Future of the UK electricity "market"

BTL on the last thread, Clive triggered some comments with: Renewables are rocking da house. And negative prices! So, while hydrocarbons will linger around for a while yet, they’re obviously not indispensable and are, arguably, definitely in run off;  followed by Anon: Interesting points being raised by @Clive on negative electricity prices due to generation imbalance. Perhaps another thread on suggestions on how to use up all the surplus power when its available e.g. pumped storage. 

So here we are.  Nobody quite knows the future evolution of the UK power fleet, seeing that the government is willing to throw really quite serious money these days - plus various threats of compulsion - into a range of energy-related options (nukes of various sorts, CCUS, hydrogen, EVs, HPs), some of which frankly look like backing several horses in case one or more turns out to be totally lame.  You can pretty much suspend the laws of physics for as long as you're willing to throw enough money at it - and certainly the laws of economics.  Also, they've allowed themselves some very prudent opt-out language in case this isn't working: for example, there's a 'security of supply' override on the 2035 'net zero carbon electricity system' deadline (which means it's just a target / aspiration).  And there's no date on ending sale of gas boilers. 

But some things we can say for sure.

1. there is absolutely no end in sight for dependency on natural gas
2. the cost of generating electricity to meet demand securely will rise
3. global anthropogenic CO2 emissions haven't peaked, and won't peak for a very long time (if at all) 

There's no point that I can see in banging on about 3, in the context of dealing with what's before us.  Anyone who thinks the global "drive to net zero carbon" (qua western-governmental policy) can be halted by blog discussions hasn't understood the force of politics behind it (as a policy).  As I first wrote in 2019, it's 100% mainstream now, including the entire banking sector, and most of industry, which expects to benefit from a whole new era of state handouts under various headings, always the source of revenue requiring the least effort.  Nothing to do with Greta, BTW, and everything to do with Business.  

So: back to 1 & 2.  It's entirely likely that the annual average amount of gas actually burned will remain on a decreasing trend, with total "renewable" electricity generated rising.  The final demise of coal will extend current levels of gas burn a while longer, simply by displacement of said coal.  But that's not the point.  Mention of pump storage - including SSE's new project - is fine and dandy but, like batteries of the present technologies, UK pump storage supplies minutes-worth, or maybe hours-worth of standby electricity capacity: important for micro-balancing of grid operations (for frequency stabilisation etc) but broadly irrelevant in terms of dealing with long periods of no wind.

But that means maintaining a lot of expensive stuff on standby, specifically, gas-fired electricity generating capacity AND the entire infrastructure, physical and commercial, to ensure gas will be available when needed.  That's easy enough** when (a) it all exists anyway; and (b) there's strong reason to believe that residential gas demand will continue for a long time at roughly the present level, even as UK industry slowly transitions towards electrification, hydrogen, or an early grave, a.k.a. further offshoring.   Keeping stuff hanging around mostly idle doesn't cost nothing.  Just like paying windfarms to stop generating; bringing ever more sophisticated batteries into the fleet; building vast new infrastructure to accommodate new windfarms; etc etc.  

But what of negative (wholesale) prices, increasingly a feature of most electricity markets?  Easy.  They are negative for just a few hours, just as they go wildly high for just a few hours (or longer ...).  It's volatility, that's all - and tells you nothing about the average price which, as I've asserted, will rise and rise.  And what do we know about volatility?  It's like a heartbeat: too low and it signifies death - but too high, and it's a Very Bad (and costly) Thing.  Or (to switch useful analogies) like friction:  too low, and you'll slide all over the place.  Too high, and you're seriously (and expensively) inconvenienced.

We hear endless chatter, mostly from the EU (though Will Hutton is egregiously stupid misinformed on this also) where ignorance about markets is a dominant strand in public life, about "decoupling" the price of electricity from the price of gas.  What do they mean?  Well, initially they "meant" nothing more than "we've heard renewable electricity is cheap, nay free - so why has the retail price gone up?" - an expression of pure ignorance.  More recently, they've been gently steered towards something meaningful, indeed, logical - i.e. thinking about a more widespread deployment of longer-term financial hedging against electricity price volatility.  There's nothing remotely new about this: any party that feels uncomfortable being exposed to price fluctuations should go for a fixed price!  If this is to be achieved via extending the market for 'renewable PPAs', i.e. fixed priced electricity sales contracts (or more likely CfDs) offered by renewables developers - compulsorily?? brokered by regulators?? - then so be it.  I'm not sure many industrial companies will enjoy the fixed prices on offer: that's another matter entirely.

But it does bring us back rather neatly to point 2 above.  Whether it's the average of volatile wholesale prices, or fixed-price PPAs, the price of electricity will carry on rising - long after Putin has been put back in his box.  That's what happens when you move to an intrinsically more complex and basically entirely new way of running an entire, very large, industry.  All at once++.  Across a very large part of the world economy.

Doesn't mean it can't be done.  Does mean it's gonna be expensive.

