Let me begin by making it clear I do want government to ensure everyone has sufficient money to be able to keep warm and do their cooking this winter. That is best done by allowing people to keep more of their income through tax cuts , or by giving people more in benefits to cover the bills who cannot earn. This blog is about the underlying problem of high prices and how you solve them.
Most people want there to be an easy answer to the ultra high prices of energy. Some say just stop any price increase for any energy sold to anyone. Some say control the prices of oil and gas that producersĀ fromĀ UK reserves can charge us. Some say stop the renewable producers charging the same price for their electricity that the gas based producers have to charge now the gas price has gone up. Maybe there is a way to do the latter that the industry would accept, but they do need to be able to make a profit on their investments and need some long term visibility on contracts. The first proposal would stop all price rises. The second and third would stop some of the price rises, but would leave us paying the new high prices for all imported fuels and for the items of domestic production they leave out.
All these schemes mean government to a greater or lesser extent stops price doing what price will always do, balancing available supply with available demand. Higher prices now surging if left in placeĀ will solve the imbalance. All those in business or on better incomesĀ who can economise on their power use will now do so, reducing demand. The state will need to rein in its extravagant use of energy by reviewing its over night street lighting, its heating and lighting of little used offices and the rest. Better off households will reach for the thermostat or timers to slice a bit off their past use. So demand will fall.
More importantly the price signal will incentivise businesses to put in more capacity to produce energy. Oil and gas producers will be encouraged to bring forward marginal new prospects that used to be uneconomic for development. Renewable investors will have more profits to plough back into additional capacity or into all important storage. In the short term energy companies will sweat their current assets more to maximise output. In the medium term they will add to their stock of producing assets and in the longer term the whole industry stands a better chance of achieving major commercial throughs with nuclear, battery, hydrogen and other technologies.
If you stop the energy industries in the UK earning the extra revenue from high global prices you will divert profit and investment capital away to countries that do allow them the benefits. If you stop them charging world prices they will divert as much of their current product as possible to markets where they can charge more. Anyway you look at it, price controls prevent more supply and impede lower demand from energy saving. It is no accident that the countries that have relied most on price controls are often those in the lower income bands worldwide, short of domestic supply.Ā I will deal with those who think that means the answer is nationalisation in a later blog. That too would make the position worse.
September 4, 2022
Good morning.
Exactly ! May I also add, that people will also add extra insulation and switch off appliances that are not needed etc. This deliberate scarcity / expense is going to make people think more carefully about energy. Which I believe was the intended plan.
So we can then cut their subsidies. Am I right, Sir John ?
I can only agree with this in part. We can ask them to sell a certain amount (say one third) to the UK at cost plus 5% for profit. Then the rest to others on the world market. They get access to our energy reserves, and healthy profits, and we get cheaper energy. Remember, it is our energy to sell and we can set the terms.
Not everyone reads this blog, and not everyone will therefore agree that they should be choosing to eat or heat.
You could have avoided all this had you planned ahead.
September 4, 2022
+many
Yes I really do object to paying a huge Green Subsidy.
If they want to reinvent the wheel let themā¦but not at my expense.
I want coal, gas and oil.
And sanity.
September 4, 2022
Someone had better warn Iceland about the potential threats in the geyser water. Canāt have anyone being warm cheaply can we? Might not sell enough eyesore bird and bat mincers.
Sustainableā¦my foot!
September 4, 2022
I agree with every word in your comment CUIBONO. The plant food also does not cause an change in the Climate.
September 4, 2022
Plus nuclear on demand and cheap there is no climate emergency due to man man CO2 and anyway the solution pushed do not even work in CO2 term. Plus world cooperation is a pipe dream. The only climate emergency is the climate alarmist religion & unscientific group think that has infected Boris, Carrie, Greta, May, Ed Miliband, Bliar, Starmer, Sunak & even Truss(?).
September 4, 2022
Mark is right. The real plan by this green eco nutter Tory party is to get to use energy rationing! Covid helped the socialist Marxist Tories to know how to control people. They will use climate emergency scare tactics to force people into compliance.
China rebranding Russian gas as their own and charging 4 times more to EU!
EU, UK and US govt know this but continue with a war for their own purposes. 70,000 Czech people on the streets protesting against energy costs and demanding energy change and an end to Ukraine war. Sound familiar? Not in MSM?
September 4, 2022
No point in insulating a whole house if you can only afford to heat one room is there? Insulating old houses to a high level and particularly for listed or conservation area houses can be very expensive indeed and often never pays back in the relatively mild UK. Lots of energy is used in doing this expensive insulating to.
Insulating one room or insulating the people often makes far more sense.
Let us hope Truss will finally realise we should ditch the insane net zero war on (actually net benefit) CO2 plant, tree and crop food. Anyway even were CO2 a devil gas China, Russia, India, Africaā¦ are never going to go in this direction so what the UK does is irrelevant. Also the solutions pushed by our deluded government wind, solar, EV, cycling, walking, public transport, heat pumpsā¦ save little or no CO2 in practice anyway when fully accounted for. EVs certainly increase CO2 compared to keeping your older car walking/cycling is fueled by extra human food intake a very inefficient energy source on a typical diet.
September 4, 2022
‘No point in insulating a whole house if you can only afford to heat one room is there? ‘
– Good comment
Last winter, I survived on one small, electric heater in the living room for heating. Not to save money. But just didn’t see the point of putting on the heating all over the house! I think the government has to keep a serious eye on the old and vulnerable this winter. But the rest of us can get through this winter on much lower energy usage. And thus play our part (small part compared to the Ukrainians) of defeating Pootin (or rather allowing Pootin to defeat himself).
September 4, 2022
Next think is poor people have to start sleeping on the sofa in the warm room too for the three or four cold months perhaps.
September 4, 2022
Again, emphasising NOT the old or vulnerable. They need help. But the majority of the rest of the population who are reasonably healthy to healthy. And would be healthier still if they eat healthier food (not expensive i.e: porridge, apples, brown rice, chick peas, broccoli, onions, cabbage, spinach, eggs, chicken, home-made soup, natural popcorn, kefir milk, yoghurt etc ..) took more regular exercise, didn’t smoke and drank in moderation.
It’s not just healthier, you also feel better and you have more energy. You even look more good looking if you want to get a date! (Really, your skin tone is shinier etc).
September 4, 2022
Lastly, people can still spend their money on other things. No need to upset the economy. So saving money on fuel and spending that money on some other part of the UK economy. In fact, might be some benefits to people’s health (if they do it properly). Whilst helping to get rid of Pootin and sending message to others that we don’t appease bullies.
But, again, need to emphasise the old and vulnerable absolutely need the help they need to stay warm this winter.
September 4, 2022
LL : āInsulating one room or insulating the people often makes far more sense.ā
I agree.
But can this be taken a step further by using an infrared heater directed to heat a person in a room and not all the walls/ceiling/furnishings etc.? Perhaps portable so it can be moved from room to room?
Like an outdoor patio heater?
How many watts would be needed to sustain a stable 20 degree C temperature in a 5 degree C room?
September 4, 2022
Aka …. a coat, Richard.
September 4, 2022
Can certainly make sense like sitting comfortably in the sun outside when skiing and the temp is circs 0 centigrade. Also for building like churches only used for a service for an hour or so.
September 4, 2022
O R
Volume of room x 2 x 0.33 x 22 assuming 2 air changes per hour and the outside temperature is zero
September 4, 2022
No no no. This is accepting socialist Tory control over our lives! It does not have to be this way. The Ukraine propaganda must not be accepted and the failure of this dishonest party to produce fossil fuels at reasonable cost is their failure and must not be accepted.
We demand oil, gas and coal produced from national reserves/ sources and used at cheap cost to provide public a better quality of life.
September 5, 2022
+1
September 4, 2022
In present circumstances government money for insulation projects should be halted. Consumers can be trusted to make an honest evaluation as to whether an insulation project is worthwhile. The record of government programmes is appalling: an industry built up to capture subsidies through box ticking measures that don’t work.
The Green New Deal spent Ā£300m out of its Ā£1.5bn budget, achieving savings of Ā£641,000 a year: a payback of 468 years. The Ā£300m would have been much better spent on reducing bills directly.
September 4, 2022
Indeed some may want to try to keep the whole house warm but other might prefer a colder house, more jumpers an electric blanket but more holidays or to fix the roof, mend the car or spend the winter somewhere warmer. Freedom and individual choices please. Not once size for all government knows best lunacy. This despite not even knowing the first thing about you and your personal circumstances/preferences!
September 4, 2022
Why my old friend Liz Truss will be the most radical prime minister in a century
It is a myth that sheās a political chameleon. She is and always has been a full-blooded free-market liberal, writes Mark Littlewood today.
