Polly Toynbee is 'optimistic' again. Won't end well ...

 ... it never does.

Over the years I've tracked the barometer, nay, the roller-coaster of Polly Toynbee's agonisingly optimistic takes on her successive political crushes.  Once the SDP was well and truly dead, she had the highest hopes for Blair - until he let her down.  Who can forget her swooning over fellow '70s soft-leftist, anti-nuke Patricia Hewitt when she became Sec of State at the DTI (whose brief then included Energy) and the ever naive Polly wrote: Get that: no new nuclear power stations!  Only to have Blair overrule her - and fire her - shortly thereafter.  Then Brown became even more of a hot fixation, an object of her wish-projection.  We know what happened there.  Then Miliband (in various incarnations).  Then John McDonnell !  (True.  I told you I follow these thing.)  Then Starmer.  And whenever a GE looms at a moment when her hopes for the incumbent leader have already waned, she always dusts off the 'nosepeg' formula for voting Labour anyway.  

And now, from today's Graun ...

We must believe!   Yes, it's heart-wrenchingly pathetic.  (When was that mugshot taken..?)  Anyhow, as a weekend Blast From The Past, back to those heady days of Gordon Brown and how he, in turn, dashed her hopes - one of my doggerel efforts, from from 2007.  Apologies to J.Milton Hayes and Mad Carew, and a good weekend to all.

There’s a one-eyed yellow Scotsman of a dour and sullen hue
There’s a stench of pious bullshit all around
There’s a broken-hearted woman dreams of socialism true
And the yellow Scot forever lets her down

He was known as Red McBroon, and he made the Party swoon
Though his cowardice had long begun to smell
But for all he was a wanker he was feted by the bankers
And Polly Toynbee smiled on him as well

He’d been stringing her along with his socialism strong
She’d swallowed all he put into her head
When she judged Blair’s time was short, she said Broon had her support
Provided he would prove himself True Red

He wrote to ask what promise she would like from Red McBroon
They met for lunch as many times before
And fervently she told him then that nothing else would do
But his vote against Blair’s mad Iraqi war

On the night of the debate, Red McBroon was in a state,
His followers could bring mad Tony down
But he’d never in his life had the balls to wield the knife
For he knew the wielder never wears the crown

When it came to the division, courage gave way to ambition
And his scruples failed as surely as his balls
When she heard them read the vote, fury welled up in her throat
And ‘betrayal!’ was her cry around the halls

Now Hell it hath no fury like a jilted Polly Toynbee
First Blair and now McBroon had sold his soul
As she stomped off in the night, for her op-ed piece to write
She vowed vengeance on the yellow Scots arsehole

There’s a one-eyed yellow Scotsman of a dour and sullen hue
There’s a stench of pious bullshit all around
There’s a broken-hearted woman dreams of socialism true
And the yellow Scot forever lets her down.

ND

Miliband - guessing-game over!

So Mili neither gets the Treasury, nor keeps his manic mission at energy.  Safely dispatched to places over the horizon.  (What must David M be thinking?)  Please don't put him in charge of another COP.

I feel his first mission should be to China, to investigate Uighur slave labour in the open-pit neodymium mines and solar PV factories; to deliver a lecture on dumping tactics with special reference to 'green' manufactured products; and to initiate a detailed study of the carbon content of said 'green' goods.

I stand ready to join the Labour Party and enter the House of Commons to take up the reins at DESNZ.  With the new government being such accomplished masters of the snap by-election this shouldn't be a problem.  A peerage will do, if needs be.  But I fancy Rosebank and Jackdaw will already have been approved, while they await my arrival for some more complex decisions that require attention.

ND    

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UPDATE:  Gotta love this from Guido - 

Is there a funnier post for Miliband than one that requires extensive use of the government jet?

The great Miliband guessing game

Well, then: is it to be:

• Thanks, Ed, but you're not needed now
• Ed, I need you to to stay where you are, it's great job you're doing in keeping the greens onside
• Ed, you're my Chancellor - you're the only one who can solve Rubik's Cube
• Ed?  No no, it's David I wanted on the line

And so we all wait.  Meanwhile, however, a couple of big energy decisions must surely be made real soon:

1. Rosebank (oil) and Jackdaw (gas)
2. DESNZ capital budget being sacrificed for Defence spending: where does the axe fall?

1.  The joke is that the Jackdaw platform has already been built and is out there in the North Sea, fully installed and ready to go; first gas in October if the starting gun is fired this month.  Surely, surely that wouldn't have happened without a clear nod from the Treasury?  Nobody develops an offshore platform on spec.  It really does look as though the formal go-ahead decision is just a formality.  Also, the case for home-produced gas is the easier to make, for Mili or whoever has to front for it.  (Mili always gets Shanks to front for the decisions he's unhappy about.)

Rosebank is a bit different: it'll be produced via a floating structure / subsea completion.  Again, the structure is complete and making its way over from Norway, but the briefing is, that's being done at the producers' own risk.  And if it's a 'no', it could be used elsewhere.  Also the argument for loacl oil production, though still perfectly sound, has just a couple of extra (low) hurdles to jump: and Mili has staked his colours to the 'No Rosebank' mast - so, a bit of humiliation involved.

What would be even funnier, is if he gets offered the Treasury provided that he green-lights both Jackdaw and Rosebank on his way to the DESNZ door.  Does Burnham have a sense of humour?  He certainly likes industry and jobs.   

