Cheery weekend update: Mandelson thwarted

Cheeringly, Mandelson came a resounding 4th in a final field of 5 for the Chancellorship of the university.  He had really pulled out all the stops on this, including blow-by-blow briefings to LabourList (who must have groaned, but still published it all through gritted teeth - I expect he indicated there'd be something in it for them.  Or issued some kind of threat, he is never slow with the menace**).

Couldn't have happened to a nicer bloke.  We read that what he's really going to be doing over the next few years is be Ambassador to the USA.  I can just see him now, wheedling with Bum-Steer Kier: "what you absolutely must have, is someone who can effectively negotiate with Trump in the only ways he understands ... What my many US contacts tell me, is that he only respects people who've been in the game for a long time, with a lot of personal money and a track record of dealing with global issues in a transactional, realpolitik way ..."  

Will it work?  I'm told not: but strange things are happening quite a lot these days.

ND

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** I have told this story before.  Many years ago I had an office in No.4 Millbank, a fine Edwardian building you will be familiar with from its roof terrace and staircase because, overlooking the Lords, it also houses the Beeb's Westminster offices and they conduct many a TV news clip or interview from there.  At the time, the Labour Party also had a suite there - it was just before New Labour's great 1997 GE victory - and Mandy was in his prime, calling all the shots.

One day I happened upon him in a corridor with a small gaggle of very young Labour staffers.  I have no idea what was the context; but in a soft, conversational manner, he berated them thus:  "... and if you ever screw up like that again, I will make sure you never work in London for the rest of your lives".  Such a nice chap.

Votey McVoteface - the Great British SOH strikes again

 Gotta love this crazy 'new election' petition.

The famous British GSOH in full flight !  Ridicule & satire are sometimes the most powerful weapons.  After 14 years, HIGNFY (e.g.) had become an anti-Tory gagfest: but I'd say that, the inevitable woke luvvies notwithstanding, it's rapidly going the other way.  So many figures of fun; so many targets.  And such a short period since that last election.  Almost makes up for the loss of John Prescott.

ND  

Xi humiliates Starmer

I return from a trip last week to find two obviously connected headlines that don't seem to have been juxtaposed in the MSM. 

UK's Starmer Confronts Xi on Human Rights at G-20 (here) 

Hong Kong jails 45 pro-democracy activists 'for trying to overthrow city's government' in latest China-imposed crackdown (here)

China is obsessed by symbolism in such matters, and the timing won't be remotely coincidental.  Has anyone dared to tell Starmer that this can only be a calculated, deliberately humiliating slap in the face?  

And why has this obvious aspect not - so far as I can find - been reported on here?  Someone please correct me if I'm wrong about that, but as I say, I haven't found it.

ND 

UK nuclear madness

Always remember what we said here a very long time ago: the whole point of France's nuclear policy is to get other nations to underwrite their astronomical nuclear liabilities.

This is precisely à propos of Mr W's prompting BTL here (he'll kindly correct any details that need correcting) ...

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The Hinkley Point C / Sizewell C story so far:

When EDF (together with Centrica & later still the Chinese) acquired the old British Energy in 2008, they were immediately set on building more of their EPR design of nukes in the UK: HPC was nominated to be the first.  Recall that until after the 2005 GE, Blair was set against a nuke revival which he'd believed to be electoral anathema: but various voices** persuaded him it was a Good Idea.   EnSec at the time was of course ... Ed Miliband.  EDF had the effrontery to announce an HPC start-up date of 2017, and that it wouldn't require a penny-piece of subsidy - the latter line being official government policy up to and including the awful Chris Huhne (remember him?)  

Next milestone event was Fukushima 2011 which, to be fair, was outright force majeure and caused significant mods to be made to the design of the structure in which the EPR reactor would be housed.  OK, so the costs went up as a consequence.  But that was the last externality that EDF can truly be excused of: covid might just also creep in to the reckoning, but not inflation, their other bleat.

During the regime of Ed Davey - to be fair, egged on by that git George Osborne - suddenly EDF was going to get subsidised.  We have written about the awful HPC CfD contract many times here.  It has only one saving grace, on paper at least: project cost overruns are solely for the account of EDF / the Chinese (who've now buggered off) / Centrica.  But given the outrageous one-way changes subsequently made to the CfD in EDF's favour, at EDF's demand, even this is of little comfort.  The project overruns are horrendous; and we know EDF will hold a gun to HMG's head for outright cash subventions at some point.  (Personally I suspect this has already happened, disguised as SZC payments, see below.)

