presuming Ed" explaining his energy policy is more flattering than the last one I saw.
Bishop, are you and your tribe really naive enough to think that a change in the share price of the utilities represents "damage done to the UK economy"? Unfortunately I think you are. Still, it is nice to see that you now value the judgement of OECD - perhaps next you'll agree with them about subsidies to fossil fuel interests.
DNFTIT
OK Phillip, much as I'd like to ignore you.
UK politicians (like those in Europe) are unwilling to stand by the logic of their own energy policy and enforce the higher costs onto consumers that naturally follow from their de-carbonisation strategy.
How long have we been saying this ??
A little bit off-topic, but I see this statement in a current BBC story:
State schools making gender bias worse
"..."We found that nearly half of the co-educational state-funded schools we looked are actually doing worse than average," explained Clare Thomson, curriculum and diversity manager at the Institute of Physics.
"That means they're actually making this gender bias in terms of progression worse, rather than even meeting the national average..."
With that level of mathematical ability, are we surprised that political decisions are so incompetent?
Dodgy Geezer - good points. I also take issue with the media's use of the word 'engineer' - why, even British Gas - who presumably employ a fair number of engineers, tell us that they are going to send an 'engineer' to fix your boiler..! I did once take them to task over this - but as you can see on the telly every night, to nil effect.
Until this country wakes up to the contribution which engineers and engineering make to this country, then we will slide further and further down any number of international performance comparison tables...
(name and address not supplied) CEng; MIMechE; CMIOSH; RMaPS
Michael Hart - You surprised me with that link. I was expecting a picture of Ed Davey rather than Ed Miliband.
Smell the coffee, people.
Ed knew that announcing a price freeze would cause chaos with energy companies' finances. That is precisely what it is INTENDED to do.
Labour, or rather Ed's union puppet-masters, plan to recreate the banking crisis in the energy sector. They wish to destabilise the energy companies, crash them, then "save" them a la Nat West/RBS Northern Rock etc on a "too big to fail" basis. Voila - re-nationalisation of the hated energy sector. The public will rejoice that these shysters have been taken out. That is, until Labour right-royally completely f**k it up, as they do with everything, and the lights go out.
Mark my words, state control of the energy sector is what this game is all about.
Not so much a lack of intelligence with our leaders and those in opposition as a resounding case of blinkered vision and lack of common sense.
PPE is perhaps the greatest destroyer of common sense and generator of sense of infallibility known to man. It takes a great mind to resist its malign influence.
Says it all really with regards our political "elite".
Thank God the Swiss aren't so stupid.
Hang on, goes to check what's happening...............
Phew, mostly seem to be trying, not very hard from this article:
http://www.swissworld.org/en/environment/climate_change/climate_policy/
"It's what you expect when our 'great leaders' are qualified in PPE. They obviously forgot to attend the E bit of the course though - far too technical for them."
Love it Phillip
And even then, if they did the E lectures, we all know that economic forecasts make climate predictions look good.
AngusPangus - 100% correct.
There's a lot of that type of strategy knocking around; the EU's relentless assaults on UK plc are imo designed to do the same thing. They absolutely don't care for a successful UK as we could demonstrably survive without our great saviours at the EU. So instead every policy is designed to choke off economic growth over here. Think the Tobin tax, red tape preventing shale gas, the whole carbon charade where we're closing down power stations BEFORE replacement capacity is ready (a truly insane policy). You can trace it right back to conceding our fishing grounds to Spanish and French rivals.
They hate the UK and will stop at nothing to destabilise us, aided and abetted by traitors like Clegg, Miliband and despite his protestations, Cameron.
When we're bust then the EU cavalry will come trotting to our 'rescue' and a condition will of course be pants around our ankles - and you can guess the rest.
AngusPangus. Labout knows this policy works. Many years ago Gordon Brown forced the price of electricity down and nearly bankrupted Drax. He sent BE into administration, took it over and then when electricity prices recovered, sold it to EdF. Red Ed knows he can do the same again with the big 6.
A crude but accurate synopsis Cheshirered,
Most of the hatred from across the channel is inspired from Paris and a 40 year effort is taking it's toll though it is hard to perceive who could be accused of being more fanatically biased towards all things EU - than that of our civil service and FCO and the left leaning political claque, media, luvvies and all [BBC] - we have also been done from within as much - from without.
Notwithstanding the salient and almost eternal fact that the French despise us - red tape and bureaucracy is their thing, in Siemens, BMW, ThyssenKrupp, RWE, Bosch, Bayer it is the Germans who have made good and done the takeover - there ain't much left manufactured here - that is truly British.
And if Dave can't sell the rest of it off - it's to China we go.