2.  OK, so the A46 Newark Bypass extension has been sacrificed for Defence spending.  Big deal: it was only ever a nice-to-have.  Yep, the big capital budgets to be raided will be those of Mili at DESNZ.  Now most DESNZ capital schemes are loaded onto electricity bill-payers' bills, the big exceptions being:

    (a)  HMG's equity contributions to Sizewell C, given that EDF refuses to take equity risk (which we've written about many times)

    (b)  The farce that is Carbon Capture and Storage - by far the biggest (thus far) at £21bn (sic) of HMT's best pounds, NOT recharged to bill-payers.  Very unusual.  And very stupid. 

I think we can guess which will be the sacrificial lamb, notwithstanding Mili's considerable attachment to it.  

More popcorn, please, as I raise a hopeful glass to Burnham's sense of fun.

UPDATE:  Right on cue, this from the DTel: 

Miliband willing to approve North Sea oil to land job as chancellor - Energy Secretary wants to prove he is a ‘pragmatist’ rather than a ‘zealot’ on environmental policy to help his case for being chancellor

ND

Streeting will land us with Miliband

I'm off on a short hol, but I leave you with my view - a prediction that has been simmering for 18 months, as you know (check the Mili tag).

• It's clear enough why Streeting might feel his only chance (ever) is to move now
• He may get 80 signatures, but he won't get elected
• Not sure if Starmer will stand and fight - John Major did (and won), but that was different in material ways
• In any case, if Streeting moves, Miliband wins

Have fun.   If I can find some wifi in a few days time, I might join in.

ND

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PS: the lefties at Novara are often quite good on lefty stuff, but made a really ridiculous assessment on Tuesday evening.  They said Miliband doesn't fly "because he's been rejected by the electorate before".  FFS!

1. The electorate ain't being consulted
2. errr ... Harold Wilson 1974?
3. errr ... Donald Trump 2024?
4. - plus loads of French and Italian politicians who think nothing of going round for a second bite  

PPS:  Rayner's 11th-hour "exoneration" is pretty damn' convenient, eh???  For Starmer as well as for her.  Sounds to me like the story of McSweeney's 'phone: nobody's gonna believe it. 

Stonewall Starmer goes full 'Sierra'

Not as much fun as you thought?

Having long suggested that Team Starmer fully intends to tough it out - and they had plenty of advanced notice and planning time [1] for this crisis, at least - that's how it still seems, & strongly so, at the time of writing.  There's only one oven-ready candidate in the wings, with no "anyone but [Wes]" votes against him: our old pick Ed Miliband.  

Team S is pursuing what I call the Sierra Strategy when I'm strategising in business.  Recall the Ford jallopy of that name?  Having had many years of consummate success with its predecessor, the smart rust-bucket Cortina line[2], Marks 1-4, Ford went for a fairly 'bold' new look.  The 'jelly-mould' hatchback found immediate disfavour, and despite the usual launch promotions sales were not good.

Ford had a massive call to make:  re-skin and rebrand it fairly promptly with as much commercial dignity as possible, or double down.  They doubled down with massive corporate determination.  Advertising, deep discounts, promotions of all kinds, a smarter Ghia variant that was half-decent - everything in the marketing man's book of tricks.  For several years!  Dunno what this campaign cost, or how the counterfactual might have played out: but in terms of sheer brute force to get the Sierra into the top 3 or 4 UK best-sellers, they succeeded.  And that's Starmer now.

PS, Miliband is sitting there trying to figure his optimum positioning for picking up the crown when it falls.  And a coronation is what he wants: no knife-job.  My guess?  At the critical moment, he offers Starmer Foreign Secretary and a big Euro-push mandate.  Kier, we can both make history together ...     

PPS  If you think Starmer is stonewalling impressively, just watch Trump between now and the mid-terms.  He'll be looking at everything from conjuring a genuine crisis in order to call them off, to calling the results void - and calling out the National Guard in every state that returns a Dem.    

ND  

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[1]  E.g. the timing of the King's Speech

[2]  The Mk 1 started life as just the plain 'Consul'.  Didn't play ideally, so they changed it to 'Consul Cortina' (as opposed to its predecessor the 'Consul Classic'.  See, these Ford guys were always sharp with marketing-based solutions. 

Today's elections: a small prediction

A subject we've touched on before is the stupidity of Starmer thinking that giving votes to 16- and 17-year olds will boost Labour's prospects.  Must have seemed a good idea when Team Starmer were plotting back in 2021-2, but the rise of Green and Turquoise tik-tok populism must surely have given them pause, even before we mention Andrew Tate and 'Amelia'.

But of course in Scotland and Wales, teens do indeed get the vote.

I'm betting Team Starmer will be analysing the demographics of today's voting patterns very, very carefully before proceeding with this particular manifesto promise. 

(And indeed Team Successor, if Starmer really is for the chop.  Though it it's to be the gurning Miliband, he really fancies himself on titk-tok.  For some reason.) 

ND

Starmer is getting cocky

A while back I suggested Team Starmer had decided to tough it out: and I'm now utterly convinced of it.  Among several straws in the wind is a flying wooden beam: he's boasting about taking us back into the single market by stealth!  This is not a man who reckons he's done for at the end of May: quite the opposite, he visibly exudes the same kind of calm faux-authority over the heads of his pygmy-challengers that he did back in 2020, when he was obviously going to win the Labour leadership 'race'. [1] 

Given the fallout amongst the ranks of his former advisers, we must presumably look to Miliband for Team Starmer's current level of brazen confidence; some kind of bargain that runs: you do what I tell you, and if you're still here in June - which you will be - you'll make me Chancellor. [2]  Ominously, Miliband knows exactly what he'd like to do with the role.

