If you want to end up with many in poverty and many fleeing your country to escape economic disaster you should follow Venezuelan policies.
They sought to control a wide range of prices below the level business needs to charge. This slashed supply and drove more businesses into bankruptcy, or stopped people trading there. Then they nationalised key industries. This drove out what remained of overseas capital and technical skill. Venezuela converted herself from being one of the most important oil producers into a country struggling to produce a small fraction of potential. The country lost big revenues.
The Starmer plan to stop energy prices going up will require taxpayers to subsidise energy companies otherwise trading at a loss, or require large sums to bail out energy companies that have gone bust. How does it help a customer to save money on the energy bill, only to have to pay more tax to deal with the corporate damage? The current price controls failed to stop prices going up and bankrupted a lot of companies. Bulb is proving a dear pensioner of the state as a result.
August 15, 2022
Good morning.
Well, given that we are over populated, at least in the South East, I think this might be a rather good idea. Would be interesting to see how the French deal with the boat people coming the other way ?
The same person who championed the price cap was the same person who championed the Climate Change Act. Again, Sir John you need to get rid of this piece of legislation and withdraw from the Paris Agreement.
What we need is more choice over how our energy is produced and an increase in capacity. Wind and solar are simply too expensive and far too unreliable.
If the decision makers will not change, perhaps it is time we changed the decision makers.
Reply I did help remove Mrs May from office who proposed these measures
August 15, 2022
Mark,
Are you volunteering to become destitute and emigrate? Generally this is a choice of the truely desperate. Despite the left-wing moaning even the impoverished in the UK are better off than people in most countries. Hence the ongoing migrant flood INTO the UK.
What staggered me after Starmer’s “freeze the cap” announcement was the total lack of critiucal challenge – who pays, how much is the bill, how does this distort markets, when would it stop?
August 16, 2022
No, I am not volunteering to become a destitute illegal immigrant. But the people who are leaving France and illegally entering my country are.
August 15, 2022
Alas May the virtue signalling, attempted betrayer & fool was not removed anything like soon enough. All sensible and obvious points to anyone logical & rational who understands economics in you piece JR. Alas even many so called “economists” do not understand.
Two excellent pieces on Tice Talk yesterday. The physicist/electric engineer Brian Catt pointing out some realities of the insane Climate alarmism religion, the war on plant & tree food and the costs and impracticality of air source heat pumps. Also pointing out that the world Temp. today is about 1C above the lowest it has been in the last 10,000 years but ~ two degrees below the highest it has been. So well below the average for this period. So what is the issue exactly?
Also an excellent piece by Prof. Karol Sikora on the dire state of NHS cancer care (not just cancer either). Still considerable excess all cause non covid deaths currently ~ 12% – but no serious investigation it seems! One would expect it to be lower after all the recent excess deaths as people can only die once and many died early.
August 15, 2022
Very large mat, with very large brush ….big sweep of floor, lift mat, sweep under. We all know its there, but many try to ignore.
August 16, 2022
+ many LL – cancer sufferers are NOT being treated. With the massive expansion in population, someone somewhere isn’t going to get treated as the NHS spends money on diversity instead of front line staff. Ambulances taking 14 hrs???? Which is worse, dying young, or getting old and neglected?
August 16, 2022
LL :
Brian Catt is absolutely correct.
Additionally a key point to be made is that 570 million years of historical data shows that CO2 concentration levels do not cause temperature rise.
Everyone should look this up for themselves.
August 16, 2022
Indeed and the solutions pushed EVs, wind, solar, burning wood, public transport, heat pumps save no sig. CO2 anyway.
August 15, 2022
Actually an astute post.
Reply to reply I think the points Mark makes is correct. Stable door, horse, bolted.
Clearly you either have a democratic choice of energy source, or you go down the road of subsidising customers which May and Milliband started on, and on which we have now embarked.
I think a dafter version of my last week’s socialist idea that a 5 year price plan increasing prices 5 percent a year will/has to happen. Starmer, May, Brown BBC and Guardian types will it to be so. The regulator says, and might even be right, the government might make a profit.
August 15, 2022
Though May’s obscene net zero law was nodded through without even a vote so scientifically and mathematically illiterate and deluded are May and indeed most MPs. Nothing wrong with a bit of wind and solar on the system but clearly they should cull all subsidies for them and all the harmful market rigging for “renewables”. Circa £2 trillion of shale gas available in the UK – about £100k per household in current value.
So is all steel production, fertiliser production, chemicals and energy intensive industries to leave leave the UK. They keep talking about state subsidised “Giga Battery Factories” another very energy intensive industry. How is this to work once the subsidies stop?
August 15, 2022
This is only a partial explanation of Venezuela’s woes.
There is an extremely wealthy elite who are untouched by economic collapse and unconcerned about the plight of their fellow countrymen. Corruption has always been prominent throughout the history of Venezuela. Kleptocracy is a current issue.
Chavez was an unwelcome figure for many in the West who saw him as a Castro figure – but one who did not need finance from the Soviets. Sanctions and policies designed to reign Chávez in did not help the economy of the country.
August 15, 2022
“There is an extremely wealthy elite who are untouched by economic collapse and unconcerned about the plight of their fellow countrymen.”
In which way is this different from the UK? The extremely wealthy Elite who support the WEF’s plans for us to own nothing don’t seem too bothered by the economic collapse they have helped create, or too concerned about the plight of their fellow countrymen. The Great Reset Project is far more important to them.
