There are plenty of questions to which shale gas is the answer

By Mark Wallace
Follow Mark on Twitter.

A few years ago, I visited the Soviet-era Stalin museum in the tyrant's home town of Gori in northern Georgia. The museum has many curios - from the small hovel in which he was born, sheltered under a ludicrously overblown marble gazebo, to his official railway carriage in which tourists can (and always do) take a snapshot of his toilet. The museum has itself become a historical exhibit - a staggeringly dishonest exercise in totalitarian propaganda, preserved for posterity as a demonstration of the Soviet regime's lies.

Even the staff are engaged in a stark demonstration of living history. Our guide, a rather stern lady, had clearly learned her entire tour in English by rote at some point in the 1970s. She rattled through it word-perfectly, shooting magazines of syllables at us like a stuttering machine gun. It was an impressive memory stunt - but when she was interrupted by questions her comprehension of English was very limited, and it became clear as we went through the plush galleries that she didn't have a clue what the words in her patter actually meant.

Sometimes political ideas gain the same rote-learned quality. We repeat them as obvious statements with which no-one can disagree, while paying far too little attention to what they mean in practice.

Here are a few: "we must rebalance the economy", "we need a British manufacturing renaissance", "more young people should go into engineering", "energy prices are too high", "the North must not be left behind by growth focused on the South East". I'd wager that most MPs and commentators have said at least one of those at some point - many will have said all of them repeatedly in recent years.

But what can be done to fulfil these aims?

Continue reading "There are plenty of questions to which shale gas is the answer" »

Fallon should be in the Cabinet

By Paul Goodman
Follow Paul on Twitter.

Michael Fallon will have had a twinkle in his eye when he told the Daily Telegraph that “Energy policy shouldn’t be ideological". The Climate Change Department Minister is one of the few Thatcherites from the lady's era in government, and little to him comes ideology-free - not even, one suspects, his choice of breakfast marmalade as he reads the paper's report this morning.  It says that he is to give local communities the power to veto wind farms near their homes: the proposed scheme seems to be similar to the take-or-refuse-money-for-new-homes Policy Exchange housing scheme that Nick Boles has taken up.  Local residents will have the choice of accepting money and approving wind turbines or refusing it - and thereby vetoing them.

Readers will be mindful that deep blue pledges of this kind tend to pop up just before the local elections.  Downing Street's reminder to me earlier this week that "the Prime Minister is the first Lord of the Treasury", a mild dig at George Osborne's resistance to tax breaks for married couples, provides another example.  But Fallon claims that he has got "a package of proposals ready", and the Telegraph says that "it is understood that the “relief for the shires” package, to be unveiled next month, will include new planning protections and a community benefit scheme".

Continue reading "Fallon should be in the Cabinet" »

A plea to Downing Street over the ECHR. Please put up or shut up.

By Paul Goodman
Follow Paul on Twitter.

A colleague of the Prime Minister's once said to me that the Prime Minister would never cooly plan Britain's exit from the European Convention of Human Rights, but would lose his temper with the court after a more than usually patience-snapping judgement - and pull us out.  Readers will remember that he told the Commons that the prospect of votes for prisoners made him "sick in the stomach".  The Sun reports today that Cameron told Ministers yesterday that Abu Qatada's continued presence in Britain makes his "blood boil". The ECHR is plainly bad for David Cameron's health. The paper also reports that the Prime Minister "is considering a temporary withdrawal from the European Convention on Human Rights so judges in Strasbourg can’t block Qatada’s expulsion".

Continue reading "A plea to Downing Street over the ECHR. Please put up or shut up." »

Energy companies: bigger fines...or more competition?

By Paul Goodman
Follow Paul on Twitter.

The Financial Times (£) conceded this morning that "For SSE, the £10.5m fine is hardly onerous".  The Sun wrote that "perhaps SSE isn’t bothered by the penalty. It represents just one per cent of its profits".

That was the range of reaction across Fleet Street to a record OFGEN fine, in response to conduct that drew from Michael Fallon, no enemy of capitalism, an unambiguous response: “I have rarely seen a worse case of consumers being misled".

It would be easy to call for a bigger fine - though an unscrupulous company would have little difficulty in passing its costs on to consumers.  What's really needed are more of the market disciplines for which Mr Fallon is enthusiastic.

In his, The Atomic Clock, Tony Lodge, a frequent contributor to this site, made the point that both the sale and generation of electricity are morphed together under our present supply system, which is dominated by the Big Six.

