Yesterday I attended a meeting with John Penrose MP who updated us on his Report into reforms of our competition policy and approach to regulating industries. He is rightly critical of the complexity and ineffectiveness of much contemporary regulation of business. He thinks it combines high cost with poor outcomes. One of its worst features is the high cost and difficulty it imposes which reduces competition, putting off challenger companies and reinforcing the position of industry giants that can handle the expense and time consuming detail of the regulations.
John thinks there should be a general duty on all business regulators to promote competition, and to seek to reduce the amount of detailed regulation they need to do as competition takes the strain. Competition can keep businesses honest, can fuel innovation, can offer consumers real choice, can show established companies how quality and price can be improved as competitors raise standards and improve ways of delivering.
In the case of the railways a few challenger companies have been allowed to run lower cost better services over parts of the network in popular ways. It is now very difficult for a company to gain permission to do this, with a more protectionist approach by the Regulator and defensive tactics by the incumbent regional monopoly providers. Government has controlled more and more features of railway contracts, expanding their cost and complexity and removing the scope to innovate, to flex services in popular ways and to cut costs in safe ways. As a result we have far fewer passengers paying good fares for travel, larger deficits and an explosion of subsidy paid for by taxpayers.
The government is planning new competition legislation which could make some of the necessary changes. It has said its recent legislation on public procurement will open up more public contracts to UK challenger companies. There is plenty of scope for improvement. I raised the tangled web of rules, price controls, windfall taxes, carbon taxes, subsidies and double increased corporation tax that now bestrides our energy sector. It is likely these interventions will deter new investment and stand in the way of the government’s proclaimed aim of greater self sufficiency. They also get in the way of delivering more reliable and affordable power.
April 19, 2023
Good morning.
It as if we have never left the EU. đ
When we were officially in the EU using regulations was a very good way of doing that which our kind host describes. Basally, make sure that any regulations favour big business and big political interests such as French Farmers(ie subsidies).
I watched Harry’s Farm yesterday on YT. His crop of oil seed rape has been attacked by a flea beetle rendering his crop almost useless. This is because he is not allowed to use a pesticide banned by the EU with the UK following slavishly along. Quell surprise đ The outcome of all this is, we will now, at great cost, have to import oil seed rape from countries which do not have the ban. Not only that, he is now considering taking up a government subsidy NOT to grow food.
The binding weeds of government are growing ever tighter. Restricted, free speech, travel and soon food.
Anyone for some flea beetle and cockroach in BBQ Sauce ? đ
/sarc
April 19, 2023
This is real world, UK economic mismanagement. Harry’s Farm seems to me, to tell it how it is, and if he’s thinking of ploughing in his productive land, then someone in DEFRA should be sitting up, taking notice and changing laws. We need to grow more of what we eat. I do hope our host will be talking to the appropriate colleagues on this.
PS, ref railways, funny how the large, private rail companies have turned a profit last year, but the government owned part of the rail system costs the tax payer money. There must be a better solution to this industry.
April 19, 2023
To your last question, ask the presenters of Country File, they are well into wilding our farmland.
April 19, 2023
Agree – it doesn’t feel like we’ve left the EU ….its a bit like climate change ”nothing has changed”
April 19, 2023
@Mark B +1
Why do we pay them, why do they stand in elections to represent us and then refuse? Self Gratification, Ego
April 19, 2023
The weak woke Tories and the EU lovers signed up to a deal which promised we would not do anything which disadvantaged the EU. EU first UK last.
April 19, 2023
I agree with your description of the tangled web of regulations stifling businesses (both large and small). It sounds like you have just taken over from a Labour administration, and need to sort things out.
What went wrong?
April 19, 2023
What competition?
The government cannot even replace the incompetent South West Railway, despite all the ballyhoo about poor performance and promises to terminate the contract in May.
Instead they have quietly extended the contract.
The franchise model does not work. We all know it, but the government will never admit it.
April 19, 2023
It is almost certainly a legacy of EU membership.
April 19, 2023
Surely one of the biggest problems with all of this is how no matter what the real situation is trying to be addressed it is all coloured and tainted with green smoke and mirrors.
For years subsidies have been handed out like sweets especially in the energy sector and every sector of society pays the obscene costs. Adding to domestic, commercial and industrial outlay.