August 15, 2022
Donna,
It is a question of degree.
Additionally the U.K. has a history of successfully mitigating the actions of the wealthy elite – even if they are currently having a resurgence.
August 15, 2022
Twaddle Peter
Chavez and his gang of Marxists ruined Venezuela.
August 15, 2022
We came close to getting Corbyn and most of the current Tory policies are essentially misguided & socialist.
August 15, 2022
Sir John, Yes and Mrs May was our last chance for sanity in high office – after that came “the joker!” well we all know how that worked out –
August 15, 2022
Thankfully, Sir John. There are far too many MP’s in Westminster who do not understand what they are doing – just following the lemmings.
August 15, 2022
Alas you are correct.
August 15, 2022
@ Reply ” I did help remove Mrs May from office…” – indeed 🙂 Let the blessings of the righteous be upon you and may your tribe increase.
August 16, 2022
Venezuela’s issue is inflation, which we have in abundance.
August 15, 2022
Good Morning,
Questiom: How many of our ‘Critical National Companies’ in such areas as water, energy, transport, communications and advances scientific expertise, are now owned by foreign corporations that are controlled, or substantially influenced, by foreign governments?
Is allowing that Conservative Government policy too?
August 15, 2022
You beat me to it.
The Conservatives care not though for the crippling costs inflicted on the people by and for foreign investors.
Money, money money and the nation as a business, one big market place. Little to no forethought of consequences of key industries and services being in foreign hands and therefore a potential leverage for said foreign countries.
Where in the rule book does it say that if we run our own key industries and services that they have to be hijacked by the politically run Unions, who will of course ensure inefficiency and disruption at every opportunity for their political purposes.
It just shows lack of ability to plan for future world events (everyone is ‘our friends’). Lack of ability to offer up an alternative to the politically run Unions who leech the life out of those they claim to represent.
Worst of all it shows the lack of care for the people and nation they are supposed to represent.
August 15, 2022
+100 Peter – other sensible countries do not allow foreign control/ownership of essential services and they do far more to give home production a priority when inviting tenders (and then collect the taxes on the subsequent profit and employment). France in particular uses ‘security’ as a reason to keep much production in France. Why don’t we?
August 15, 2022
Good question Shirley. One answer is that Whitehall loathes British big business, that most politicians of all parties have delusions of national grandeur that “we” should set an example to the world and that the City of London sees UK quoted companies as stock-in-trade to be sold to the highest bidder.
The other answer, as Sir John has often pointed out, is that the UK has not paid its way any year in the past 30 and creditor countries have worked out that it is better to buy our business assets than to put the money on deposit.
August 15, 2022
The problem, as I have said here before, is that Conservatives (and Labour too, for that matter, but they are not in office so it doesn’t matter) are TOO STUPID to understand the difference between foreign investment and foreign ASSET-STRIPPING. Foreign investment is when a foreign company comes to the UK and builds a NEW factory (or suchlike), thereby increasing UK economic output and national wealth. Nissan is an excellent example of this. This is very good, very welcome and should be encouraged through tax incentives.
What we mostly get, however (and the foreign-owned utilities are an example of this) is foreign companies coming here and simply taking over an EXISTING business. This adds NOTHING to the national economy and REDUCES our wealth because all the profits are stolen from us and taken abroad. This is filthy ASSET-STRIPPING. This is the ‘economic rape of Britain’. This should be banned. If foreign compnies want to come here – which I hope they do – they must ADD something NEW to our national industrial assets.
August 15, 2022
Dear Peter Wood, you may recall that Gordon Brown sold our state-controlled nuclear power industry to the Government of France while keeping the liabilities for UK taxpayers. Along with selling our gold reserves at a discount, this must rank as one of the master’s outstanding achievements.
August 15, 2022
Did Venezuela also help to provoke a “post-imperial imperial” proxy war with a major global energy supplier?
From March:
https://johnredwoodsdiary.com/2022/03/09/sanctions-disrupt/#comment-1305211
“Here is the transcript of Putin’s speech at the Munich Conference on Security Policy, February 10 2007 …
… And here five months later is Jose Manuel Barroso talking about the EU being a “non-imperial empire”:
https://www.youtube.com/watch?v=c2Ralocq9uE
On which basis the war in Ukraine could be seen as the EU’s first war of imperial expansion, like those that we and other imperial powers triggered in the past.”
August 15, 2022
I would say we had our fingers all over this war, too.
We were in the EU in 2014 when there was the foreign-supported coup (sorry, its now called the “Revolution of dignity) that removed the elected President. The EU foreign minister then was a Brit, too. That was the catalyst for the civil war there.
We’re also a key member of NATO, whose expansion was one of the factors that led to the invasion.
So, yes EU to blame, but also UK, and of course the US. Provoke Russia, and eventually they respond. Lots of people suffer and a few make pots of money or take pleasure in their power games.
August 15, 2022
The Ukraine war was the result US engineered NATO expansion, using the EU as its mechanism for imperial expansion.
August 15, 2022
Something that doesn’t get mentioned but should-after the coup in 2014,Ukraine was encouraged to seek World Bank funding.To get this funding they had to open their largely state-owned agricultural land up to foreign “investment”.I understand c30% of that land is now in the hands of US financial groups.
August 15, 2022
Gosh acorn there’s me thinking that Putin illegally invaded a UN accepted sovereign nation territory and committed dreadful war crimes.
Who knew.