ND    

___________

** It'll be a lot more difficult without a base level of residential gas demand  

++ People who pretend otherwise  - and there are many - are like those who said Brexit would boost the UK economy.  I write as someone who voted for Brexit.  But I never thought it would be anything other than costly.  

The End of Brexit and the return of the Remainers

 Why do I write this you ask? 

Well if you recall the crazy days of 2016 there were 4 very strong Brexiteers. Farage, Boris and Gove with guidance from Cummings. They really led the charge  to the Brexit vote. In more recent times, the brain charged with delivering Brexit has been Lord Frost and he has made his excuses and exited stage left (because of Covid, allegedly). 

Here in 2021, Boris is on the edge, his reputation will never recover from this, even if he limps back up a bit for a while. Farage is a radio host and Cummings sniping from the sidelines, disillusioned by the realities of power. 

Meanwhile, remain leader - Keir Starmer - is happily sitting an waiting for the Covid mess to hand him the keys to No 10. Future Tory leaders like Liz Truss and Rishi Sunak are both europhiles. 

Whilst no one, above all Brussels, will want us back in the EU full time. The machinations will begin to get the UK into the vast majority of EU things, maybe even the army using Ukraine shenanigans as cover. 

Won't it be ironic, that the outcome of the Covid pandemic will be a long-term remainer victory? Even though in reality the jabs, boosters and even-handed approach to the science have overall been very effective from the Government since the early disasters of March 2020. 

Who is there available to the Tories who could credibly lead the post-Boris Brexit faction. The loonies on the right of the party like Andrew Bridgen are only going to make things worse - who is there?

A welcome back to Brexit and an EU sausage story

 Om my how much Covid-19 changed the world. For five years, the UK national conversation was nothing but the screeches of Brexit from all sides and endless comment and opinion pieces (I offer no defence, m'lud). Covid put a stop to all of that, we have heard little of Brexit since it was done.

Pre-dating even that, were the horror stories, originally more or less invented by one B. Johnson when the Telegraph's EU correspondent, about 'bendy bananas' and other such hilarious single market rules and regulations. This was a 20 year feast for British newspapers so to speak. 

And lo, here we are in 2021 and we get a perfect marrying of the two old trends. Firstly, the Northern Ireland compromise, never really a compromise and designed solely to get Brexit done as per instructions from the British electorate is coming unstuck. The EU have decided that the main reason for this is the importation of British sausages (and mince) to Northern Ireland that now require health certificates for Export to the EU - certificates which, um, don't exist in the EU.

This has long been a simmering issue and it a classic of its kind. The UK, on doing Brexit, knew there was this risk as the Industry bodies have highlighted it for ages. In a typical fudge, the UK extended a grace period whilst negotiations were ongoing. However, the EU does not have to budge and it has not. It will simply insist Northern Ireland imports from Ireland and the EU itself - after all that is the point of their closed single market! The Eu commissioner is wallowing in joy at being seen to be fair, yet beastly to the Brits. 

Meanwhile, the UK side can't believe the EU will be so intransigent and ignore all efforts to make exceptions for the UK. Lord Frost in particular, can't seem to understand the EU does not care about playing fair and sees the UK as a third country. 

In fact, the situation is about to get worse,  as for less high-risk meats such as frozen produce, the non-EU country of origin must be authorised for imports into the EU, and establishments that produce the meat must also be approved to follow EU standards. The UK has yet to be listed as such a country, which is cause of concern to British meat producers, some of which are heavily reliant on exports to the EU.

Brexit is back and back for good, I hope no one thought it would ever go away. Perhaps at the G7 meeting compromise will be reached, but it seems unlikely, the EU is being very tough, but is on solid legal ground on these issues and as we know, has past form for insisting on bizarre terms for food import and export. 

Resign now, Boris

Auberon Waugh once wrote of Rupert Murdoch:  for crushing the print unions, Murdoch deserves a dukedom.  For everything else - one of the less pleasant circles of Hell.

Two dukedoms, then, for Boris: one for crushing Corbyn, the other for seeing through (after a fashion) the Trade & Cooperation Ageement.

Then go. 

Oh - and a Happy New Year!

ND

Unreconstructed Remainers: The Last Outing

There are those Remainers like Grayson Perry who after 2016 acquired a modicum of reflective humility about how little they probably represent those whom they once thought they spoke for. 

But there are plenty who did not.  The Graun, which these days rarely opens its CiF pieces for BTL comments (which itself speak volumes) has today seen fit to open the floodgates under a Brexit piece.  And what a deluge it is; some 2,000 gobbets of turgid Remainerist bile, deposited in a mere three hours on a Christmas Sunday morning.

The Comment piece that sits grandly above it is from none other than Will Hutton, the man who destroyed that once estimable institution the Industrial Society, a story for another day.  Funnily enough, while predicting we'll be back to the EU on our knees within the decade, even Hutton is obliged to acknowledge a list of detailed achievements the UK made in last week's trade agreement.  No such qualifying remarks in the bilge below, which as a body of unrestrained online echo-chamber emotion could serve as a data-source for a psycho-sociological thesis on the low intellectual content of metropolitan *progressive* thought.

