Category Archives: Economic

Britain, Economic, Government, Politics, Society

Ingratiating the unions will lead to ruination

BRITAIN

DURING the election campaign, one of the very few things Sir Keir Starmer was clear about was that the Labour Party had “changed”. He said this even more often than reminding the nation that his father had been a toolmaker.

Anyone listening to this pledge must have assumed that he meant the party had changed for the better: less militancy, more readiness to tackle immigration, being tougher on crime, no rapid resort to higher taxes, and more consideration for the squeezed middle class.

Well, it has been far from that. The “changed” Labour Party has immediately resorted to traditional Leftist policies, from a penal VAT levy on independent schools to promises of higher taxes, based on highly dubious claims of a hitherto concealed £22bn black hole in the national finances. It has begun to sidle up to the EU, giving every sign of stealthy plans to undo much of Brexit. On top of that, it has cynically cut pensioners’ heating allowances, launched a frenzy of green spending, and lit a bonfire of the planning protections which have for many decades helped to keep the suburbs reasonably green and spacious. It all sounds pretty “unchanged”.

But above all Labour has remain unchanged in its treatment of trade unions and their excessive pay demands. There is hardly a militant union which has not received a large bag of taxpayers’ golden mint in the past few weeks, which is why Chancellor Rachel Reeves is now complaining that she does not have enough of our money and will soon be demanding more.

With amazing abandonment, within just a few short days of Labour coming to power, intractable disputes were cheerfully resolved. This was easy to do if you do not care how much it costs. The political benefits to Labour are considerable, especially now it has ended the very unpleasant and dangerous junior doctors’ dispute in England.

Such a primrose path which has started merrily will end in tears and trouble. That is a given. Perhaps Sir Keir and his government ministers have forgotten their party’s own history, and the story of how it was undone in the 1960s by an unstoppable round of pay claims, one group leapfrogging another. This did huge damage both to private industry and the great nationalised concerns which took up so much of the landscape.

Unions today, it is worth remembering, do not have the power, wealth, or strength of their 1960s and 1970s forbears. They tend to pester and annoy the public with short and frequent protest strikes, rather than marathon walkouts lasting months at a time. We should be grateful we are not contending with that.

But even so, strikes do great mischief. They slow down the economy, they can wreck the education of the young, they can get in the way of the very necessary movement of getting people away from “working from home”, and they keep inflation and prices on the boil.

Free trade unions are an integral part of any open and proper free country. But with freedom comes responsibility, and a combination of militant-led unions and an increasingly spendthrift Labour government does not encourage such responsibility.

If he is not careful, the PM will soon find that he has made a rod for his own back. He may think that he can pass on the costs of this policy to hard-pressed taxpayers. But experience shows he will instead destroy the very businesses he needs to pay for his largesse. We need real change before the bad times start rolling again.

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Britain, Economic, Energy, Environment, Government, Politics, Society

Great British Energy risks decimating energy security

UK ENERGY POLICY

KEIR Starmer’s aspirations for a carbon-free and energy-secure nation fulfilled at a stroke through the creation of his new quango, Great British Energy (GBE), is at odds with the reality of the situation.

The UK would, of course, welcome a green and pleasant land with cleaner air, lower carbon emissions, cheaper fuel bills, and a reduced dependence on Vladimir Putin and his gas pipelines that run from Russia to the West.

But the truth is the creation of GBE will deliver few, if any, of the bold pledges that Sir Keir Starmer and his Energy Secretary, Ed Miliband, are making.

In the King’s Speech, Sir Keir’s new government confirmed that GBE, the state-owned energy company, will develop, own and operate energy projects such as wind farms, using public money to help spur further private sector investment.

But the £8.3billion of money promised by the Exchequer for Britain’s energy transformation over the term of the current parliament will be a mere drop in the ocean.

In spite of the overblown language, this is a fraction of the sums of money already devoted to “climate reduction” goals by our UK-listed oil firms Shell and BP, as well as domestically owned power suppliers Centrica and Scottish & Southern Electricity (SSE).

Some argue it is reassuring that GBE will be headed up by Juergen Maier, the former boss of German multinational Siemens’s British arm, who might bring some much-needed private-sector experience to the job.

What is less reassuring, however, is the disastrous financial performance of Siemens Energy. It ran up losses of £3.7billion in 2023 alone. Combined with the desperate track record of past Labour governments to command and control the economy through grandiose quangos such as the National Enterprise Board of the 1970s, it looks almost inevitable that GBE will become yet another vast black hole, drawing vast public cash at the expense of other strained public services.

Most critically, by blocking future North Sea oil licences, as Starmer has done, and holding fire on the prospects for new nuclear production, the nation’s energy security is being sacrificed in order to pursue unproven green energy “solutions”.

