James Allcock RIP, rogue [2]

Continued from last week

So what disturbed Allcock's stately scam ship as it sailed serenely through the market?  The first issue arose in the mid '80s when the laws of supply / demand / price caught up with him, as they always do eventually.  You can suspend the laws of nature, but only for as long as you are willing to throw money at it.  

What happened was this.  He'd secured vast quantities of gas at ultra low prices (the units don't matter, but it was single-digit pence per therm) in the late '60s and early '70s - see part 1.  This was amply sufficient, right through the 70's.  But by the '80s there had been two oil crises, 1973 and 1979; and the price of oil had risen tenfold (sic).  The prices BG was paying for its gas had jogged upwards a bit with inflation and other adjustments, but nothing on that scale.  So the big producers, who were always oil companies au fond,[1] stopped drilling for gas, concentrating on the still bounteous North Sea oil reserves.  There were whole years in the '80s where not a single gas well was drilled - not for exploration, nor even for extending already-producing gas fields.  A complete gas-investment strike by the producers.  BG did the sums, and correctly assessed they'd be facing a supply crisis in due course.  And new gasfields took an absolute minimum of 2 years to bring onstream[2], often much longer if outright new exploration was to be involved.

Still, BG had a monopoly to go with its monopsony, and they knew who was going to pay for the business of digging them out of that hole - its captive customers!  So Allcock did the rounds of the big producers, intimating that BG was now willing to pay prices above 20 p/th - a huge increase - for any new gas fields they could bring to the table in the next few years.  This, of course, set off a new round of stately and highly enjoyable negotiations I described last time, as the producers dug down into the archives for overlooked gas discoveries, and indeed started drilling again for new resources.  It worked: high prices have that effect.  (I've written before about another, hilarious aspect of this episode as the crazy, artificial boom-and-bust cycle ran its inevitable course.)  Thus did Allcock and his monopoly powers - a dismally blunt instrument indeed - avert the first storm that broke over his head.

The second, however, was to be terminal, albeit a protracted affair.  On purely ideological grounds, Nigel Lawson persuaded Thatcher to privatise BG, a task given to Peter Walker.  To make a long story short, in 1986 he succeeded in getting the public to buy the shares ("Tell Sid", for those with 40-year memories), and the legislation ended BG's de jure monopoly / monopsony.  But it did nothing to eliminate or even, in the short- to medium-term undermine, its de facto stranglehold, not least because in the initial legislation, no regulator was appointed!  

And it was Allcock who commanded BG's first and highly effective line of defence: making sure no other bugger could obtain gas with which to go into competition with the monopoly.  In the next part we'll tell the story of his long, ruthless but ultimately unsuccessful rearguard action.  And, no, I haven't forgotten the promised account of the colourful abuses of its monopoly that BG perpetrated over the years - some of which will feature in part 3 and others in a later episode.

ND

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[1] Gas was always seen as a more-or-less unwanted by-product - something that came up from most oil-wells anyway, or something you discovered, disappointingly, when you'd really been looking for oil.  In some places around the world, by-product gas was simply flared

[2] A lead time as short as 2 years would be for a geologically simple gas field in shallow waters, close to existing infrastructure, that had already been discovered but never developed because the price BG had been willing to pay was just too low - the producer had better uses for its development budget

Starmer's China Triumph: errr ... visa-free travel!

The scene: a small, bare office on an industrial estate near Beijing Capital International airport.  Sitting nervously on a metal chair, nursing a plastic beaker of water and facing a plain table adorned with two small pennants, one a Union Jack and the other the Chinese flag, is The Most Important Man In Government Jonathan Powell, legendary Xi-whisperer (self-styled) and Starmer's right-hand man on all foreign matters. 

A loud voice off, shouting into room:   You bow low!

Powell leaps to his feet, turns to face the figure walking in through the door and doubles over at the waist with as much gravitas as he can muster.

Enter Yu Bau-Lo, 3rd Deputy Under Secretary at the Chinese Ministry of Protocol.  

Yu:  Mr Powell, get up.  Very busy.  Have many executions of Ming gang to supervise.  What you want?