What's perhaps most striking is the sheer raging impotence of it, what with Starmer whipping in for a supportive vote in Parliament.  That'll be the next major belly-laugh on offer in this bleak Covid midwinter.

Although many of these people will still be fuming in their smart progressive sitting rooms and their rancid progressive bedsits for years to come, I can't see there being many more outburst-outings quite like this one.

ND  

Optimism from the bottom of the sherry glass

I should really save this for next week, but I can't resist being a little Happy on a Christmas Eve.

In the space of December we havd or will have had;

1) Pfizer vaccine approval

2) Moderna vaccine approval

3) AstaZeneca on the cusp (28th Dec allegedly, but we will see I think there maybe a delay)

4) A Free Trade Deal with the EU/UK

What a month, after surely the worst year in living memory (was any particular year in the 1970's really worse? certainly not the 1960's or since then) it is a big bang to end on. 

Yes, the vaccine will take 4-5 months to roll out and against an ever-evolving virus this will be a race that will have twists and turns yet. But the worst is here now and improvements will permanent rather than the tides we have seen this year. 

The brexit deal is even better. The benefits of Brexit, such as no more payments to French fisherman and Greek mafia masquerading as farmers, we have banked and also the decline in immigration to more sustainable levels. With trade deals to be done we are away from the worst of Brussels with only limited downside in the long-term. Better yet, our politicians are newly accountable, much that they will come to regret that in time!

Predicting the FTSE from here for next year will be a challenge, but that is for next week. 

Merry Xmas one and all!

Covid & British Regulators: Makes You Proud ...

Seriously: this is one of our great competitive strengths.

 

2020 has not been a year of pride for this Brit.  Although it started well with the Greenwich Speech, on the scale of what matters I can't think of anything from Boris Johnson's government that has subsequently been greatly to his credit**, and an awful lot that is utterly disgraceful.  (Card-carrying Tory writing here.)

This is, until the lightning-fast regulatory approval and delivery of Covid vaccine, outstripping the rest of the Western world by, what - weeks?  months?  And how much slower still would they have been if we hadn't set the pace?

This is pragmatic regulation at its very best; and we may hope that it, and we as a nation, will be rewarded.  I have frequently lauded Ofgem, the regulator in my own specialist sphere, for its speed, flexibility, practice of consulting properly, willingness to experiment - and to admit shortcomings, and to reiterate swiftly, intelligently and without stupid pride of authorship.  

In absolute terms, when you are faced with what seems like a slow response from Ofgem, it's certainly possible to be frustrated.  That is, until you talk to anyone working in energy in the EU, where the regulators are slothful, inflexible, uncommunicative, stolid, obtuse and unresponsive.  I've lost count of the number of times I've heard continentals say, in open sessions, "they do this already in the UK", or "the British are so much better at this". 

It's pretty obvious that in the brave new Covid / "Zero Carbon" world, national flexibility is at a massive premium.  The vaccine approval, and a pretty impressive roll-out process, are deeply hopeful signs we are going to make new-found Brexit freedoms tell to our advantage - and in parallel, are going to make the obtuse, Civil-Code-bound federasts squirm.

That's my crumb of comfort at the end of a bleak 2020, and I'm sticking to it.  (For now.)

ND

_____________ 

** The defence spending & foreign aid announcements? - Ed 

Deal or No Deal

Here we are again, another round of latre night, over the weekend, Pret-eating, high stress negotiations. You would have thought we had become quite skilled at these given they have been a constant stream for nearly 4 years now. 

But from what I can see, no, no progress has been made. The whole point of negotiaitons is to, err, negotiate. if you just turn up with a list of red lines which can't be crossed, then not much will ever be achieved. 

The original concept is that you have some giveaways, some core red lines and somethings you will only give up in order to close a deal and also if the other side gives something back. That way you get a good deal. 

With the EU, they seem to have very firm lines, this is ahuge drawback of having to agree them with 27 in the first place, it makes them a very inflexible negotiator which is a big risk to ever dealing with the EU. I think the EU makes them seem it is powerful, but in fact it just shows the whole thing for the ponderous animal that it is. 

For the UK side, a no deal is disastrous and represents and outcome only the most crazed anti-EU people ever wanted. Even Farage and his pals all thought we would get a deal of some sort. If it comes to leaving the EU with no deal it is a huge failure of UK statecraft. Why is there no back up plan for a Norway or Swiss light, or even an Australian type deal? The UK has staked its economic future on an all-or-nothing free trade deal with the EU. Frankly, it has been a terrible strategy for a while, whislt it played well in a 2019 election, it has been a waste of another year to pursue this single strategy. 

Of course, if it works then many will say what a great plan and team we have, however, to be less than 50/50 the day before the deadline is not good at all. 