In doing so, the UK is exposed to the danger of factories being closed, the elderly and poor freezing in their homes, and the lights going out when the wind fails to blow and the sun doesn’t shine.

It is also critical that the UK can maintain a minimum level of electricity production at all times – especially if the Government pursues a mad rush towards electric vehicles which, in many cases, are proving notoriously unreliable.

That is why Centrica-owned British Gas is investing heavily in renewing the nation’s gas storage capacity at Rough off the East Yorkshire coast and exploring other potential sites in Wales.

Not to mention that Starmer and Miliband appear willing to trash 100,000 North Sea oil-related jobs, sabotage Aberdeen, and lose £30billion of new investment in fossil fuels, and the engineering services which go with them, to drive the “green revolution”. Labour believes that by signing an agreement with the Crown Estate – which has command over most of the nation’s coastal waters – it can generate £60billion of new investment. The link to the monarchy alone could potentially attract some foreign investors on the grounds of offering a kind of royal imprimatur. But we shouldn’t get carried away by Labour’s hoopla.

The Crown Estate has much more skill and expertise on redeveloping real estate, such as Dumfries House in Scotland, than it does in energy projects. Despite its prestigious reputation, the Crown Estate’s new agreement with Labour, is at the hands of hard economic facts. The only thing that will attract investors is a competitive entry price. If the price at which energy generated at the offshore windfarms can be sold is set too low to make the projects viable, it will deter bidders.

We learnt this the hard way in a crucial auction last year, when not a single company bid to run a new offshore wind farm. That was because the Tory government had set the energy price too low. Even more seriously, a major proposed investment off the Norfolk coast was temporarily put on hold.

The same thing happened in the US last year when Ørsted cancelled £3.3billion of wind projects because it could not make the financial returns.

Earlier this year, BP also pulled out of its involvement in New York state wind farms – at a heavy cost to investors – because of the difficulty of getting decent returns.

The ultimate goal in all of these wind farm projects may have been lower prices for consumers. The reality is that only by offering a higher energy price to investors will they come forward – and the projects be built. It’s an uncomfortable truth for Labour, who want to be seen to be providing the cheapest energy possible to its citizens.

They have been repeatedly questioned about when, or even if, their “Green New Deal” would deliver lower prices for consumers, but Labour have been unable to answer. So much for cheaper bills and the election manifesto pledge that consumers would be £300 a year better off.

A secondary aim of GBE is to boost our manufacturing sector, creating new skills and employment opportunities to replace those in fossil fuels.

Certainly, this is a perfectly noble aim. But in Britain, we have already sold ourselves out. Most of the solar panels being installed on the roofs of homes and factories across the UK are being built in China at a fraction of the cost they can be made in the UK.

One only has to look at how Beijing is dominating the market for electric cars – and the 50 per cent tariffs imposed by the US and Europe to slow imports – to understand how difficult it is going to be to compete with Asian production.

There is also evidence that Chinese suppliers of wind farm equipment are using cheap Uyghur labour to manufacture wind turbines. It will be all but impossible for UK manufacturers to compete (currently responsible for less than 10 per cent of wind farm components).

There is one area of green technology where Britian does have a competitive quality and engineering advantage. Rolls-Royce, with the assistance of government funding, leads the world in the development of “small modular reactors”. These are mini, simple-to-construct nuclear reactors based on the turbines that power nuclear-powered submarines.

Rolls-Royce believes it is capable of capturing a £250billion global market if it receives the go-ahead from Whitehall for UK production. The Czech Republic has already expressed an interest in buying them.

Tens of thousands of real jobs – not the Potemkin quango roles envisioned by the UK’s new Government – are there to be created.

We can only hope for the success of Great British Energy and the zero-carbon nirvana envisaged by our mission-driven Government.

But there are huge fears in creating a taxpayer-funded white elephant which will decimate our energy security.

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Cyber security, Economic, Government, Internet, Society, Technology

CrowdStrike: The risk is ours

INTERNET SECURITY

THE bleak lesson from the devastating global computer breakdown on Friday 19 July – which grounded flights, crashed payment systems, crippled NHS surgeries and hospitals, disconnected phone lines, and knocked media outlets off air – could have been even worse. With no end in sight, this malfunctioning has been dubbed the “digital pandemic” and has already incurred colossal costs in time and money.

To those unversed in the intricacies of computer technology, the speed and extent of the disaster are almost incomprehensible. Surely, many will say, computer systems should be designed to avoid crashes on this scale at all costs. We would not accept planes, trains, or automobiles that dysfunction so badly.

But the truth is when it comes to computers, we accept inherent levels of risk that would be utterly intolerable elsewhere. The technology companies’ profits soar and, when things go wrong, we – the digital serfs of this brave new world – must humbly accept the cost and inconvenience that our masters inflict on us.