Still we have the green fear factor running riot as it is obvious the electorate are not totally convinced with it all.
Please not competition for competition sake standards of Exceptional Customer Service Excellence must be in the vanguard, as that will encourage more customers and passengers.
April 19, 2023
Green idiots attack green baize.
Putting them out to grass in jail will snooker them.
April 19, 2023
@turboterrier A subsidy is money taken from the taxpayer, that the Government then refuses to manage for a result
April 19, 2023
On Sunday the nations mobile phones will all off with a loud and very annoying noise
I can predict those sitting quietly having lunch with family and friends at home or in the pub will not be thinking how helpful the Government are but will be thinking they are an intrusive, annoying and invading our privacy. The only thing louder than the very annoying phones will be the curse words and expletives aimed at the Conservative party.
Anybody who has a vague understanding of social situations will realise no political good will come of this.
April 19, 2023
+1
Does turning off the setting not work then?
It is bullying and harassment if you ask me. And âHateâ (bleat) probably!
No doubt their puerile minds are weaving together some ludicrous scenario for warning no 2
âBear escaped from Zooâ.
âScare the pants off them!â
What a nice thing to say!
April 19, 2023
Javelin
Do what we have done. Go into emergency settings and turn them off! We’ve spread the word to friends and family. There is bound to be an unwelcome ulterior motive to this.
April 19, 2023
You’re expected to reply to it. Failure to do so will render your Iphone unusable. This is what happens when morons vote Labour, Tory and SNP. You end up with barbarism and authoritarianism
April 19, 2023
Javelin,
Another question that needs answering… Apparently in order to continue using your phone after receiving the alert, you need to confirm reception. So does this send any data back? – knowing this Government / Civil Service & Google I wouldn’t be surprised if at a minimum your phone number, IMEI number and GPS data get stored somewhere…just a thought đ
April 19, 2023
Not on my phone it won’t, I’ve turned ‘Alerts’ off.
Watching a JSO Protester on TV last night and the reality is that she wants to Just Stop Everything. The poor girl was nearly hysterical at one point – we are apparently facing Imminent Armageddon. I’m more worried about ‘Skynet’ and whether I will be able to believe anything I see or hear in an AI powered future. There’s so much misinformation floating around currently without AI contributing…
In the meantime (in the real world) – Big Government, Increased Taxation, Negative Real Growth continues to deliver Financial Armargeddon in tiny doses….
April 20, 2023
JSO are controlled by ‘others’ to encourage people to demand tougher laws and more powers for government.
April 19, 2023
@Javelin
In the words of this Conservative Government – “this will take place to protect you”
April 19, 2023
There is no escaping the fact that if government really got on top of all the waste that is reported and generates high octane arguements in all sectors of society and stamped down hard on the areas of their bad management and inability to eradicate the rules, treaties, agreements they use as excuses for doing nothing but waste our money the country would have more belief in them.
Two things at different end of the spectrum. Dingy Invaders and green fuel for ICEs. The German car industry are supporting research to keep their business and work force together. EVs are not the panacea to all our environmental problems.
The costs involved and the soft approach to dealing with the invaders is totally and utterly unsustainable. A damning report in the Telegraph yesterday exposes what is really happening in London regarding the movement of the born and bred residents moving out of the city looking for a better life for them and their children. As the culture base has completely changed.
April 19, 2023
Oops should have read
get on top of all the waste.
April 19, 2023
Yes appalling. Big brother one step closer. My phone will be off and the message ignored.
April 19, 2023
Isnât paragraph no 1 the actual reason why unscrupulous authorities came up with regulations?
Regulate any potential competition out of existence?
Why we now have such incredibly nasty and boring yogurts!
And probably why nothing works.
How many electrical items were forced off the market because they worked/dried/spun/washed/heated etc and the manufacturer could not afford/refused to update ( to uselessness) production methods?
April 19, 2023
If you do not trust people then the only thing to do is to regulate them.
If you do not trust people, then do not expect innovation or improvements.
If you do not trust people, then work becomes routine and boring and unsatisfying.
If you do trust people, they let you down.
If you do trust people then some grab all the goodies leaving others in the gutter.
And some go on to help, to innovate, to improve.