August 15, 2022
acorn rapidly becoming Dave Spart on here.
August 15, 2022
NATO expansion has nothing to do with the Ukraine war. Russia is a country with a massive number of nuclear weapons and so in reality cannot be invaded and they know that. The Ukraine War is only about Putin’s wish to restore the Russian or Soviet Empire (correctly described by Ronald Reagan as The Evil Empire) and thereby make himself into ‘Putin The Great’.
August 15, 2022
Capping energy prices cannot be a proper solution in a market economy. The factors that created energy shortages, instability and high prices were largely created by the state in various countries, including ours, and should now be rolled back by those states. They should take the decision to wind down support for the Ukraine war and seek to restore confidence in global trading links. This will include discouraging China from going over to a war economy.
In the last few decades we have sadly run down our ability to function self-sufficently as a nation at any level, in favour of relying on global supply chains. I personally think this was a dangerous poilcy, but since we have gone for it, it makes no sense to now pursue foreign policies that destabilise those supply chains that we rely on for everything including energy supplies.
August 15, 2022
The way to discourage China from military adventurism – and specifically from attacking Taiwan – is two-fold:
1. Become economically independent of China. China currently believes that it is too important to the West – both as a market for our products but even more so as a source of products and raw materials – for us to sanction them, and so they can do what they want with impunity. If they can see that we can do without them their confidence that we will not retaliate as we did to Russia will diminish as will their willingness to provoke us.
2. Make an attack on Taiwan militarilly unlikely to succeed. This can be done quite easily, by selling Taiwan the two things they need: (i) an air defence missile system so that they can shoot down Chinese jets and rockets, and (ii) submarines so that they can sink Chinese warships crosing the Taiwan straits. Not only will this prevent war from breaking out (as the Chinese would be too wary of failure) but it offers us a huge financial opportunity!
August 15, 2022
Sorry, who’s ‘us’? I’m not Taiwanese, X-Tory, are you?
August 15, 2022
Your second suggestion would be very provocative indeed. The UK has no vital national interest in who rules Taiwan.
August 15, 2022
For those who worshipped at the altar of Globalisation – you reap what you sow.
August 15, 2022
It is NATO, the US State Dept’s military wing which has been pushing Eastwards by force of arms.
The EU’s expansions are based on non-military carrots and sticks. So far the Tories have given £6 billion of our money and material to support the war, but as with the war in Afghanistan, it is difficult to discern how our vital national interests are being served.
August 15, 2022
As a general rule the EU follows up to provide the civil administration once NATO has established whatever military security is needed. From a comment on this thread in March 2015:
http://johnredwoodsdiary.com/2015/03/18/russia-nato-and-ukraine/#comments
“Just a reminder that NATO membership PRECEDED accession to the EU for all these countries: that is the established pattern, with 22 of the present 28 EU member states having become NATO members BEFORE they became EEC/EC/EU members:
1949 Belgium, Denmark, France, Italy, Luxembourg, Netherlands, Portugal, UK
1952 Greece
1955 West Germany (reunited Germany 1990)
1982 Spain
1999 Czech Republic, Hungary, Poland
2004 Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, Slovenia
2009 Croatia
These 4 were declared neutrals before they joined the EEC/EC/EU:
Ireland, Austria, Sweden and Finland
Malta had been in the “Non-Aligned Movement” since 1973 but left it in 2004; similarly Cyprus joined that in 1961 but left in 2004, and is still argued over by two longstanding NATO members.”
“… the EU still lacks the military power to defend its new territorial acquisitions and must rely on NATO, including the US, to provide the military security while the EU provides the civilian government … “
August 15, 2022
Only with the connivance of their politicians. The US interest is to enforce dollar hegemony enabling it to obtain resources at zero cost.
August 16, 2022
Not by force of arms at all, but by the will of the free, democratic, applying nations.
Why must you post silly fictions?
August 15, 2022
Labour have zero concern about the cost of such destructive measures only that they deceive enough voters into voting for them. If that means convincing them then deceiving them that they can enjoy a cost free existence then that’s what they’ll do. Truth and cost doesn’t enter into the argument. But then this argument can be applied to lockdown, green taxes and the scam of ESG-Net Zero Socialism. The Tories know it’s all politically driven but all UK parties are captured by this lying tosh being driven by Washington, Blackrock, WEF and UN players
I don’t believe the Tories want to expose Labour’s inhumanity and the unions deceit. Indeed John’s party facilitate insulating Labour from harm by appeasing them to maintain the status quo. Well that type of politics has brought us to this point
Truss isn’t Thatcher though she can be if she chooses but that means rejecting the cosy consensus that now prevails. Adhering to Cameron’s ‘go with the narrative’ approach condemns us all to digitalised, authoritarian Socialism that will rip our remaining freedoms to shreds
August 16, 2022
FFS ! There is also the issue of rogue capitalism which has given rise to the unions.
Is it really only one sided in your view, Dom ?
August 15, 2022
The government’s since and including Blair have already interfered too much in the energy markets. They should keep their noses out of things they don’t understand. Sadly with this lot that includes a lot of things .
August 15, 2022
FUS
They suffer with a God Complex, believing that they can reduce global temperatures just by signing a piece of paper that says we will such down our industries, farms and fossil fueld power stations.
Insanity.
August 15, 2022
Indeed the Blair/Brown era was a disaster everything they did. A reverse Midas effect. I have yet to find a single positive. Botched devolution and legal reforms, idiotic wars, ever more EU and red tape, more worthless university degree, ever more green crap, the ECHR act…
Then again Major, Cameron & May eras have been truly dreadful too.