When I hope so we shall see. But she was Libdim and a remainer! First things to do this week are:- reverse Sunakās manifesto ratting in full and make it clear they will never not on future manifesto promises to voters. Then scrap net zero, abolish the climate committee, ditch the ECHR, get fracking and mining, scrap HS2 entirely, give tax breaks for private health car and education, get real competition, stop the war on the self employed and landlords, stop blowing up power stations, stop renewable subsidesā¦
September 4, 2022
M.B.
Your first point, cutting 5% or 10% of your normal power usage won’t make a lot of difference if your normal bill goes up 500%
Yes, NO MORE SUBSIDIES for renewables.
Here we come to the nub of it, there is the immediate problem, how do we either reduce the cost of energy to normal(ish) levels, or how do we help out those that can’t eat, stay warm, or stay in business THIS WINTER. Nowhere in Sir J’s blog does he address this. IF the government is going to help it’s either by borrowing or money printing.(we STILL have a budget deficit) Which is it Sir J?
Even the police now plan for civil unrest over the energy cost emergency, WHY, because Joe Public can see that they are being forced to make an unconscionable fransfer of wealth from the least well-off to the most well-off. It’s time to get serious.
The longer term problem; we need a national energy policy, that demands self-sufficiency, and that we can afford.
September 4, 2022
Since we face limits to available supply that will be lower than normal demand the alternative to rationing by price is rationing by quota and blackout. Such rationing can produce lower prices if the remaining demand is less than the potential supply.
Rationing by price is not without its problems as we have already seen in the fiasco over fertiliser and CO2 manufacture. The threat of industrial shutdown is economically catastrophic. You can’t afford anything if the economy ceases to function, because you have no jobs and complete import dependence, and a currency that is worthless.
September 4, 2022
It rather crossed my mind that the scarcity and expense of energy couldn’t have come at a better time for those who intended to wean the masses away from such resources.
Coincidence, good fortune or a plan?
Will we see in the future cheaper energy from renewable sector or will the industry be hooked on subsidies and huge profits.
It seems those in the business of our natural resources have in the past been making very enviable profits, investing little back into infrastructure, storage etc. and passing on little of the benefit to the bill payer.
Time will tell I suppose and if things don’t change then they’ll stay the same especially all the while their is a captive population to fleece.
September 4, 2022
Correction ‘their’ should be ‘there’ typo error.
I thought I’d correct myself before some pedantic so and so does.
September 4, 2022
What is the point of having different and often very irrational spellings for words that sound the same anyway? Write, rite, right, their, there, ring, wring, rode, road – no confusion arises when they are pronounced the same! Then again what is the point of irrational spellings in general – like Ghost, Yacht, rough, though, through, trough, knight, night, knife. Why have a soft and hard C/K but not use them as such?
September 4, 2022
The argument is that, at least with homophones like ‘write/rite/right’, the particular word meanings are identified more quickly in written form if they have a distinct spelling.
People have been trying to come up with a rational English spelling system since the 16th century but have never succeeded. It’s partly to do with the traditionalist mindset of printers, and partly to do with the nature of the language itself – English has a much larger vocabulary than most European languages, so more words that happened to be pronounced the same.
September 4, 2022
Lifelogic
Ejucated people will no the diffrence and unejucated people wont.
(Doesn’t that look ugly to you ? Why debase ourselves for the thick and lazy ?)
September 4, 2022
Indeed to the last part.
For UK based subterranean reserves, or the land and sea we can place solar or wind farms on, as well as the wind itself, we do or can effectively own those sovereign entities. We’re therefore entering into processing contracts whereby oil, gas, windmill and other companies are processing our resources. It’s a bad time to do this, but we have every right to agree to cap in perpetuity their return on those reserves in return for a relatively benign contract that their returns won’t be taxed away to zilch. This shouldn’t affect their willingness to invest.
September 4, 2022
Companies will invest elsewhere where the returns are better. Attempts to run a socialist planned economy are a signal to disinvestment. See Venezuela.
September 4, 2022
a very strong signal.
September 4, 2022
@Mark; “See Venezuela.”
Well yes, if you only want to pick examples who suffer from western capitalist sanctions! But what about China, not a lot happens in that country unless it benefits their centrally planned economy and meets with the approval of the “Party”, and the western capitalist countries depend upon them . But there are other economies far closer to home that have at least a mixed economy, in fact many of original EEC six do, planned and shared resources etc. have always been at the heart of the EU, the EEC and before tham the ECSC.
September 5, 2022
Lots of billionaires in China. Not many in Venezuela.
Which bits of the UK economy are a rip roaring success? NHS, Railtrack?
September 4, 2022
@Mark B; The only people who like insulation are those who sell insulation, or solutions to the problems caused by over insulating/sealing up of buildings! The last thing anyone should be doing is sealing-up or insulating properties to the levels some are suggesting, that way lies damp, mould, properties need to breath.
September 4, 2022
+1
Bricklayers spend a long time perfecting the cavity wall.
September 4, 2022
If the war is the cause of the rising costs then any move towards peace talks/negotiations should be fully supported. Leapt upon with joy even. Why on earth not? ( I canāt think!)
Any tiny stirrings of a desire to end the war should be nurtured.
I hope that would be the case!
We are not, contrary to the obvious fantasy of some, living in a dystopian novel like ā¦.errr ā1984ā!
September 4, 2022
On my walk this morning I asked myself this question: which of these two issues is most important to me?
1. Whether Northern Ireland should remain part of the United Kingdom, or join with the Irish Republic.
2. Whether Crimea should remain part of Russia, or be rejoined with Ukraine.
I know what Volodymyr Zelensky thinks on 2., because he made his position very clear only last month:
https://tinyurl.com/4dw4wbeb
“Ukraine war must end with liberation of Crimea from Russia, says Zelensky”
and so forth, but are we going to carry on supporting him indefinitely to achieve that questionable ambition?
As for 1., I have always been clear that I am an Englishman living in England and I would not expect much or indeed any say in that decision if/when it is made, but I am not prepared to sit idly by while disloyal elements use our withdrawal from the EU as a specious excuse to push for the break up of the UK.
September 4, 2022
I believe the Truss woman made noises about pushing Russia out of Crimea not so long back.
Not sure if the likes of her, Johnson and others are putting ideas in Zelensky’s head or vice versa.
Either way it’s very worrying and I do hope Truss doesn’t have an ego inflation moment if she gets the No.10 slot.
I don’t hold out much hope of this country and its people being considered first when there’s a career on the world stage to be had by someone in politics though.
September 4, 2022
Denis, you have given me a little joy today when I read your comment. As an ex resident of Northern Ireland, I moved to Devon when Blairs proposal that a Republican terrorist should be the minister in charge of my children’s education. That was a step far too far which i would not tolerate . I live in hope that a British government will appear and support the British majority and repeal all the wrongs against Northern Ireland by the Yanks and traitorous left Labour politicians.
Please keep supporting we Brits!
September 4, 2022
Well, I do my best. Here is a little letter that I had printed in the Belfast News Letter last week:
“It is reported that in 2021 the Northern Ireland protocol forced over 10,000 firms to supply one million customs declarations to move goods from Great Britain into the province.
None of those declarations related to the flow of goods which could actually pose a risk to the EU Single Market, the exports across the open land border into the Irish Republic.
As repeatedly pointed out, any significant threat to the integrity of the EU Single Market could easily have been countered by a UK system of export controls over those goods.
Googling for “SPIRE export licences” will bring up information about the existing system already run by the Department for International Trade, which could easily be adapted.”
That’s:
https://www.spire.trade.gov.uk/spire/fox/espire/LOGIN/login
“Using SPIRE, you can apply for an export or trade licence for your activities and items if you require a licence for the wide range of “strategic” goods (such as security items, military goods, civilian products designed with a military use or purpose, firearms, police and paramilitary goods, radioactive sources and much more). You can also use SPIRE to make a Ministry of Defence Form 680 application, Private Venture security grading or Exhibition Clearance applications.”
And the same system could readily be extended to “All goods carried across the land border into the Irish Republic”.
September 4, 2022
+ one and the left Tories – Major, Cameron, May, Boris.
September 4, 2022
Appeasement doesn’t work. If you give in to Pootin in Ukraine, he will then carry on into Europe / doing other things that will cost the UK far more in the long-term. Pootin is a gangsta. You can’t do deals with gangstas. A strong, healthy capitalist economy depends on the Rule of Law here, and to a certain extent abroad where are national and economic interests are threatened, in the short and long-term, by a gangsta such as Pootin.
September 4, 2022
Ed M
Do you really think so ? (Putin marching through Europe ?)
The truth is that NATO and EU flags (followed by missile bases) have been the ones marching towards Putin’s border.
You now face poverty (no matter how well off you consider yourself) and our nation is on the verge of a Marxist takeover because the Tories are going to be utterly hated by 2024.
So we defeat Putin by becoming Communists ? Is that how it works ?
September 5, 2022
Do you realise how childish you sound?