Until or unless there is more transparency and liquidity in the system, consumer choice will be unnecessarily constrained.  And while it is constrained, the risk of further SSE-type behaviour will be greater - and the choice consumers have will be smaller.

Fuel and electricity prices are a pressing problem for voters - especially workers who rely on cars and older people on fixed incomes.  As I've said before, action on energy prices is even more important to them than tax cuts.

Two of the Conservative Party's success stories get bigger roles: Fallon and Hayes

By Tim Montgomerie
Follow Tim on Twitter

David Cameron has conducted a mini reshuffle this morning. He has appointed John Hayes MP to the Cabinet Office and Michael Fallon will be taking over John's Energy brief. Both men have been two of the Coalition's success stories.

Taking John Hayes first. In his previous ministerial incarnation Hayes oversaw the Coalition's skills and apprenticeships policy. He was a master of the subject - having shadowed the portfolio for most of the last parliament. In government he worked closely with George Osborne to ensure that, in this era of austerity, this long-term investment in our nation's future got extra funding rather than less. Hayes has had a rocky relationship with Ed Davey at DECC, with the two men disagreeing rather publicly over windfarms policy. Nonetheless, I understand that one of John Hayes' last acts was to sign off a settlement of the government's onshore wind policy. It's not exactly clear what John Hayes' new role will be but the MP for South Holland and the Deepings and co-founder of the Cornerstone Group understands the Right of the Tory Party (including the 2010 intake) and Number 10 doesn't. Hayes will be acting as a political and parliamentary adviser to the PM and will, I hope, be doing a lot more media. His non-southern, non-posh voice is one the Conservatives lack. He is a curious mix of Right-wing and One Nation. He signs up to nearly all traditional Tory positions on immigration, Europe, crime and the family (especially the family) but he's not much of a liberal when it comes to economic matters. Although a businessman before entering politics he's never been much of a fan of free trade. He sees a large role for the state in providing a social safety-net and underpinning UK manufacturing. Cameron's decision to bring Hayes into his inner team - a team that doesn't understand working class Conservatives - is a very good one. Hayes recently claimed to be the personification of blue collar conservatism.

Continue reading "Two of the Conservative Party's success stories get bigger roles: Fallon and Hayes" »

What would lower earners prefer - lower taxes or cheaper energy?

By Paul Goodman
Follow Paul on Twitter.

Tony Lodge of the Centre for Policy Studies had a letter in this morning's Daily Telegraph about how to tackle "the looming energy crisis".  One can't accuse Lodge, a regular contributor to this site, of shying away from the root of the problem, which in his view is the EU's Large Combustion Plant Directive. He wrote:

David Cameron should now act in the national interest and deviate from the EU directive, instead keeping those coal and oil plants that are under sentence as an emergency energy reserve for the next five years, allowing them to be used when necessary to provide electricity.

Let's leave aside the technical issues raised by Lodge's proposal (the Government is already implementing the directive, so there would be compensation implications), not to mention the legal ones (which would doubtless help to swell the coffers of various HugeFee QCs), and imagine for a moment that the Prime Minister took his advice.

As Lodge himself points out, there would still be "an elephant in the room" - namely, the Carbon Price Floor, which in essence will see the companies concerned paying extra taxes to government...which, in turn, will mean consumers paying extra costs to companies in the form of higher bills as costs are passed on to them.

Lodge has an answer to that too.  As he has argued on this site, he believes that the Government should "re-examine a carbon price floor which will prematurely force coal out and encourage a greater reliance on gas than relative prices warrant".  In other words, Ministers should decarbonise more slowly.

Never mind what Greenpeace would say.  Think of reaction in the Treasury: after all, the money from the carbon price floor will provide be a steady stream of revenue.  But reduced energy bills would surely be no less attractive a proposition to lower income earners than a 10p tax rate or higher thresholds - probably even more of one, given recent and future energy bill rises.

The Chancellor would demand a quid pro quo for any carbon price floor suspension or delay.  I respectfully disagree with Tim Montgomerie about the merits of a tax cut for lower earners funded by new council bands for higher ones.  (Miliband's proposal for a 10p rate/mansion tax deal would be worth a mere 67p a week.)

Rather than replace lost revenue from a delayed or suspended carbon price floor by further tax rises, I would look for further reductions in the rate of spending.  I hope that we have followed in Lodge's footsteps by not shying away from the root of the problem.  ConservativeHome has itemised how to scale back spending further by as much as £50 billion

The developed world may soon be compensating the developing world for climate change

By Matthew Barrett
Follow Matthew on Twitter.