August 15, 2022
surely you meant to include Johnson, didn’t you?
August 16, 2022
Certainly the post Carrie, green crap, socialist one.
August 15, 2022
I understand the French have had their energy capped at 4,%. EDF being a nationalised company will be recompensed by the taxpayer.
Even with this the price is much less than we are paying.
I think we are subsidising French consumers.
August 15, 2022
Robbing, Peter to pay Paul methinks.
August 15, 2022
Whether it’s the consumer or subsidies via government or industry windfall the taxpayer ultimately foots the bill as the energy providers still have to pay the prices set by the futures market….the answer is to go completely self sustained bypassing international markets or get rid of net-zero
August 15, 2022
“The Starmer plan ….. will require taxpayers to subsidise energy companies… “ – true, but how many actual payers of tax does the party of the welfare recipient, bogus asylum seeker and public sector parasite represent? Sir Kier is on a winner I think.
August 15, 2022
Everyone pays tax, just not necessarily income tax.
August 16, 2022
It doesn’t matter anyway, Starmer is not in office and his idea can be safely ignored. Even if it were perfect and solved every problem, the Tories would not accept it purely because of who put it up. And therein lies the problem with this country – politicians who only serve their party, never the country. They prefer petty point scoring in their stupid game of thrones to getting together to get the country out of the mire they have created. FPTP must go. It is said that proportional representation produces weak governments. Well, FPTP has produced what? Low productivity, low wages, poverty, food banks, high and ever higher cost of living. Politics poisons every thing.
August 15, 2022
The problem we have is that at the moment the Government (taxpayer) is already “spending money like water” on many of the industries you outline.
Broadband, Government expenditure, Nuclear power generation, Government spending, Railways, Government spending, Steel production, Government spending, and so it goes on, thus we already have a HyBrid system of spending, all these so called private companies/organisations are already getting the advantage of tax payer “investment/grants”
Thus at the moment we seem to have the worst of both Worlds.
August 15, 2022
We have to buy 50% of our gas from overseas suppliers at the market rate. Moving money around between the government and UK supply companies can’t change that fact. There is a shortage of gas and the only solution is to produce more gas. The government chose to ban fracking based on a campaign by eco lobby groups some of whom were funded by Russia. The supporters of that ban across all political parties should stop complaining – they got what they wanted.
August 16, 2022
Roy. The gas produced in the UK MUST be supplied to us at UK and not global rates, which means nationalisation.
August 15, 2022
It is a politicians job to deride its opponents policies and linking to Venezuela is a clever diversion, however Theresa May with her party’s support wrecked the energy market, Bulb being the latest fall out.
More importantly we read the ‘Putin cutting off gas’ scenario had been modelled as had a possible pandemic but this government was too complacent to act.
We also read it was lobbied to support the opening up of gas storage facilities providing another 10 days of generation in an emergency, a new coal mine was refused whilst we are now paying extortionate import prices, fracking still hasn’t started. An alleged voucher scheme supported by major companies was squashed by the Treasury who wanted a windfall tax.
And in other news the Treasury has now suddenly discovered the amount Truss has to play with in terms of tax cuts etc is at the bottom end of the range. Nothing to do with trying to spike her campaign because she has got them in her sights.
Of course not. Time for Sir Tom to be moved in.
August 15, 2022
Once again you have to wonder who updates Risk Registers. Covid, Hospital beds, Contact prevention supplies, Innoculation procedures, Medical Research funding ( err.. in reality read Pharma Research Funding), Arms supplies and replacement, Channel protection, Russian naval and airborne threats, Water resilience, National Grid capability, Oil and Gas reserves, Oil and Gas forward ordering……shall I stop there?
postscript ..Deputy Ministers and PM when unavailable.
August 15, 2022
I read into your blog this morning Sir John that you want us to pay £4K per year for our gas and electricity. Solutions other than price capping and subsidy will not come on line before the latest increases hit and again in January.
Increasing supply to reduce prices in a global market is going to be difficult in the short term so some from of intervention will be required whether price capping or subsidy.
My approach would be cap the standing charges and to remove VAT and green levies, then subsidise the price to maintain the current rates. I do not know how much that will cost the taxpayer but to cover the cost I think that producers will have to contribute ever more tax. Maybe this could be tied into national production and supply so it becomes advantageous to mine oil, gas and coal in this country for this country. This legislation would be rolling and have a three month sunset clause each time.
The subsidies would be for all, not just for the needy to maintain differentials in disposable income. Suffice to say the misguided drive for net zero must be (at least) paused with more emphasis on reducing pollution and waste.
August 15, 2022
If the CONs didn’t want Venezuelan policies they shouldn’t have implemented Blair/Brown and Corbyn/McDonnell policies. But they did, so they obviously want Venezuelan policies …. and the consequences of them.
If CONs shouldn’t interfere by subsidising energy companies, then they also shouldn’t interfere by making taxpayers subsidise the producers/enablers of windmills and solar panels. And they shouldn’t ban forms of energy which have demonstrated their viability and reliability over centuries, in favour of a method of producing energy which was phased out after centuries of demonstrating that it was unreliable and the energy it produced was intermittent.
The problem with the energy market is lack of supply. And that lack of supply has been deliberately created by the MPs and “Lords” in Parliament at the behest of the UN and WEF and under pressure from the Environmental Charity-Quangos.
