Tuesday 15 March 2016

'Strategical' Osborne Hits the Hinkley Buffers

Sorry to keep coming back to the Hinkley fiasco, but it really is quite an extreme (not to mention amusing) example of several phenomena, all in the one train-wreck.  In no particular order ...

Can-kicking:  one of the key aspects of Hinkley is that in its physical manifestation - i.e. as a producing power station (putative) - it has been viewed as consequence-free within the usual political time-horizon.  It was always going to take more than one parliament to build the wretched thing so Osborne was able to take the approach of 'paying for it' via an ultra-inflated electricity price that wouldn't kick in until that distant day when production commenced, by which time the price of other energy could be, well, it could be anything, really.  OK, in the meantime there is the minor matter of millions in legal fees etc, but that's small(ish) beer.  Kick that can!

Hubris:  of course in its political manifestations there have always been much more imminent aspects.  Osborne reckoned there was a triumph to be had if (a) Hinkley appealed to the Chinese as an icebreaker for their own nukes to follow, a down-payment on the relationship he wants for when he's PM four years from now, and (b) it could be heralded as the dawn of a new age, proof of political will, marquée project, big swinging dick etc etc.

Kinda depends on it actually going ahead, though ...

Suspending the Law of Gravity:  as I often say, you can suspend the law of gravity - but only if you are prepared to throw enough money at it.  And guarantees backed by an AAA government plus a couple of AAs are worth a heap of money.  But: when the music stops, you fall to earth, every time.  And Hinkley just doesn't fly.   

Naïveté in Whitehall:  but less so elsewhere.  In the red-white-and-blue corner over here we have the endlessly ignorant and gullible politicians + civil servants of Whitehall who know nothing of industry, finance, commerce, negotiation etc etc - in fact, the whole real-world package, it's just plain missing from their repertoire.  In the red-white-and-blue corner over there we have the shameless, unscrupulous, highly adroit members of the French diplomatic machine and politico-industrial complex who think nothing of lying, lying and lying again.  We'll build you four new nukes if you'll just let us buy British Energy.  The first will be up and running by 2017.  All we need is a guaranteed floor on the carbon price.  The first will be up and running by 2019.  Oh, and a guaranteed electricity price of £45/MWh.  The first will be up and running by 2020.  Well, make that £50.  The first will be up and running by 2021. No, actually £80.  The first will be up and running by 2022.  OK, if you twist my arm, £92.50.  Index-linked.  For 35 years.  The first will be up and running by 2023.  Oh, and a stack of indemnities ... did I mention, the first will be up and running by 2025? 

The Strategical Genius that is Osborne:   we do rather keep coming back to this, don't we?  On the one hand, it's clear enough he does indeed think in a rather 'strategical' sort of way: he knows what chess is, he's thinking several moves ahead, he has long-term goals and a game-plan, he can often trip up political opponents (of all parties) who can't see beyond the end of the next gin and tonic.  In the land of the blind men, the one-eyed man can sometimes score a few easy points.

But thinking strategical-type thoughts isn't enough - eventually they have to be good ones.  This is doubly the case, because the arrogant and ambitious would-be strategical genius frequently projects himself into a Position of Power, where the stakes are high.

And in the cockpit of Power, sooner rather than later one comes up against the two-eyed man.  That's the sort of person who's often to be found in such places.  Playing Big Boys' games.

Yes, you're a strategist alright, George, OK?  We've noticed, and we've acknowledged it.

But you're crap.  And that's been noticed, too.



CityUnslicker said...

A* post. the naivete in Whitehall para is pure gold.

Anonymous said...

@ It was always going to take more than one parliament to build the wretched thing

The British, French and Chinese!

Demetrius said...

This coupled with his other Great Plans just announced are terrifying in their total barminess. The longest road tunnel in the world from Oldham to Huddersfield or something? The man is barking and consumed with the arrogance of power. If he really wants a project perhaps the reopening of The Bethlehem Hospital with himself as the first inmate would be the cheapest option.

BE said...

I think we should press ahead, if only so we have another 20 years' worth of moaning. How is that Finnish one going?

There are at least two very good reasons why we stopped building nukes in the UK, and why even the French aren't quite as keen as they used to be!

Trip-A post ND.

Nick Drew said...

Demetrius - the Bethlem, you will be pleased to know, is alive and well:


it incorporates a secure unit for some really nasty types (special high-security zone, 20-ft wire fences, frequent helicopter overflights, searching the grounds for escapees, that sort of thing - we neighbours think it's *wonderful*

I'm quite sure there's a bunk for George there, in the same room as Big Spike

rwendland said...

Superb writing ND.

But £45/MWh was already well into the mountain climb. Areva originally pitched it to UK politicians at a very enticing, even competitive, £24/MWh (in 2005-ish I think).

DJK said...

Great post. It has always been clear that Osborne thinks of himself --- and Cameron appears to share his opinion --- as a strategic genius. And yet we've had --- what, seven years? --- of plain evidence to the contrary.

ND: Great post.

Dick the Prick said...

Ha ha - great summary, cheers ND.