September 5, 2022
Don’t you realise that I am mocking the daft, delusional world of Pootin – instead of people who take him far too seriously but in the wrong way.
Bit like soldiers and generals mocking Hitler and the Nazis during WW2 but still taking them seriously as a foe.
I think you got your comment back to front. You’re taking yourself and Pootin too seriously in the wrong way whilst perhaps not taking just how dangerous he is in particular if we appease him like Chamberlain to Hitler in WW2.
September 5, 2022
Lastly, if Parliament hadn’t taken Blair so seriously (and there had been more mockery / satire – which I am not very good at, I admit), then we wouldn’t have got involved in the daft war in Iraq and Afghanistan. Blair was daft and delusional on this. And Parliament was morally ‘childish’ for being duped by him. Two wars I was vehemently opposed to (and not for pacifist reasons) at the time – and still, even more in hindsight. So please be careful about making sweeping statements when someone tries to use mockery / satire.
September 6, 2022
Lastly, Pootin undermines the ultimate meaning of what it means to be a Conservative: FREEDOM.
There is no democracy in Russia. No real Parliament. No real Rule of Law. It’s people are not free. Pootin isn’t just a criminal but a ruthless, freedom-destroying dictator. Without him, Russia would have a much more powerful economy. And the UK would be the wealthier for it, our economy that bit stronger because we had a strong Russian economy to trade with. And Pootin has always hated the UK (and The West). And now he is just creating more instability. More and more. That’s all he knows. You can’t appease this man. Not just for moral reasons. But for practical / political ones as well.
September 4, 2022
The war is not the cause of this problem, just a symptom of the fact that we (the West) blindly rushed to cut our fossil fuel supplies without having any rational transition plan. Putin simply saw our weakness and exploited it. Trump may not be my ideal US presisdent but he told the UN Assembly in September 2018 that the Germans would regret their reliance on Russian gas and the German delegation openly laughed at him. Well they are not laughing now.
Unfortunately, neither are we, because we were nearly as short sighted in our rush to net-zero. Our Government liked to posture at COP events about how well the UK was doing, when all that was really going on was that we were exporting our emmissions elsewhere and importing our “net-zero” energy and finished goods.
Want to save the World? Then start having everything carbon audited and be honest about it. That environmentally friendly EV cost a lot in more ‘carbon’ to manufacture than an ICE vehicle but how many know that? Those cheap Chinese goods were quite likely to be made in factories powered by coal, so let’s start counting their carbon footprint. How much carbon was emited in the manufacture of that iPhone?
If you want ot be honest about our national ‘carbon’ footprint, let’s measure the carbon footprint of our imports. Rather like VAT, the carbon ‘cost’ should be owned by the end user, not the producer. Then we might see some honesty about what is environmentally friendly – and what is not.
September 4, 2022
‘Trump may not be my ideal US presisdent but he told the UN Assembly in September 2018 that the Germans would regret their reliance on Russian gas and the German delegation openly laughed at him. ‘ – great comment (and from someone – me – always criticising Trump).
September 4, 2022
I think most people are concerned with pollution and environmental destruction that carbon or nitrogen cost, but I agree that there needs to be more transparency about the true cost of so many ‘green’ initiatives that are anything but.
September 4, 2022
Quite right Ian. Everything that’s made abroad that could have been made or produced here should be counted.
September 4, 2022
The war and other issues IS the main problem for the eye-watering hike in energy prices.
However, long-term, fuel prices should go down. But not go down as much as one or two years ago. Because the green agenda has put an end to that. Perhaps if we could wean ourselves away from fossil fuels a bit slower then things would be more palatable to people in general.
But what we don’t want to do is conflate the eye-watering hike in energy prices with the green agenda (although partly to blame). When the main reason is Pootin and other factors. Need to stand up to Pootin and let him defeat himself so that we can then please get back to normal as quickly as possible but we won’t if we give him the oxygen to keep going and getting more and more powerful. He seems to hate the UK and is a gangsta and you can’t do deals with gangstas who appear to hate the UK.
September 4, 2022
The energy shortage in the UK is due to Net Zero.
Putin hates us because Boris made us his biggest enemy outside of Ukraine.
Putin is the convenient bogeyman to make people such as yourself blame him instead of our leaders which made such bad decisions that we’ve wrecked ourselves.
September 4, 2022
Pootin isn’t the only reason for this crisis but one of them. Other reasons are lack of storage in UK, Covid and more.
Yes, Net Zero IS a contributing factor. So you hate Net Zero. I get it. But let’s deal with this immediate energy crisis first (and Pootin). And then let’s (the Tory party) work on a plan to deal with Net Zero but not by grossly exaggerating its influence on the current energy crisis. Just doesn’t help. The opposite. People will take opposition to Net Zero less seriously.
September 4, 2022
Pootin has always hated the UK. The guy’s paranoid because he’s been in power for 20 years without any checks and balances on his power and other reasons. So paranoia has taken over and he sees enemies everywhere and has done so for years but in particular recent years.
September 5, 2022
The energy shortage in the UK is also due to the way privatisation works (or doesn’t in our case.)
Putin is a convenient fall guy for the Great Reckoning that is here.
War in Ukraine (defence of OUR liberty – according to Ed M), lockdown (to save us from disease – but really about further debt inflation to counter Credit Crunch Mk 2) and Greenism (to save us from climate change – but really about our inevitable fall in living standards caused by the Credit Crunches)
So all for our own good, you see how it works ???
But really – this is about gross Government incompetence and neglect over the past three decades. They are using Putin, Covid and Greenism (and quangos) to absolve themselves of the implosion of Western economies which they caused and some of us told them that they would cause.
Puh-lease don’t tell me that Putin was any direct threat to my freedom. Not even remotely so. His ground forces and knackered and incompetent and clearly not battle fit. Do you read military blogs like I do ?
However. The Putin cut of Nord Stream 1 is certainly destabilising for the governments of Europe whereas the Putin army was no threat whatsoever to Nato nor EU members.
Europe is now in a state of political and economic instability. The threat was never military. It was a big mistake to think it ever was.
The boomerang of support for Ukraine and the consequences of our sanctions. You do realise that China is now selling Russian LNG to the EU @4x NS1 price ?
So on that score military support has failed and Putin is winning against us, if not against Ukrainian fighters themselves.
September 7, 2022
‘Putin simply saw our weakness and exploited it.’
– another reason why you can’t rely on other countries for one’s energy. There’s too much political instability (as well as price hikes) out there. Countries such as Russia, Iraq, Saudi Arabia, Iran, Nigeria, Kazakhstan, Algeria and so on.
Our country / economy has to become 100% self-sufficient in energy through nuclear, fracking and renewables. Still big problem with technology in renewables but getting better all the time. And this is a real priority over HS2 for example. Renewables also goes with electric cars which appears to be the future – for one reason, electric cars produce less direct physical pollution AND noise pollution to our cities. And there is the consumer demand for this change whether politicians like this or not whether the consumers are right or not.
We’ve got to be objective and practical about this.
September 4, 2022
I fully agree. I’ve asked myself over and over why there has been very little attempt to try something, anything other than just the continuation of more bloodshed.
I’ve actually felt physically sick at the sight of Johnson getting his kicks out there in Ukraine.
There is also an immense amount of hypocrisy in this cry of freedom and how Russia will crush Ukraine’s culture and therefore its identity and very essence.
A short and brutal attack on a people’s culture/identity isn’t too dissimilar to the long slow boiling the frog method Western culture has been undergoing.
September 4, 2022
+1000
I couldn’t believe that I’d have more contempt for a politician than Tony Blair but Boris has managed it.
September 4, 2022
There were rumours of moves towards rapprochements as far back as February 2022.
Obviously some quarters did not want this.
Probably there were little scoot zoomy visits to Ukraine to get the message across?
Message beingā¦KEEP THE WAR GOING!
Followed closely by Net Zero or bust.
September 4, 2022
Could not Russian supply be vastly increased at once by introducing Mr. Putin to some British remoaners who could explain to him how all powerful is the E.U. and how it must never be defied?
September 4, 2022
+many
It is all a bit Brer Rabbit and the Briar Patch.
Except that the rabbit had a cunning planā¦that worked!
But in our case itās all about forcibly imposing Net Zeroā¦ innit.
I donāt know why they could not have been upfront about it.
āThis is what we intend to do after the next electionā
Ohā¦ā¦.!! š¤
September 4, 2022
That made me laugh š
September 4, 2022
Price controls and subsidies are mere side issues. The real issue and indeed the blame for what we are seeing lies squarely with the governing class. What we are seeing is deliberate not inadvertent. What we are seeing is an ideological assault by government on the manner and way we have lived our lives for generations.
I have no doubt that collectivist politics has taken control of many western governments. It is also telling that Tory MPs never, ever publicly condemn Socialism, Marxism, Maoism and every other collectivist ideology that seeks to usurp the living, breathing individual. Even the Tory party is captured by the convenience of Socialism
The supply of energy, of food and of water has become political and that should worry us all. It reeks of Social engineering.