If you don’t want Venezuelan policies then stop interfering in the energy market, scrap the Net Zero lunacy and repeal the Climate Change Act.
August 15, 2022
Hear hear !
August 15, 2022
Nail on head Donna. Exactly. Get out of the way and stop interfering with things you don’t know about.
August 15, 2022
And in other news we read what an utter sham the governments pledge to control immigration, is with almost every cabinet minister having lobbied the Home Secretary to be more lenient.
Illegals not stopped, over a million living and working here, no one sent back anywhere including people arrested for sham marriages.
Instead of hammering Starmer for something he might do in the future you should start closer to home.
August 15, 2022
”The Ministry of Defence briefed the media confirming “more than 20,000″ illegal migrant crossing attempts have been made this year across the English Channel. However, Frontex has the figure at 27,990 by the end of July” Reported by EU FRONTEX on Leave.eu
August 16, 2022
Several football stadia of young blokes, to put the figures for net immigration in some perspective.
August 16, 2022
And every one of the (almost) 28,000 CRIMINALS the Government has ferried into the UK costs British taxpayers £400,000.
August 16, 2022
Agree – everyone of them has broken the law, they should be in jail until deported
August 15, 2022
You are speaking to the converted here.
Really one needs to get the entire public to understand that “price caps” (or however you dress it up) can mean forcing businesses to operate at a loss. Honestly, some people don’t understand that. Nor do they understand that said loss-making businesses close down, unless the public’s (tax) money is given to them.
With the lousy education people have had for decades, and a left wing media that doesn’t explain the consequences of such policies, many people are not equipped to question such ideas. This may include some MPs, too. Other MPs simply bang the price cut drum hoping to get into power. Energy now, what next?
We need great communicators to counter this socialist narrative, or else enough of the public will vote for fairytale “lower household bills” and Venezuela here we come!
August 15, 2022
replace ‘lousy education’ with ‘political aims education’.
August 15, 2022
“Venezuela is showing us there is another way” Jeremy Corbyn during the election campaign.
August 15, 2022
equally you could say ‘ Putin, Kim Jong Un, Xi Jinping’ are showing us another way.
August 15, 2022
It is simply incredible that these obviously failed socialist ideas go round and round and keep coming back, advocated even by supposedly moderately intelligent people like Starmer. Labour hasn’t really changed since corbyn. It’s still a nest of extreme leftwing politics, socialism, Marxism even, wokery and ant-semitism. It’s really important the Conservatives win the next election. I’m still wondering whether Rishi or Liz offers the best chance.
Economist Kristian Nielmitz’s ‘socialism the bad idea which never dies’ is instructive reading and a comprehensive summary of the failure of socialism whenever and wherever it’s been tried.
August 15, 2022
But it’s a Conservative government that’s introduced the energy price cap and therefore facilitated Labour’s proposed embedment of it – and as expected, the BBC’s uncritical discussion of it as if it were an entirely natural development. Management of Decline policies rule in both Tory and Labour leaderships. It’s why most of us are sick and tired of this never ending Tory leadership campaign delaying the continuation of the status quo under a new leader.
August 15, 2022
I sit here and think that because I’m a UK citizen I have a share in the mineral resources in the UK. I don’t see that as a Venezualan view. I expect to have to pay someone to extract it, refine it and supply it to me. However, I don’t expect to have to pay extra because the government has sold what was my resource to someone else, and I have to compete for it at global rates.
August 15, 2022
Not long ago, near Whitby in Yorkshire, a home owned company Sirius Minerals raised money to extract an extremely valuable fertilser. The project was very costly and they needed about £400m to see them through.
They applied for a government loan which was refused. The business had to be sold as a result and was bought by the global Anglo American. So, the profits will go overseas.
These Tories, as I have mentioned many times before have no care for the preservation of our assets and our sovereignty and security. All they care about is getting money here via their City spiv friends thinking short-termism is the answer to everything.
August 15, 2022
+100
August 15, 2022
What further proof is needed how lamentable British politics has become.
There are, if the country is really lucky about 50 members worthy of their place in Westminster.
It is not only the swamp that needs draining it’s all it’s tributaries.
All the time the country maintains the status quo on who and how they select for parliament nothing will change.
A ship with no captain, helmsman, rudder no communication to engine room with an incompetent crew.
August 15, 2022
Domestic energy prices will only come down when the international futures market prices come down
The international futures market prices will only come down when western world policy of net-zero of fossil fuels and the attacks on co2 is cancelled and confidence returns to the sector
Every other plan to reduce prices is just moving the deckchairs
August 15, 2022
+1
All this won’t happen (abandoning net zero) until people start freezing. Even then, I expect a massive public campaign to divert blame away from the net zero policy. Once people start to waken up, there’s the time it will take to do something about it. Even coal fired power stations can’t be built as quickly as a circus tent.
Meantime, expect the government to address the issue in their preferred way – kick the can down the road, in other words borrow heavily.
August 16, 2022
+1
August 15, 2022
Labour has historically supported socialist Venezuela.
Corbyn was a big fan of Hugo Chavez.
Starmer was a member of Corbyn’s shadow cabinet and campaigned for him to become PM.
Starmer wants to cap domestic fuel prices.
Go figure! Lol
Hard left Trotskyist socialist.
August 15, 2022
I read the piece searching for traces of irony.
The Venezuela model seems to me to be the basis of the Government’s energy price cap.