To repeat: once the Fukushima design changes were made, everything subsequently is down to EDF's monstrous incompetence.  EDF hints that UK regulators have kept tinkering unreasonably with new design demands, but remember: the CfD states that unless a new regulation could have reasonably been foreseen by EDF, the latter is indemnified against extra costs arising.  So we can put 'costly regulatory tinkering' out of our minds.

Fast-forward to SZC

EDF, of course, realised even before the ink was on the CfD (which they only signed because they thought Brexit would scupper the project altogether) that they couldn't carry out SZC on the terms explicitly for SZC itself that are actually contained in the HPC contract (i.e. for SZC as a put-option for EDF).  So they carefully played a lobbying game resulting in Boris agreeing to finance SZC on a US-style 'rate base' footing (i.e. underwritten directly by taxpayers) - and then, got HMG to stump up hard cash: a billion here, a couple more there ...  now the cash commitment has hit £11 bn of taxpayer money, rather than the usual 'stick it all on the electricity bill'.  AND - amazingly - although EDF has yet to take FID on SZC, the new reactor is already under construction in France, paid for by us.  FFS !  Talk about "too big to fail" ...

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So now we loop back to the very first line of this post.  Also, we should stew in the details of how badly in trouble HPC is, and how cash-strapped and liability-riddled EDF is in general; how much HMG needs French cooperation on the Boats issue; and the perennial suspicion the whole civil nuclear programme is there to underpin the military nukes ... and you have a recipe for an ongoing haemorrhage of taxpayers' cash that starts to look seriously injurious.  And in the middle of this, Miliband thinks he can get electricity bills down!

An appalling tale - egregious even by the standards of HMG cockups and nuclear age skullduggery.  I have nothing against nukes in principle: but in practice they just never add up.  If we wanted an SZC, let it be remembered that by far our best-performing nuke has been SZB.  We should have 'simply' (hah!) built an updated SZB. 

ND  

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** including one G.Brown, brother of whom worked for, errrr, EDF

General - if you follow the tags, you'll find loads more C@W posts on these topics.

The eternal attraction of cushy deals + the easy life

"Nicolas de Warren, president of the French Union of industrial companies with high consumers of electricity, calls on the government to appoint a mediator between the Union - which wants a deal for for cheap electricity - and stated-owned EDF.  "EDF appears to be in a form of denial of the current situation and the very serious loss of competitiveness suffered by French industry [...]. If we do not reach a conclusion quickly, [there are] risks of plant closures and the relocation of production," he warns. According to him, the main point of divergence between EDF and industrial companies is the methodology for defining the cost of nuclear production."

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I've recounted the following story before.  My commercial career was spent in companies that expected to make their own ways in the world, & never looked for subsidies[1].  One day I found myself dealing with ICI (deceased), that blue-chip paragon of British Industry, where I discovered their attitude was "why do a hard day's work when you can lobby government instead?"  Soon, I encountered more firms like that and, aside from initial revulsion, I realised there was an entire slice of the 'commercial' world with a 'business philosophy' I didn't know existed, and needed to understand.    

This entitled sense of "always look for the easy life, we deserve it" soon hit me again in a slightly different variation.  In the firm I was working for we had cannily acquired a long-ish term contract for purchasing gas at a deeply discounted price, from a seller for whom the gas was more-or-less an unwanted by-product.   It wasn't an outright distress sale - they were a perfectly viable going concern - but if they'd wanted to get top dollar for it, they'd have needed to set up, in a hurry, an entire new, specialised commercial department, which doesn't even sound easy and in practice would have been extremely difficult.  Getting shot of the whole lot in one go, for a price they found acceptable, was just fine by them.  The deep discount was the price they were willing to pay (- or rather, to receive).  To give a rough indication: if market price at the time was 100, we settled for 85.  A bloody good deal for us, and they were a willing seller.

Somehow, word of this deal got out (it always does).  So then I get a delegation of senior managers from big industrial companies based in the area where we'd be taking delivery of the gas (some for our own use, some for onward sale).  Their pitch was as follows (and I'm not making this up):

"Now look[2].  We all know you've bought a big slug of gas at a price of 40.  You've got to share this windfall with us.  We'll offer you 50.  You've a moral obligation to sell it to us."

