Friday 29 November 2013

Good news from Eurozone - rare edition!

In a rare foray into looking at economic measures, here is some more good news for a Friday. Not only do a we have strong housing growth in the UK which is helping prime the recovery, but also even in the sickly Eurozone the two key measures are turning positive.

Firstly, unemployment has fallen by 61,000 - the first time it has fallen since January 2011. That is a long wait, it may yet be a blip, but it should be a good sign that economies are stabilising.

Secondly, inflation has risen from 0.7% to 0.9%. There was a big chance that the Eurozone was headed towards outright deflation - a total disaster for Greece and periphery countries laden with debt.

Even a small rise and trend change is a good thing, if sustained, then growing inflation and falling employment will mean a better year next year. Of course the fundamental issues with the Eurozone have not really been addressed and the whole Euro area will be at risk for years to come with instability at its core, but at least in the short term there maybe respite from a long crisis.

Thursday 28 November 2013

BBC Question Time Competition - YES WE CAN edition

David Dimbleby presents the topical {?} debate from Falkirk, with Scotland's deputy first minister Nicola Sturgeon MSP, Liberal Democrat secretary of state for Scotland Alistair Carmichael MP, former leader of the Scottish Conservatives Annabel Goldie MSP, Labour's shadow Scottish secretary Margaret Curran MP, co-convenor of the Scottish Greens Patrick Harvie MSP and the singer-songwriter and member of Artists for Independence Eddi Reader

This week is the equivalent of the international fixture period in the premier league. 
That means politics is being played, but no scores apply in this tournament.

Scotland is usually one of the better QT venues. However C@W won't be asking you to phrase 'YES OR NO' in 5 alternative ways.

So the only way to win tonight is to guess the Dimbletie: 1 win awarded for closest to the colour of
the long piece of cloth that is worn around the neck and under a collar and that is tied in front with a knot at the top.

I'll pitch for a St Andrews dark blue with yellow SNP stripes.


Mr Drew is pulling ahead Vettel style.
Number of wins 

Nick Drew -4

CityUnslicker -2
Measured - 2

Mark Wadsworth - 1

 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 

Kilgore Trout - 1
DJK - 1

Wednesday 27 November 2013

RWE Shuffles Closer To The Exit

By way of exemplifying our recent comments that RWE might be occupying the bed nearest the door (click on the RWE link in the labels below), they've followed their sale of a portfolio of 770,000 customer accounts by withdrawing from the much vaunted Atlantic Array offshore wind project.  The feathered inhabitants of Lundy Island will be much relieved by this non-development.

At 1.2 GW capacity* from 240 turbines, this leaves a serious gap in DECC's hoped-for renewables fleet.  I suppose they can try passing round the hat in the far east again.  I'm sure they'll find that headlines like 'Miliband declares 20-month energy price freeze'** are helpful in this cause.


UPDATERWE in UK to axe 1,500 jobs.  

* Recall, however, that Teesside Power alone (gas-fired, of course) was rated at 1.875 GW, and was built in just 2 years.  By way of an update to my earlier post that it was due to close shortly, I can report (with a tear in my eye) that the bulldozers came on site this week.  The plant has been sold for scrap (sic).  It is gone.

** Yesterday I attended a learned seminar on energy policy with an expert panel of all sorts: greens, investors, financiers, climate scientists.  Gratifyingly, every single one declared that Miliband was off his head, and deeply dishonest to boot.  It may yet be the policy screw-up I immediately assumed it would be

Tuesday 26 November 2013

Oil and Troubled Geo-Political Waters

Iran, Russia, Ukraine, Turkey, Saudi, Syria - and back to Iran again

Up and Down
Initial reporting of the Iranian nuclear deal had it that the price of oil had dropped $2 on the news.  It wasn't true and in fact the price of Brent went up, slightly.  Brent has been range-bound, $100 - 120, for a long time now.  Not a tight range, but not headline-setting any more.

Russia, we gather, was one of the major players behind the Iran deal, and they certainly have no interest in a materially softer price of oil.  This DTel piece paints a pretty grim picture, and repeats the received wisdom that Russia needs an oil price of $110 to balance its budget (others have quoted a higher figure).  They remain uncomfortably stuck as a raw materials economy, despite their fervent longings to be a manufacturer: I've recorded here before that they have tried several times to sell gas and oil into the far eastern markets in packages with manufactured goods, 50:50 by value.  You can imagine where the Chinese have told them to stuff their useless trucks; and I read with amusement a couple of weeks ago that their new LNG export deal with South Korea works the other way around.  In this package, the Koreans will build the LNG ships for the Russians.  This is the sort of reality that has Putin tearing at what little hair he has.

But it's not all bad news for Russia.  They must relish the leading role they've taken with Syria and Iran (it's their back door, after all) - and what about the Ukraine !?  Their pulling out of EU accession negotiations must send the expansionist tendency in Brussels ranting up and down their luxurious corridors.  (I could wish the estimable Hatfield Girl was blogging just now; she writes interestingly on these matters.)  When will Turkey decide it's not worth the effort ?  That really would be a turning-point.

Who else is seriously long oil ?  Why, the Saudis, of course, who at the same time are none too chuffed about the Iran deal.  One particularly daft comment suggests that "Riyadh may try to 'rap America’s knuckles' by flooding markets with enough oil to puncture the US shale oil revolution. Production costs at the US Bakken shale field are around $80".  Yes, the USA is long oil as well: but I have a feeling that 'something' would happen long before the price fell that far.  There has long been the theoretical potential for a genuinely significant oil-price reversal: it is the truly epic quantities of oil reserves everyone knows are present in Iraq.  But somehow it never gets developed ...   

One also reads that the Iran deal is bad, bad news for the Syrian 'opposition'.  Assad-supporters Russia and the Iranians are now riding high and surely command at least several months of goodwill in the West  - so woe unto the enemies of Assad ?  Well maybe: but the perennial enemies of Iran are not appeased.