As an aside. I have been watching the US this week being dragged into a place that I never thought I would see in my lifetime. It is genuinely concerning for those in the UK to see such language being used. What happens in the US tends to find its way over to our beloved nation, the UK. The Left are out of control. Is Labour heading in the same direction?
September 4, 2022
+Agree 100%
And the govt. even allowed its attack eco loon dogs a safe passage into Parliament.
To show its solidarity with their views?
Which MP, I wonder, held a cardboard straw and can of Coke to the parched lips of those superglued to the Speakerās Chair?
I expect they were all fighting for the privilege!
September 4, 2022
In conducting their kangaroo court against the PM they are already aping the Democrats. In fact the whole of Smeargate was reminiscent of Russiagate.
September 4, 2022
kangaroo court – – an unofficial court held by a group of people in order to try someone regarded, especially without good evidence, as guilty of a crime or misdemeanour.
That good evidence was apparent and witnessed and confessed to by many, indeed Police charged them.
So you are wrong in asserting ‘justice’ was brought by a kangaroo court, it was brought to avoid the full and visible prosecution in valid courts!
September 4, 2022
+1
September 4, 2022
A huge frustration to me has always been why the so called Conservatives have never gone on the attack against the Marxists (or whatever label you wish to give them) in our midst.
They now run every institution. Why are true Conservative voices silenced with little a whimper from establishment voices. The BBC has gone from strength to strength in its oppressiveness to those who dissent and is now blatant in its prime causes. They could have been brought to heel years ago.
Excellent book by a former MP who had also been in the Intelligence services shows how it was all done and we see it even now with various charities and ‘movements’ all with a shop front of doing good.
This was written in the early 1950’s and not sure it’s still in print ‘Pattern for Conquest’
Godfrey Bloom ‘whatever happened to the Unions’ on his You tube channel also touches on the subject.
September 4, 2022
It’s not the left out of control. Here’s a perfectly reasoned article from one of them on what appears to be happening:
https://leftlockdownsceptics.com/2022/09/winter-and-beyond-part-ii-the-pivot-to-financial-armageddon/
suggesting to me that left/right is now irrelevant and it’s a top-down/bottom-up debate. On various occasions it tended to be the Labour ‘left’ and Tory ‘right’ who voted against further lockdown restrictions.
September 4, 2022
Secretly the government is pleased with what’s happening.
Demand reduced, industry shut down. Good lord the Business Extinction and Import Substitution department must think all its Christmases have come at once.
The only rogue is petrol, this is reducing in price making it more expensive to charge an EV.
Never mind, I’m sure a large increase in fuel duty will sort that out.
Meanwhile all the pubs close, you got the smokers now the drinkers.
HoC bars still subsidised so no problem there.
WEF must be ecstatic.
September 4, 2022
WEF are thinking that all went well, better than could be expected.
September 4, 2022
UN (WEF) Key Performance Indicator KPI ā box ticked
Big bonus to all the UN (WEF) team….mission complete
September 4, 2022
I agree with the broad thrust of your argument, there is only a limited ammount of money available to use on thie problem. The question is; āWho do you allow to control that money, the government or the taxpayerā?
If there is to be any regulatory control, let it be over the āstandard daily chargeā.
We Consumers can reduce our demand if we wish but we will not be helped if the suppliers are allowed to increase that charge willy nilly.
September 4, 2022
Reducing demand? Here are some other demand-reducing things that are likely to happen but you don’t mention, Sir John. Some manufacturing will close because energy bills are too high. Venues such as pubs and restaurants will close during the winter for the same reason and because footfall is lower then. Their staff will be unemployed for months, then just as have seen post-lockdowns, some will no longer be available once those venues try to open, so it’ll be permanent closure. The consequences of your government’s policies, leading to nearly the highest retail energy price rises in Europe, will then be obvious in our high streets, shopping malls and industrial areas. Germany is reportedly preparing the Bundeswehr to deal with civil unrest and a state of emergency. Perhaps that’s what our military are doing too, unreportedly. You mention street lighting cuts. Well, it won’t be needed if there’s a curfew.
September 4, 2022
yep…. tumbleweed will be blowing in the cold deserted high streets formerly noisy and busy.
September 4, 2022
I thought that a lot of our energy companies are foreign owned anyway?
60% of our gas etc comes from abroad.
And profits on energy were rising by near 50% as recently as 2021.
Plus looking back at old newspapers there have been plenty of warnings regarding rising energy prices.
And what is moreā¦the storage problems with batteries have always been knownā¦since the days of milk floatsā¦and have they solved them? NO!
September 4, 2022
Thatās why you donāt see electric milk floats anymore nor many electric fork liftsā¦you need two of everything to ensure and maintain effectiveness; and the cost of replacement batteries is onerous
September 4, 2022
+many
Lol.
Were there ever such trucks?
September 4, 2022
When it comes to essential services, if demand is cut, then the suppliers will put up their prices to compensate for the lack of sales and ensure they still obtain good profits. This can only be done with essentials, as people would do without unaffordable luxuries, but we cannot avoid those essentials, can we! We are a captive market!
September 4, 2022
If ever there were a party devoted to “Something must be done – this is something so it must be done” it is the Tories.
The prize example being their utterly catastrophic referendum on the European Union.
September 4, 2022
It is a fine example of something must be done, but sadly only half done! May, Johnson guilty as charged.
September 4, 2022
The referendum was politics, old lad. It won them an election.
September 4, 2022
Why price controls and windfall taxes do not work.
Of course they do not work but then net zero is economic and environmental insanity too. Tax levels at the currently absurdly high level do not work either, a state monopoly NHS hardly works either – it kill hundreds of thousands and fails millionsā¦ the same can be said for so much of the UK state sector.
The main aim of government department is to increase their budgets and power base, expand their areas of activities, not to deliver any useful service to the public.
September 4, 2022
In government buildings get Mr and Mrs Mop to whizz round the offices close to the end of the working day and at night turn off all the lights and reduce the heating drastically. It’s our money after all.
September 4, 2022
Sir John
I agree that price controls are not beneficial in the longer run; although they could act as a short-term fix to get through an immediate difficulty whilst medium-longer term plans are implemented. People will naturally reduce their consumption of energy this coming winter in order to try and reduce the financial clobbering they will be getting thanks to the Westminster/Whitehall Uni-Party’s short-sighted, irresponsible and frankly lunatic Net Zero policy.
Since I follow events closely, I’ve taken steps to prepare for the winter which will keep my gas/electricity bill consumption as low as possible whilst still living in a reasonably warm home. That’s the part of the bill which is under my control, so I’ve done what I can.
Perhaps Sir John could advise us how we can reduce the standing charge which was quietly doubled a few months ago – to bail out the energy supply companies which failed because their business model was flawed? Another case of “private the profits and socialise the costs/failures” from this Not-a-Conservative-Party.
September 4, 2022
+many
Horrible shoddy electrical goods, loans, huge beastly cars designed to conform with batty child seat legislation, āsustainablyā concreted front gardens(!!).
All foisted on us.
Grow veg. Walk. Off grid solutions to washing etc. Candles. Lamps. Wood burners.
Some have told energy companies to take back meters.
They can bā¦ well shove their rotten energy.
September 4, 2022
The energy supply companies weren’t bailed out. It was the customer who had a credit with them who should have acted sooner to prevent the energy supply companies inflating their direct debit payments.
Since the demise of our energy supply company we were with, we have now been transferred by Ofgem to an alternative. We pay 3 monthly according to meter readings and are in no hurry to go back to DD.
September 4, 2022
I’m not calling for permanent price control, I’m calling for temporary government intervention to protect energy consumers in the UK from the worst effects of the massive increases in the wholesale prices of energy. Not just UK consumers who pay high taxes who could have some back, or UK consumers who are too poor to pay much tax who could get a handout, and not just deserving parsimonious UK consumers or vulnerable large scale UK consumers, but all UK consumers in general across the border. The sooner we can end the war in Ukraine the sooner Russia might agree to kindly send Europe the gas supplies for which it has contracted and the sooner we can drop our sanctions on Russian oil, and then we could look again at whether it was still necessary to cushion UK consumers from global price rises with other causes. And that should be UK consumers in general, once again, not a complicated and incomprehensible system directed at certain groups but a simple subsidy system to enable retail energy suppliers to sell the energy at below cost.
reply Mrs May introduced temporary price controls and they are still with us and they have not worked.
September 4, 2022
You can’t do deals with a gangsta like Pootin outside the Rule of Law. He’s a megalomaniac addicted to power and making mischief for others like a cocaine addict.
Again, ‘deals’ are only for people within the Rule of Law. Not criminals or cocaine addicts or ganstas addicted to power – and outside the Rule of Law – and living to make trouble for people others like Pootin.