August 15, 2022
While I agree with Sir John that Labour would not alleviate any of our problems, I can’t help but think this ‘Venezuela’
article is an exercise in deflection.
No matter how bad things get this winter at least we can all say ‘well at least we are not in Venezuela’.
I don’t think that’s going to work somehow.
The opinion of many across the political spectrum is united in one thing and that is that many will die here this winter through fuel poverty.
We have had a Conservative government for a long time now and this is the result of all those years?
You couldn’t slide a Rizla paper between the establishment party apparatus when it comes to the mismanagement of our affairs which have left us in the dire situation we are in.
It has been all hands on deck for decades to manage the decline in every aspect of this country. As for bail outs and tax payer subsidies, are we to believe this hasn’t happened already under the Conservatives, especially in ‘green energy’. Conservatives have forever got their hands in our pockets doling out our money here there and everywhere to everywhere bar here.
Deflection will only work for so long.
August 15, 2022
Guido has laid the energy cap at the feet of Theresa May back 2017!!!
August 15, 2022
She was partly bounced into it by Ed Miliband who actually called for a price freeze. No sooner said than done, and prices started falling, eventually bottoming out in the oversupplied markets of lockdown in 2020.
August 15, 2022
The Venezuelan model is the utopia the communist fifth column in our Government, Parliament, civil service, quangos, institutions, “charities”, corporates et al seek.
Hence they have designed and are implementing Net Zero to cause economic collapse with the replacement of cheap, reliable, high energy density fossil fuel and nuclear with the medieval technology of windmills to make our electricity expensive and intermittent. As I write wind is providing just 0.72 GW from an installed capacity of 27 GW. 2.33% of demand.
To make the situation even worse they are forcing us to buy impractical and expensive evs and heat pumps, despite not even planning for there to be sufficient wind power to power these devices.
Furthermore they are making our energy totally insecure because 95% of wind turbines and 100% of solar panels are supplied by China – who are using cheap, coal fired power of course.
At the same time they are dramatically increasing our population through massive, uncontrolled immigration. Even the illegal immigration of young men of fighting age is encouraged as no ID is not a barrier to obtaining 4 star hotel accommodation, £40/week pocket money and the freedom to roam our streets until they wish to abscond never to be found again. Our fifth column communists have no concern at all for our safety.
Uncontrolled, massive immigration is designed is to put such pressure on our housing, schools, healthcare and infrastructure, that it causes our services to collapse and institutes social breakdown hastened by the economic meltdown of their Net Zero Strategy.
August 15, 2022
Our economy and society is already dangerously and destrucively controlled as is being acknowledged.
In addition freedoms are being removed and foreign beliefs accepted out of fear of challenging them and acting firmly to defend ours.
Action must be taken urgently to dismantle the controls that have been introduced by the most recent governments or tolerated when applied by others.
If robust immediate action not taken our nation and society will have been given to others, after all most of our infrastructure and major businesses are in foreign hands.
Those who claim to be our defenders will be seen as our cowardly deceivers and our sacrificers.
August 15, 2022
Having heard the Starmer plan which I presume is in effect a price subsidy to energy companies, it is much like what I have been advocating to curtail inflation and hold down the impact of fuel increases on people and discretionary spending.
However it does have shortcomings. A greater windfall tax without the reliefs proposed for extra investment is likely to be damaging. A better idea would be to reduce public expenditure.
More fundamental is the fact it only lasts 6 months by which time most of the funding (abolishing £400 customer rebates and a windfall tax) would have been exhausted with most probably the problem remaining. Inflation would only have been held down for 6 months and would then jump. We have to recognise the problem is most likely more fundamental and is likely to cost around fifty billion pounds a year for a few years. That is a good pretext to initiate and push through ‘a smaller state agenda’, cutting other public expenditure which would in itself be beneficial.
As for John Redwood’s Venezuela notion, it is important not to bankrupt and nationalise key businesses. However doing nothing would result in Venezuela style destitution for some of the unemployed and big economic problems for most other people and most businesses.
August 15, 2022
Why is Starmer’s idea so much worse than what the PM candidates are offering? If prices were capped at current levels and the government paid for it direct to the suppliers, surely that is more efficient than trying to work out who gets 67 quid here, who gets 4oo quid there. When the government gets involved, chaos ensues, as we saw with billions in fraud blithely written off and millions of small businesses not getting anything during the Covid con. It will happen again. Whichever way it is done the government is going to subsidise rip off prices as evidenced by the enormous profits being made by the producers. Which companies are trading at a loss and are about to go bust? Total nonsense. Either way the tax payer is on the hook, unless you are you suggesting the government does nothing and let the devil take the hindmost?
August 15, 2022
British Gas owner Centrica banked a £56million tax rebate on its North Sea operations last year. The industry giant was able to use losses in the previous few years in its UK drilling arm to offset what it made in the division in 2021. But the analysis by climate group Uplift found that, in the same period, Centrica paid Norway £35million in tax.
August 15, 2022
Was Centrica not drilling in Norwegian waters then? Does it not recognize a tax offset when it sees it?
August 15, 2022
But that is what all businesses are allowed to do on corporation tax laws which have been in operation for many years
Even under Labour acorn.
If you make a loss in one year and thr make a profit in another, then you can (under complex rules) claim back what you have previously paid.
And specifically with oil and gas exploration companies….they have further allowances to allow for the very speculative engineering they do.
PS
acorn
would you risk all your money on drilling a hole in the ground?