At the climate talks currently being conducted in Doha, there is a radical proposal that, it seems possible, may be accepted by many of the major developed countries in the world. The UN talks look like they will conclude with an agreement that developed countries will compensate developing countries for the impact of climate change. 

The principle of compensating the third world has been discussed since 1992's climate talks in Rio, but many industrial Western countries, especially the United States, have resisted such an idea. The US appears ready to consent to it this time, because the wording of the proposal caps compensation payouts by wealthy countries at a nonetheless-eye-watering €100bn a year.

Our man in Doha, Gregory Barker, pictured as part of the British delegation, right, has been keeping followers updated on Twitter. By all accounts, delegates at the Qatari capital's conference centre are extremely tired, and the talks have frustratingly stretched on for longer than expected, having been supposed to have finished last night. It is still unclear what the final outcome of the talks will be, or if the radical plan will finally be adopted, but the signs so far point to definite progress.

The effect of the resultant climate change bill on Britain is not likely to be a happy one; countries have signed up to a further reduction in carbon emissions, which usually means an increase in fuel prices for British consumers, a less competitive atmosphere in which to do business, and so on.

Continue reading "The developed world may soon be compensating the developing world for climate change" »

Osborne makes the right calls on benefits, basic income tax threshold, corporation tax, shale gas, fuel duty and teachers' pay

By Tim Montgomerie
Follow Tim on Twitter

I won't revisit what I said at the end of my earlier blog. If Osborne had embarked upon a growth strategy from the beginning of this parliament then the Chancellor might have made more progress on fulfilling his ambition at that time to eliminate the deficit by 2015. Instead the country will still be borrowing £73 billion at the time the Coalition parties go back to the country, seeking re-election. Even though much of the blame can be put at the door of the international trading environment - verified by the independent OBR - today's news about the lengthening age of borrowing and austerity raises big questions about the debt burden that will shackle British business and will hinder Britain's long-term competitiveness.

Continue reading "Osborne makes the right calls on benefits, basic income tax threshold, corporation tax, shale gas, fuel duty and teachers' pay" »

Chris Heaton-Harris MP’s remarks typify David Cameron’s wind farm troubles

By Peter Hoskin
_{Follow Peter on Twitter}

There’s no denying it, this morning’s Guardian story about Chris Heaton-Harris is an embarrassing one for the Conservative Party — and a troublesome one for David Cameron. Mr Heaton-Harris, who is the Tory campaign manager in Corby, was recorded suggesting that he encouraged the writer and anti-wind farm campaigner James Delingpole to involve himself as an independent in the by-election. You can watch the footage here and here, but the gist of it is contained in Mr Heaton Harris’s remark that:

“I suggested to him that he did it … Please don’t tell anybody ever … He just did it because it’s a long campaign, it’s six weeks to cause some hassle and get people talking … Maybe we’ve just moved the [wind farm] agenda on.”

Mr Heaton-Harris is this morning downplaying the story, claiming that some of it can be attributing to him “bragging about things beyond my control,” and pointing out — in a statement that’s included in the first video — that Mr Delingpole was never actually a candidate in the election because he never actually submitted a deposit, and has since pulled out of proceedings anyway. “I always hoped that James Delingpole would not formally enter the race,” reads one part of the statement, “as I hoped to convince him that I and the Conservative Party represent his views across a broad spectrum of issues.”

Continue reading "Chris Heaton-Harris MP’s remarks typify David Cameron’s wind farm troubles" »

John Hayes: Tilting at wind farms, pushing for Cabinet promotion

By Paul Goodman
^{Follow Paul on Twitter}

Ed Davey is the Climate Change Secretary, John Hayes is his junior Minister, and the Coalition must be preserved (in the view of the Conservative leadership) - all of which points to Mr Davey getting his way on wind farms, or enough of it to save face, at any rate.  It doesn't matter how many reviews Mr Hayes commissions or how many interviews to the Daily Mail he gives.  Nor does the process-ology behind his recent intervention matter much: whether or not he was due to make an anti-wind farm speech that was cancelled on Mr Davey's instruction; whether or not he was put up to his Daily Mail interview by Downing Street.  In any clash between Mr Davey and Mr Hayes, Mr Davey will find a way of winning, at least in the short term.

Yet Mr Hayes is a medium-term winner as well as being a short-term loser from his clash with the Climate Change Secretary.  Let me explain why.

Continue reading "John Hayes: Tilting at wind farms, pushing for Cabinet promotion" »