September 4, 2022
So the war will go on forever.
September 4, 2022
If you mean this:
https://www.global-counsel.com/insights/blog/theresa-mays-energy-price-cap-more-about-who-how
then that is precisely the kind of price control system that will not be effective under current circumstances.
As I wrote:
“And that should be UK consumers in general … not a complicated and incomprehensible system directed at certain groups but a simple subsidy system to enable retail energy suppliers to sell the energy at below cost.”
September 4, 2022
The worst-case scenario which we may have to face is that even after Ukraine sues for peace, Russia has no interest in resuming oil and gas shipments as before. Why should it, when more reliable customers that don’t spit in Russians’ face can be found elsewhere? India and China will then continue with their very lucrative policy of buying oil cheaply from Russia and reselling it to the West at a big markup, as they are doing now. And the Truss government will be desperately asking Norway for natural gas, but is told sorry, none available.
We then end up with a war-ravaged Ukraine, sacrificed for military-industrial profits, and a Europe with many millions newly plunged into poverty, living in the wreckage of what were once prosperous economies, and maybe even civil unrest in the streets. I can’t imagine who would have wanted this outcome.
I wanted to think that the colossal errors made by van der Leyen and Johnson could just be reversed, but I’m beginning to doubt they can be. It’s a sombre prospect, I fear.
September 5, 2022
It’s not that easy or quick to set up gas supplies for Russia. And there is only so much demand for oil. And Russia’s heavy dependance on selling oil for its economy requires maximum prices / profits.
We can’t rely on Russian energy. Our economy requires another solution. It is possible and will require some financial sacrifice for a few years (but not as much as prices now) but worth it long-term. So oil and gas from other countries. Nuclear. Fracking. And Renewables (the tech is getting better and better – but not to rush this). To rely on Russia right now is like relying on the mafia for a basic part of our economy.
September 5, 2022
That might have sounded OK in February, Ed, but not now. My point was that energy markets are being reconfigured permanently. We no longer have Russia to ‘rely on’ anyway, so your last point is way out of date: sanctions unleashed a dynamic that we can longer stop. People like you who are keen on renewables won’t mind, but I do.
September 5, 2022
The effect of the OFGEM cap has been to allow BEIS and OFGEM to ignore the problems that were being signalled by wholesale prices over a year ago, and even two winters ago when we saw the first EMN capacity shortage notices given out. There was no understanding that the cap was crucifying energy retailers, just complacency and an attitude that it was OK because the cap was insulating consumers from higher prices. Instead of bolstering dispatchable capacity they closed and destroyed it. Instead of securing and developing fuel supply they prevented investment. Are they on our side?
September 4, 2022
So the energy companies won’t invest if we levy windfall taxes. How about the energy companies won’t invest if we tell them their investments are on notice because of the net zero agenda?
I’m quite happy for the energy companies to make a profit. What I’m not happy about is them making super profits from our gas the UK government has sold to them cheap, which after all don’t go into investment but into shareholder dividends.
So don’t tax the energy companies, so who do you tax to prevent old people dying of hyperthermia? Whoever is taxed will have their investment curtailed, so why not levy it on the companies who are profiteering?
September 4, 2022
“How about the energy companies wonāt invest if we tell them their investments are on notice because of the net zero agenda?”
Aren’t we already suffering from that? (Think how high the prices are in those three summer months at a seaside resort.)
September 4, 2022
Exactly. I don’t call paying shareholders extraordinary dividends, not actually earned investing. I don’t call share buybacks to increase share price investing. What happens if we let them continually rip off the public causing the UK to subsidise bill payers to the point of bankrupting the country or exhausting our borrowing possibilities and then we find they have not invested anyway. What are you going to do about that Sir J? Who says the wealthy are going to cut their living temperatures or cut down on cooking etc. Why should they if they can afford to keep their lifestyle going? Tax cuts do not help the poor much. Buy a Ferrari and you save serious money. Buy some food at high prices and you suffer. This is a dream world. Let prices rip and it will solve shortages he says. This is classical Tory featherbedding of rich firms and letting the devil take the hindmost.
September 4, 2022
If you want to increase the inequality between the top 20% and the bottom 20% of UK households, then tax cuts are the best way to do it. Keep in mind that the vast majority of Conservative Party donors and hirers of MPs as lobbyists, are in the top 20%. Keep in mind also tax cuts have to be balanced by spending cuts which affect the bottom 20% far far more than the top 20%.
Continental, particularly Scandinavian States, do the opposite; with the continuing cooperation of their voters. Higher taxes are used to reduce inequality between the top and the bottom households. Hence for instance; the bottom 20% of French households have 20 – 25% more spending power than the equivalent GB households. Which the UK voters continue to be perfectly happy with.
September 5, 2022
How does increasing the point at which you start to pay tax increase inequality?
How does reducing the basic rate of tax not improve the amount of money people have left to spend and positively affect the poorest the most?
September 5, 2022
If you increase the point where you start to pay tax by Ā£1, then that is Ā£1 you don’t pay tax on at 20%. If your income is over 50,270 it will be taxed at 40%. Income over Ā£100,000 that’s Ā£1 you won’t pay tax on at 45%. It is such an advantage for high earners at Ā£125,000 you lose all the personal allowance. That increases inequality.
September 5, 2022
Well dodged acorn.
An increase in take home pay for the poorest tax payers of a few pounds or more, is a very useful extra sum in their budget.
And helps the many.
The top earners already pay a disproportionate amount of the total of income tax.
Your tax the rich til the pips squeak envy policy has been tried before in the UK and it was a failure.
September 5, 2022
Who are you going to tax? Chinese oil and gas companies making a fortune from reselling LNG they signed up for on what now looks like cheap terms? Where do you try to tax Orsted’s Hornsea 2 wind farm, which we know has been effectively selling at market prices since it started selling power last December because it has yet to commence its CFD, half of which is now owned by European pension funds, which have purchase agreements that go through an undisclosed chain of contracts before the power is finally acquired by energy retailers?
September 4, 2022
Crematoria have to use a lot of gas!
September 4, 2022
It seems that the West is in potentially a stronger position than Pootin (but don’t want to get complacent). There is only so much oil China and India can buy from Russia. And it takes a long time to set up gas pipe lines from Russia to other parts of the world. The West has confiscated $300 billion of Pootin’s war chest. Russia’s manufacturing sector is in a shambolic state (because of over-dependence on energy sector). Pootin made a catastrophic strategic mistake going into Ukraine. He never imagined the Ukrainians would resist like they have or that the West wouldn’t capitulate either. But he’s stuck. Because if he pulls out of Ukraine then that will make him look ‘weak’ and he would feel personally threatened by that. So he’s stuck fighting the wrong war and desperately trying to keep things together in order to try and somehow get some kudos back. The man is NOT in control at the moment of his destiny. He is struggling. To capitulate to Pootin would be wrong at so many levels, not just morally / the rule of law but also economically in the long-term / geo-politically. In fact, at the end of the day, morality / the rule of law isn’t just about morality for moral-sake but also because the world just plunge into chaos without it (and the rule of law), and with it our economy.
September 4, 2022
That fossil fuel that is being sold to China Russia is being re-packaged and sold back to those that are sanctioning Russian gas/oil. This is being allowed to happen. Its a clear arbitrage. This will collapse as western economies deflate and so will exporter deflate.
Stock up on tinned high calorie food that requires minimal heating.
September 5, 2022
The re-packaging (or the effect of) has been exaggerated. In the overall sense that Western Sanctions are impacting on Russia. Marching into Ukraine was a foolish thing to do. Pootin now knows it. Don’t give him a Get-out-of-jail appeasement card over it. Not just because he’s a mobster but because he will just go on haranguing the West in anyway he can. Because he’s a deluded, loopy megalomaniac (not 100% but close to).
September 4, 2022
Thanks for your update, Ed, from where you see things. Meanwhile in the real world, food banks are facing unprecedented demand, 12 million are forecast to be in fuel poverty soon, and our small and medium size businesses, which employ 60% of the employment in the private sector, wonder how they can survive the winter. So what will happen to those jobs, goodness knows.
Elsewhere in the real world, referendums are due this month in the regions of Ukraine captured by Russian forces, to see if they wish to remain with Ukraine or become independent. That was why, to stop them happening, Zelensky launched his much-heralded Kherson offensive, which has now got stuck, after heavy Ukrainian casualties. So I guess the referendums will go ahead. For me, it’s more important to let people on the ground decide what they want for their future, than for us to wag our finger and pronounce on what’s moral and what isn’t.
Our politicians were elected to work for the benefit of the people of Britain, not some other country or countries. It is time they remembered that. I hope that our government and others will now allow some stability back to world markets, rather than constantly ratcheting up international tension and conflict. Forcing British people to choose between heating or eating, which is what existing policies have led to, is not very moral in my view.