April 19, 2023
Did anybody see that legal beaver with the tied up hair bun justifying all this rebellion and attacks on these sporting events? You couldn’t make it up. If this is our countries future God help us all.
The waste of the public and civil services time and resources because they have a legal right to protest?!!!!
The legal profession are making a fortune out of all this nonsense. Stop immediately all legal aid and increase the fines or seizure of family property and possessions on all disruption of public events and people going about their normal business.
Talk TV are reporting at this very moment even more Extinction Rebellion unprecedented disobedience..
Government has got to man up and take these people out of circulation to prevent them causing more mayhem and be made to pay for the real cost on us the taxpayers for their at times obscene actions.
April 19, 2023
The Government’s recent energy security strategy expressed cautious interest in the British start-up Xlinks. This innovative project will generate 10.5GW of zero carbon electricity from the sun and wind in Morocco, to deliver 3.6GW of reliable energy for an average of 20 hours a day including an energy storage facility
Located in Moroccoâs renewable energy rich region of Guelmim Oued Noun, the project will be connected exclusively to Great Britain via 3,800km HVDC sub-sea cables. Due to the global shortage of cable manufacturing capacity, the company XLCC has obtained planning permission and finance to build a huge cable factory on a brownfield site in Hunterston, Scotland. Ground was due to be broken in February. Unfortunately the fossil fuel lobby faction in the SNP has appealed the planning decision and the factory is now in doubt.
The UK government should intervene in this decision, the energy security of the UK and a fine manufacturing asset are now threatened by the fossil fuel dinosaurs
April 19, 2023
It strikes me that a 3,800 km HVDC cable and a desert solar park made with panels from China in a country with which we have very little connection is not a sensible low risk option. It is obviously not low cost and without intermittency problems, as no-one is proposing that it could get used to electrify poor parts of Northern Africa instead. Greens seem to think they can con government into backing any old scheme at the expense of consumers.
April 20, 2023
@Mark
As usual, your comment reflects a total lack of knowledge of both renewable energy projects in N Africa and a misunderstanding of the nature of lowloss HVDC power distribution.
Xlinks will use four 3,800 km cables manufactured in a single length at a purpose built factory on the old Hunderston nuclear site in Scotland. The daytime sun never stops shining in the desert in Guelmim Oued Noun; Morocco is a stable monarchy. The project will include a windfarm covering nearly 25 km2 and a 5GW energy storage facility. There will be no intermittency, power will be generated 20+ hours a day and will provide ~8% of the UK’s power requirements. The project has finance from the City and no taxpayer subsidy will be required. The solar panels will last 30+ years.
April 20, 2023
Meanwhile Russian ships disguised as trawlers are sniffing round our windmills. It is suspected they are surveying so they can cut the cables in the event that loony Putin decides to up the ante against the West. Who can now doubt they blew up the gas pipeline? Is this our safe and secure future for energy and our lives, let alone the intermittency of the whole shebang. I did not know the sun shone in Morocco for 20 hours a day. I have been there, admittedly a long time ago and I could have sworn they had night time. The near you get to the equator the shorter the days get, even if they are hot and sunny.
April 19, 2023
Simply, the mere existence of the Climate Change Act and Net Zero is a huge obstacle to fare competition with the massive subsidies involved.
Similarly, Diversity, Inclusion and Equity (DIE) as with Environmental, Social, and Governance. Did all this dangerous stuff not emanate from WEF?
April 19, 2023
2nd attempt ..first one accused of duplication.
Regulation is the preferred weapon of ( govt. sponsored/related?) big business.
How wonderful to ( effectively) buy the ability to legislate through cronies in power and knock out all opposition by way of regulation. NowâŠthis far down the industrial time line, one spin off being totally useless goods. Or goods that are just âinventedâ for an invented reason ie masks etc etc.
We enter a world of things that donât work, weâre never intended to and are not really needed.
April 19, 2023
Lessons to be learned from the Financial Conduct Authority include:
i) lack of understanding that capitalism is an ongoing process of creative destruction.
ii) how to manage risk in the landscape of capitalism.
iii) lack of investment experience, resulting in the FCA driving with a rear view mirror and failing to recognise at an early stage situations likely to lead to avoidable problems for investors.
iv) having a culture which results in asset management firms putting in place processes which lead to lowest common denominator decision making outcomes.
v) huge expense being borne by the consumer.