It doesn't hurt that, even in the midst of endless and ongoing tactical miss-steps[3], Team Starmer have lighted upon a phrase to use in connection with Iran, which they clearly the believe to be highly felicitous:  I won't be dragged into this war!   

The bottom line is: he currently looks confident, which is 90% of the battle when it's just 330-odd fractious and frightened parliamentary sheep you need to get in line - with the Streetings and Rayners of this world left looking pretty sheep-ish themselves.  Yep, Team Starmer have convinced themselves they are going to see the post-May period out, and in some comfort.

And those May elections?  Is Reform really going to sweep the board, as sone thought inevitable not so many weeks ago?  Well, maybe, but I doubt it.  In my manor, they are a complete rabble, feuding like crazy amongst themselves.  If by some strange twist of the electoral arithmetic they were to get the mayoralty and/or the council, they'd not have a clue what to do with it: and in the meltdown-process of colourful infighting and manifest incompetence thereafter, they would lose any hope of a decent result come the next GE.  Is this representative of Reform across the country as a whole?  I'm guessing so.

One might imagine that Greens, equally full of chancers and losers, are just that little bit less likely to blow things completely by way of fratricide in any council where they get power in May.  We haven't had Peak Green yet; though I'll hazard a guess we've had Peak Reform.  Meanwhile, Starmer struts confidently around his confected B-list gigs here and around the world, and the media portray him in exactly the way Team Starmer have scripted for them.  His nerve, his brazen shamelessness, is holding. 

ND

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[1] Who remembers Long-Bailey or Nandy now?

[2] Though I still maintain that, the longer he hangs in there, Miliband stands a chance of the leadership for himself

[3]  E.g.

• "You can't use our bases ...
• ... oh, actually, yes you can"
• Chagos
• HMS Dragon
• RFA Lyme Bay
• "I need to talk to my team"

... etc etc - and that's just the last few weeks.  Then there was Mandelson, the by-election, ...

Miliband & the perpetual belief in perpetual motion

There's something very deep in human psychology that encourages people to believe in magic swords, universal elixirs, price forecasts, perpetual motion machines etc etc.  It's out there - and it just needs that little bit more human ingenuity to bring it to reality.

Ed Miliband is (we are told) a human, and clearly suffers from this syndrome.  Here are some of the things he believes in:

• a "net zero electricity grid" by 2030
• nuclear fusion as a practical source of power
• "negative CO2 emissions" from burning trees for power and burying the CO2
• hydrogen as a wonder-fuel of very wide practical application
• himself as a dominant force in a post-Starmer UK government

A man can dream: but he's spending our money on the first four of these (and indirectly, one might say, on the fifth).  In a harder-headed world, they would disqualify him from the fifth.  

Sadly, I don't think they do.    

ND

Budget compo: and, yes, Miliband - again!

With the Budget looking to be one helluva political set piece drama, it's time for C@W to predict the content.  She's gonna do something big, but what?  Over to you all.  Compo question: which levers will Reeves pull?  

(I have always reckoned that simply adding more bands at the upper end of the Council Tax meets all the political and technical tests: it's fast, 'progressive', virtually impossible to dodge.  If that isn't one of her measures, she's even madder than previously thought.)

AND of course it all leads to heightened leadership speculation.  AND as you all know, I have long championed the notion that Miliband's prospects are a great deal better than most people say - in that Doomsday aspect, if not for keeping his job under Starmer.  Right on cue, here's Guido: 

The Times picks up on rumours that Ed Miliband is a viable replacement for Starmer come the PM’s defenestration. As Guido reported back in September the Energy Secretary went on major manoeuvres after the PM tried and failed to remove him from post at the Phase 2 reshuffle. He is blamed by senior figures in Labour for a series of inflammatory briefings whose aim is to undermine Starmer. No surprise then that with Keir’s possible end on the horizon someone has decided to start whispering Miliband’s name in hacks’ ears…

I agree.

ND

All up for Miliband?

Last week before a Select Committee, a bunch of genuine energy industry experts effectively demolished Miliband's plans - at least in his risible 2030 timing for de-carb and price cuts, if not in totality.  Their numbers and reasoning cannot be gainsaid.  Even the Grauniad has noticed.

And yet he & DESNZ still keep mouthing the same nonsense. "It's all the fault of gas. £300 bill reductions by 2030 are a commitment. 95% decarb elec by 2030. Both will come through investment in renewables, and that's the only way." 

Emperor. No clothes. It's too serious, just to point & laugh.  

I know he thinks Net Zero is his life's mission on earth & redemption for losing the 2015 GE; he's resilient, determined, politically adept and relentlessly optimistic: but how long can he last in office?  Before he's simply pushed by Starmer, or baited beyond endurance by Reeves, or his intellectual pride causes him to throw in the towel?

UPDATE, THURSDAY  -  not saying "you read it here first"; but this morning's Graun reckons it is indeed all up for Miliband's policies & targets.  Can he last until Xmas?  The Budget?

ND

Drax: criminal charges a possibility

Not before time, the FCA is investigating Drax: 

... covering the period January 2022 to March 2024 relating to certain historical statements regarding Drax's biomass sourcing and the compliance of Drax's 2021, 2022 and 2023 Annual Reports with the Listing Rules and Disclosure Guidance and Transparency Rules.