Dissolution of the Monasteries, 2020-style

What is going to happen when the wave of local authority bankruptcies hits? 

... as, in the coming months, must surely be highly likely.  We've raised this before, and I remain extremely interested in it.   As well as serious general political interest there's a local angle for me: after 6 years of Labour excesses, mismanagement and all-round failure, my borough (Croydon) is well up there with the most indebted, over-extended councils in the land.  Others said to be near the brink are Luton, Oxford, Birmingham (!), Woking and Peterborough: and that's by no means the end of the watch-list.

There are a couple of clues as to what happens next.  This month the government imposed a new Chief Executive  - a turnaround specialist - on Croydon as the price for being willing to continue in dialogue with the Labour leadership.  There must, though, surely be a very finite pool of genuinely competent *turnaround* merchants available at short notice.  (I'd offer myself but I don't think t'unions would relish my management style ...)

The other massive clue is what happened in Northants, where the fateful day of the Section 114 Notice has come and gone.  As well as the government dividing up the old responsibilities into newly-minted authorities with revised boundaries (which sounds like doing something radical just to make the point), rather than bailing them out the government gave them approval to sell capital assets until they'd filled the hole in the ordinary accounts.  Generally speaking, a council's ability to do that is very heavily circumscribed, for obvious reasons.

So here's the vision.  Council after council goes bust.  If they couldn't contemplate rescuing Northants (Tory-held) in 2018, there's no way on earth the government is going to bail them all out: so massive, nationwide asset sales are mandated.  There's been nothing like this since the Dissolution of the Monasteries, supervised by that outright genius of an administrator, Thomas Cromwell.  And before that, the shakeout of labour relations following the Black Death.

This might actually be a major component in the dynamics of a post-Brexit, ongoing-Covid UK.  Sadly, there's no obvious likelihood of a latter-day Cromwell to execute the same highly diligent job he made of the 16th Century version.  (Cummings?  Don't make us laugh.)  Mostly, Cromwell ensured Henry got top dollar for the assets seized.  Even under his distinctly hands-on guidance, however, there was plenty of dubious cronyism involved.  We may be sure all manner of *bargains* will fall into undeserving hands at ridiculous prices - less Henry VIII, more Boris Yeltsin, I'm guessing.  Which will be depressing.

If anyone truly relishes the idea of all the pieces being thrown up into the air ... I know what you mean, but be careful what you wish for.  If Brum goes under, that'll be quite a crash.

ND

Ride a Black Swan

One of the many great things about Enron, long before it went under, was that it brought really strong financial practices into the energy industry and made people take financial risk management (FRM) seriously.  We can talk about the rich, deep ironies another time.  I was never a risk manager myself, but was strictly schooled in its principles, technical and pragmatic, the better to negotiate sound contracts (which is my trade).

One of the interesting aspects of FRM is that no commercial institution, even a bank, is held to providing 99.9% certainty in its hedging etc - not even 99% in fact; because it can't be done using shareholders' equity without crippling economic cost.  Everyone knows that 100% physical safety is impossible - the cost of moving from, e.g. Five Nines to Six Nines is prohibitive - and likewise that extreme financial events happen out in the "fat tails" of the distribution, that can't really be catered for within the economics of an enterprise in the same technically-sound ways that can be implemented out to two standard deviations.  But what if folk are deeply risk averse, as they surely have the right to be?  The textbook solution to this puzzle is that they must take (partial) responsibility for their own FRM, by diversifying their exposures.  Not everything will go pear-shaped simultaneously ...

Except of course when a Black Swan glides onto the waters.  At this point, hitherto non-correlated risks all become correlated, in the shit-direction: so Diversification fails (as well as hedges not performing and insurance not paying out).  And then we are down to the last resorts:  burning through capital reserves (which were anyway set at the 95% risk level, so by definition they don't go far enough), and then ... socialisation.

Now as CU said the other day, 2020 looks like making 2008 seem like a picnic.  (E.g., I had a massive hedge on against 2008, and it paid up.)   This time, it's straight through to socialisation, and pray God that good decisions are made.

A lot of Socialists are drawing understandable (sort-of) but very wrong conclusions.  Wonderful, they say - and let's keep it fully socialised thereafter because Capitalism Doesn't Work.  This is the merest crap.  I won't rehearse what a feeble-minded misunderstanding that represents as regards What Capitalism Is; suffice to say that they were saying the same thing at the outbreak of WW1, and WW2 (and in fact every day of every week).  It was equally ridiculous then as it is now.  We socialise against the Black Swans, the Kaiser, the Nazis, the C-virus.  And in normal times, we optimise our affairs intelligently.  Leftist snipers can f*** off, and do something useful in the community. If they know how.

One more weekend thought for now.  The EU can f*** off, too.  Their threats will have no force whatsoever, when negotiations recommence.  What, they gonna threaten us with a 1% hit on GDP?  Shortages in the supermarkets and bread riots?  By then, we'll have solutions for all that stuff - and quite possibly better ones than theirs.  Small comfort right now, but I'd confidently say we'll get a sensible deal quite easily - with whatever's left by then.