The LDI saga graphically illustrates the above.
April 19, 2023
The tories brought in new IR35 rules which has allowed the state, namely HMRC and other government departments and councils to game the system making status declarations so that IT contractors could continue to use their limited companies when working for them unlike the private sector. For me this was the end of my relationship with the Conservative party, watching them overspend during Covid, keeping myself and my family under house arrest. I was and am a keen Thatcherite but alas this was a blip in the life of the wet statist tory partys history. I donât know how JR stays in.
April 19, 2023
Subsidies promote inadequacy by propping up the inefficient at taxpayersâ expense.
Consumer choice enabled by competition auto-selects the best ways.
Regulations provide safety where needed.
Consumers donât need protection from the best.
John Penrose and Reform may combine the best choice for improvements.
April 19, 2023
Compliance is truly the enemy of competition.
Self anointed jobsworths sending out detailed questionnaires in order to become a supplier all worshipping at the holy grail of ESG. The amount of my day that is taken up by proving we are worthy to become suppliers of a service that can not be sourced elsewhere is a complete waste of my time.
April 19, 2023
It sounds like a hangover from EU membership. If Mr Penrose can persuade government to ignore the lobbying of the CBI/Big Business we might make progress. John Penrose MP sounds like a real conservative, hang on to him.
In the interests of openness and democracy does the Speaker keep a register of all those who decide to lobby against specific measures and are MPs obliged to report all personal lobbying approaches. It would be interesting to know who is against John Penrose’s proposals.
April 19, 2023
Too many new laws are passed these days, most of then ill thought out and really unnecessary.
I suggest that before a law can be put on the book another must be deleted.
April 19, 2023
The problem with new regulation is that the old still stands as well, even if sometimes it is in conflict with the new.
Thus we end up with complicated chaos and very expensive law suits.
Just look at the 22,000 pages of tax legislation for an example of how regulation has grown, who can really keep up with this constant barrage of change without paying for an accountant, who are often confused themselves for months after such changes.
Then we have Health and Safety and Employment Laws etc etc.
April 19, 2023
seconded. an ever greater proportion of the ‘working’ population seems to be engaged in setting up hoops for the rest of us to jump through. This is not only wasteful but actively damaging as it discourages entrepreneurship, investment, innovation etc. the tax rises do the same.
e.g. in the financial services sector the FCA has ballooned in size, invents ever more tests and regulations. Its costs go ever up but it is unclear what if any good it does.
Elon Musk has cut 80% of the Twitter workforce but Twitter’s offering has improved. Its not in spite of the cut its because of it. Why? Because much of what the departed people were doing was actively destructive (political activism and censorship in the case of Twitter). We won’t be able to do the same with our quangocracy, but we should at least move in the same direction.
April 19, 2023
A perfect example of what is wrong with our Government, which is supposed to be a conservative one, doing everything to kill enterprise instead of encouraging it! When will they ever learn?
April 19, 2023
Sir John
A couple of things âgovernment is planningâ? Over the last 13 years the Conservative Government has been planning, wishing, talking, and so on. But, has yet to intact on anything meaningful, other than kowtowing to what they see as higher authorities than their electorate and accept positions that undermine the very purpose of Parliament and Democracy.
From the inside looking out(business organisations), businesses that carry out operations in the UK are well organised, and have the ears of Government. A bit like the EU Commission they are not for competition but the protection of themselves from competition. The rules regulation etc. that they champion with Government are specifically designed to deter the startup, the challenger and maintain the curtain of protection. If Government is looking at establish business leaders, for thoughts and direction they have got it oh so wrong. The only question should be does this or that regulation, bit of red tape enhance competition above all.
April 19, 2023
Sector & industrial regulators are no longer defined and run by industrial members, theyâre government quangos run and managed by government appointed people with their main goals of being self funding by levy (tax) and implementing the government policy of net-zero âŠscrape all quangos and industrial levies
April 19, 2023
Well just like Fox vs Dominium where Fox has to pay 787 million dollars for telling lies the same penalties should apply here to politicians, regulators etc – in fact to all those in public office and including those in the media who tell blatant lies to the public –
April 19, 2023
Looking on everything that we have been faced with for some time now, the overriding tone from the Conservative Government and Parliament as a whole, is that they donât understand their purpose and job.