September 4, 2022
While I agree that Wind-Fall taxes donāt work – You fail to connect the dots from the current policies of ānet-zeroā and its effect upon the energy markets and the price riseā¦I am surprised that ānet-zeroā and even āsubsidyā was omitted from todays analysis
September 4, 2022
When I was a youngster people had open fires and ranges where I lived they cooked with use of coal and peat, wood etc – this was also the means by which they kept their homes warm. Lighting for dark evenings was by oil lamp and candles – where did we go wrong?
September 4, 2022
I’m old enough to remember that, but as a born and bred Londoner, am also old enough to remember the smog that was the result – bus conductors walking in front of their buses with torches to show the driver the way, extending your arm and not being able to see your hand. And having a fairly detrimental effect on the lungs!
September 4, 2022
Indeed. The coal nutters on here think itās a clean fuel. Every cityās buildings were black in the 1950s. Jet washing them was an industry of its own in the 1970s when the Clean Air act of 1956?really began to have an effect. We went to school in the 1950s with a handkerchief over our nose and mouth. It was yellow by the time we got yo school.
September 6, 2022
Smokeless coal is now available.
And has to be used in smokeless zones by law.
September 4, 2022
Why price controls and windfall taxes do not work – not only do they not work they do massive harm, wreck markets, lead to shortages and rationing, deter investments and wreak general economic havoc.
We currently have such rigged markets in the NHS, banking deposit protection, overdraft interest rates, longterm care, energy, CO2 emissions, social care, transport, the legal system, housingā¦
You rarely see the damage done by many government actions the jobs not created, the damage to productivity, investments not made. The deterred investments just quietly do not happen. Osborneās moronic taxation of landlords on āprofitsā not even made. This has pushed thousands out of the industry leading to a huge shortage of properties to rent and thus job mobility. The numerous attacks on the self employed and making tax digital has damaged productivity and pushed many to give up. The CO2 religion has deterred so many sensible investment in energy and this area. The OTT building controls has made many property developments unprofitable so deferred or abandoned. The threat of rent controls (theft) like windfall taxes likewise.
If manifesto ratter, tax to death, net zero enthusiast, globalist dope Sunak does, very unexpectedly, actually win I will assume the next election is lost and sell all businesses and properties I still hold in the UK asap.
September 4, 2022
Latest interference, LL: new legislation compelling shops to put the treats away from the till. So our local shop is being turned upside down and rearranged. No-one knows where anything is and we have lost a lot of healthy things we used to buy. What a waste of time and resources all round. The children themselves are saying they can exert as much pressure at the back of the shop as at the front.
September 4, 2022
Plus we all have to pay for ever more shoplifting as the police do nothing thus encouraging more and more of it – as with most real crimes.
September 4, 2022
I would describe myself as an ultra-capitalist and a believer in minimalist government because government is inherently inefficient as it does not incentivise and usually does not even encourage efficiency from its employees.
However Capitalism does have some limitations. For a start it only caters for those who have or can acquire money. So government has to give some money to others such as the unemployed. It also necessitates some legislative restraint that for instance a factory cannot take the cheapest option of throwing all its waste products into the local river. Another weakness is capitalism may fail under extreme pressure such as the fuel prices crisis. If this had happened to say apples most people would eat something else instead, maybe pears or oranges. However this is not practicable with electricity. Furthermore we live in a democracy and income differentials (i.e. incentive) between those in work and and those not in work need to be maintained. Granted nationalisation would make matters worse and to work at all businesses, including in electricity and gas, need to make a profit. Thus a government financed price subsidy pending reduced usage and extra supply normalising the market price (paid for by downsizing the public sector) is the least bad option along with forcing those extracting oil or gas in British land or waters into supplying Britain for just a small profit, not a massive scarcity profit.
September 4, 2022
+10
September 4, 2022
Pootin (who is beatable) is a great example why we in the UK need 100% our own energy – and not be at the mercy at gangsters, abroad, like Pootin or price hikes from abroad for our fuel (and the effect of this on our economy). Pootin is a great wake-up call. We’re in a strong position (without being complacent) of seeing Pootin defeating himself (sooner rather than later hopefully). And then we need to focus on weening ourselves off fossil fuels from abroad. Focusing on nuclear, UK fracking and Renewables (the technology is getting better and better – just not quite there at the moment).
September 4, 2022
Putin is a convenient bogeyman. This is all driven from within.
September 4, 2022
Costs can always be cut, economies found and made. I have always been thrifty perhaps too much; it will be difficult to be more so but I have not wasted money, as many others may have.
The main issue in my view however is to urgently increase domestic extract of gas oil and coal. Licences must only be given to home owned businesses and can only be owned by home owned businesses and what they and existing businesses extract must be sold to UK users on special terms.
We have given away far too many of our assets to foreign interests in all manner of ways. This must stop. I note that the latest windfarm on the North Sea is foreign owned and is laying down the law to us. Well done Boris, another big brag of yours working against us.
September 4, 2022
+ many – no other civilised country is so foolish as to allow foreign control of essential UK services.
ps. Macron hasn’t threatened to turn off our electricity lately, but I am sure the help we have provided the EU will result in no appreciation whatsoever, and the threats will start again at some time in the future.
September 5, 2022
That’s because we have been keeping the lights on in France. As winter draws in we will no longer be able to do that unless it is windy. Then we will be arguing over who gets the blackouts.
September 5, 2022
Foreign ownership of our assets is a direct consequence of policies that have killed off so much of our industry, leaving us dependent on imports and not making enough for export. The resulting chronic trade deficit has to be financed somehow. International borrowing soon leads to currency depreciation. To avoid it, we have sold off and mortgaged our assets to foreign interests. We are starting to run out of things to sell.
September 4, 2022
“The fossil fuel industry benefits from subsidies of $11m every minute, according to analysis by the International Monetary Fund. The IMF found the production and burning of coal, oil and gas was subsidised by $5.9tn in 2020” (Guardian)
The fossil fuel industry has become expert at “Greenwashing” their business. Particularly Carbon Capture Utilisation and Storage. These plants have captured a small percentage of the CO2 they were supposed to achieve; but, 100% of the government grants, politicians were dumb enough to give them.
But, the CO2 they do capture is injected back into old oil wells to increase the recovery from those wells, by a process called “Polymer Flood”. So full circle when the extra oil from those wells is burnt, it ends up producing more CO2 than it captured originally. Clever yes? “The dirty “Net Zero” carbon myth (that everyone believes)”
September 5, 2022
Those figures in your opening paragraph acorn are nonsense and use theoretical costs of pollution and the fact most nations don’t put purchase taxes on fuel eg VAT in the UK to help produce that figure.
The reality is governments get huge tax revenues from producers of petrol and diesel.
September 5, 2022
BP Revenue: $164.2 billion (2021) Shell Revenue: $261.5 billion (2021).
“Total government revenues from UK Oil and Gas production were Ā£1.4 billion in the tax year 2021 to 2022, compared to Ā£0.3 billion in the previous year, an increase of Ā£1.1 billion”
“Statistics of government revenues from UK oil and gas production July 2022 Updated 20 July 2022”
Alas, the government did make Ā£26 billion plus VAT from motorists at petrol stations.
September 5, 2022
Another strange reply which doesn’t address the points I and others raised to your very odd report by the IMF
PS
You are conflating sales revenues and tax revenues acorn.
September 5, 2022
According to the IMF your income is heavily subsidised because you aren’t taxed on all your income including your personal allowance at the highest marginal rate. Their analysis it utterly bonkers, and ignores the facts that oil and gas is the world’s biggest taxpayer. Subsidies are few and far between, mainly confined to rich oil producers offering pump prices below cost, and subsidised kerosene supply for the poor in a few countries.
September 4, 2022
Iāve never understood the price cap. Seems like socialism and therefor a failure
September 4, 2022
A price cap on the sale of Russian oil exports. Roll those weary eyes. This is a massively bullish development for the oil price as we will come to learn. The EU and the ignorant in Washington are docile, myopic and utterly out of their depth.One would assume John rejects this silliness
I see Biden’s created 10 billion jobs since he morphed into the POTUS
September 4, 2022
We’ve a short-ish squeeze on gas & when electric KWH goes up x7 fold (700%), as in case of businesses, either they get ‘adequate’ help or they close, it’s a binary choice for all governments affected – i.e. europe. Their voters will need help too, as had to happen because of lockdowns. So it’s another bailout or tax cuts however you wish to phrase it.
Whether the new PM has the bottle to frack with v short lead times – let’s see, it would bring us into balance & with some decent long term energy contracts & some solid exporting to EU would make a pile for the Exchequer whilst we can afford to keep warm again… Ditto the nuclear rollout which will be a decade on before becoming really effective. As some have said, there appears to be dark forces are stopping all this, so the new PM has to drive it, flush out the blockers, still has a sizable HoC majority. If not…. we’re just as stuck as the EU countries are, when there is absolutely NO need.