The theme song from MASH is "Suicide is Painless". Economic Suicide is not going to be painless.
The UK is doomed. The US fracks. China fracks. The UK thinks cheap, clean, shale gas is an abomination.
I think the KGB put something in your water supply.
I see another parliamentary pillar of the green community is facing de-selection like Yeo.
http://www.bbc.co.uk/news/uk-england-york-north-yorkshire-25292065
Caption contest entry:
Ed Miliband (pictured) enters a plea of diminished responsibility.
Don Keillor
PPE is the original soft option course for the upper-crust hard of thinking, the 1930s/50s equivalent of Media Studies or Golf Course Management though without the potentially useful end product.
It does, as you say, take a good mind to overcome its baleful influence though I have to say Lawson is an excellent example of one who has managed it.
EdRed the Unready.
It seems to me that ALL political parties , except UKIP, require an 'OUT' for this quandary. If it can be pointed out to millipede, camaroon and cleftbrain that they were 'LIED' to , by 'unscrupulous activists' they could do the necessary U turn. But I don't hold out much hope of this happening in my children's life time let alone mine
I keep hearing about this "PPE" degree, which apparently includes economics. Yet, graduates do not seem to have heard of things like supply and demand, price elasticity and so on, which I learned and comprehended when I was 15 years old and in high school.
Can anyone enlighten us about the "E" part of those degrees? What do they teach them - organic farming?
Ed-el-Red the Unready
That reads a bit better, I think.
The words of Liberium are also exactly the words of the Chairman of Centrica yesterday according to the Telegraph;
“It is now apparent that politicians are unwilling to stand by the logic of their own energy policy and enforce the higher costs on to consumers that naturally follow from their decarbonisation strategy.”
Odd, but if the push-back is gaining ground, so much the better.
@pharos Thanks for this.
This shows her true (green) colours
http://www.publicwhip.org.uk/mp.php?mpid=40605&dmp=1030
She is a Law graduate- so clearly an expert on climate change :-)
Get rid of the idiot!
Michael Hart - You surprised me with that link. I was expecting a picture of Ed Davey rather than Ed Miliband.
Dec 9, 2013 at 1:10 PM | Unregistered CommenterPeter Crawford
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Fair comment Peter. But in both cases the end result is the same: Their energy policies suck the life out of the economy until it becomes one of the un-dead.
While AngusPangus' suspicions may be correct, there are alternatives, based largely on incompetence, which should never be underestimated in the face of conspiracy.
I suspect, but cannot prove, that both Eds have made the same mistake. They thought that the multiplicative effects of energy costs didn't operate in this country anymore. They thought that once a few energy intensive industries have finally left for China (or the United States, now shale gas is available), the rest of us would simply Bank our way to prosperity. Or become climate-change "analysts" at the BBC and the Guardian. They thought no one would much notice increased energy costs because we would all be wealthy enough to not care, or even notice. They thought that much of the economy and the electorate lived lives comparable to their own, and that increased energy costs were a small price to pay for saving the planet every five years.
If they had never given it consideration, it would be bad enough that they didn't realise that the economy is more sensitive to energy costs than they thought. But I think they DID think about, and STILL got it wrong. That is partly why the markets are reacting so negatively to the "political risk" attached to Milliband's energy pronouncements: He is more stupid than they thought, and they are frightened.
The root of the problem is that we swapped a state monopoly for a private one. Unlike the state, the privatised monopoly has to make good profits for its investors.
The prospect of having political leaders each more stupid than those that went before (michael hart) is very much the history of the recent past and the foreseeable future. Booker sees us rising up in protest
http://www.dailymail.co.uk/news/article-2290444/Madness-How-pay-billions-electricity-bills-Britains-biggest-power-station-switch-coal-wood-chips--wont-help-planet-jot.html
I just wonder what the catalyst will be
Pharos / Don Keiller, that is rich – “Policy #1030: “Stop climate change”! I have now realised how they will solve fuel-poverty deaths – “Policy #1-Lalaland: “Abolish winter”. So simple! How could we have missed it?! Now I know why we are here and they are there! Soon, to take the UK into space, they will repeal the laws of gravity.
AngusPangus / Cheshirered: I have long held the suspicion that, shortly after WWII, Germany and France agreed: “We can’t beat these beggars by warfare. Let’s try something more devious.” The final irony is that Churchill gave them their inspiration.
Snapped Irish turbine: http://renews.biz/55803/gamesa-probes-irish-blade-snap/
It's a complete farce and I'll be voting UKIP to see that Roger Helmer gains a platform to stand on.
"Miliband's promise is a corrupt, cynical and murderous lie. It is the exact opposite of the statement he previously made about increasing electricity prices as a result of his "Climate Change" Act.