Needless to say, this hasn't done anything for its share price.

During the period under investigation, Drax was found guilty of misreporting by the pusillanimous Ofgem which let it off with a £25m fine.  In the context of literally billions Drax has received in subsidies, that's a bad joke.  And Ofgem's entire approach was pathetic, they had more than enough to throw the book at it.  But it means the FCA has a fairly robust platform from which to commence its own work, 

What's it all about?  Au fond, the issue is that Drax gets subsidised thus because it says it is saving the planet by burning trees for electricity - and it isn't.  The entire business model is built on a lie.  Living a lie is never good for integrity, personal or corporate.   In lay terms the FCA will be looking at something rather different to Ofgem which was, notwithstanding the proven misreporting, limited to whether Drax technically qualified for its subsidies.  In essence, their finding was, "even though they don't provide accurate info, we can't be sure Drax is in breach - so we'll carry on paying".  Pretty lame. 

The FCA will be looking at whether Drax has misled investors / shareholders / the market.  Here, as in the States, this can be a criminal offence.  When I was an FCA-authorised player (well, FSA in those days) it was "up to 2 years, and/or an unlimited fine" for executives involved.  In the USA, they actually do bang people up for this - see this earlier blog story.  

Who knows where the FCA will come down?  My own two-penn'orth is that (a) Drax's dissembling about its supposed CO2-reducing impact, & exactly what trees they burn, is probably of only peripheral concern to the FCA; (b) the Risk Disclosures in successive Drax annual reports look distinctly questionable.  They know how perilously they are placed via-a-vis regulatory risk, but it's not clear to me that comes across in the ARs (see for yourselves).  They've also spoken with forked tongue over whether they would be a going concern without subsidies at all.   And being already proven as prone to, err, *mis-speaking* - some entertaining stuff came out at an Employment Tribunal earlier this year - won't help Drax's cause.

My guess is that the CEO's future could be under scrutiny when the Board gets round to thinking about how they've got where they are.  But Miliband still depends on Drax to keep the lights on in 2030 - friends in high places.  That's just about their only plea in mitigation.  And it wouldn't stop a handful of execs being made an example of.  We shall see.

Popcorn, please ...

ND 

Miliband "tells the truth" (sic)

Yes, it's the Silly Season, and the hot weather has gone to somebody's head.

On Monday ... Ed Miliband is to explicitly call out politicians who reject net zero policies for betraying future generations in an unprecedented update to parliament about the state of the climate crisis, which he is calling “an exercise in radical truth-telling” ... In what is planned to be an annual event, [he] will make a “state of the climate” address to the Commons setting out the findings of a new Met Office-led report that says the UK is already facing extreme weather and its effects. “I feel a deep sense of responsibility to the British people to tell them the truth about what we know about the climate and nature crisis.  I want this to become an annual statement where it’s an exercise in radical truth-telling about the state of the climate and nature."

If he's for the chop, he's decided to go down fighting.  Well, let's see what he comes up with.  I'm thinking we might have something to say about this. 

ND

UPDATE: well, nothing to see here! - what a bizarre outpouring of hot air that pre-briefing was. "An exercise in radical truth-telling", my arse: the much-vaunted "Statement" is completely empty.  (Check for yourself: it's 30 second's reading at most)  Another day in the crusading life of Mili.

AFTERTHOUGHT:  In fact, it's so vacuous, I'm half-inclined to wonder whether he was reined back on something more "substantial" he'd intended to say ...    

Trump's team & the remarkable tale of the M10 tank

While Trump is stomping the world making desperate attempts to sate his Deal Lust at whatever cost to plausibility, partnerships, policy or prestige, business goes on in the vastness of the US government: and it seems possible not all of his appointees are complete dickheads.  I give you the youthful Army Secretary Dan Driscoll (wiki doesn't seem to know quite how old he is).

The M10 'Booker'.  Of no use to man nor beast

Upon taking office this chap has noticed that the M10 Booker program - a tank? an assault gun? an "armored infantry support vehicle"? - is, in any event, a costly dud.  And rather than soldier on regardless, as in many a similar circumstance over the decades, he has simply scrapped it, boldly and wisely stating that he ain't gonna fall for the Sunk Cost Fallacy.  

What a man! 

The soundness of his decision-making is of course compounded many-fold by the war in Ukraine, which signals as clearly as anything could that the weapons and doctrinal paradigms of the 20th Century are badly in need of 100% overhaul, not to say wholesale discarding.  In the race to do this effectively, every dollar spent on badly-procured, intrinsically obsolete stuff like the M10 is a dollar wasted, that could have been spent much better on something so completely different, it makes the head spin. 

In another excellent move, the US Army is not going to replace its 150,000 lumbering Humvees like-for-like.  For infantry purposes they are going instead for this - at a fraction of the cost.  

The Mad Max vibe obviously represents the future: see also the Russians abandoning the use of APCs for assault use - they get instantly malleted by Ukrainian drones - in favour of motorbikes on weaving courses to traverse the open fields between tree-lines.

I do feel sorry for the descendants of the two Booker families being commemorated.  Hopefully, they can take faint cheer from the wisdom of Driscoll's action.

Anyhow: to encounter a politician who properly understands the Sunk Cost Fallacy is a rare event, much to be applauded.  (Maybe there are other such people in Team Trump ..?)  As a matter of urgency, can Driscoll take Ed Miliband aside, please?  Hinkley Point, Sizewell, government-financed hydrogen projects etc etc, this means you.