September 4, 2022
Energy prices are high because there is too little supply. European gas wholesale prices are 3x higher than USA gas wholesale prices. Guess why. Remember that also when people say there is a world market in gas which means thereās a world price. There isnāt. Gas is very difficult and costly to export.
September 5, 2022
I haveva chart of prices in $/MMBtu that shows the recent peak for UK NBP Gas at over $100 while US Henry Hub was just $9.
September 4, 2022
Do the Downing St flats have separate gas and electric meters or is the supply plumbed into the general building and is there a plan to alter the whole building to air source heat pumps and if not, why not?
September 4, 2022
I am not sure about Downing Street, but I believe Whitehall has a Combined Heat and Power unit(s). So the CS Mandarins will be nice and warm this winter.
September 4, 2022
The CAGW/Net Zero insurgents have deliberately cut back on the availability of cheap fossil fuels by curbing oil and gas exploration in the North Sea and banning fracking and coal mining and thus causing energy prices to dramatically increase.
Not because they want to reduce CO2 emissions using renewables but to force through the electrification of heating and transport because expensive and intermittent energy will enable the controlling power to lie with those in control of the smart meters.
Expensive energy will also make Net Zero easier to achieve through reduced energy consumption and raise the income from electricity taxes.
Unless Net Zero is cancelled high energy prices will be permanent.
September 4, 2022
Exactly !
September 4, 2022
Expect a big increase in people burning wood from a range of unofficial sources, thus damage to forests and nature reserves and a big hike in CO2 and pollutants into our atmosphere. Net Zero cannot be achieved without massively disadvantaging the bulk of the population, and we won’t accept it meekly. Care to rethink your energy policy?
September 4, 2022
Cancel net-zero and have an energy policy based on fossil fuels…..like India & China, and almost every country in South America, Africa and the Middle East
September 4, 2022
I have noticed that a lot of YT vids appearing in my suggestions are for wood burning fires. It seems people are already thinking well ahead.
And guess who also was thinking a head :
It is a government website Sir John
https://www.gov.uk/government/news/restrictions-on-sale-of-coal-and-wet-wood-for-home-burning-begin
September 4, 2022
Watching Sophy Ridge on Sunday I’m sure that at this point:
https://youtu.be/EqH5Wku6IaY?t=1538
David Davis referred to “backing off from Ukraine”, but maybe he didn’t mean what I might hope he meant.
September 4, 2022
It is not in the interest of private companies to provide surplus. They can make huge profit in times of shortages.
There’s the problem.
September 4, 2022
Sir John
Your party needs to tell the truth. That they see this as a dramatic and permanent fall in living standards for our own good – either climatic or economic (a great reckoning) or both.
If you continue to pretend this is curable then the unions will run rings around you.
The cuts and hardships must be felt by all.
Had we known the payback of lockdown and that it would necessitate killing by hypothermia those we saved from Covid…
September 4, 2022
Perhaps now the Conservative leadership election campaign has ended is the time to review. It is practically certain Liz Truss will win not because she is any good but primarily because she was the only one of the 8 candidates not to call for Boris Johnson’s resignation (with or without them resigning their job). So in the initial first Parliamentary ballot her support seems mainly to have come from the residual Johnson supporters to which she later added the ultra Brexiter and low tax factions. Then faced with an unelectable opponent (unlike Sunak I suspect Dominic Raab or even Mordaunt and others would have beaten Truss) in the Conservative membership electorate (a sizeable proportion of which will have joined because they are fans of Boris Johnson) she ran a relatively poor campaign, never giving a good answer to what she was going to do about people too poor to gain anything or much from tax cuts but facing huge and unaffordable fuel price increases. While Keir Starmer is not charismatic and is not a vote winner he is at least articulate, relatively consistent and apparently credible which is too good for her especially in bad economic times.
While Truss’ economic policies might work in 4 or 5 years, all she is likely to do in 2 years is inflict economic pain. Nor would including centrist Conservatives who supported Sunak do any good – what political use are people of such negligible political ability that they put forward somebody unelectable among Conservative Party members? Because she is now so far behind in opinion polls a snap election is not even a reasonable political risk. While Boris Johnson very likely might have lost in 2024 under Truss the Conservatives risk not just loss but final annihilation (eventually to be superseded by some new populist Party of the right). We’ll see in next May’s local elections but if the Conservative Party does really badly changing Leader yet again, preferably back to Boris Johnson (by far their strongest campaigner at elections) would be the least bad option.
September 4, 2022
“That is best done by allowing people to keep more of their income through tax cuts , or by giving people more in benefits to cover the bills who cannot earn”
The above appears a very simplistic approach! So just how does either help those who a/. do not pay (meaningful) income tax, and/or b/. do not claim benefits. Cutting, even abolishing, VAT on non-discretionary purchases will only help so far, and not at all on any discretionary purchases not being made, that only leave Council Tax (and perhaps UBR) as a universal tax but even then…
“This blog is about the underlying problem of high prices and how you solve them”
One of the problems that has emerged since privatization is ever greater competition from intermediate billing companies (some entirely new, others having been hived off from the previously nationalized area distribution networks), basically these middlemen want their own cut, thus competition has actually forced prices higher than needs-be. If these intermediate ‘Billing’ companies were all forced to merge with a ‘Producer’; companies who own either generators, oil & gas fields, or wind-farms etc? Would this not allow economies of scale to be made, prices cut or substantive and provable reinvestment, the govt and energy companies could call it direct marketing!
September 4, 2022
Talking with Laura Kuensberg this morning Liz Truss claimed that over the past twenty years there has been too much discussion on the redistribution of wealth rather than its creation, and consequently the UK economy had seen “no more than one per cent growth” per annum on average. But that is not the story revealed by the GDP chart that I referenced when I questioned this kind of claim before, back in July:
http://johnredwoodsdiary.com/2022/07/16/the-debate-last-night/#comment-1329606
2019 was the last year before the pandemic knocked the economy sideways, and then GDP was Ā£2255 billion, up from Ā£1575 billion in 1999, 1.8% a year average. Even starting with 2021, before complete recovery from the pandemic, and going back to 2001, it would be 1.4% a year. Since the Second World War the growth rate has been irregular but keeps averaging out at about 2.5% a year, a rather strange but undeniable phenomenon.
September 4, 2022
Eastern Europe will break ranks with the EU, USA and UK, when push come to shove, the people living there will see to that, by the time the frist winter is over the seen will look completely different to the one you see now.
Russia influencer is alive and well, ME countries on Russia side, India, China most of the stans countries, most of Asia, Africa, South American, the list of support get longer each month.
September 4, 2022
Why are we allowing ourselves to be controlled by this bloke? From the Sunday Times:
“President Zelensky says the financial hardship enveloping the UK and other western countries is a price worth paying to avert a new world war.
Zelensky said the consequences of the Russian invasion of Ukraine were āpainfulā but admitted that he had āno strength and timeā to worry that the West might be suffering from war fatigue spurred by soaring energy bills.
He said: āYes, we know [standing up to Russia] is going to be painful.
Every country will lose something.
That is the case. It is always the case. During the war, as in any combat operation, you could lose something, but then you will win it all. If you are not willing to lose something, then you will have even graver risks to face.ā”
September 4, 2022
Why? I don’t know, Dom. But there’s at least one good thing about Liz Truss. She’s never going to be able to play Winston Churchill.
So we might yet get out of this mess…
September 5, 2022
Johnson never offered to fight them on the beaches.
September 5, 2022
No, because putting our lives in harm’s way wouldn’t play well in 2022, so he preferred fighting to the last Ukrainian.
We need a prime minister for this country, now. Not one who dresses up and talks as if it’s 1940.
September 5, 2022
It is Putin who wants to fight to the last Ukrainian.
September 4, 2022
– So where is the competitive independent UK energy supplier increasing output to meet the demand and to reduce the ‘ Super Massive extra-ordinary Profits’. Because of decades long Policy of embedding European state suppliers and massive energy companies and self interest it won’t.
– It would appear the suppliers are overly benefiting from closing down perfectly serviceable old reliable plant and charging more when capacity crunches develop.
– End net zero and unleash new competitive UK supply for the UK market.
– India China et al will not pay “world prices” they will just buy Russian gas and laugh at you or with you, while selling it to the poor people who are taxed to give them foreign aid.
Incidentally , i hear only 30% of Ukraine help makes it after the skims.
We appear to be at the end of a cycle , of bad policy, after bad policy, followed by elections referendums and then further bad policy and laws. Lets have open book accounting on all major suppliers in the UK. Lets insist they are UK controlled companies, with no offshore shenanigans.
I would certainly and immediately nationalize nuclear power production in the UK.
The UNIPARTY, WEF, UN own this mess. Clowen -Piven strategy?
A competition suppositry is needed. Ofgem and prior policy advocates need not apply.