To appreciate the scale and complexity of the problem, consider this thought experiment.

Imagine if we allowed almost every traffic light in the world to be made by the same manufacturer. Worse, imagine that all of them were made with a remote-controlled switch that turned them to red. And – catastrophically – that a simple error at the manufacturer or one of its suppliers could trigger this switch all over the world.

Traffic would be instantly gridlocked on every continent. To repair these traffic lights, technicians would in many cases have to dismantle them and fiddle around in the works.

That, in crude terms, is the story of CrowdStrike in this computer breakdown and collapse. Most computers in the world use Microsoft – which makes the ubiquitous Windows operating platform, as well as Word, Excel, and the Teams video-calling system. Many Microsoft customers also rely on other software – in this case the Falcon Sensor program provided by the cybersecurity firm CrowdStrike.

Security software protects computers from attack, typically by screening incoming data to ensure that it does not include “malware” – malevolent programs that steal data, freeze computers, or scramble their contents.

To work properly, these programs must operate unhindered on our computers, phones, and tablets. And to protect against new threats, they must update regularly – and automatically. In this current incident, one of the automatic software updates from CrowdStrike contained a simple, devastating error. Automatically installing on computers that run Windows, it crashed affected devices, triggering a page containing Windows’s error message – the so-called “blue screen of death”.

The result: the world suddenly had to switch to cash payments and handwritten boarding passes, while shops were forced to shut, medical appointments cancelled, and aircraft at airports grounded.

It is little comfort that George Kurtz, the co-founder and chief executive of CrowdStrike, says he is “deeply sorry”. Fixing the problem will not just take hours, but days or even weeks. At best, computers will need to be switched on and off again, allowing a new update to install. At worst, affected machines will need hours of specialist attention.

Nor will it be any comfort to furious customers around the world that CrowdStrike’s share price has crashed, knocking £10billion off its £65billion capitalised market value.

It could have been far worse.

This does not appear to have been a cyber-attack by a foreign power. Microsoft systems in countries all over the world, including Russia and China, were affected.

Nor was it the work of cyber-criminals. The faulty update did not scramble our databases, leaving us open to ransom demands from crime gangs in return for a key to recover our information.

Nor – unlike many recent cyber-attacks – did it whisk our most precious private information away to the Chinese Communist Party’s spy services in Beijing.

A far worse – and narrowly avoided – cyber-attack earlier this year could have given our enemies the master key to hundreds of millions of computers around the world, enabling them to wreak deadly havoc. Known in tech circles as the “xy” attack, it involved a little-known but ubiquitous program that compresses data to improve efficiency.

This attack, probably the work of Russian spies, was uncovered and stopped by chance at the last minute. And because in the end the damage was minimal, it attracted almost no public attention.

That was a near-miss. Far worse was the SolarWinds attack, exposed in 2021. Hackers – almost certainly Russian – bugged an update issued by Microsoft for a widely used program. The targets were Western (chiefly American) defence and other government networks. The cyber raid also exposed data from the U.S. Treasury, Justice, and Commerce departments, and thousands of Wall Street’s top companies.

The internet has become the central nervous system of our civilisation. Yet it was never designed or intended for this. It was built to promote academic cooperation and technological innovation, not global security. It is wide open to abuse by pranksters, fraudsters, and rogue states.

A handful of operating systems and software that updates remotely and automatically create a sitting target.

We would hardly accept such a concentration of risk in other walks of life, especially if we had no control over the decision-makers in such systems, and almost no redress if they made mistakes. With most other products and services, you can sue the provider if there’s a malfunction – and gain additional compensation for any damage caused. Not computers.

Unlike other parts of our technological universe, computers, phones, and software are not sold with proper guarantees. The manufacturers can shrug at their products’ shortcomings.

Buried in the terms and conditions are clauses that exempt the manufacturer from almost all liabilities.

One might well ask how on earth we got to such a parlous state of affairs.

One reason is greed: tech giants like their profits. They lobby hard for their privileged status, just as they do for the right to sell our attention to online advertisers – and to resist demands for proper age verification on social media platforms like TikTok.

But a deeper reason is that we have been naïve and complacent in our headlong embrace of new but untrusted technology. We have prized innovation and convenience ahead of security.

These risks, we were told, were the price of admission to the brave new world of computer wizardry. Maybe. But we are paying heavily for it.

In the case of this cyber meltdown, the culprit was carelessness. But suppose the perpetrator had been some rogue regime, perhaps distracting us at a moment of geopolitical tension?

Imagine that this outage had stopped the trains running, frozen all cash machines and, for that matter, turned all our traffic lights to red – or worse, green.

We would have nobody to blame but ourselves.

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