Sometimes, big-power diplomacy really does put the lid on a boiling pot. Remember North Korea ?  Ah yes, that's right, a few months ago they were threatening a first strike on Seoul and Seattle. It was headlines on every news channel for days and days.  And then suddenly ... nothing.  Oh, to have been a fly on the wall when the Chinese took Fat Boy to one side and read his fortune for him.

However.  When it comes to Iran, those perennial enemies probably have the means to keep the pot boiling for a while yet to come.  Price of oil on 31 December this year ?  Predictions in the comments, please.


Monday 25 November 2013

Vinc Cable refers RBS - the first of many?

Well, RBS's scandals seemingly never end. Many of its traders are caught up in the ongoing LIBOR scandal, there is the FX scandal to come and the FT has reported RBS traders may be endangered. And now over the weekend Vince Cable has referred another report to the FCA which alleges that the RBS GRG unit (its restructuring business) has purposely put small firms out of business in order to make money by obtaining their assets on the cheap.

Now this seems a little far-fetched to me in the round. A bank lends money to a customer who can no longer pay, the bank claims assets, probably to a lesser value than the loan, but at least gets some money in. Yes, this is a remedy and potentially if you managed to time property acquisitions of this nature to the bottom of the market there is an upside- but as an overall strategy it is ludicrous. You have to make bad loans in the first place to make it work - any bank that did this would go bust....ah, hmm, I see the problem now.

Still, who can trust RBS - I attach a small diagram, hand drawn, which is a useful guide from a few years ago of how the defunct FSA may have viewed the various major UK retail banks. A one could guess from this, RBS will always be the first one up before beak on account that it is more exposed than the other institutions culturally (though that has changed) and systems wise in terms of exposing any mistakes or wrong-doing.

Friday 22 November 2013

Who shot JF?

50 years ago. The first modern president, TV era president was assassinated.
With him died the belief that the government might be telling the truth. It has never come back. 
Only this week we find Prime Minister Blair was signing secret spying agreements with the Americans to let them snoop on British citizens who were convicted or even suspected of nothing.
So government has a long history of lying.
Secret IRA negotiations. The EEC is only a trading club. Immigration is just a net 2 people a year.  MP's have had tiny pay rises, etc.

 Few are expecting the Iraq report to be anything but pages and pages of long black redacted lines.
And its all JFK's fault. Well..the Warren commission. And the Dallas police department. Because they did botch their jobs. The Warren Commission because they seemed to think it was just a murder enquiry. And the Dallas police for A} not properly guarding the President.{secret service detail aside}  And B} Not guarding his killer..

When I chanced on a documentary on the death of Marilyn Monroe I became interested in conspiracy theories. The Monroe one is still the best as there are quite a lot of unexplained details and suspicious events. When I saw Oliver Stone's JFK I was amazed. How could a government have, at best  lied about and then covered up the murder of the commander in chief, and at worst, committed the deed themselves?
Later on, when I did some research, I discovered that JFK was just a movie. Billed as a documovie it is nothing of the sort. It takes liberties with facts, events, times, statements and the actual people. It leaves out anything that doesn't support the multi-gunmen theory.  Oswald's brutish and abusive behaviour to his Russian wife is ignored. What his co-workers thought of him. What the Russian and Cuban he hung out with thought about him. And  the really key and mostly unknown, attempted assassination of General Walker which the FBI, Oswald's note and Oswald's wife, say was carried out by Oswald. If that is true, then Oswald looks much more like a wannabe assassin than a patsy.
 As a film,JFK is 9/10. Very powerful. Great cast. Superbly crafted. But as a version of historical is poor. Powerful, but poor.

I might be one of the few people to have read

Reclaiming History: The Assassination of President John F. Kennedy

I won't recommend it. Its unbelievably long and heavy going. The author decides to leave no stone unturned. All double checking and cross checking and rumour removing, hearsay chucking and lie deleting. So.. based on that and a few other volumes, I am pretty sure Oswald fired the shot that killed. Even Stephen King, genius author, lifelong Democrat, and JFK adorer, is convinced as he says at the end of his own, weight and stodgy 11/22/63. A book dedicated to time travel and saving the president from the assassin. - I'm not recommending that book either. 5/10 unless you are a REAL Kennedy fanboy.

But .. its conspiracy day. And our governments have a history of cover ups.. so .I may well be very wrong, so...have at it.

But you must say why. Not enough to cry -- its the Bilde-a-bears!. Its a Bilde-a-Bear conspiracy! As I think some red neck just said on C4 news. 

Thursday 21 November 2013

BBC Question Time Quiz: Cristal Methodists edition

David Dimbleby presents the topical {?} debate from Salford, with an audience who are all either under 30 or over 60 years old, for no particular reason other than they do like trying to make the show different without actually making it any different.

With health secretary Jeremy Hunt MP, shadow justice secretary Sadiq Khan MP, And ??? They don't know or have just forgotten to tell us.
Will post guess later - Christmas Window is today. Get shopping you lot. Its been quite laggy.

2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter @BillQuango 

Mr Drew is pulling ahead Vettel style.
Number of wins 

Nick Drew -4

CityUnslicker -2
Measured - 2

Mark Wadsworth - 1

 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 

Kilgore Trout - 1

DJK - 1

'Big 6' Fragmenting? HMG Beware

For some time now I have been suggesting that if the government continues to beat up on the hated 'Big 6' energy suppliers, it may wake up to find only 5, with RWE and Scottish Power (Iberdrola of Spain) probably the weakest hands.  E.on has its problems too: and while the others (Centrica, SSE and EDF) all probably have sufficient UK energy market ballast to stick around and play 'last man standing', even Centrica has been known to make dark hints.

