Category Archives: European Union

Britain, Economic, Energy, European Union, Government, Politics, Society

Reduction in energy bills following the removal of green levies – a step in the right direction…

ENERGY BILLS

Householders will be somewhat relieved to hear that the UK government will be pegging back the recent increases made to electricity prices by all the major suppliers. The reduction is being made because the government is removing some of the green levies applied to bills to pay for policies designed to either reduce energy use or to encourage renewable energy development. These levies can be as much as 11 per cent that are directly added on to domestic bills. The impact of green levies on suppliers is to be lessened and the savings passed on to consumers. Utility bills will still go up by an average of around £70, rather than £123, a saving of about £50 this winter.

Changes are being made to two of these levies, the Energy Company Obligation, which commits energy firms under statute to assist with the costs and installation of better insulation, and the Warm Home Discount, which reduces bills for elderly consumers over 75. The idea is to transfer some of the money raised to pay from these schemes to general taxation so the taxpayer rather than the energy consumer foots the bill.

These charges are not being scrapped, but diverted. According to Ed Davey, the Energy Secretary, this will cost the taxpayer somewhere in the region of £600 million. The problem, however, goes much further than the bills themselves. Whilst Labour have proposed a freeze or cap on bills from 2015, this is wholly unrealistic since energy companies cannot control wholesale costs and will be required to invest for the future. The dilemma of market failure arising, something which is still to be investigated, will be attributable to Labour – because when the party took office in 1997, there were 17 companies in the energy sector that kept the market competitive. By the time Labour left office in 2010, there were just six remaining. Most analysts now perceive the energy market as operating like a cartel where energy prices are effectively rigged.

All the main political parties must share some responsibility for the confusing mess that passes for an energy policy. They are now engaged in a political battle over who can promise the lowest prices. Yet, the biggest problem concerns energy security.

Next winter looks certain to be affected by a coalescence of factors that will alter the capacity of the electricity system. A recently published report from the Royal Academy of Engineering suggests that the mothballing of gas-fired power plants and decarbonisation targets could lead to a ‘significant reduction in the resilience of the system’.

Undoubtedly, the cheapest way to generate electricity at the moment is by burning coal. The global price of coal has dropped substantially in recent months as coal mines in many parts of the world, including America, remain under-exploited. Yet, amendments to the UK Energy Bill are expected to force coal stations to close earlier than planned. In addition, there are also doubts in the medium term over the nuclear power programme planned at Hinkley Point, with questions in Brussels over the payments of subsidies to French and Chinese companies. Future supply, then, is the critical issue: energy consumers may be pleased to see their bills go up less than originally planned, even though many will still be paying for it through taxation. But they will be appalled if the lights go out. And for those who believe that green energy is greatly over-valued will complain that the government is just shifting the burden from one set of people to another.

The finer details of the changes also reveal that homebuyers will become eligible for a £1,000 contribution towards insulating their new home. Mr Davey has said this will be paid via a reduction in the stamp duty paid on the purchase price.

The changes to energy bills might just cause the energy companies and the government to be more transparent about exactly what makes up the unit price of gas and electricity on our bills. Hopefully, that might lead to them being more sensitive to that information, delivering consumers a far better deal in the longer term.

Standard
European Union, Government, Politics, Scotland

Scottish Government’s white paper on an independent Scotland published…

SCOTLAND

The Scottish Government’s white paper that runs to 670 pages is an insight into what an independent Scotland will look like. The Referendum for Scottish independence will be held in September 2014.

The Scottish Government’s white paper that runs to 670 pages is an insight into what an independent Scotland will look like. The Referendum for Scottish independence will be held in September 2014.

For all the pro-Unionist harping, it could never have been expected that, for all its length, the independence white paper could provide clear, definitive answers on many key issues including the status of our membership of the European Union.

Scotland’s First Minister Alex Salmond, like many of us, will be convinced that the EU would wish for a resource abundant independent Scotland to be a member. The assertion that Scotland should continue to be regarded as still being within the EU while negotiations are held on the terms and conditions of our membership as a separate state are pointedly correct, though Unionists will probably play hard and fast with the notion that conviction and assertion are not the same as hard and fast constitutional fact. Yet, the United Kingdom itself has no written constitution.

Mr Salmond’s assertions have also been challenged by comments last week from the Spanish prime minister, Mariano Rajoy,  to the effect that, if a ‘region’ opted to leave a member state, it would ‘remain outside the European Union’. It would then, he added, require the agreement of all 28 EU members before it was allowed to join. Scotland, however, is not a mere extension or region of England but a country in its own right. Mr Rajoy has missed the point completely, though he may have been speaking bluntly and loudly enough for Catalan nationalists to hear what he was implying. Whether he speaks with the authority of the Treaty of the European Union (TEU) behind him is highly debateable.

Of course, numerous voices have been raised and will continue to be raised in support of the premise that a region choosing to secede from a member state automatically ceases to be part of the EU. Consider the comments made by José Manual Barroso, the president of the European Commission, or Romano Prodi, his predecessor, to the effect that a secessional territory ‘would no longer be a member.’ Or the unequivocal statement, too, from Viviane Reding, commissioner in charge of justice and vice-president of the Commission, who wrote to the Spanish government last year insisting that… ‘Catalonia, if seceded from Spain, could not remain in the European Union as a separate member’.