There must be some 400 of the 650 MPâs that just donât comprehend they are the sole UK legislators, the 100% sole body for the direction of the UK. They are there to create a framework for every person in the UK to excel.
In stead of what we elect and pay these guys to do they appear to be stroking personal egoâs, looking for self gratification and placing the people they serve well behind those that without consent aspire to create a new master race and Empire of the World.
April 19, 2023
I just can’t think of any real success during the past decade …not a single one
April 19, 2023
The regulators in general are useless as public protectors and mostly act like industry associations. We hear them regularly on programmes such as ‘You and Yours’. Even when questioned by tame BBC journalists, they never seem to have a proper answer and are always ‘going to do something’ usually after having a ‘consultation’ lasting months which then seem to disappear into the weeds. They can certainly give MP’s a run for their money in waffle, but actual energy and the will to do something useful for the public is woefully short, just like parliament
April 19, 2023
âThey also get in the way of delivering more reliable and affordable power.â
Thatâs their purpose.
We will not have energy security relying upon China, a state described by our security services as âhostileâ, for the supply of all our wind turbines and solar panels, plus depending upon China for the extraction and refining of 60% or more of the metals and minerals we need for motors, generators, batteries and cabling. The wind may be British but the necessary infrastructure and material is all from coal-fired China.
The fact that nuclear energy, which is the only affordable, reliable and secure low carbon energy is ignored is proof that the attack on fossil fuels by the green lobby is not because they believe that we will have a climate catastrophe from anthropogenic emissions of CO2.
April 19, 2023
Sounds good, yet it was your government that took the contract off Virgin who I always felt were doing a fabulous job at keen prices on the West Coast line with good service, clean toilets and good food to Avanti, with a high calorie poor menu, often not being served even when high prices for tickets are charged, less drinks served, dirty toilets, I’ve started taking journeys by car again.
“Further modernisation of the route finally occurred during the 2000s in the period of privatisation, which saw speeds raised further to 125 mph (201 km/h) and the introduction of tilting Class 390 Pendolino trains.
As much of the line has a maximum speed of 125 mph (201 km/h), it meets the European Union’s definition of an upgraded high-speed line,[7] although only Class 390 Pendolinos and Class 221 Super Voyagers with tilting mechanisms operated by Avanti West Coast travel at that speed. Non-tilting trains are limited to 110 mph (177 km/h).” Wiki
April 19, 2023
Regulation of Companies is more often than not the result of bureaucratic interference ; behaving within the law is respectful and necessary ; competition produces results . As things stand there is little inspiration within the economy resulting in manufacturers and service organizations having to operate at minimum costs . What is needed now is economic stimulation to break the existing deadlock .
April 19, 2023
What I find is that the more a company is “regulated” the worse customer services becomes and, it appears, the higher prices go.
A typical response, after I complain, is “you’ll find it’s the same everywhere else”.
April 19, 2023
We did not have the OF’s when the country’s strategic services Gas, Water, Electricity, Railways and Telecommunications were directly State Controlled (tax payer controlled).
Looks like Privatisation has not turned out to be the wonderful example Mrs Thatcher thought it would be. But in fairness to Mrs T the idea was that we would all have shares in the Utilities. But over time the shares moved into ownership of Foreign Companies only interested in maximising profit and no consideration for customers or long term investment to provide a continuing good service.
The War with Russia has shown where this approach leads
April 19, 2023
SJR, many thanks for providing very clear Conservative thinking on GBNews this morning. It makes me realise that there is a very real crevasse between your Conservative thinking and that of the current conservative party in power.
April 19, 2023
Adam Smith, the economist, covered all these points a couple of centuries ago. I suppose the Sir Humphreys of this world have tamed their Ministers sufficiently to not think about removing anything that will put the civil service out of a job.
April 19, 2023
VERY off topic, BUT…
A children’s cat-hunting competition in New Zealand has been cancelled following backlash to the event.
Organisers of an annual hunt were criticised after they announced a new category for children to hunt feral cats, which are a pest in New Zealand. Youngsters were told to not kill pets, but they were otherwise encouraged to kill as many feral cats as possible for a prize of NZ$250 (ÂŁ124; $155).