The beating these guys take isn't just non-stop public floggings in front of fatuous parliamentary committee hearings or in the media.  Nor is it even the fines that Ofgem periodically boxes their ears with (they probably deserve them).  It's also the extraordinary burden of social obligations and 'green' policy objectives they must comply with, because under current and future energy policy they are the vehicle through which government raises billions, soon to be tens of billions for its inane interventions in the energy markets.  No wonder the barriers to entry in the sector are considered well-nigh insurmountable.  General taxation would be the honest (and progressive) way of doing this but they find levies on unavoidable energy bills a more expedient approach.

And now RWE has sold off a large chunk of its UK supply portfolio.  Of course this is being spun as creating a 'Big 7', hence better for competition: but this shouldn't fool anyone.  RWE is a sickly beast, having taken even worse beatings at the hands of German energy policy, and desperately hanging on (like E.on) for massive compo they are suing the German government for in respect of the half-baked, summary closures of their nukes.

Companies have sold chunks of portfolio before, but earlier sales were part of of the baleful consolidation process which, coupled with the restoration of vertical-integration-via-acquisition that we've slated here before, is how we got to the 'Big 6' stasis everyone seems to despise.

In many respects we already had a Big 7 because GdF of France has quietly assembled a UK portfolio of power generation assets and industrial customers making it bigger than Scottish Power in most aspects other than residential customers (of which it doesn't have any).  And Gazprom (yes, Gazprom) already takes the #8 position.  But there ain't much scope for small players in this market (and why should there be?), notwithstanding that gas retailing (to industrial customers) is a relatively straightforward proposition (not electricity, though - nor residential sales).  From time to time a fresh new hopeful joins the fray, for example Co-op Energy (!).  Good luck to them all.

So - let's see how Utility Warehouse, the proud new owners of 770,000 of RWE's best UK customers, make out in this bracing environment.

And watch out for further retrenchment, by RWE and others.  That's a warning for HMG as well as a comment for investors:  how much investment towards their mad, hundred-billion-pound energy schemes can they expect from these guys when their balance sheets are under such pressure ?


Wednesday 20 November 2013

Stuffing the Doctors' Mouths with Gold - Again?

You have to hand it to the medical profession.  Really: I mean, you just have to.  Hand it over.  It's the only way to get them to do, well anything.

When Nye Bevan was asked how he managed to win the doctors round to cooperating with the creation of the NHS he famously replied that he had "stuffed their mouths with gold".  Yes, the doctors always have a pragmatic solution on offer. 

This time, with winter coming on and heating bills on the front pages for weeks, suddenly we are warned that A&E will be chokka with the elderly as soon as it turns cold.  Disaster for the coalition looms. But what's this, do we hear the clinical cavalry riding to the rescue ?  Yes, right on cue the doctors are to get new contracts, under which, says Jeremy Hunt "all NHS patients over the age of 75 must be assigned a named, accountable GP who will oversee their care".

Remarkable !  Is there an over-75 in the land who doesn't have a named GP ?  Is there anyone ?  (Aside from those not actually eligible for NHS care, who just stride into A&E or a walk-in centre anyhow.)  And does this mean house visits as in days of yore, or out-of-hours attention from the GP ?  Errr, no - but the GP must 'monitor the effectiveness' of other agencies' out-of-hours provision.  That'll keep the over 75s in their own beds.

And for this new contract, minister, what about the money you'll be giving them?  Turns out, that's not what we might call transparent: it's certainly not mentioned in this short guide to what's going on.  Or this one.  And Jeremy Hunt is a bit oblique here, too.  “The public will know what salaries GPs are taking home for NHS work. This will give the Government more confidence to hand more funds to GPs in future.”  

And the timetable for all this change ?  Will it be in place by, say, the end of the month in time for the really cold weather ?  Nope: it commences April 2014.  And publishing the salaries ?  That'll be 2015-16.


Tuesday 19 November 2013

The Co-Op saga deepens; what is wrong with mutuals?

Ursula Lidbetter, Lincolnshire Co-operative
Ursula Lidbitter
Here is the latest statement from the Co-Op as Len Wardle has resigned as Chairman:
"The recent revelations about the behaviour of Paul Flowers, the former Chair of The Co-operative Bank, have raised a number of serious questions for both the Bank and the Group. I led the Board that appointed Paul Flowers to lead the Bank Board and under those circumstances I feel that it is right that I step down now, ahead of my planned retirement in May next year. "I have already made it clear that I believe the time is right for real change in our operations and our governance and the Board recently started a detailed review of our democracy. I hope that the Group now takes the chance to put in place a new democratic structure so we can modernise in the interests of all our members."

He is to be replaced by Ursula Lidbitter, who has climbed the corporate pile after a long career at the Co Op. She is to lead a root and branch reform of management. Of course, being a co-operative is a bit like being a Union. Non Members need not apply. So how far the reform will really go who knows, but good luck to her.

What though of our Westminster Politicians. They were lining up to praise the likes of Co-Op and the John Lewis partnership just a few years ago. David Cameron had them as the drivers of an inclusive Big Society. Ed Balls had them down as the acceptable face of Capitalism. Problem is that nearly all the mutual building societies have gone under since the Financial crisis or are now stuck offering very uncompetitive products as their cost of capital is now so high. The Co-Op, long a bed-fellow and huge supporter of the Labour Party has come very unstuck too in the Banking game. Those of us old enough to remember will recall the Banking Partnerships of the 80's have long since disappeared. There is precious little evidence that mutuals or partnerships are fairer or better than normal companies. All companies risk appointing coke heads and ego maniacs to the top job if they fail the basic tasks of finding the right, experienced candidates. Once you have a demonic leader, as the Country found with Gordon Brown, the road to ruin is true and straight.

