Category Archives: Politics

Britain, Consumer Affairs, Government, Politics, Society

Imposing a price cap will not improve the energy market

ENERGY MARKET

Energy costs

A series of remedies have been called for to encourage greater switching.

The energy market does not work well. Consumers who shop around by believing they have obtained cheaper tariffs soon find they will be paying higher prices not long afterwards when the special deals they signed-up to expire. Unless people are prepared to spend time looking out for better terms, or by getting another company to do it for them, they will likely end up with a bigger bill than they should. Energy consumers are being trapped into a false sense of security.

With energy costs increasing for a variety of reasons – not least because of onerous environmental requirements imposed by the state – the cost of energy has become a toxic political issue. The Labour Party recognised this prior to the last election when it pledged to cap prices.

Now, the Conservatives under Theresa May – who ridiculed this policy when it was proposed by Ed Miliband – plan to do the same if they win the general election on June 8. Mrs May has said the Big Six were ‘ripping off’ consumers and has stated that the Conservative manifesto would regulate the maximum costs of the standard variable tariffs on which most users are parked. The analysis offered suggests this will save the average customer around £200 a year. But, even if we accept that the market is flawed, price controls are not the best way of addressing this. It is not for a free-market Government to decide the right price for a commodity but rather to encourage competition by allowing people to make their own choices.

Big Six Cashing In

There are several price comparison websites that help consumers switch suppliers, as some two million have done over the past six months. But millions more stay with the same company; and it is this inertia on which the companies rely allowing them to freely hike up prices with impunity. One thing a cap will do is bring down prices for many users.

On the other hand, it will simply consolidate the lack of movement by entrenching consumers to stay with their present provider: if you know that the price is capped why look around for a better deal? What is more, if the cap is set too low it will force small suppliers out of the market; too high and prices will gravitate upwards.

Following a review last year, the Competitions and Markets Authority recommended against a variable tariff price cap and called for a series of remedies to encourage greater switching. The energy companies say the Conservative policy would destroy competition, jeopardise jobs and deter vital investment. Yet, if that is the case, rather than constantly complaining, they would be well advised to make sure that the market works for the benefit of all their customers.

Standard
Britain, Government, Politics, Society

The UK Government needs a clearer policy on migration

IMMIGRATION

Theresa May follows her predecessor by setting a specifically vague target on net migration levels. But how will the targets on immigration be met?

As Theresa May seeks a mandate from the electorate on June 8 to proceed with Brexit negotiations under her own terms, there are certain and specific issues that should be central to her case. Immigration policy is clearly one of them.

But in keeping and in line with much of the Prime Minister’s campaigning so far, the political debate on such issues fall short on substance. Certainly, it’s apt to ask whether Conservatives can agree on what the detail of their immigration policy should be. Yet, when pressed on the matter, Home Secretary Amber Rudd, could only say that the party’s manifesto “will not be identical” to the last two election campaigns. Hardly enlightening given that one of the central tenets prior to the Brexit vote was people’s concerns over migration. Mrs May insists there will be no back-tracking, and the target will be to reduce net immigration to the “tens of thousands”, a policy enshrined previously by David Cameron. If that’s suitably vague to speak in such terms, we must question whether it is credible? In 2016, net migration stood at 273,000, and it is some 20 years since that figure was below 100,000. What interpretation are we to apply when the Prime Minister repeats the mantra of old by insisting that net migration be reduced to the “tens of thousands”? An issue of confidence might yet arise.

In all of this, however, we should be careful of assuming that the EU is to blame for the UK’s high net migration. That would be a mistake. Migration from the EU accounts for less than half of the total figure, at 44 per cent. The other 56 per cent, from the rest of the world, is already within the control of the British government.

A difficult dilemma arises. The suggestion being made is that immigrants who shore up our workforce will be permitted entry if they are important to the economy, such as filling the skills-gap in industries such as health and IT. But those who come here to work account for half of the annual influx. Reducing the immigration figure by enough to get anywhere near the target (whether notional or not) will be tough if an exception is to be made for the majority of migrants.

The government could halt the flow of students into the UK, but by doing so could harm our universities and cut off a supply of skilled workers who could help to drive economic growth if they stay on. Or, the number of asylum seekers and illegal immigrants could also be tackled. The most recent figures, however, show that just over 12,000 people were granted asylum over a 12-month period. Even if all of them were to be removed at a stroke that would make minimal difference to the headline figures.

When published, the Conservative manifesto could yet contain a coherent strategy on immigration. But, on the evidence of recent years, when net migration targets have been repeatedly missed, we are entitled to doubt whatever the document says will be done or if the targets will ever be achieved.

Standard
European Union, France, Government, Politics, Society

Emmanuel Macron’s task is to restore confidence in the Fifth Republic

FRANCE

Macron

Emmanuel Macron wins the election to become French president.

The revelation of a last-minute attempt by computer hackers to influence the outcome of the French presidential election is another sane reminder of the forces at work in undermining democracy. In the end, however, it had little effect, as Emmanuel Macron secured his expected victory, at 39, to become the youngest French head of state of modern times. This is an extraordinary achievement for the President-Elect for he has been a candidate without a party.

Some will likely argue that the margin of triumph over Marine Le Pen was emphatic enough. Others might suggest that with around one third of voters still prepared to vote for the Front National (FN), this too was none the less a good result for a right-wing populist, anti-EU party.

The results suggest that if Mr Macron disappoints during his five-year tenure in office – as François Hollande so evidently did before him – then Ms Le Pen will be well positioned in 2022 to take power.

Given that this was an election in which neither candidate represented one of the mainstream Left- or Right- wing parties, Mr Macron has assumed an enormous level of responsibility on his shoulders.

The French electorate have clearly become weary of political leaders who promise much but deliver little. One prominent sign of their dissatisfaction with the political system as a whole was the lower than usual voter turnout, with participation possibly lower than at any time for 40 years when final figures are collated.

Whilst there is a sense that the French voter may have been left to feel short-changed, their rejection of the traditional parties has not exactly enamoured them of the populist fringe movement represented by Ms Le Pen. Or, indeed, of the alleged centrist appeal of Mr Macron, given his connections to former president Hollande.

Primarily, it is incumbent on Mr Macron to restore his country’s faith in the Fifth Republic over the next five years. This task will be made more difficult by the fact that his movement, En Marche!, has no parliamentary representation, something that will have to be swiftly rectified when elections take place to the assembly next month.

With little in the way of an activist base, Mr Macron faces a political paradox – one in which he may end up with the trappings of political office but none of the power that derives from a strong presence in the legislature. Moreover, and more worrying still, is that information in the hacked data might yet mire him in political scandal.

The contents of the hacked data were not disclosed because of the strict rules operating in France during the latter stages of the election campaign. But the new French president-elect must be hoping that there is nothing embarrassing, or worse, to be revealed.

Yet, the lesson of Ms Le Pen’s showing in the polls needs to be readily acknowledged by Europe’s elites, who have openly welcomed Mr Macron as a saviour. But they need to understand that this does not represent the definitive victory of the European project over its detractors. Far from it. It is a desperate throw of the dice for the EU to have relevance and meaning.

Standard