Keep safe, all.

ND

Boris the Dealmaker

Can I strongly recommend watching Boris' Greenwich speech?  For a politician, it's truly excellent: he really does have the makings of a statesman  That's the way to give clarity of purpose to your negotiators: it immeasurably strengthens their hand.  Many have bemoaned the UK team's lame performances under Cameron (his pre-referendum "Deal") and then May, in the face of perfectly ordinary Euro-wallah opponents - who were competent, but no more.  Shamefully, that has been quite enough to wipe the floor with our side.

It would be a singularly inept negotiator who couldn't make serious headway under the Colours that Johnson has issued to the troops.  He's won half the battle for them already.  How?  He's trumped the Euros at their own game, by equiping our side with a knock-down "Logic".  Because "Logic" wins negotiations.  As an old negotiator, let me explain.

An army acquaintance of mine was about to leave the service after 25 years: he'd never known anything else.  He had an attractive skill-set, and found no difficulty in getting interviews for jobs he knew he could do.  But he was finding a problem: as a chap in middle life with loads of experience, he wasn't being considered for bog-standard entry-level jobs with a defined pay band: he was being asked to name what salary he wanted.  Formal negotiating wasn't something he knew anything about, so how the hell did he proceed, on this simplest of early challenges?

I told him to make a cost-list of everything he could think of that a respectable family man could reasonably expect to spend over a year maintaining a decent lifestyle - housing, transport, food, holidays, education, entertainment, insurance, etc etc.  Comprehensive: everything he could put a name to and stand by it without embarrassment if questioned in detail.  Add it all up, then add 10% plus rounding.  Then, when questioned, say calmly & firmly: I've totted it all up and I need £x.  Then stay silent, calmly awaiting a repsonse.

It worked for him.  It generally does.  Why?  Because it comes across as a "Logic":  (a) because it is indeed fairly based on a genuine logic, albeit one capable of being wrangled with by a particularly quarrelsome antagonist; and (b) because it's presented calmly and with finality - as if the presenter truly believes in its logic, and won't be shaken on it.  Any type of vagueness or flimsiness or randomness invites strong push-back.  But anything that seems to be believed ("seems" is all you need, though it really must seem!) as a matter of fact or logic, invites being accepted.  Even if the other side is inclined to say: well that's not right  -  they find it hard to press on that with ultimate conviction if, at the same time, they have to admit:  well, but he believes it, he's clearly not going to budge, whatever we think ...

It's only one of a hundred negotiating tactics; but the Euro-wallahs played this with great success on Mrs May.  This is sequence the negotiations must take, because of X and Y.  This is the bill the UK must pay, because of A and B.  This is why the Irish issue must be addressed first, because of the Good Friday Agreement.  Barnier played this card all day long, for months at a time.  And May was taken in by it, every time.

They were limbering up to play it all over again.  These are the rules you (obviously!) must accept, because you want access to our markets.  They've even got a standard embellishment, which they used last time and Barnier explicitly said they were going to use again: it's up to you (oh, it sounds so reasonable!  It's "Logic", after all ...)  - you decide what you want from us, and we'll tell you the price-tag: the more items you want, the longer you're going to have to be in talks, and the more of our rules you're (obviously) going to have to accept.

Boris has thwarted the whole trick with two simple observations:  our standards [environmental, workplace benefits etc etc - listen to the speech] are higher than yours (we set them higher because of our own superior policies); and we could demand you level up to us - but we're not going to; we'll just have mutual free trade, thank you.  It's simple: it's robust: the point has now been made publicly: everyone on our side can easily rehearse it all day long (and would have a helluva problem going home to explain any backsliding on such a straightforward point).

It can't be screwed up  -  can it?

Anyhow: Field Marshal Boris has magnificently played his part, conveying his battle orders with clarity and impeccable knock-down Logic.  Let battle commence.

ND

Brexit, delivered.

So, I never thought I would really write this post. The UK is leaving the EU tonight!

After all the drama since 2016 I had long predicted the Remainers and the Establishment would get their way and that the UK would not leave. At best maybe a very soft Brexit.

Actually this is too off the table. The somewhat clueless Torres are not going to end up with a soft Brexit by 2021, they will go for a shallow Canada style agreement and if they have to negotiate hard it will still be a pretty decent exit.

I think too that the now rejoiners are going to fail to understand there is no way back. There are no votes in joining the Euro, the EU army etc. This idea we will go running back is for the birds.

Others have written better about the populism, idiotic remainer idealism and the dark period of British politics. Yet now there is a new peace, victory soothes many ills and 2020 is shaping up to be a good year for the UK.

So long and thanks for all the fish

The end of our EU membership is upon us and the sangfroid from watching the dying embers of remoanerism try and block an EU exit celebration in London is a delightful sight to behold. This is what has become of all that money being spent on People's Vote, the marches, the Qusilings trips to Brussels - reduced to trying to stop a party in Trafalgar Square. Oh, the deep joy.