The event drew immediate condemnation from animal welfare groups.
On Tuesday, the New Zealand’s Society for the Prevention of Cruelty to Animals said it was relieved the “children’s category which involved shooting feral cats” would not go ahead.
You tell us often that NZ is such a wonderful enlightened society, isn’t it Martin?
April 19, 2023
It’s not only regulation (although this is a major issue of course), it’s also the mindset of corporate management.
In the old days, IT was managed by people who had done the work and understood it well. They recruited a team for a project and developed software. Then companies began selling software, tailoring it to requirements and the company implemented it, although using a “partner” (yet another consultancy) to do the implementation.
This is all passing the buck t someone else. The “Don’t need to kn ow to manage” brigade have no abilities and routinely fail lwhen they try to develop things themselves. The major advantage of buying in is that the fault lies with the partner – or at least, that’s the narrative they spin.
On a modern Invitation to Tender (ITT) or Request for Proposal (RFP) you find criteria about “ability to support the software” and the internal discussions are along the lines of “Company X is too small to support a company our size”. The problem could be solved easily if the tendering company provided a support partner but that is never discussed, the criterion is there to exclude small companies – because management are afraid to do anything that could attract criticism to themselves.
Another criterion is quite simply that they need to be big enough to be sued. Even though most attempts to do so fail. It makes it *seem* as though the ultimate responsibility is with the consultancy, when the reality is that making that stick is difficult and rarely happens.
The fact is that the managers doing this *should* be criticised – since often they choose the wrong companies/products and miss important factors such as sotware arriving as multiple modules with no integration between the modules (just an introduction to a partner to do the work).
Bottom line: Big business only deals with big business. To properly open up competition you would need to remove the “gotcha” criteria.
Modern day IT, thanks to IR35, has consultancies increasingly inserting themselves into the supply chain since they take on the risk of outside IR35 contracts putting in “associates” that they have simply found online. Direct contracts are mostly inside IR35 now. This is all part of their plan to kill off the self-employed. It’s a simple fact that the involvement of consultancies in this way adds nothing but cost to the end client (in exchange for low risk of an IR35 bill, but that’s a risk/cost that only exists because of silly govt regulation… lobbied for by… the consultancies of course).
April 19, 2023
John,
You are correct. Regulation across the board is done very poorly in this country. From the FCA, various Ombudsman, to local building inspectors and planning, to the Information Commissioners Office, to the Parliamentary & Health Services Ombudsman, the council licensing panels for venues, Equality and Human Rights Commission, and so onâŠ
They could all be done so much better.
A lot of the core skills are common across all of these aspects of regulating society.
Things that are desperately needed include:
Proper impartiality rules, which prevent individuals regulating a business one minute, working for that business the next, then be back in the regulator shortly after, and so on. Inspectors drinking in the pub come Friday night with the very businesses they are regulating. We need properly enforced impartiality rules.
Proper professionalisation of roles, the way that many of the ombudsman use generic grads to investigate cases that they simply have no background in, or understanding of, is beyond a joke.
The complaints processes about all of these organisations all need radical improvement, if you cannot get proper remedy when these regulators and enforcers break the rules then you can tell the system is badly broken. So they all need properly independent and audited complaints processes.
Probably the only way to fix things is to amalgamate them all into one uber regulation organisation, to give the staff proper career progression, and the ability to cross pollinate skills and experiences far more widely.
But it does need fixing. They all cost us all a large amount of money, and simply do not deliver the basics of their roles.
Cheers
April 19, 2023
Off Topic, but a clear illustration of this Conservative Government double speak
âOliver Dowden announces new system for Whitehall cyber-health checks
the Government faces a “range of attacks” in the cyber space, including ransomware and espionage.âÂ
The only reason that anyone using the internet is open to abuse, is that rather than ensuring everyone’s security, this Conservative Government does the opposite just to facilitate and ensure the âauthoritiesâ can monitor everyone in minute detail.
What happens is we get the opposite to the real need, UK Security! Any open door is an open door for all, that includes the act of espionage. This Conservative Government doesnât even know who has the data that is collected in the UK â it is kept offshore outside of UK Jurisdiction. The UK Police and so on may be able to monitor to their hearts content, but as a consequence so can the Chinese and Russian security services.