So what now can the politicians who seek an alternative to Limited and Public companies do - the options are more limited with a return to State sector or perhaps a hope that State Owned Enterprises of other Countries, like the Chinese ones invited to build our new nuclear power station, maybe the answer....

Monday 18 November 2013

World Toilet Day - Political Special

It really is World Toilet day, which means surely it will be a flushing success? Anyhow, the business of toilets is one that comes to mind when we think of politicians. The best political scandal I have seen of late is in Brazil. Brazil, as a any passing reading of an article will tell you, is at the endemic end of political corruption. Something indeed that all the 'BRIC' countries seem to be world leading experts in.

Of particular note is this Mensalao scandal that afflicted the Brazilian Labour party. Though taking place in 2005 the fast movement of Brazilian courts has meant that the trails are stil on-going and indeed have made the news again this weekend as one of the defendants has managed to abscond to Italy to receive a 'fair' trail.
(Italy, that well known home of politically-independent judges and lack of graft....hmm, I guess with only an Italian passport he had no other option!)

The core of the scandal was a nice little merry-go round of public money which ended up in the hands of Left-leaning Brazilian MP's. An advertising company was used as a front and the plan was all the MP's would get a nice £12,000 a month in return for voting with there, er, party and also with the, err, Government of the Left that was in power and led by Lula Da Silva (who is not implicated as this was a party issue in a Presidential system).

So what am I telling you all of this? Well Mr Guido Fawkes has had a rather good run of late exposing our own MP's humble efforts to fill their coffers and that of their party. The expenses claimed for offices rented from Unions is a prime example. The who Grangemouth incident where the plant was nearly closed on the back of Unite Union causing a fight over their rep who was allegedly trying to fix a Parliamentary seat up in Scotland for their candidate. Indeed, Unite having a whole slew of MP's whom it funds directly and even calls Unite MP's.

In Brazil finally, the perpetrators are in court and each getting 10 years each. All complaining of the political motivations, which will be inevitable in any political scandal that mud will be flung at the other side no matter what the truth is. However, our own World Toilet Day Hero, a certain Len McCluskey, remains a free man his union-funding of the Labour party is of course 100% legal.

Saturday 16 November 2013

Sunday Challenge: Papal SurveyMonkey - Tempora, Mores ...

Q&A?       pic - V&A
Charles:  What about Papal infallibility?
Father Ted:  Yes… er …is it for everything? The infallibility, do you know?
Charles:  I don’t know
Father Ted:  Right ... anyhow, nothing to do with me ...
It is not unknown for religions to have sudden and miraculous changes in doctrine to align themselves conveniently with 'the times' - Mormon rulings on the eligibility of black people come to mind.

But they don't usually run focus groups beforehand, still less roll out the old SurveyMonkey.  If you'd been ask to nominate the last religion who'd countenance such a step, I'm guessing the Roman Catholics would come a close second to Islam in most people's judgement.

But no - it's the Catholics.  And the questions are a pretty mixed and earnest bunch.  How many answers will they get to this one ?
What anthropological ideas underlie the discussion on the natural basis of the family?
And here's an ... interesting one:
How can an increase in births be promoted?
(I didn't make that up: take a look for yourself.)  But they are also testing the water for, errr, policy changes - how else to describe it? - in distinctly focus-groupie ways:
Could a simplification of canonical practice in recognizing a declaration of nullity of the marriage bond provide a positive contribution to solving the problems of the persons involved?
Seriously: infallibility at the top is a very logical approach to religious doctrine claiming universal authority.  Not just because it's kinda consistent with the whole business of telling people what to do; but because the obvious problem with an inflexible Doctrine From Above, is that for any number of reasons it may, how shall we put this, fail to meet the needs of the hour.  Well, 2,000 years is a very long time.  And a very good way to fix that, when fix it you must, is to have someone properly authorised to do the business by fiat.  Much better than trying to figure out who might have had a really genuine encounter with a burning bush, angelic voices, etc.  Look where that got Joan of Arc.

If the new Pope is a bit uneasy with the authority vested in him, well ... invoke the spirit of Father Ted.  Or even Father Jack.  They had their ears pretty close to the ground, on all sorts of matters.


Friday 15 November 2013

UK Inflation falling - not for me!

This was quite an interesting find. I was going to a a post on the CPI inflation basket, although actually CPI and RPI are pretty close in correlation this year - with RPI being a little higher but moving in line even given housing prices and lending going up. With Help to Buy early next year, this correlation will probably start to widen.

What I did find though was this personal inflation calculator which is quite interesting and makes for an interesting view. My own circumstances have been very trying this year and I can see why as when I input my personal spending patterns it shows me having to cope with a personal inflation rate of nearly 8% for the past 18 months - no wonder I have to be hard working capitalist.

Here you go, peek if you dare...

Thursday 14 November 2013

Question Time: sting in the tail edition.

BQ is at least 24 hours from Telford, so this weeks guest picks were supplied by DJK - Who missed the easy points from tonight's location. The penalty of first.
And ND's favourite minister Ed Davey makes an appearance + Stella Yawn- Paul Militant - Nigel Wise and ???

 David Dimbleby presents Question Time from Portsmouth where shipbuilding is about to end with the loss of almost a thousand jobs. On the panel: Energy Secretary, Ed Davey; Shadow Business Minister for Labour, Stella Creasy; Nigel Lawson, Conservative former Chancellor; Paul Kenny, General Secretary of the GMB union; and Nikki King, director at Isuzu Trucks UK.

Anonymous DJK
Question Time (apologies for early post):

1. Doesn't the Philippines Typhoon show the need for a UN-sponsored no-strings International Rescue organization?
2. Energy companies! They're just as bad as the banks, aren't they?
3. NHS A&E. Is the National Death Service really safe with the Tories?
4. How would Israel benefit from a peace treaty with Iran?
5. Are you ever too old for a tattoo?