However, the Quislings like Blair are I can see now focused on trying to force a Hard Brexit. Blair has been advising Macron on the weak points politically in Brois' strategy with a view to forcing a no deal and thence re-launching their Rejoin campaing immidiately.

None of this is very subtle so no doubt Cummings has war-gamed the strategy but the outlines are clear, firstly for the EU to insist on the touchstone of fishing which they know will drive the right wing Brexiteers mad if we don't re-assert control of our fishing rights and then to complete a pincer movement with demanding full regulatorty compliance both now and in the future. Again by doing this it is barely leaving the EU.

However, I see some holes here. Firstly, regulatory compliance is actually OK as it allows for the low friction trade we want. So I am sure this will be bargained away at the last minute for a high price. The fishing is more troublesome but again there are a wealth of access compromises that can be made. The big win is ending free movement whilst retaing more or less ful access to the singel market and enabling our service setor to continue to sell into Europe.

From where the EU are starting this looks doable to me this year in outline. Of course Blair and the others will keep trying to push over Boris' red lines, but I do wonder whether in the end the EU would be crazy enough to torpedo a deal in the hope that the shock worked - they have form as they did this with Greece, but I am not sure that is an experience worht repeating.

Farage Makes His Move

To the utter disgust of some of the purist BTLers on Mr Raedwald's fine blog, Farage has made his move.  An entirely logical move, and actually the cleverest use of the leverage he has carefully assembled.  And, as luck would have it, more or less exactly what Raedwald asked of him first thing this morning.  Everybody's been thinking the same the past few days - we said it ourselves in our post at the end of last week. 

Two of Drew's Laws of Politics are in play here:

#4:  The lines of logistics in politcs are short.    Meaning, (most) decisions can be taken - by the right collection of people - in the small confines of a smoke-filled room: and if they are decisive people (unlike, e.g. May or Corbyn) they can be taken quickly, in a single sitting.  

Neatly, Farage ensured he entered the fray with the shortest possible lines of logistics in the context of a democracy (more or less), his party being quite literally a one-man band reserving unilateral powers of decision-making to N.Farage, esq.  Doesn't get tidier than that, short of being J.Stalin or A.T.Hun. 

#1:  Never buy off anybody at a price higher than absolutely necessary.   One of the neatest tricks in politics, as in business, is to get oneself into a position where one can threaten to make the obviously stronger party suffer a severe but avoidable nuisance.  Then sit back and wait to be bought off; to exact a fat fee for the ransom-strip so cunningly acquired.  In practice this frequently works out much more lucratively than it should - in business, as in politics.  Just as most businessmen secretly hanker after a monopoly, (and criminals seek enrichment without time-consuming effort), so most politicians dream of unopposed election, victory by acclaim (vide both Blair and Brown in turn).  Their inclination, therefore, is to rush for the metaphorical (or actual) chequebook and do a deal.  

Fearing more inconvenience than is actually plausible, they generally pay too much.  What would Cameron give for the opportunity to recalibrate his own offer to the electorate in 2015?   What joy came to Tony Blair by giving Brown full and explicit control of both the Treasury and domestic policy?   Etc etc etc: this particular strand of human history has been playing on a loop since 4004 BC.

Though further and better particulars are awaited in the present case, it looks very much as though Boris has held his nerve superbly, and paid nothing.  And Farage, making his own calculations, needed the concurrence of precisely nobody to carry his conculsions through.

I expect much wailing and gnashing of teeth across the public domain at this hilarious development.

ND

Boris as Tsunami: Unstoppable

Many years ago, what I thought I knew about a tsunami was that it was a monstrous wave; a wall of water tens of feet high which smashed down on a coastline that was only prepared for waves of everyday size, and therefore caused much destruction. It made sense: a grotesquely scaled-up version of the first wave to hit a child's sandcastle on the incoming tide. Easy to envisage. 

However. More recently, when every person and public building has a camera permanently primed to capture whatever happens, we learn that it’s really no such thing. It's a wave only a little greater in height than usual, if at all - but instead of being a big ripple with nothing behind it (except the next wave), it's the front of an entire body of forward-moving water, all of which is a few feet above normal sea level. And it's inexorable, with the most epic volume of advancing water directly behind it, extending back into the ocean for miles. 

Being water, it does various things on reaching land. Sure enough, against some obstacles it rears up into the legendary thirty-foot wave. But against others, it just flows around, powering inland, on and on, with unstoppable force that demolishes and sweeps up trees, vehicles, light buildings, indeed everything not fully anchored to stable rock. It's no more to be stopped by regular sea defences than was the surging crowd at Hillsborough to be held back by mere crush barriers. 