But, according to Articles 49 and 50 of the TEU, the EU Commission has no say in who ceases to be a member or becomes a member. This is a matter that is entirely left to the European Council and the European Parliament. The First Minister might invoke Article 48 of the TEU which provides for treaty amendment in the event of the council failing to unanimously agree, though any such change would still require agreement ‘by common accord on the part of the representatives of the governments of the member states’. Here, Spain may invoke its right to exercise a veto. None of this immediately precludes Scotland becoming a full EU member, but it is a hurdle Mr Salmond will need to clear if Scotland is to retain full EU membership rights if negotiating after a Yes vote following next September’s referendum on whether Scotland should become an independent country.

Unionists have been knocked down a peg too when it comes to the other thorny issue of a currency union. Bank of England governor Mark Carney says he would welcome the opportunity to hold talks with the Scottish Government. Mr Carney is the only person within the British establishment thus far that has had the decency to admit such dialogue should take place. Other than Pound Sterling being as much Scottish as it is England’s apparent inalienable right to continue using sterling after Scottish independence, Mr Salmond’s government should accept this opportunity with alacrity and get round a table with Mr Carney and officials from the Bank of England.

– The writer seeks an independent Scotland

Get your hands on a copy of Scotland’s Future:

Standard
European Union, Government, Iran, Middle East, Politics, Society, United Nations, United States

Negotiations between Iran and the West on Tehran’s nuclear ambitions…

A NEED FOR AN AGREEMENT WITH IRAN

Expectations of an agreement over the Iranian nuclear programme have been high ever since the recent trip to Washington by Hassan Rouhani, Iran’s president, who declared to the United Nations he wanted better relations with the West. It is little surprise, however, that such a realisation has not been met. The immense difficulties facing the negotiations in Geneva in the last few days faded into the background amid speculation of a ‘historic deal’ and an imminent end to decades of mutual suspicion and misunderstanding. The Geneva talks concluded last weekend without any deal in sight, with many analysts branding the discussions a failure.

Related:

There is still some cause for optimism. Since Mr Rouhani took over the Iranian presidency from the bellicose and belligerent Mahmoud Ahmadinejad in June, the rhetoric emanating from Tehran has been markedly softened in tone and style. With international sanctions – both EU and US – biting hard on ordinary Iranians, domestic pressure for a deal on its nuclear programme with the West cannot be ignored. Particularly so given that inflation is running at 40 per cent, and that Iran’s economy has shrunk by more than 5 per cent since the imposition of sanctions took effect. The number of families below the poverty line has doubled to four in ten, exasperated by several currency devaluations that have had an adverse effect on the net worth of many Iranian families. Assets have depreciated and net incomes have been seriously eroded. Focusing minds, too, is the threat of Israeli air strikes on Iran’s nuclear facilities, not to mention the Islamic Republic’s pivotal position in a volatile and unstable region, including that of Syria.

The difficulties for the West in reaching a mutual agreement with Tehran still rest upon two primary sticking points. One is the question about the future of the heavy-water reactor being built at Arak. The other is what to do with Iran’s existing stockpiles of highly enriched uranium and centrifuges. Tehran appears determined to retain its ‘rights to enrichment’ (enriched uranium is required and allowed for its medical programmes), though the international community, not unreasonably, remains sceptical. Enriching uranium to weapons grade material that would fit into the head of a ballistic missile is easily enough done.

Yet, we are far from stalemate. Just as those predicting immediate success were unduly hasty, so are those now rendering and calling for defeat. John Kerry, the U.S. Secretary of State, spent eight hours at the negotiating table, the longest such high-level talks between the US and Iran since 1979 – no small achievement in itself. Mr Kerry’s assertion that ‘we are closer now than when we came’ cannot simply be dismissed out of hand. With negotiations to restart in a week’s time – albeit between diplomats rather than foreign ministers – the process is far from over.

Coupled into the equation is the danger of the moment. Barack Obama’s critics in Congress, largely fuelled by Israeli’s inflammatory opposition to a deal, are already pushing for more sanctions. In Iran, the frustration of public demands for immediate relief could well erode support for further discussions that many Iranians feel infringe on national sovereignty. Apparent divisions in the international community, exemplified by France’s outspoken warnings about a ‘fool’s game’ before the Geneva talks were concluded, will not help either.

Perseverance in seeking a deal along current lines remains key as no other constructive alternative exists, but in reaching an agreement concessions will be required from both sides. The notion that the Islamic Republic continues with some degree of uranium enrichment may not be palatable and will be contested by those who remain deeply sceptical of Iran’s objectives. However, it is allowed under the Non-Proliferation Treaty (NPT), and – in return for close controls and even closer oversight by the International Atomic Energy Agency (IAEA) – it is a better and plausible option than either accepting an Iran with nuclear weapons or by attempting to bomb them out of existence.

A deal with Iran may have a high price, but the value will be enormous. This will not only patch up one of the world’s most dangerous and intractable disputes but, an accord between Iran and the West could also help to resolve any number of issues bedevilling the Middle East, not least the internecine civil war and bloody conflict in Syria.

Standard