Where they came up with '40' is anyone's guess.  I politely replied that their numbers were way off-beam: that we'd be delighted to sell them gas; and that they'd pay something based around market price[3], like anyone else.

"But whether it's 40 or 45, it costs you much less!  You must sell it to us at cost-plus.  What's 'market price' got to do with it?"  

Tempting as it was to give them a little lecture about how house prices have nothing to do with the cost of bricks, I decided it was best to draw the meeting to a close with as little emotion as possible.

Nothing changes.  I suppose you can argue that EDF, as a state-owned monopoly, is in a slightly different position.  But the attitude remains the same:  what's mine is mine, & what's yours is up for negotiation.  Now hand it over. 

ND

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[1] Sometimes they had subsidies almost thrust upon them, but that's a bit different. 

[2] They didn't quite add "you devious London ba-astards", but that was the tone.

[3] After several months when they'd calmed down, we did indeed do a deal for them.  It was at market price, minus half the transportation charges they'd been paying to get gas delivered through the grid.  Given that we could deliver direct, locally, this was the logical win-win arbitrage.  A perfectly good deal for them, as they ultimately recognised.  We got there in the end!  - shame we had to go a fraught round of SillyBuggers first.

Revenge of the Spads (3): COP Comms Catastrophe

Scene: a breakout room in a Whitehall conference centre.  Sparquin the Junior Spad is sitting alone, idly thumbing his 'phone.  Enter Ru-Ru, a Superspad, looking bronzed but distracted.

JS:  Rupes!  You're back!  God, we've needed you.  What was it like over there, working for the Dems?

S-S:  A total shitshow.  Started in DC, hot as hell, but then they shipped most of us to Penn.  Fucking incredible, all they cared about was their sodding celebrity endorsements.  Turns out, Swifties aren't old enough to vote - who knew?  Everybody, that's who.

JS: But you're looking fit, man - where've you been?

S-S:  Chap I was at school with owns a small island off Trinny.  All beach cricket and surfing.  I needed some R&R, I can tell you.

JS:  Maybe, but mate, we needed you here these last few weeks.  Total comms fuckup on all fronts.  First, PM goes to the Commonwealth thing at Samoa, gets ambushed on reparations!  Never saw that coming, totally unprepared, had to busk it: only headlines were bad ones.  Disaster.  24-hour flight each way, comes back knackered and furious.  All the hacks at the back of the plane - they used to keep a straight face & simper for the group photo, but now they snigger!  

Then.  THEN there's COP.  Off to Baku, absolute hell-hole, nobody else there that the PM knows but with big shiny Lines-To-Take for him & Mili on new UK emissions commitment bollocks.  Plus a new line on being Leader of the World - I thought of that one, seeing that no other first-tier c**t bothered to show up - which cheers him up a bit.  Mili of course is completely in his element & off with the fairies - far as I know, he's still out there arguing the toss with the petro-states, well he's on his own with that one.

ANYHOW.  Then fucking Welby explodes!  Catastrophe - can't buy a headline anywhere for love nor money.  Does any man, woman or child in the entire country know we increased our bloody emissions offer last week?  They do not.  

S-S:  Tough gig: I was better off on that beach than I realised.  Can't have helped, either, that the Gray woman finally sloped off, briefings from all directions - much juicier story than CO2.  Someone put shit on her shoes on the way to the door alright - was that you?   

JS:  Ah, now you're talking!  Yes, I got to do that one, and very satisfying it was, too.  We targeted end-November, didn't we?  Spot on the money!  Fucking excellent.

S-S:  I'll give you that one.  Sounds like you're just the man to spin the economy for Reeves - you'll enjoy that.  Now: diaries out: when's that Xmas Party ..?

As overheard by ND

Russia - extreme measures to prop up the birth rate

As we well know, declining birth rates across substantial parts of the globe, coupled in many countries with ever-increasing longevity (of a sickly fashion), is a massive strategic issue - economic, social, political, demographic, you name it.  Russia has it as bad as any, and they are now losing their youthful menfolk to war at a striking rate.  As elsewhere, they are increasingly reliant on immigrant labour, but as elsewhere this causes serious tensions.  Wage inflation is rampant as the war economy grows. 