ND 

Miliband's perfect positioning

By way of elaboration on my assertion last week that Miliband can't remotely be discounted should Starmer topple in the near future, look at this telling chart from the loyalist LabourList platform and its Survation polling:

Survation / LabourList:     click link above for full-size

Every Cabinet member has seen their ratings fall after Reeve's efforts of last week: but L'il Ed's fell the least by far; and with Rayner heading west with all the rest, he's now miles out in front with Labour supporters.

He'll be making very careful decisions in the event his damn-fool energy policy dreams come under even more pressure from Reeves and her Growth-At-Any-Cost strategies.  Would yet another serious slap in the face be the ideal time to quit?  Or exactly the moment not to rise to the bait, and to hang on grimly instead, making the usual offstage noises and pointed absences that ensure everyone knows his true feelings?  The almost-iron rule of UK leadership elections is that Leaders of the two main parties only ever come from the ranks of the Cabinet / Shadow Cab.  And whilst in government, when the Chosen One becomes PM immediately?  That really is an iron rule.**

ND

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** The Corbyn Exception relates, of course, to a period of opposition - and even that needs qualifying for special circumstances, because there was only a 'shadow-shadow' cabinet in being during the short inter regnum of Harriet Harman, following the resignation of, errrr, one Ed Miliband.

Labour leadership stakes: rats-in-sack update

It's two months ago since we last looked at the jockeying for position going on in the Cabinet.  At that time we cast our eyes over Reeves (nobody's idea of the next leader, then or now); Streeting (obviously positioning himself actively); Lammy (radiating ambition); and Rayner (also ambitious but actually a joke).  For completeness, we mentioned Khan (permanently on the lookout for the Main Chance); Miliband (radiating competence); and Mandelson (devious and unpredictable as ever).

How do things look now?  The Grauniad has a telling, tearful piece, avowedly briefed by the wimmin: and it's worth quoting a couple of chunks. 

... a female minister spoke directly to the prime minister to complain about the leaks and briefings she saw directed against other women ... including Bridget Phillipson, Liz Kendall, and Yvette Cooper .,. “Cabinet really no longer feels like a safe space for genuine debate,” one minister said ... after weeks of tension felt by some women in the cabinet... Almost a dozen female Labour MPs who spoke to the Guardian said they were unnerved at how female cabinet ministers appeared to be getting the brunt of the blame for issues in government – though there is less sympathy for the chancellor, Rachel Reeves, because of anger over the Treasury’s handling of spending cuts and welfare. Among some of the new intake of MPs, there is a strong feeling that any ultimate successor to Starmer should be a woman – and a resentment of what they see as a campaign to anoint Wes Streeting.

Hahah!  More popcorn supplies, please.  It goes on: 

At the moment [Streeting] has no obvious female rival as the heir apparent. Senior cabinet ministers who did not want to see Streeting win had previously coalesced around Reeves, but her unpopular decisions as chancellor have meant that is no longer the case. Other ministers would back Rayner, but she would face a brutal press onslaught. Among Labour members there is no doubt, however. Rayner is streets ahead of her rivals in terms of popularity with the grassroots ... There is only one cabinet minister ahead of her, who is probably the least likely of anyone around the table to have another shot at the top job – Ed Miliband.

This is not intelligent commentary.  First, selecting the next leader when there's no vacancy is well-known to be an absolute mug's game.  Genuine, nailed-on heirs-apparent are few and far between in British politics (in the past century or more, only Anthony Eden and Gordon Brown).  

Second, Miliband is not at all the least likely to have another shot.  In countries like France and Italy he would be the number one contender in everyone's books: competent (at politics, that is), confident, popular, experienced, sure-footed, intelligent, and comfortably dynamic enough.  And he has the green-left eating out of his hand - potentially deemed a vital constituency when the Green Party is snapping around Labour's heels in such politically volatile circumstances.  That's how he'd be marketed, anyhow. 

A couple more comments.  (a)  You just can't rule out Khan or Burnham.  These guys' ambition and political capital is so great.  Safe seats aren't so hard to find in a hurry: Boris always found one at the drop of a hat.

(b) Having mentioned the Prince of Darkness last time and just out of interest, I have it on good authority Mandelson has already f****d up royally in Washington.  Of course, he's made comebacks in the past from many an appalling situation of his own making, so who knows?  But right now, his political capital is deep in the red.

Oh, and Lammy?  Speaking of in-the-red, he's so far out of the money right now, I almost forgot him.

ND  

By popular request: zonal pricing for GB electricity

Under both Labour and the previous Tory regimes, serious consideration has been / is being given by DESNZ & Ofgem to the introduction of zonal (wholesale) pricing of greater or lesser granularity.  Maybe it'll be a handful of regions with separate mini-markets at the wholesale level, maybe it'll be a serious plethora of pricing nodes, with nothing that could be termed a 'market' at each.  

[To recap: right now there is a single wholesale pricing zone across the whole of GB (not NI) - essentially, the whole of the national grid HV transmission system is a single trading point.  This doesn't mean that all bilateral trade in the UK takes place at the same (half-hourly) price: but there is a single, transparent 'settlement' price for each half-hour, arising out of open-market commercial activity, that is an absolutely vital marker for any number of other commercial applications - settlement of forward deals (many of them representing essential hedging activity); basis of CfD subsidies; basis of 'index-related deals' for companies that want to be exposed to spot market prices (there are some); etc etc.  Open markets for commodities cannot exist without such things, even if the design of each market is strikingly different in detail.  The market we're sketching here looks not at all like, say, the spot market for Brent Crude: but they both have the same essential features.]