He is therefore, by definition, a corrupt, cynical and murderous person.
On the other hand the ConDems are unable to say this because they are almost equally so.".
..but the ConDems are not not "murderously" so, eh Craig? Nail your colours to the mast why don't you!?
Are any of you who comment here actually poor enough to feel the effects of "market forces" energy policies directly?...I somehow doubt it. Those of us near the poverty line, even we who understand the phallacy of CAGW, aren't quite so lucky. Let's re-nationalise energy I say! Hmmm I bet that goes down well.
Anyway I'm fed up with this increasingly marginilised, essentially right wing site, though I bought Andrew's book and was once a fan. But when push comes to shove you guys have no idea what working class lives are all about. I'll stick to Steve Mc's from now on.
TonyB, there are several regular commentators on this site who self-identify as being left-of-centre in the British political sense. Up-thread I politely offered an alternative explanation to one expressed opinion, and it doesn't trouble me that I can't share every sentiment with every other reader.
If you ask about the economic circumstances of the other readers on the thread, I think it is polite to wait for at least one answer before leaving in a huff.
Well, Tony, I'll fess up. I am retired, but not yet able to claim a pension. I do a bit of consultancy work which keeps the wolf from the door. My land rates just went up $300 a year, and gas, electricity and communications services all rose above the rate of inflation in the last 12 months.
No fancy holidays and designer clothes around here.
Why do you think that people who comment here are heartless, insensitive fat cats? My family were migrants and our first home outside the migrant hostel was a converted garage. My parents didn't take out a loan to buy a house until I was 16 years old, and I was a toddler when they arrived.
I can assure you that I know what it is like to be poor.
TonyB. Regardless of how poor we are, or how hard we worked and saved to provide ourselves with a decent pension, I don't understand where this "market forces" energy policy is. The energy policy in this country is not driven by "market forces", but by EU and UK Government diktat. Anybody who watched last night's Panorama programme could see how energy prices are driven by Government and EU policy. Even if we were to have shale gas coming out of our ears (which EU and Government policies seem determined to make sure won't happen), EU policy also dictates that we wouldn't be allowed to buy it at a price reflective of how much it costs to produce.
I'm getting a bit fed up with all this abuse of PPE which I did about 35 years ago. Its a perfectly respectable course, within which there are a lot of interesting options - the reason I did it was because it gave the opportunity to do a lot of modern British history, whereas the Oxford history course was a whizz through from 800 to about 1960. And of course you only had to do two parts for Finals so a lot of people like me dropped Economics at end of the first year because it was crushingly boring tripe, common sense wrapped in equations and verbiage. Really its like any Arts degree, the subject matter is less relevant than the particular skill that is being acquired, the ability to digest a lot of information and say something sensible about it, in a short period. I think the argument "you did PPE so you're a berk" would be better presented as "You're a berk (and your having done PPE neither adds nor detracts from your berkishness)".
Unless of course I'm being a bit touchy and missing the point, the point being a sub-text which says "engineers should be in charge". Well all I can say to that is think Rolls Royce, about 1971.
Last night, the BBC Panorama programme discussed the cost of energy. I didn't give it 100% attention because I expected BBC bias.
The BBC explained that we must move to low carbon energy (renewables such as wind power) though the cost will be huge. Maybe gas will help to make the increase in cost less steep in the medium term.
I was right about the bias. The BBC didn't mention the global temperature hiatus or uncertainty about the climate sensitivity to GHG. Catastrophic warming would result if we didn't proceed with these changes.
Furthermore. the BBC didn't mention the effect of these policies on industry or our competitiveness or the fact that Green Germany is busy building new coal fired power stations. It did not mention the impact of our sacrifice on global GHG levels and the resulting reduction in global temperature which is negligible.
As always. the BBC reinforced the global warming message and avoided all sceptical views. Much of the BBC bias is in what it doesn't report.
Look on the bright side. When MPs are forced to take their massive pay rise, which none of them really want, they will be able to ignore the increases in their energy bills that their own policies have caused.
@Tony B I'll "fess-up" to been a "fat-cat" as well.
Father left school at 14, Mother at 16, Grandfather worked down t'pit.
I am where I am (reasonably comfy) by dint of their hard work and mine.
They didn't ask for handouts and neither do I.
However, what I and many others on this site object to are decisions, apparently made in complete ignorance-or maybe not!, that are fleecing the working classes and enriching the pockets of speculators, rent-seekers and the already rich and parasitic.
The whole "green/renewable energy" sector is profoundly corrupt and our "leaders" are complicit in it- either actively, or passively.
The whole edifice stinks.
At least unlike the French in the 1700's they have built us our own rotatry bladed haircutters. At least it's progress.