But Putin is, after his fashion, a strategist - and plans are afoot to rectify the situation long-term.  Some of what follows is in the "do we really believe this?" category, but I assure you it all comes from informed Russian sources.  Measures under active consideration include:

• a "childlessness tax"
• reducing the age of consent (the earlier kids get at it, the more offspring they'll have - that's the theory)
• banning abortion
• banning divorce
• contraceptive purchase made significantly more difficult
• revival of all manner of patriotic "have lots of children!" campaigns from former years
• Orthodox priests to tell their flock childlessness is a sin
• tax breaks for large families
• some of Putin's childless mistresses to "mend their ways" rather publicly
• banning alcohol 

Banning alcohol?  In Russia??  Yes, you heard that right.  When I first read this, I assumed it was some Russian satirist at work: just one piss-take too far - but no.  Apparently there will be some experimental "dry regions" established in the near future.

Never, ever, consider getting into a drinking contest with Russians - they have what is termed "special training".  If you've never been there, it can be like Saturday night in the Gorbals, seven days a week.  For Russians, hitting the age of 60 is a really big deal, so many of them keel over of alcohol-related causes before then.  In any office, at all levels of seniority you'll find puffy, red-faced people bimbling around doing not very much: that's the latitude given to dipsos.  As for the streets ... Russian cops carry big black-and-white striped sticks, notionally for traffic control, with which they tenderly shepherd the drunks into side alleys.  

Good luck with that aspect of policy, eh?

ND 

Germany: looking grim - energy policy doomed

We've often said hereabouts that Germany is never to be underestimated for the things it does strongly.  That, of course, includes vigorously digging deep holes for itself: Es irrt der Mensch so lang er strebt  - and there's no striver like a German who's got religion.  Prior to Ukraine Germany was already embroiled in a nonsensical 'energy transition' policy - Energiewende - that we've written about here several times.  Formerly I took a simple & cynical view on this: they can probably afford it; and it's better to watch them do the experimentation on moonbeams from cucumbers etc, than do it ourselves.

Since Putin kicked off in 2022, they've bizarrely doubled down on what was at the time an embryonic policy, namely to become a hydrogen economy.  The (natural) gas sector in Germany had been privately working on this for a while, using its own funds (always a good sign) , wishing to have a lifeboat for its vast sunk-cost infrastructure against the scenario of natgas falling as far out of favour as have nukes, lignite and hard coal in their turn.  Quite fairly, the entire German state doesn't favour UK-style deindustrialisation as an alternative approach to 'green'.  In some kind of arm-waving fantasy, hydrogen seemed to be the answer - first 'blue' H2, swiftly to be followed by 'green' H2, and getting started with imports (another fantasy; but a lot of countries from Australia to Saudi keep saying they'll be big exporters any year now).

Being Germans with a Policy, they've now zoomed past the sensible 'private experiment' stage and have erected a complex system of targets and subsidy structures for hydrogen projects, both upstream and downstream.  (I have tried to get to grips with it in all its byzantine complexity, but it's not easy - and indeed may not represent anything you can understand rationally at all.)  Every German firm that might conceivably participate in the putative H-economy is dabbling in this, all hoping someone else will jump first.  Along the whole length of the putative H2 supply chain, every single major scheme that was more-or-less on the starting blocks at the start of this year has either foundered already or suffered major setbacks.  

A key player in the German economy - until a couple of days ago - was Federal Minister of Finance Christian Lindner.  I have a very good friend who knows the man, and tells me Lindner was a lone voice of sanity in a cabinet of lunatics.  Lindner's overarching view is that his fellow countryman have too much in the Manic Enthusiasm department, and little instinct on the matter of value for money.  These two things he saw coalescing to baleful effect in the hydrogen policy.

What now?  Ploughing on regardless would be very German, but maybe even they are beginning to see it for the nonsense it is.  Perhaps everyone hangs on until after COP29, and then the ructions really begin.  However much we might mock, we'll all feel the impact if the bicycle topples over. 

Es irrt der Mensch so lang er strebt.  Yes, Goethe had it right: and as he also suggested, they just can't stop striving ...

ND

The (apparent) perennial draw of US politics

Well, not for me anyway.  Obviously the outcome is extremely important: and one could see why de Tocqueville found it a matter for serious study ... in the 19th Century, when it was all rather novel.   And the US-historical novels of Gore Vidal are great stuff.  But the minutiae?  Today?

And yet many folks (OK, many folks within the chattering classes) are absolutely obsessed, and we are about to be bombarded with it.  Why?

Open thread:  what's up with that?  And US situation generally.

ND