Dimbletie: Autumn shades of brown.

No points for first

2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter @BillQuango 

Number of wins 

Nick Drew -3

CityUnslicker -2
Measured - 2

Mark Wadsworth - 1

 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 

Kilgore Trout - 1

DJK - 1

The Philippines: How Do They Keep Smiling?

A Channel 4 reporter said it last night: the most remarkable thing is "their astonishing cheerfulness".

It accords with the happy stoicism of Filipinos I've met in my travels, and you can verify it with your own eyes and ears on every news report.  What makes a people so upbeat in the face of such devastation ?  What is the source of such amazing morale ?

While we ponder this miracle of human fortitude, here's the DEC site for a practical response.


Wednesday 13 November 2013

The power of OPM

Nick's last post highlights well the living fallacy that our politicians thrive under of hiding how much of Other People's Money they are giving away. By forcing private companies to extract taxes on our behalf, they direct the ire of the populace against capitalists, when all the while it is the socialists who are responsible for the rising taxes. It's very clever and from a realpolitik perspective, an excellent play.

Of course, the real truth is worse still. It is not just the energy companies that various Government's have hit with this wheeze;

 - Rail subsidies have been cut, still these are at least subsidies, but by reducing them steadily the Government has instead allowed RPI+1% as minimum increases in rail fares, pushing rail travel to become more expensive than air travel domestically.

- With the introduction and increase of the air passenger tax, air travel too has been made more expensive and the collection of this tax falls on the airlines. So in particular, former national industries are often hit, no doubt the socialists enmity to progress focus' them on such business.

However, it is not just the Government who like the spending on your behalf. Just this week we have seen a private sector case, which will be of little interest tot he high minded, but does get to me! BT Sports have massively outbid Sky for the rights to Champions League Football from 2015 onwards. This huge bid has been portrayed as the first real challenge to Sky since ITV's ill fated ITV Digital initiative. Sky suffered a 10% loss of share price on the back to the loss.

Worse though for punters, is that BT Sport will only offer one match per season per team free to air. So now there will be even less 'free' football on TV. Now of course this is BT's commercial right to try and compete with SKY. However, the massive over-bidding for rights, will mean more costs to watch the sport. Let alone having to potentially buy Sky and BT Services, the actual prices for the sports packages will go up.

Of course, this is a commercial decision that is up to BT, if they don't get the subscribers they will give up. But what it does mean is for 3 years there will be very little free to air champions league and then after that Sky, should BT fail, will be in a better position to not revert to offering more for terrestrial opportunities.

But then again, those football clubs, just like the Government, really do need those extra revenues. At least I can opt out of watching football, it will be harder to live without power.

Tuesday 12 November 2013

Political Attacks on the Big 6: Have A Care

It takes a brave man to defend the unlovely Big 6 energy suppliers these days - or a Telegraph comment-writer mindful of advertising revenues.  We don't see that kind of dosh at C@W, but there's still a case to be stated.

Particularly when we read crap like this from Ed Davey, trying to elbow out Milibean from the driver's seat on the bandwagon.
"[people] look at the big suppliers and they see a reflection of the greed that consumed the banks. So this is a 'Fred the Shred' moment for the industry. You deliver an essential public service, so your industry must serve the public"
Where to start ?  Firstly, yes, the ability to buy reliable and safe gas and electricity supplies in the home is essential.  The 'natural monopoly' aspects of this have long since been analysed out to be just the pipes and wires, the costing and pricing of which are heavily regulated and always have been.  The supply and commodity aspects (along with ancillary services such as meter-reading) are not natural monopolies, and have been 'contested' - i.e. subject to competition - in the residential sector in this country since around 1995 (gas) and 1998 (electricity).  The last Labour government finally dropped all price controls around the turn of the century.

They also regulated every other aspect of residential supply very closely, imposing no end of social obligations (such as not disconnecting elderly non-payers).  Indeed, they and their Coalition successors have been layering on ever more social obligations and 'green' surcharges with every passing year, culminating in the 'electricity market reforms' and the Heath-Robinson Energy Bill now inching its disreputable way through Parliament.  Is this 'good' regulation?  No, generally speaking it is not - but it is a far cry from the 'hands-off', light-touch, non-regulation (or at least non-enforcement) that was the Blair / Brown / Balls policy for the banks in the run-up to the 2007 crisis.

Undermining the operation of a proper market in residential supplies still further was the shocking failure to prevent the revival of vertical integration by acquisition, again on Brown's watch.  We've discussed this at huge length in comments here before.  Suffice for now to say that permitting Powergen (latterly E.on) to become the vertically integrated behemoth it became, followed by RWE and most recently EDF**, was a capital error - and I do mean capital: lots of it. 

(The scotties - SSE and Scottish Power - were of course privatised as verticals, and have jealously maintained their integrated structures. I exempt Centrica from all this because they achieved their 75% integration organically, not by acquisition - a very different thing - and it was done defensively, against the declining wholesale market liquidity engendered by the others.)    

No shortage of very pro-active regulation, then, albeit frequently crass.  Actually, rather a shortage of intelligent intervention, which should have been initiated by Ofgem to promote wholesale liquidity.  Their efforts have been protracted and pitifully lame,

The Big 6 must of course play the game under the ever more complex and often self-defeating rules they are faced with: and now to be turned upon by politicians of all parties is pretty rich.  I've no doubt that in many ways they haven't helped their own cause.  But, politicians beware! - because somewhere out on this uneven field of play is a cliff-edge.  Anyone who reads the papers will know that the UK is hoping for hundreds of billions of pounds of investment from these companies (and the National Grid, which raises almost all its revenues from them), to finance the comprehensive programme of power-plant replacement and grid upgrading required (a) to prevent the lights going out and (b) to deliver the monstrous 'decarbonisation' agenda.