What's this to do with Boris? Think back to May's fairly determined efforts to get her Deal through. We noted at the time that relentless slog is a strategy with something to commend it in certain circumstances - even if it's unattractive to watch, and unsatisfying to those who favour the bold and sudden stroke of a blitzkrieg or dashing, decisive flanking maneouvre. 

But May's resources petered out after four or five months. 

It seems to me, though, that Boris may yet be more relentless still. His whole career is one of being unstoppable - by setback, scandal, shame or scruple. The "greased piglet" moves, this way and that, around barriers and through attempts to lay hands on him. We're seeing this in his willingness and ability to pivot instantly in front of the roadblocks and tripwires hastily erected against his every move. Ordinarily, the cheap cries go up of "U-turn!" and "but, but last week you said ...". And Boris, knowing that nothing ever sticks to him with the great voting public, he cares as little for consistency as did the legendarily shameless editors of the Sun when the time came to declare "reverse-ferret". 

And as he moves, this way and that, it's always somehow net-forward. 

The XR-wallahs, just as the HK protesters, have adopted the old strategy-slogan, "Be Water". (They attribute this to Bruce Lee, but old Mao got there first; and Soviet military doctrine for the offensive could be described in a similar way.) Boris "Tsunami" Johnson, too, knows how to be Water; about swirling and flowing around obstacles, always surprising and outflanking the blocker, always relentlessly moving forward. His stamina for doing this has seen him past quite a few apparently insuperable roadblocks over the decades. 

Let's see where the waters stand by Christmas. And what counts as 'forward', so far as Boris is concerned. 

ND 

PS - gotta love Polly’s latest: "Even if the Tories win an election, Brexit will finish them".

From the sports pages: Even if England win the RWC, the Welsh are still very scary ...

Brexit becomes the Never Ending Story

So, another meh week ahead.

Johnson won't get his election today.

The EU will extend until 31st Jan.

Nothing will really happen, just a rinse and repeat of the past few months.

Parliament won't pass a Boris Brexit and there are too many at risk of losing seats to have an election.

So it seems we are stuck until the EU decide we must leave (hint#; they won't) or we have to have an election (2022).

The only way out is for Boris to no confidence his own Government, a move that will split what is left of his own cabinet and party.

Happy days!

PS The film the Never Ending Story really frightened me as a small child, little did I know it was a 6th sense predictor of what was to come. Many of the characters and plot lines are more realistic than those in the current UK Parliament.

Kicking Off, Kicking On: RWC and Other ...

Apologies for my dereliction of blogging duties recently - have been abroad.  Sort of hoping, faintly, for a Brexit result whilst I was away.  Hopeless, of course; though something mildly amusing awaited at Gatwick upon returning.  In the big poster telling you which queue to join at the 'border', they've relegated the EU to just one among many flags of nations (etc) that don't require visas.  Nothing special, just one flag among many.  Made me smile, anyway (a touch of Gove?)

More of a result in the RWC last week, for the English and Welsh at any rate. We had a look at this a few weeks ago after the first round of matches, and things have panned out pretty much as they seemed at that point.  England going nicely; Wales OK too, provided injury doesn't strike;  Ireland confirmed as having peaked too early, as had been pretty evident for several months; and Scotland, well, ...

But now injury has struck for Wales, and with it their serious prospects of advancing against South Africa, IMHO.  The latter are really playing hardball now.

For England, drawing Australia in the Quarters was (a) predictable and (b) exactly what suited Jones and his boys.  A well-understood opponent presenting no fear-factor.  And on Saturday England showed every sign of just enjoying themselves thoroughly.  A great way to move forward to the big'un.

Ah yes, the ABs.  And because this fixture, too, was entirely predictable, we may be sure Jones has something in mind for the occasion.  Something he's been hatching for months, if not years - as he does.  Something special.

What made facing the Aussies in the Quarters ideal, was that Jones had no need to show his hand.  They were eminently beatable using basic means: solid defence, good territorial play.  (In the event, the defence wasn't even tested as much as in that epic Second Test against the same opponents, away from home, in 2016.)

The ABs know they will be facing something extra this weekend.  Will it be enough?  Can't guess.  But the whole 2019 RWC has been as favourable to England as could reasonably have been hoped for.

ND

More time wasting

I really don't get the current Boris Strategy. My only explanation is he has been got at by the civil service who have outlined just how much doom there is in a no deal Brexit or it is a very cunning ruse to an election.

Yet that still seems where we are headed, the clever people in most of the media that I am reading currently are choosing to ignore some obvious points of parliamentary arithmatic:

1. Boris has a majority of -45
2. Labour won't vote en masse for Tory plans and most will only vote for Remain
3. SNP, Lib Dems etc will always and only vote for remain
4. Tory rebels will also only vote for remain.

Ergo, the deal, not matter how good, cannot pass. I suppose this is the part of the cunning plan, which is to get a deal, see it voted down and then by law have to seek and extension. Then have a General Election on the basis of his deal versus the remain coalition.

Either way, feels like No Deal is off the table unless the EU walk away first.