Why might there be pressure for change to a more fragmented set-up of regional-or-even-smaller mini (/micro) markets?

The argument is essentially theoretical, albeit based on experiences elsewhere.  Its most vocal advocate is Octopus, the UK's largest energy supplier (with tentacles in all manner of other sectors).  We might explain it by analogy with postage stamps.  Whether I send a letter to someone in the same town, or to Inverness, the stamp will cost the same.  Is that in any way reflective of the costs and dynamics of the post?  Patently, it is not.  Why shouldn't postal rates be properly cost-reflective?  It would surely make for efficiencies.  If you wanna live in Inverness, well, there you go.  It doesn't take much to make the cross-over analogies: if you are determined to build your windfarm in the North of Scotland, why should you get paid for getting your electricity into the GB-wide market at the same wholesale price as if you have a windfarm close to the 'centre of gravity' of GB electricity demand where your product is actually needed?  You sure as Hell cause a lot more problems for the Grid.  Hence the idea of moving, at least to regional wholesale pricing, if not pricing at an even more granular 'nodal' level. 

Oh, and for completeness, those advocating such changes say "it'll be cheaper for everyone in the long run".  That's a big leap of faith, though, because although there might (possibly) (in the long run) be an overall system gain from efficiency, the distribution of that gain is unlikely to iron out the positions of the winners and - more significantly - the losers, of which more below.

From first principles, other things being equal I am a big advocate of cost-reflective everything - you need accurate cost / price signals in order to know what's going on in economic life.  It's a matter of policy if you subsequently decide to subsidise those 'losers' deemed to be horribly disadvantaged by this, and unable to rectify matters themselves by reacting rationally to those signals.  That should be the exception, of course, because the aim is positively to incentivise rational responses!

But there are other considerations than efficiency, and I'll highlight two.  The first is political: the great cry of "postcode lottery" goes up - you can hear it already - there being, errr, winners and losers on a geographical basis, with corresponding heartfelt loser-lobbies, and locally-based politicians to heed them.  That includes residential energy users, but also electricity generators.

The second is Liquidity.  For markets to function, there must be liquidity: it's of paramount importance - a big topic, but for those who don't know why this is so, we'll hold a tutorial another day.  How big (in economic terms) does a region need to be before one can be certain of enough free-trading commercial activity to constitute a liquid market?  There's no precise science, and a lot of ignorance in play.  Yes, we can point to some apparently much smaller electricity markets than GB's, where there seems to be adequate liquidity.  But sometimes these turn out to be not genuinely separate markets, but rather 'branches' of the same 'tree'. 

All I would conclude with is this:  the current GB market[1], with the rather blunt, non-granular price signals it sends, may not be quite as efficient as would be ideal, but it is liquid (some say, 'indeed - but only just') and that's a precious thing, not to be taken for granted or tampered with lightly.  If blundering, incomprehending hands break this thing - and Miliband / DESNZ / Ofgem-as-currently-led[2] are just the poeple to do that - it'll be a disaster.  I'm not in the thick of the current market-design dynamics, but I sure hope they know what they are about.

ND
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[1] I had a hand in the design of the original manifestation of the present market (2001), though there have been many modifications since.  You'll accuse me of pride and undue sentimental conservatism?  Fair enough!  But I know what the dangers are.

[2] There have been previous Ofgem regimes - and before that agency came into being, its predecessors 'Ofgas' and 'Offer' before it - that were truly excellent.  The present management is sub-standard.

War to the knife with Greens: Starmer going for broke

Going for growth?  There's every sign Starmer is going for broke - a slew of deeply controversial decisions either made already, or being readied, all in a rush.  Someone's told him it'll be a compelling, critical-mass message for all those would-be investors in UK plc that he's really open for business and will trample down all nay-sayers into the building-site dust.  (And presumably McSweeney has told him that 'all at once' is the best tactic.)

• Support for Heathrow third runway (already signaled explicitly)
• 'Nothing to stand in the way of new nukes' (yesterday)
• 'Likely to grant Rosebank etc oil/gas production licences' (yesterday)
• Extension of subsidies for Drax (Monday, by all accounts)

Everyone has their favourite 'hate' - mine is Drax; & I approve of Rosebank - and there is many a Green (and Red-Green) who hates them all with equal passion.  Perhaps there is someone other than Reeves who loves them all?  The construction industry, I guess, although they get nothing from the Drax announcement because Drax won't be committing to it's putative, ridiculous next-phase project "BECCS" in the near future - in fact, maybe never.

Wow.  Has McSweeney decided there'll be a month of massive sound & fury, followed by the usual amnesia?  Are the lefties who've just had the Whip restored so pathetically grateful, they'll take the required vow of silence?  Will the construction unions come swinging in with big support?

And Miliband ..?  Ah yes, we've mused about him several times.  He's swallowed LHR3.  He is in favour of nukes, and can probably swallow Drax (with much sophistry).  But Rosebank?  Lots of pundits are tipping him to quit over this, but I reckon otherwise: check his performance at the ESNZ Select Committee last month (linked to in an earlier post) - he very studiously repeated the exact wording of the Labour manifesto pledge: no new exploration licences.  Rosebank et al don't need an exploration licence, just a production permit.  I reckon he's swallowed it already, but we may soon find out.  His substantial cred with the greeny-lefties is going to be stretched to breaking-point soon.  What spectator sport this is!