It's well worth reading this piece from the Economist, which points out that as a consequence of the impositions and changes foisted upon them the market cap of the European power companies has fallen more than that of the banks (!!)  These are fast becoming companies whose balance sheets just will not support what is desired of them.  "Existential threat" is the phrase used by the Economist, and indeed RWE is arguably in a bed quite close to the door, with Iberdrola (Scottish Power) none to healthy either.  Imagine the reaction if Big 6 were to become Big 5 one fine morning: who'd be investing their billions the day after that ?

Meanwhile, back at the populist soap-box we have Ed Davey stirring things up instead of calming them down.  Ironically, on the same day we also have Cameron spouting this
Growth depends not just on Government policy but one wider social attitudes towards commercial success, he said. “We need a bigger and more prosperous private sector to generate wealth and pay for the public services we need. That means we need to support, reward and celebrate enterprise,” he said. “That requires a fundamental culture change in our country. A culture that’s on the side of those who work hard, that values that typically British, entrepreneurial, buccaneering spirit, and that rewards people with the ambition to make things, sell things and create jobs for others up and down the country.”
And that's the perverse political climate of double-think in which the Big 6 must go about their business.  Let's not imagine they won't one day, one way or another, respond quite badly to the kicking they get.

** remind me - was EDF's vertical integration in the UK achieved by acquiring British Energy ?   Oh yes indeed.  And was EDF advised by Gordon Brown's brother ?  Well, now you mention it ...

Monday 11 November 2013

Leak Exclusive: Milliband Labour election winning policy

Not content this weekend with a single new policy announcement, something to do with payday loans all being a bit mean and should that they should have restricted advertising, Ed Milliband is going to announce his most revolutionary change yet; and it has been exclusively leaked to C@W from the Labour press office ahead of its announcement at 4pm tomorrow.

Not content with the just the policy announcements of recent weeks that will see energy prices frozen and wages rise for all under a Milliband Administration, tomorrow sees the most ambitious statement of intent yet from the Labour leader:

"If the British people choose a Labour Government at the next election, then the Government that I lead will see to it that rain is banned. Not all rain to start with, but certainly between 4pm and 5pm on Tuesdays. We need more happiness in the Country for our poor people who have had a miserable time under this Coalition. Everyone has been suffering for decades under a capitalist, laissez-faire, market-based approach to our national Weather management. Even if it is only for one hour a week to start with, before we can raise the taxes on bankers enough to expand the hours offered, people will be able to make special plans and the most of Tuesday afternoons. Our children will get to play in the parks, dogs walked.The increase in revenues from shopping alone will more than cover the costs of the thousands of chemical artillery rounds that will be used to break up the clouds. The jobs created in the munitions factories will also be beneficial to the economy and we have estimated that the net boost of this policy will be £3 billion a year.

However, only the most deserving postcodes will benefit and rich, low-rain zones such as Surrey, Chelsea and Kent will not benefit from the new policy (Westminster will be an exception). This will be a targeted, progressive measure. The jobs created in the munitions factories will also be beneficial to the economy and we have estimated that the net boost of this policy will be £3 billion a year. Soon after its successful implementation we will look to expand the policy to bring through even more social cohesiveness and economic benefits.

For so long this Coalition has denied poorer people the right even to a dry afternoon, even when the power is in its hands and it has been proven a net economic gain; clearly their anti-poor political stance has been at the forefront of their minds to lead to such a dereliction of duty. My administration will be of an altogether different and progressive mindset"

How will the Government possibly challenge such an audacious bid. I understand that focus-group polling by the Labour party has seen 100% of responders confirm that they are not very keen or even don't like rain and are very supportive of a policy which reduces rain. we can only await the Government response, but with nearly two years until and election, perhaps the Government has time to form its own policy and perhaps even go the whole hog and ban rain altogether?

Saturday 9 November 2013

France: The Longest Running Love-Hate Relationship

She's in trouble again
Further to Mr Q's excellent post yesterday, the 1000-year relationship between Britain and France really does have the characteristics of a soap opera.  In the words of Nelson, an Englishman should hate the French as he hates the Devil himself: and when I was a staff officer it was the convention that the first suggestion for a plan to solve a strategy problem - whatever it was - would always be: "Phase 1, bombard Paris".
They bake their bread in such a naughty shape. 
They brag about their wine and worship the grape. 
They criticise our food but then they eat crêpe. 
That's why i hate the french, oh, 
That's why i hate the french.
On the other hand, just how many Brits speak French, love the country and its wines, have houses there etc etc?  We have fought each other so many times; our rival empires grew together; we faced all the same problems - we know and respect each other so well, it's a family quarrel, au fond.  This wretched nuclear deal with EDF has thrown us together once again: both governments will be going cap-in-hand (or in the French case, CAP in hand) to Brussels for approval** of the gigantic state aid it involves, God help us.

And now, as 'Kayter' said in the comments yesterday ... and now Le Downgrade.

For any who have not yet done so, Evans-Pritchard on this in the DTel is well worth a read: one of his best.  But by way of weekend rumination, what do we all reckon to this complicated relationship with France ? Who else can put it into words ?


** Being turned down by the EC may be our best hope on this one 

Thursday 7 November 2013

The Popular Front

The Popular Front was one of France's many inter war governments. A mix of hard left socialists, true Moscow instructed communists, Radicals and usual 1930's assortment of International Socialists and Marxists that today would comfortable sit with the looney left tag.

The great crash of 1929 had not at first done much to harm France. In fact, there was a boom. But that soon faded and France fell into the same depression as everyone else, only worse. Wages, which were already low by British standards and abysmal by American did not keep pace with prices. Working conditions in private sector factories were poor. Deep mistrust of unions and workers by the ruling classes existed. Revolutionary prone France was always worried about the next peasants revolt and many factory owners operated as 19th century industrialists keeping workers in their place through fear of dismissal for even minor infringements and anti trade union legislation  Working relationships were very poor.