Which Factor Weighs More in a Ballot Box?

"The wellspring of Tory electoral confidence is Jeremy Corbyn... voters sense that the opposition is crawling with cranks and bullies.   Luckily for Corbyn, Johnson is striving to make the Tories look even more unhinged and thuggish ... Many anti-Brexit voters have no more patience with Labour and no respect for its leader.  But Johnson’s Trumpian excesses make Labour government seem sensible by comparison, even to people who once recoiled at the thought of Corbyn in Downing Street.  It is hard to know which of those factors weighs more in a ballot box."

Sounds about right. Who, indeed, can tell?  

ND

Dominic Cummings speaks

So, Dominic Cummings has decided to try and game the coming General Election by releasing a statement to The Spectator. it is very rare I would post like thism but given the state the Government has found itself in, this is quite some statement. Read it for yourselves:

‘The negotiations will probably end this week. Varadkar doesn’t want to negotiate. Varadkar was keen on talking before the Benn Act when he thought that the choice would be ‘new deal or no deal’. Since the Benn Act passed he has gone very cold and in the last week the official channels and the backchannels have also gone cold. Varadkar has also gone back on his commitments — he said if we moved on manufactured goods then he would also move but instead he just attacked us publicly. It’s clear he wants to gamble on a second referendum and that he’s encouraging Barnier to stick to the line that the UK cannot leave the EU without leaving Northern Ireland behind.

There are quite a few people in Paris and Berlin who would like to discuss our offer but Merkel and Macron won’t push Barnier unless Ireland says it wants to negotiate. Those who think Merkel will help us are deluded. As things stand, Dublin will do nothing, hoping we offer more, then at the end of this week they may say ‘OK, let’s do a Northern Ireland only backstop with a time limit’, which is what various players have been hinting at, then we’ll say No, and that will probably be the end.

Varadkar thinks that either there will be a referendum or we win a majority but we will just put this offer back on the table so he thinks he can’t lose by refusing to compromise now. Given his assumptions, Varadkar’s behaviour is arguably rational but his assumptions are, I think, false. Ireland and Brussels listen to all the people who lost the referendum, they don’t listen to those who won the referendum and they don’t understand the electoral dynamics here.

If this deal dies in the next few days, then it won’t be revived. To marginalise the Brexit Party, we will have to fight the election on the basis of ‘no more delays, get Brexit done immediately’. They thought that if May went then Brexit would get softer. It seems few have learned from this mistake. They think we’re bluffing and there’s nothing we can do about that, not least given the way May and Hammond constantly talked tough then folded.

So, if talks go nowhere this week, the next phase will require us to set out our view on the Surrender Act. The Act imposes narrow duties. Our legal advice is clear that we can do all sorts of things to scupper delay which for obvious reasons we aren’t going into details about. Different lawyers see the “frustration principle” very differently especially on a case like this where there is no precedent for primary legislation directing how the PM conducts international discussions.

We will make clear privately and publicly that countries which oppose delay will go the front of the queue for future cooperation — cooperation on things both within and outside EU competences. Those who support  delay will go to the bottom of the queue. [This source also made clear that defence and security cooperation will inevitably be affected if the EU tries to keep Britain in against the will of its government] Supporting delay will be seen by this government as hostile interference in domestic politics, and over half of the public will agree with us.

We will also make clear that this government will not negotiate further so any delay would be totally pointless.  They think now that if there is another delay we will keep coming back with new proposals. This won’t happen. We’ll either leave with no deal on 31 October or there will be an election and then we will leave with no deal.

‘When they say ‘so what is the point of delay?’, we will say “This is not our delay, the government is not asking for a delay — Parliament is sending you a letter and Parliament is asking for a delay but official government policy remains that delay is an atrocious idea that everyone should dismiss. Any delay will in effect be negotiated between you, Parliament, and the courts — we will wash our hands of it, we won’t engage in further talks, we obviously won’t given any undertakings about cooperative behaviour, everything to do with ‘duty of sincere cooperation’ will be in the toilet, we will focus on winning the election on a manifesto of immediately revoking the entire EU legal order without further talks, and then we will leave. Those who supported delay will face the inevitable consequences of being seen to interfere in domestic politics in a deeply unpopular way by colluding with a Parliament that is as popular as the clap.

Those who pushed the Benn Act intended to sabotage a deal and they’ve probably succeeded. So the main effect of it will probably be to help us win an election by uniting the leave vote and then a no deal Brexit. History is full of such ironies and tragedies.’

So basically, Cummings has gone BDS to denying the EU want a deal which they really do and instead now moving to blame everyone else for No Deal. Whilst there are elements of truth to this position re Varadkar, the threatening of EU members who will or won't entreat with us is just mad. After a No Deal Brexit the only thing on the Government's agenda will be seeking a deal to mitigate the downsides - blasting your future negotiating partner like this is very poor strategy. Yes we all know the Mad Parliament has created this situation unnessecarily but this is still not the only way out of the situation.