Interestingly, only the nukes on that list above involve government money - and even that has (thus far) been limited to the ill-judged, probably ill-fated Sizewell C.  Everything else will either be private money and/or subsidies levied on energy bills.  So none of these 'announcements' is anything more than permissory.  Performative policy, on the cheap.  May never happen (aside from Drax grabbing the new subsidies with both hands, of course).

So:  let's see if there's a lasting political cost.  Maybe, maybe not.

ND

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Sorry, no links on this post - not easy from a 'phone.  You'll need to google it all yourselves!

Labour headed for serious internal strife

The Starmer government has been trying the patience of Labour members from MPs downwards, ever since the 2-chid allowance and winter fuel payment things, not to mention the freebies.  Their mealy-mouthed stance on Gaza enrages further tranches of their base.  Kow-towing to Trump - and who knows what that might entail - won't go down at all well in many quarters.  But now Rachel Reeves seems to have cut loose altogether, and must surely be moving onto a whole new patch of extremely thin ice.

Growth as a panacea for, well, everything, has a moderately respectable economic pedigree (even if achieving it has seemed to be beyond UK politicians - and there are respectable theories about that, too).  Months ago we noted that the Starmer regime seemed to have come to it fairly late, and there's no doubt it's the only thing that matters now - to Reeves, at least.  It's also top of Starmer's rhetoric just now, but soon he may find he has a few competing priorities to juggle.  And ahead of any ultimate, actual growth-derived economic benefits arriving - a long-term prospect, at best - manic growth-stimulating policies come with a lot of near-term political downsides.

This all comes to a head when, last week, Reeves explicitly said growth takes priority over Net Zero etc.  Well, in that case, we can suggest several cost-saving measures right away!  That's after weeks of "the Cuts are Coming!", which is hardly music to the ears of the rest of the Cabinet - and the Party.  Then, to cap it off, LHR3 seems likely to be given the thumbs-up.  

Apparently, Miliband says he won't resign over LHR - and we know how exceptionally "loyal" he is.   OK, LHR might not technically be within his brief, so he might feel able to let it go.  But, seriously, if NZ is to be downgraded as a priority, there really are several material savings to be made there: Sizewell C is a current cash drain for no immediate gain[1], and numerous other smaller, stupid projects too (hydrogen for heating, this includes you - and many more besides).  Reeves' axe must surely swing in his direction as well as every other.  These cuts and blunt Go-for-Growth bulldozer measures will be pissing off Labour swing voters and NIMBYs everywhere on a big scale - and there's one helluva big, restive, worried labour backbench cohort.

Now I may be getting ahead of myself here, but I feel we see some of the bigger players starting to position themselves for genuine internecine strife.  Streeting is the one who caught my attention last week with his big, heavily-trailed "battle of ideas" speech - a sure sign; and of course Khan is always on the lookout for cues to work his passage back into Parliament and the leadership he fondly imagines is his by right.  They say Lammy is boundlessly ambitious.  Rayner is a joke, of course, but for completeness I feel it must be noted that Miliband is seriously radiating dynamic confidence & competence (that's "radiating", not "actually delivering"), and looks like leadership material [2] if anyone was in the market for it.  In a country like France, he'd have no difficulty in being a candidate to go round again.  Mandelson, of course, is always on expert manoeuvres and his favours are fairly fickle. 

Popcorn time, then.  And sooner than we might have expected.

ND

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[1] Not in energy terms, anyhow.  Of course, many say the underlying purpose of the whole civil nuclear programme is to subsidise the military nukes.  And I persist in viewing it as part of the overall craven France-mollifying strategy which of course involves the Small Boats issue.

[2] If you want to judge for yourself, view his performance at the ESNZ committee in Parliament two weeks ago - masterful stuff.

"50 new gas-fired power plants for Germany" - and UK?

"German opposition leader vows to build 50 gas-fired power plants if elected", the story goes.  This is Merz, leader of the CDU and potentially Germany's next Chancellor (although see the 2025 Predictions compo).  50 is hyperbolic[1], but the point remains: Germany is hugely lacking in natural energy resources and, having bizarrely closed all its nukes on Merkel's whim, can't remotely rely on its large but actually not very impressive fleet of solar and wind power.  (Solar?  This is N.Europe.  Wind?  It has only a very small coastline, and that's in the wrong place.  Coal & lignite?   In abundance - but not "green", of course.)

So where would the gas come from?  Well, "imports": but lack of detail on this is just one element of the hyperbole, and his statement isn't any kind of practical plan.  But the point remains: the more wind & solar in a power fleet, the more strategic, long-term[2] backup power is required.  Right now, batteries aren't even remotely candidates for this, and won't be within a realistic planning period.   Pumped-storage hydro is great but in limited supply.  Imports of electricity are what Germany relies on right now but the Scandinavians are getting pretty testy about this - it plays havoc with their own markets - and may well pull the plug. 

Which brings us to our own shores.  Large-scale build-up of solar and wind - check.  Growing electricity demand (after more than a decade of decline) - check.  Declining nuclear capacity[3] - check.  Reliance on imports which might not be a practical proposition indefinitely - check.  So: continued, nay, growing need for gas-fired backup - check.  Even Little Ed Miliband realised this before the election, and now plans to retain the full 30-35 MW of our existing fleet[4] in his feeble "100% decarbonised by 2030, oops, make that 95%, it's what I always meant, it's the same thing" non-plan.