August 16, 2022
I have said previously that the producers never actually lose the billions as has been stated they did a year or two ago, simply because they are allowed to offset those losses against tax over the following five years. They choose which figures they want to offset against which profit.
August 16, 2022
Their accounts are scrutinised by HMRC each year.
The losses were real and accepted by HMRC.
There are complex and strict rules about offsetting losses.
It isnt as easy as you think graham
August 15, 2022
You don’t have to follow the Venezuela model to bust the country. Net Zero will do it just fine and we are already well on the way.
August 15, 2022
+1
August 15, 2022
What the Absurd Left fails to see is the sheer economic illiteracy of taxing businesses. Businesses, they think, are evil; profits are evil: it’s an extension of the ideas of the idiot Karl Marx.
Who does the Left imagine actually pays taxes imposed on firms? The firms themselves and their owners certainly don’t. No, any tax is simply added to the firms’ costs and passed on to the one person in the chain with no-one to whom to pass the cost on: the consumer. Only consumers — i.e. individuals (a.k.a. tax-payers) — actually pay taxes, either direct (as income or sales taxes) or indirect (through the amount of taxes incorporated in the price of goods as above).
Treasuries do not benefit from business taxes; only tax accountants and lawyers do. Instead of gathering to eliminate competition amongst countries on corporation-tax rates, politicians ought to get together to agree on scrapping business taxation altogether. Buy, hey, when did politicians ever do anything to help their electorates?
ΠΞ
August 15, 2022
You are quite right, Sir John, that you can’t artificially reduce prices, but you CAN STOP artificially INCREASING them! Scrap the Emissions Trading Scheme and all the carbon taxes (the Climate Change Levy, etc), so that the only cost of gas is the actual extraction cost. This has not increased, so neither should the price.
August 15, 2022
With all the talk on television and among the political class, our host excepted, about energy costs, the dearth of discussion about increasing supply is, to coin a phrase, “deafening”. What is it about supply and demand that these people do not understand?.
August 15, 2022
>How does it help a customer to save money on the energy bill, only to have to pay more tax to deal with the corporate damage?
I expect Starmer is prioritising his own voters – recipients of state (taxpayer) largesse. The result will be that the taxpayer will find ways to pay less tax – thereby affecting economic growth – ‘slaying the golden goose’ and everybody loses.
August 15, 2022
Shame on all those MP’s who voted for Disaster May’s crazy Net Zero policy and who chose to believe the highly inaccurate and biased ‘back of a beer mat’ calculations of the Climate Change Committee.
August 15, 2022
Spot On
August 15, 2022
have we moved on from back of a fag packet.? Oh Good.
August 15, 2022
Precisely. The idiots voted for this shambles.
August 15, 2022
The Labour party has been technically bankrupt over many years and are experts in deploying it to the private sector. Remember “Sorry, no money left”? No joke, they are seriously naive and dangerous to everyone bar Russia.
Corbynomics admires the Venezuelan coercion model and is a joke except they seriously believe in Marxism despite the disastrous consequences and recent evidence to the contrary.
August 15, 2022
There is a virus called Gullibility Associated Syndrome (GAS) that has infected the British Parliament. It is transmitted by computer models.
Recently GAS reached epidemic proportions with MPs believing in pandemic models, economic models, climate models and population models. The MPs did not understand the models were simply Opinion Pieces dressed as Science they believed had to follow or look foolish.
These Opinion Pieces threw concepts like profit, energy and safety out of the window and replaced them with authoritarian controls and five year plans.
August 15, 2022
Already at the beginning of 2022 my dual-fuel utility company had increased its standing charges by about £12/month. When I had asked why, they told me that it was a contribution that the regulator had imposed on customers of still running utility companies as a ‘supplier of last resort’ contribution to bailing out those companies that had gone bust.
This was reported for example in guardian.co.uk, 28/03/2022 ‘Cut unjust electricity standing charges, UK regulator urged’.
As far as I understood in those days it had nothing to do with the Labour leader. I don’t remember Sir John jumping out of his box and condemning the increase.
So how comes that he suddenly calls on Venezuela when the Labour leader proposes a policy that could help the average customer? Double standards?
August 15, 2022
Hef,
You are spot on about standing charges. I raised it ages ago. It was sneaked in under the carpet hoping people would not notice and the slimy lying govt could falsely blame world/ global prices. Then the Tory party and govt came out to ask how it could reduce the cost of living knowing it had deceitfully increased the standing charges!
JR, explain to us this was not the case.
August 15, 2022
standing charges are robbery, plain and simply…..they’re only on energy…no standing chargers on any other product or service, our government should get them removed
August 15, 2022
What you were not told was that a large element of the increase in standing charge was in fact the result of transferring network/grid costs from a per kWh basis to the standing charge. That of course hits smaller consumers far harder than big ones, some of whom might even benefit. These charges are only going to increase sharply as the grid investment to hook up more and more wind farms ramps up. I already advised OFGEM that they should return to the previous basis to help protect less well off consumers.
So fas as SOLR charges are concerned I also suggested that since the chief beneficiaries of artificially low tariffs set by companies who went bust were their customers they should take a greater share of the pain, rather than passing it to other customers who avoided the fly-by-night operations that OFGEM sanctioned.
August 15, 2022
There’s nothing like the smell of a False Dichotomy in the morning.
There are innumerable workable economic structures between the Tufton Street model and Venezuela’s, though the first is actually sillier than the second anyway.