April 19, 2023
The government has just launched a consultation on how to implement more complex under the table subsidies for new wind farms. This follows being told by Orsted and Vattenfall that the wind farms they bid to build under AR 4 are no longer financially viable with the windfall tax, and they need tax relief. AR4 contracts allow a wind farm not to commence its CFD and take market prices instead, so that is not really about strike prices. The AR5 round terms are much more onerous, requiring wind farms to see at strike prices and offering no CFD compensation any time market prices go negative. It is hard to see much interest in investing on the harsher terms, although some firms may pre qualify for the auction, hoping for a softening via the new back door.
Negative prices will become increasingly frequent as more wind capacity is added and curtailment surpluses will become larger. Compensation payments via the Balancing Mechanism have exceeded ÂŁ150/MWh recently. This is of course another subsidy to wind. It would have to redouble to provide low cost energy to feed green hydrogen projects.
Government needs to step back and admit it was wrong to assume that wind was getting cheaper. It must completely reassess policy before we end up with severe capacity shortages not only of dispatchable gas and nuclear, but now also of wind due to the investment hiatus it is causing. It should concentrate first on the dispatchable capacity before embarking on more wind expansion whose real system cost will escalate with rising curtailment and horrendously expensive storage options.
April 19, 2023
Somewhat O/T: FT, 19/04/2023 âBritainâs ÂŽCapitalism without capitalâ: the pension funds that shun riskâ, part 1.
April 19, 2023
Pension funds are plainly long term safe funds they rarely invest in risky or short term funds.
April 20, 2023
Indeed, they are long term, but the first three figures should be noticed. The first one shows that the international pension fund demand for UK equities has crumbled, fallen by ÂŁ400bn since 1997 (from ÂŁ600bn in 1997 to 200bn in 2021) while the demand for non-UK equities went from ÂŁ550bn to ÂŁ2,900bn; the second that UK pension funds have moved away from holding equities, particularly from UK equities and mainly replacing them by bonds; the third that this shift from equities to bonds is specific to the UK and is not apparent in other markets.
So maybe present/future UK pensioners do not/will not care where the money for their pensions is/will be coming from, but the overall report does not show the UK (or UK-owned) industry under a brilliant light (at least wrt the source of financing provided by UK pension funds).
Could the Chancellor act to remedy this state of affairs?
April 20, 2023
Fallen due to what?
Too much risk or not enough?
Your list of statistics develops no real conclusions.
April 21, 2023
Sorry, it is not âmyâ list of statistics nor âmyâ conclusions, but a report looking at the evolving make-up of UK pension funds over the years and how it compares with those of other countries (Australia, Canada, Japan, NL, Sweden, USA). As for the conclusions (comments by seven CEOs of UK pension fund-related companies) read them yourself from the original FT article.
April 19, 2023
Who is the government working for because it is not Britain or British industry or the British people?
Perhaps a more apt question would be “who is the establishment working for?”
April 19, 2023
I note here a deterrent effect regulation has upon people contemplating going into business and into competition with existing traders in regulated sectors, resulting in regulation doing more harm than good. It is pointed out the market rather than regulation most influences quality and value for money. Good points.
However the arguments I use against regulation are different. I say regulation is not only rather expensive but also inherently flawed and therefore counter-productive. One inherent problem are the regulatory officials themselves – they are not usually as expert nor as clever as the operators. Operators live in the practical world of the activity whereas regulators are now theorists. Furthermore as regulators, especially at the top level, are not anywhere near as well paid as the senior managers of sizeable private sector operators, just about nobody with much ability would choose to work for a regulator rather than an operator. Also, when there are only relatively few operators in a regulated field (e.g. water or broadcasting), the regulator’s relationship with the operators gets too cosy and anyhow the regulators could not bear the social costs of putting operators out of business.
So most regulation is a waste of money but regulators soon become an interest group who befuddle the public as to their worth. An example is franchising. To Britain’s credit there is no franchising regulator in Britain and we manage without difficulty or much problem. However there are franchise regulators in the U.S.A., Australia and elsewhere. You can bet the franchise regulators in the U.S.A. and Australia are busy saying they are indispensable for protecting franchisees and the public, ignoring the fact they are a waste of money Britain does well without.