Here's the thing: these things are easy for a politician to say but that's not enough.  Capital plant can't equally easily be made to stand around doing nothing all year, but spring into life with ultra-high reliability on the odd, unpredictable occasion it's needed to be in action for a week or so.  That's not how the world works.

To be fair, HMG has gone one step further and has come up with a new subsidy for which backup gas-fired plants would qualify - but that's only the financial aspect.  The practical and physical aspects are legion, not least because if Mili's plans for decarbonising home heating progress[5] the overall scale of gas infrastructure[6] will be diminishing materially, and it would be comprehensive extant infrastructure paid for by someone else (as it is at present) that a rarely-used gas-based backup system would parasitically depend upon.

Yet another facet of the infeasibility of Miliband's plan.  He gave a very upbeat (and in fact, rather good - in political terms) performance in front of the Select Committee last week, and one can easily see how Labour MPs who don't understand the subject matter (evidently including Starmer and Reeves) would be inclined to view him very favourably and trust him implicitly.  But it's all destined to hit the rocks of hard reality at some point.  When?  I'm not sure.  Meantime, a heap of subsidy-contracts are gonna get taken by some players - and paid for by us.

ND

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[1] ... but music to the ears of hard-pressed Siemens!

[2] In this context, 'long-term' means weeks.  Batteries are only good for hours - which is very useful for some purposes, but not for Dunkelflaute

[3] Hinkley Point C start-up is a distant prospect, and the existing fleet is in decline, even if its life is prolonged to the max and the ONR throws safety considerations to the winds

[4] Numbers vary from document to document

[5] His targets won't be met, of course, but the gradual replacement of gas boilers with heat pumps is inevitable, even if at infinitesimal pace.  Ditto EVs

[6] By 'infrastructure' I mean not only the pipelines, storage facilities and LNG import terminals, but also the commercial and 'soft' aspects associated with there being a vast amount of gas sloshing around the UK all the time & particularly in winter:  lots of long-term supply contracts, gas traders, commercial, engineering & tech expertise, market liquidity etc etc - in other words, a thriving, extant gas industry of critical mass.   

Miliband, China, & the feasibility of government plans

Last week Miliband published his risible "Clean Power 2030 Action Plan", piling on yet more nonsense atop the supposedly supportive NESO report of a couple of weeks ago which ostensibly provided cover for his & Starmer's disingenuous retreat from "100% decarbonisation by 2030" to "100% always meant 95%".  That's a lot of reading there, if you're so minded.  Don't expect much[1] intellectual consistency, though.

Anyhow, whatever target he finally declares to be what he really meant all along, one of Mili's ideas is for some kind of 'bonus' to encourage developers to use UK supply chains instead of, as at present, importing just about everything including the workforce.  I can report that would-be new renewables developers are all very keen to be given this bonus, in whatever shape or form it materialises - to the point where they are putting their plans on hold until they learn the details!  Unfortunately, even the fingers-crossed "endorsements" of Mili's breakneck 2030 timetable state that there isn't a nanosecond to be wasted (code for "it's impossible, matey") - so this new cause of delay (among very many one might list) could prove to be a pretext for yet another volte face.  Most likely, I guess, the ditching of the UK Supply Chain thing[2].  By way of support for this cynical view: FID has just been announced on Phase 1 of our very first Carbon Capture & Storage project[3] - and the developers have announced a "non-binding ambition" to source 60% of their stuff from UK supply chains.  How very amusing.

And of course the same goes for the building industry - in spades!  (see what I did there?)  1.5m new houses (sorry - homes: we now learn a significant % will be converted office blocks) cannot remotely be built with nothing but indigenous supply & labour.  Nor the building standards that so many activists believe they were promised would be imposed on housing developers - for energy efficiency / heat pumps / solar panels / disabled access etc etc.  There's another target ripe for downwards revision.

In amongst all this oh-so-cynical realism, we learn that in the New Year ... Mili is off to China!  - that well-known "developing country" (for COP purposes) which is the source of almost all solar panels and much else besides.  What, do we imagine, is the purpose of his mission?  To tell them they must locate their factories in Sunderland, & stop burning coal?  To lecture them on human rights?  To demand the return of Hong Kong?  To stop sending weapons components to Putin?  Do tell us, Ed - what will constitute success for your mission?  We only ask because we want to know.  

ND

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[1] I was about to say "any / whatsoever" there: but in fact there is a thin strand of consistency detectable.  Having not formally decided whether or not to extend the wretched Drax's baleful biomass subsidies beyond 2027, Miliband pays lip-service at least, to the possibility Drax stops generating thereafter.  Personally, I'd be very surprised if he held his nerve against the blatant subsidy-farmers at Drax - but this formal reserving of the position is at least a modest positive sign.  

[2] See, for example, the sad little story of the Vestas Isle of Wight turbine blade production / job losses.  How are those "650,000 good new jobs" shaping up, Ed?

[3] Obviously this announcement of "CCS" at Teesside came with a great fanfare.  Look closer, and you'll notice that its primary sponsors, BP and Equinor, are committing only to the new gas-fired power plant at this stage.  That's the low-hanging fruit, of course, and in any event, CCS or no CCS, is likely to have a role as part of Mili's "fleet of gas-fired back-up" which he now realises he always meant to retain.  We'll believe the commitment to the actual CCS aspects when we see it, Ed ...