Category Archives: Economic

Britain, Economic, Government, Politics, Society

Labour’s true manifesto is being revealed

BRITAIN

NOW he’s safely in office, Sir Keir Starmer continues to reveal his real manifesto – attacks on pensioners, higher fuel bills, and a whole array of excuses for other flops and errors that he has not even made yet. With apparent gusto, he will tell us shortly that things will get worse before they get better and that he will not shy away from tough and unpopular decisions.

Such rhetoric has often been a favourite warning from Prime Ministers nearing their end of time in office, usually an attempt to claim that their difficulties will one day produce a happy outcome. But it is highly unusual for newly elected leaders with a full five years ahead of them to use language like this. If he starts in this way, what will it be like a year hence?

This is a government in trouble within weeks of being elected to office.

Beguiled by Labour’s legendary skills at spin and planning, many expected and hoped that Sir Keir would ride smoothly into power. It has been anything but. Apart from proposing to concrete over the Green Belt, abandoning any attempt to control illegal migration, splurging taxpayers’ money on extravagant public sector pay claims, and mauling independent schools with VAT, there has been little for the PM to boast about. The chief turn of phrase of his opening few weeks, along with that of his Chancellor, Rachel Reeves, has been: “The Tories left a huge black hole in the national finances.” Labour claims that the outgoing Conservative government left a £22bn black hole that Labour has exposed following an audit of the books when they took over. Anyone who understands economics, whether Labour supporting or not, will know the claim to be untrue.

Absurdly, and in a similar vein, Labour has even started blaming the previous government for the recent violent disorders. No doubt the Tories have not been as tough as their voters would have liked on law and order, but Labour, for more than half a century has been the party of soft sentencing and politically correct policing, can hardly blame the Conservatives for the “cracks in our society”.

This is a government in a mess. The removal of the winter fuel payment to pensioners looks more than ever like a classic political bungle, now made even worse by the ten per cent rise in the energy cap that has just been announced by the energy regulator. It will hit many elderly people hard. Is this what Starmer calls a “government of service”? It increasingly looks like the sort of administration in which the people serve the state, and the state is above our heads in ways that aren’t normally associated with socialism.

Britons can feel the wind blowing and will know that things aren’t right. Expect some heavy hitting changes.

Standard
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.

Standard
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.

Standard