Putin may have delivered a wake up call to the so called “free west”. Some say Russian is more Western European than Europe.
What is a democracy or āA Republic, If You Can Keep Itā
September 4, 2022
I really don’t see the problem in saying that UK energy producers – be it in the form of oil, gas, or renewable electricity (wind / solar) – must sell to the UK market at actual production cost + a fair profit (I suggest 7%). And don’t give me that weak desire to do this in a way “that the industry would accept”. The government is in charge and can IMPOSE this on the industry. Offering them a guaranteed, reasonable profit, but preventing them from profiteering, would satisfy both the producers and the consumers. And while, as you say, we would have to pay “the new high prices for all imported fuels”, that’s better than paying the high prices for ALL the fuels! And obviously the solution is to also produce MORE energy, in all its forms, so that we end up not having to import any. I can’t see why this simple solution which ticks all the boxes is too difficult for this Tory government to understand.
September 4, 2022
Another 960 ushered in at Dover yesterday. Move along, plenty more room in the sweat box. Still, the government has plenty of our money. I read the NHS has spent Ā£750k on booklets for their staff explaining that things like Black Lives Matter. Plenty more where that came from. Splash it around.
I despair of this country and, in particular, your government – Mr. Redwood. Why not turn the boats back? Simply blockade them and make it very clear they will not be allowed to beach in England. You’d only have to do it once and the word would soon go out – ‘don’t bother paying to go across in a dinghy – they’re blocking the way’. I am surprised we ever bothered with Dad’s army during the war. Surely we should have welcomed the Germans ashore and put them up in 4 star hotels.
Still, I don’t pay much tax these days. No income tax or NI. Just council tax, VAT, car tax, duties on fuel, parking charges, tax on insurance policy premiums etc. etc. Hmmm, still paying a load of tax for illegal entrants to be put up in nice warm hotels while I am ordering thermals.
September 4, 2022
Richard Tice of Reform points out that so many Albanians are involved in criminal behaviour that in 4 years time there will be more Albanian prisoners here than in their own country. You couldn’t make it up.
September 4, 2022
I’m beginning to think that we ARE approaching the point where we need something like America’s Defense Production Act, so that HMG can order companies to extract gas, coal, and oil for the domestic market, at a controlled price, whenever the market-price exceeds a certain level. This because we are in a near-war situation.
One ray of hope today was The Sunday Times’s reporting of government contingency planning for the trials of winter. Kit Malthouse, and his supporting cast, seem to be doing a good job. A lesson learned from the pandemic?
September 4, 2022
Possibly one of the more sensible ideas on here today SW. The Government can only control the price of energy produced in this country – it clearly cannot control external sources. So if we want to do control energy prices, then clearly you have to become much more energy self-sufficient first, which we are clearly are not at this point.
September 5, 2022
Thank you.
September 4, 2022
I wonder if it would be helpful to clarify that unlike Ukraine the United Kingdom was never part of the Soviet Union, or part of any previous Russian Empire. We were at times allied to Russia – Napoleonic Wars, both World Wars – but also at other times on the other side to Russia – Crimean War, North West Frontier, and after the Second World War there was Korea, Cuba, and Vietnam – and so Russia has no conceivable claim over the United Kingdom, unlike Ukraine. So the domino theory being promoted by Zelensky, that if we don’t stop the Russians in Ukraine they could end up rolling their tanks all the way through London, is even more nonsensical than the domino theory that got our American friends embroiled in Vietnam:
https://www.history.com/this-day-in-history/eisenhower-gives-famous-domino-theory-speech
Luckily Harold Wilson politely declined to join them in that doomed enterprise, and Parliament should have stopped Boris Johnson getting us involved in Ukraine, except perhaps with an offer to mediate in an effort to avoid war. As towns and cities are reduced to rubble, and the hospitals fill with casualties and the bodies pile up, and now the whole world faces energy and food crises, is he still proud of what he did to encourage war? Was this his way to show that the UK was not turning its back on the continent post-Brexit, or was it his idea to keep in with the Americans, or did he just fancy playing at being Churchill?
September 4, 2022
+1
Our economy has imploded. Putin is the convenient fall guy for it.
September 4, 2022
Iāve just received a link to a paper by Andrew Montford of the Global Warming Policy Foundation explaining how electricity and the National Grid works and how itās going to change. Electricity going forward will not be constant as now, but when itās available or at a much higher variable cost.
https://www.thegwpf.org/content/uploads/2021/10/Montford-Smart-Homes-Energy-Rationing.pdf?mc_cid=4de3102eef&mc_eid=9ea36bba31
September 4, 2022
If the gov wants to have proxy war then the people and businesses should not suffer because of them and be paid compensation to where they were in OCTOBER 21, if not then they shouldn’t be doing what they are doing to the businesses and people in this country after coming out of another gov crisis 6 months ago. If people lose their homes or businesses they need to be fully compensated for there loss.
September 4, 2022
The data below is for the 24-hour period 00:00 to 23:59 3 September 2022.
Number of migrants detected in small boats: 960
Number of boats detected: 20
NORMAL SERVICE HAS BEEN RESUMED
September 4, 2022
On that basis the government will need to build the thick end of 80,000 homes per year to house the migrants. Mind you, they managed to return 32 Albanians recently but doubtless these same people will soon have another go.
September 5, 2022
They only returned 32 Albanians after a lengthy police investigation, lengthy court case and time in our luxury Jail system…..oh no; we’d never sent them straight back same day
September 5, 2022
And the government is telling us 26,000 have crossed so far. I’ll say this in my view is a lie. The number is more likely to be in excess of 50,000.
September 4, 2022
Yes Denis, it goes with build back better and the great reset, you have to have rubble to build with first, some say 80% of all restaurants and pubs will close, that just one area of business.
September 4, 2022
While I am no lover of any form of taxation, the problems we face are so dire that exceptional means will have to be deployed.
The government canot tax the richer part of society to relieve the energy problem, it is nowhere near large enough. It can only look for other forms of taxation or print the necessary money.
This problem is being faced by the whole of Europe and far beyond. The cost of extracting gas from the ground has not increased, all that has happened is that somewhere enormous profits are being made. In my view, governments should get together and tax those extra profits, wherever they are being made.
This is hopefully a one-off emergency and exceptional action is therefore justified. I can see no other equitable solution.
September 4, 2022
Sir John, I know that you believe accuracy to be important, so whilst I agree with parts of your post, I must correct you on something. Regarding renewable energy providers being paid for their energy at the current price of gas, this is not the case – these providers are being paid the agreed strike price for their energy. It is the Government that is claiming the difference, and this money is meant to be returned to the public via a private company wholly owned by BEIS, ‘Low Carbon Contracts’ under the so called ‘Contracts for difference’. So the ‘green levy’ should in fact be a ‘green rebate’ – which I am sure we can all get behind, as a good news story for green energy. Please use all your influence within the Governing party to ensure that this happens swiftly, and is done in a way that brings inflation down.
Reply Yes for CFd contracts
September 4, 2022
Simon R :
Incorrect, some renewable energy providers are delaying the start of their CfD contracts and are selling at the currently much higher market prices very profitably.
I will agree that where renewables must adhere to their CfD contracts, the higher market prices means that the Treasury and not the consumer benefits.
Anoher reason why the idea that renewables are reducing the price of our electricity is entirely false.
September 5, 2022
In the current quarter just 5% of our electricity has been supplied via CFDs. If it gets windier that might double. The majority of renewable electricity is sold at market prices alongside the gas, nuclear and coal. Most of that renewable power attracts lavish subsidies on top via ROCs. New wind farms like Hornsea 2 and Moray East are bypassing their CFD contracts by simply not submitting the required formal notice to commence CFD payments, benefitting from the much higher market price this allows them quite legally.
Reply. Yes, a folly
September 4, 2022
I don’t know whether our host, Sir John Redwood will be made a Minister though I do know if Liz Truss is serious about effecting economic change he must be made a Cabinet Minister as no other M.P. has his economic expertise or ability.
I hope John Redwood would continue a scaled down version (say one blog each weekend with responses limited to one contribution per person) of this blog even if he becomes a Minister. As it is this has been a tremendous effort from him even devising a piece every day, let alone reading through hundreds of contributions each day. Almost nobody else could have kept this up in addition to a demanding job.
For those of us who have contributed, it has been a means of putting our thoughts before a Member of Parliament (when nowadays M.P.s are hard to reach and it is at best the luck of the draw with many employing staff whose object seems to be to shield their M.P. from contact with the public) and more important an exceptionally clever and skilful M.P.
This has been an exceptional political forum and very many thanks to John Redwood for enabling it for so many years.
September 5, 2022
I agree. As a constituent I’d have access via surgeries etc but this blog by Sir John has provided valuable and unparalleled insights into politics, policies and economics.
September 5, 2022
above was supposed to be a reply to Geoffrey Berg (Sept 4)