  Scandal, misappropriation, incompetence, lies and anti-Semitism had been hallmarks of the many previous inter war governments of both left and right. By 1936 people wanted a real change and so, spurred on by the thought that 'it can't get worse than this' and lots of the popular socialist imagery and communist beliefs of the day the people voted in a coalition of assorted ultra lefties led by the brave, and honourable Léon Blum, the first socialist Prime Minister of France and the first Jewish one.
 It was a triumph for the left and a savage blow to the right. As if Owen Jones and Bob Crow had become Prime Ministers. 

Immediately disgruntled workers occupied factories in the first sit ins. They just moved into the factories and lived there. Doing no work and preventing work from being done.There were daily speeches by popular left wing agitators.The singing of fraternal songs and the usual art and culture poetry and pamphleteering beloved of solidarity movements. The daily demands for a fair day's pay for a fair day's work and better working terms and conditions were cheerfully delivered to the management. And as the occupied factories were mostly in the arms industries, the bosses were told if they didn't pay up, then the factories would be blown up. The Renault factory was a major occupation site as were steelworks.

At the time many many left wing intellectuals and writers and poets and academics were extolling the virtues of the all new Soviet Union. Stalin was showing the world how his worker's co-operatives had transformed the USSR into a major manufacturing power. Avoided the depression and leapt ahead 50 years in just 10. The reports from Western intellectuals confirmed these claims, which were, as we now know, bogus at best. The reality of the mass murdering regime remained mostly secret and what little reports of the terrible atrocities taking place in the people's paradise that did emerge were disbelieved. . 

So there was much excuse for the workers to take to the streets and occupy the industries in the summer of 1936 National Strike. To defy government and law and threaten even themselves with loss of income by revolution. their list of grievances was long, their leaders incompetent and out of touch and popular front government seemed to be working elsewhere, whilst capitalism was failing everywhere and looked like it was doomed to be remembered only as a brief early 20th century phenomenon.

 The government and the people and the unions duly signed the Matignon Agreements that paved the way for modern socialist France and Europe.

Wikipedia records that "Despite its short life, the Popular Front government passed much important legislation, including the 40-hour week, Paid 2 weeks holidays for the workers, collective bargaining on wage claims and the nationalisation of the arms industry."

And there was much more . Legal rights to strike and removal of any obstacles to union organisation. Shop Stewards. Forms of employment tribunals.And a 10-20% blanket wage increase with some of the very lowest paid, especially women, getting up to 400%. Pensions were increased and right wing, semi-fascist, organisations were banned. It was a great achievement for the popular front government. 

This, nowadays normal seeming, progressive agenda and bounteous give away to the taxpayers should have seen the Blum government in power for a decade. But it fell in under a year. The usual mix of lefty infighting, complete cabinet disagreement over what to do about their Republican comrades in the Spanish civil war and ..all the money ran out.

 French society was deeply divided. extra taxes were promised on businesses and agriculture that were reluctant to pay them. Many of the wealthiest moved abroard. And capital flowed out of the nation at an alarming rate.
The popular front had gambled that by giving workers higher wages they would become more productive and spend more. Instead production fell as workers actually put in fewer hours.
Employers could see no point in investing in their industries that might be nationalised at any moment. The arms industries, the rail roads and even the bank of France had been part or wholly nationalised. And besides, what point in generating greater profits if they were to be taxed away?
And during the summer of 1936 alone, prices across the entire country rose by almost a fifth.

The 'living' wage increases won in the summer were all wiped out by 1937. The Franc had to be devalued by 10%, which was not enough. Workers then demanded higher wages to keep pace with the new prices and industry resisted every attempt to pay them. 

Division, bitterness constant stoppages, strikes, indiscipline and a continuing loss in productivity plagued France until 1940 when the Germans crossed the Meuse and the nation that had withstood and then defeated the Kaiser's army in 1914 were themselves defeated in a week.

Some can argue that all this was a long time ago. Has no relevance to us today and times have changed and anyway this time it will definitely work out differently if the popular front ideas are implemented.  This time, in the modern world,  25% pay rises for all, a freeze on energy prices, food price controls, more social housing, higher benefits, longer holidays, greater employment rights..
Its all going to be a huge success.

However we are lucky. Because modern France has partially gone down this route again for us.
And if we want to see how a Popular Front style government would work out today, we can just look across the channel at the most unpopular French premier since Julius Caesar.

"More than 70 per cent of the French feel taxes are “excessive”, and 80 per cent believe the president’s economic policy is “misguided” and “inefficient”.
 By 2014, France’s public expenditure will overtake Denmark’s to become the world’s highest: 57 per cent of GDP. In effect, just to keep in the same place, like a hamster on a wheel, and ensure that the European Central Bank in Frankfurt isn’t too unhappy with us, Hollande now needs cash. Technocrats, MPs and ministers have been instructed to find every euro they can rake in – in deferred benefits, cancelled tax credits, extra levies. As they ignore the notion of making some serious cuts..."

BBC Question Time : End of the ship-of-the Line edition

David Dimbleby presents Question Time from Boston in Lincolnshire. With defence minister  
Anna "I see no more ships" Soubry MP.
 Shadow attorney general Emily "Chocolates" Thornberry MP, 
UKIP leader Nigel "I am not a one man band" Farage MEP.
 Poet Benjamin "Seriously immigration man - that is my profession. No . I'm not trying to be funny.." Zephaniah and 
Vicky "Within these Walls" Pryce, author of the book Prisonomics.

BQ thinks
1. Sacrificing Southern shipbuilding for the sake of the tartan union. A price worth paying?
2. Energy bosses not saying V. much.
3. The living wage. Why won't evil capitalist bosses  pay enough ?Bas**ds
4.  The terrorist bloke who did a very hackneyed bunk.
5. Spymasters and the Guardian. TREASON!