August 15, 2022
Only tens of thousands of people haven’t died as a result of current Conservative policies whereas they have in Venezuela
One of your more “sillier” posts NHL
August 16, 2022
The delay in lockdown – in spite of being begged by Italy and WHO to act – reportedly has exceeded any claim like that as to Venezuela.
So, you were saying?
August 17, 2022
Delay?
Huge red herring NHL
The argument was about Venezuela
Now you rapidly switch to Covid
Hilarious.
We were one of the first to lockdown
You would have locked down when the UK had just a few cases.
And remained in lock down until when ?
Yesterday?
No criticism of Spain France and Germany or Holland.
And let’s not mention Sweden eh NHL?
August 21, 2022
Three times I tried to have the cper.net report ‘Economic sanctions as collective punishment: The case of Venezuela’ by Weisbrot and Sachs to be quoted here. You decided not to accept it because it would pierce a big hole in your original comment.
But maybe you’ll remember what Napoleon said to Talleyrand regarding a silk stocking. That sums up what I think of you.
August 15, 2022
I keep hearing today politicians scrambling around trying to come up with solutions to the high domestic (they never talk about the industrial) energy price
But all their solutions are meaningless without asking and finding solutions to the high international futures energy market first
International futures energy markets are high because of the western world policy of net-zero….find a solution to that first
(a) Reverse policy of net-zero
(b) Restrict UK energy supply to UK markets (surplus to international futures market)
(c) Keep kicking the can down the road with grants, subsidies and windfalls
August 15, 2022
In the interests of spreading info, as opposed to disinfo.
I’ve just received a £200 pensioner food voucher from the council
( funded by the government ).
Email your council.
Not Soylent Green tinned pensioners btw.
Thank you Gov.
August 15, 2022
You have to state you have less than 10K savings.
August 15, 2022
At some point after the price cap is held down, government will have to release that cap.
Labour reckon a 6 months hold might cost £30 billion
One might speculate that a 12 months hold could cost £60 billion
Say energy prices continued to rise after 12 months and we continued the hold.
£130 billion?
The whole NHS costs £190 billion so these are huge extra State spending potentials.
August 15, 2022
After a very quick look at Venezuela’s recent history, I can quite see your point Sir John !
What I have not seen recently, even from you, is why we can’t simply remove VAT from domestic and manufacturing uses of energy, and also petrol and diesel at the pump. (Though the latter were reduced and have begun to help there.)
Perhaps the worry is that if VAT was completely removed we would all go mad using energy so the country would run out completely ?!?
August 15, 2022
O/T: The US passed the Chip and Science Act with a $52 bn budget for R&D this July. The EU has had since Feb’22 its €43 bn Chips Act to incentivise production within its area.
In the UK, the BEIS Secretary has suddenly realised that the takeover of Newport Wafer Fab by the Chinese Nexperia in April 2022 might not be the best advertisement for Global Britain. Better late than never.
And if ARM ever becomes quoted on the LSE, the US Qualcomm and Intel are ready to pounce to share the ownershift with the Japanese Softbank.
As Hermann Hauser, a founder of ARM , said: ‘Starting with M.Thatcher’s premiership in the 1980s, we really screwed things up royally’.
FT, 15/08/2022 ‘The semi-conductor boom: Has the UK missed its chance?’
August 15, 2022
Sir John, I’m perplexed that some of the media (eg Telegraph’s Christopher Pope and the Spectator) have taken a quick look at Keir Starmer’s energy intervention today and are all cock-a-hoop. But it doesn’t solve the issue long-term, it just buys favour for 6 months. In contrast UK Energy’s former leader Angela Knight has taken a much longer term view that would bring all parties together and it gets no coverage other than on GB News. I wonder what you think of all this?
August 15, 2022
I am staggered that Truss is being accused of intending to introduce ‘radical economic policies’. Turns out she is proposing what I think of as a bogstandard Conservative economic model, hopefully via a sentient Conservative ie John Redwood. It’s the disaster we have lived through for 30 years which was radical and destructive.
On that basis we are voting for Truss. She is not very well informed, does not seem to understand monetarism and has no idea of foreign policy. But if she can choose those who do, that’s good enough for me.
PS buying Russian oil from India with a markup is NOT honest or sensible, lift the sanctions before Russia sells all its natural resources elsewhere and our sanctions become redundant anyway. And start fracking!
August 15, 2022
Labour has done something like this before. Prescott and Byers capped Railtrack’s track access charges, denying it adequate revenue and forcing it into bankruptcy. Its nationally owned successor, Notwork Rail, has so far accumulated a deficit of £60 billion. And this is the body that RMT and ASLEF believe should be given full authority by the Government to settle with the Unions. No way, Hose.
The Government should say this to the rail unions: “You can have any wage increase you like and you can retain your restrictive practices, but we will cancel all loss making services and shut down unprofitable lines. The poor can go by bus.”
August 16, 2022
Agreed.Not enough supply. -Investigate re-opening closed power plants, nuclear , coal oil.
Do we not have any spare “sub reactors” or other floating carrier reactors we can borrow or connect to the grid?
How about allowing more 3rd parties to bring plant online if it is using domestic resources , with quick permissions at old sites.
Strong suggestion to the Germans. Bring their nuclear plants online, otherwise we cut should consider charging even more for the gas exports or simply reduce them.
Also lets get farmers to increase their own water supplies either by collective exercise or individual water reserves husbandry. We also need to think about food.