Dimbletie - Silver surfer

2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter @BillQuango 

Number of wins 

CityUnslicker -2
Nick Drew -2

Mark Wadsworth - 1

 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 

Kilgore Trout - 1
 Measured - 1
DJK - 1

Wednesday 6 November 2013

Scots win in Govan at English expense

One of the good side effects if your a Scottish worker or politician is that having a referendum on independence next year means you have lots of political leverage now. BAE, a private company but with the closest links to the Government of any private company, will no doubt have an ear out for what Downing Street and the mandarins would want.

In this case it won't be too hard to guess, with a downgrade in the need of naval building capability obviously needed after the aircraft carriers are built, there have to be some job losses. The choice is between the shipyards of the Clyde or Liberal Democrat Portsmouth. I pity the people of Portsmouth who deserve better than to be shafted to prevent Alex Salmond smiling, but that is what will happen.

One of the problems of the referendum is that anything done now to upset the Scots can be played as 'forcing' independence. In fact anything at all, a Tory or Labour win in the Eu elections, closures of shipyards, infrastructure projects funded or not funded.

It's called in other way being held to ransom; like the bad marriage where one party constantly misbehaves and then threatens to leave all the time anyway. As we would advise our friends, the only sensible thing to do is tell the mis-behaving party to get knotted and get one with the bitter divorce.

Tuesday 5 November 2013

For Once, Regulation Is Actually Warranted

We suffer under grotesque amounts of interventionist EC regulation, generally misconceived, frequently futile if not actually counter-productive: so one's knee-jerk reaction is negative.  (Always a painful manoeuvre, and called upon all too often.)

But, say I, mandatory charging for supermarket plastic bags in England and other countries is long overdue.  The pricing mechanism to resolve a nonsensical situation, in its simplest, most effective form.  (It even taps into the tax-dodging reflex and people become determined to reject a proffered bag.)

A capitalist speaks.

That's it.


Monday 4 November 2013

A living wage

Well, you wouldn't start from here would you. What a bizarre place the modern UK has become. Gordon Brown's huge extension of tax credits and the general extension of welfare benefits has led to a large percentage of wages effectively being subsidised by the State. The damage that this has done cannot be under-estimated. Brown was a brilliant marxist economist, he knew full well what he was doing. Now so many people are dependent on state hand-outs that any threat to take them away can result in protest groups like UK Uncut being formed.

Ed Milliband's weekend whimsy has been to suggest that companies pay the living wage rather than the minimum wage. the difference is quite a lot, but far less then people imagine when taxes are taken into consideration - almost half the increase would go in NI and income tax anyway, plus benefits would be reduced for the higher income - leaving receivers of ed Milliband's promise probably no better off. The companies too would benefit for one year, so hardly and incentive to change or much of a reward for doing so. all this smoke and mirrors avoids the key question in any event, why are wages so low?

Well, firstly, free movement or labour has not helped the lowest paid as they face the heaviest competition for work from unskilled immigrants. Secondly, with input costs rising as the Pound has de-valued 25% since the recession, businesses have had to cope with increase costs, with prices hard to rise in a deep recession, wages took the brunt of the crunch. Thirdly, there are taxes, it is very expensive to employ people, less so at the bottom, but still expensive. This is why firms have moved to zero hours contracts and other ways of trying to avoid full-time recruitment, because the costs are prohibitive. Fourthly and finally, taxes are too high, this is related to the third point for employer taxes but also applies to the employees, too much of their wages go on taxes on council tax, fuel duty, VAT at 20% and so on - even though income taxes are low and nearly non-existent for low income households, other taxes are high, reducing their disposable income to be spent on real goods and services.

What is interesting is that Labour are sort of trying to come up with a partial solution to point three, but ignoring the other three. Current politics has become a game of band aid policies, with seemingly little attempt to alter under-lying dynamics. Above I have laid out the obvious, immediately changeable issues, with even mentioning the standard or schooling or the type of jobs being generated by the economy, both of which are harder for a 5 year Government to do too much about.

Sunday 3 November 2013

Gas, Eggs and Baskets

I have a fair amount of time for Michael Fallon (pity about the EDF nuke deal), but ...
"We are looking for more long-term gas supply contracts with Qatar – they have proved a very reliable partner," Mr Fallon told The Sunday Telegraph. "It's very important we strengthen our relationship with them."
A bit close to, errr ...
Hmm.  The article goes on to say that LNG accounted for 28pc of the UK's gas imports last year**, 98pc of those from Qatar.  Reliable, yes - but the geography is worth considering, too.

Diversification is kinda important, Mr F.  As Churchill said à propos of the Navy's one-time near total reliance on oil from Persia: “Safety and certainty in oil lie in variety and variety alone.”


**I thought it was more, actually, but can't be arsed to check just now

Friday 1 November 2013

Trick, Treat - and Knowing When To Shut Up

So the Drew household has installed the ceramic cut-out pumpkin with the night-light in the porch, assembled the confectionery, and is quietly watching TV and awaiting the chaperoned hordes of Halloween tinies.

The bell rings; Drew throws open the door, and - - - 

- - - two teenaged lovelies in dustyspringfield make-up, school shirts, ties, and the shortest skirts you've ever seen.  Jailbait alert !   - this is horror of a different kind. 

In normal circumstances I am fairly quick off the mark with a half-arsed witty gambit ... and the words 'trick' and 'treat' came very readily to mind in various combinations, not to mention I've got something here for you ... 

Not to mention !  That's the key: not to say anything at all - and mercifully the brain engaged first time as I silently proffered the basket of candies.  The door closed to a round of approving applause from Mrs D.

Phew.  Have a good weekend, all.