Powell:   Err, Mr Yu, greetings ... I, err, we, err, came good with the approval for your new London embassy, just like we discussed.

Yu:  Yes.  So what?

Powell:   Err,  we were, err, hoping there might be something in return?  Something big, that Sir Kier could announce?  

Yu:  He could say "I got to meet President Xi.  In person.  Camera present, photo taken."  This is great honour.  Everyone in world deeply impressed.

Powell:  Err, we were hoping for something, like, err, tangible? 

Yu:  We will send copy of photograph meeting with President Xi.  Can have framed.

Powell:   But, but ... we need a deal - everyone needs a deal these days!

Yu:  OK, (looks through notebook entitled "Sops") - we give you visa-free travel!  Big concession - only Vietnam, Thailand, Indonesia, EU, Canada, Turkey etc etc etc get visa-free travel.  North Korea desperate for visa-free travel!

Powell, crestfallen:   Surely there must be something more than that?  The embassy ...

Yu:  Don' push luck Mr Powell.  OK, final word: half-rate tariff on Scotch whisky.  

Powell, utterly crushed:  Thanks ... we're very grateful.

Yu, turning to leave as shots ring out offstage:  OK.  You go now.  (With back turned)  Anyhow, Chinese people don' drink Scotch any more - Indian whisky really good these days**.

As overheard by ND

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** It's true!

Would he, wouldn't he? Yes, "Burnham Would"

Sorry, but the Macbeth idiom is irresistible.  Presumably, after a full week of letting it be understood that any move by Burnham would be stopped dead in its tracks by the NEC, the Mcsweeney coven was hoping that he is

... not without ambition, but without / The illness should attend it

But no: whichever witches our Andy encountered on Newton Heath knew their man better: 

When you durst do it, then you were a man

The Mcsweeney bluff was in truth a really easy one to call.  So they block Burnham tomorrow: what chance then, for whatever hapless stooge Labour puts up in the by-election?  "I know you all really wanted Andy ... but I'm hoping you'll support me now ..."  A great rallying cry indeed, with only the thin chance of a haphazard but possibly lucky 3-way split to save Gorton & Denton for Labour.  

Shakespeare again: let's imagine Mcsweeney's day-dream.  The scene is some darkened Labour office in Manchester: Mcsweeney has Burnham marched in, sits him down, offers him a cup of instant coffee and says

Yeah, right, in his dreams.  For, (at dearieme's suggestion BTL) Burnham replies:

                      That's all you've got?  Thou knave, thou dunce inane

                      Starmer will rue the day he gave you rein! 

Great spectator sport.  Amusing, too, to see Miliband's response for the cameras yesterday, impishly saying Burnham would be "a massive asset" in Parliament and that he hoped Gorton and Denton party members would have "the option" of selecting him as a candidate.   He also hopes, of course, that Burnham would make him Chancellor.

More popcorn!

ND

© Nick Drew 2026

Mayor Burnham! - may I deign to call you Andy?

We all do have the high'st regard for you 

Rogues I Have Known: James Allcock, part 1

Pic:  Daily Telegraph

There won't be many readers who have heard of James Allcock (died at the age of 90, obit here, which you should maybe read first). De mortuis nil nisi bonum, obviously; and I'll immediately say, he was a very nice guy who commanded tremendous loyalty, which (generally) speaks well for a man.  But he was also, how shall we say, a tough customer.  Being, as he was, the head buyer for the old British Gas when it was a monopoly.  I shall explain.  At length.

BG took on the form we most associate with it when North Sea gas hove into view in the late '60s.  The late (and not very lamented) Dennis Rooke was given responsibility for converting the nation rapidly from town gas to natural gas, in which he succeeded, using methods that left a lasting and very equivocal legacy - a story for another day.   It seems from the above-referenced obit, Allcock (I never knew this) had a hand in it, too.

However, it was in his prime as BG's head buyer of gas from upstream producers that I first met him.  Did I say 'buyer'?  BG enjoyed, not only a statutory monopoly, but also a monopsony, which it enforced zealously.  So if your company had discovered gas in the North Sea (and later, off the west coast, too), you had nowhere to go but to headmaster Allcock's study.  The only question was, how painful the experience was going to be.  He had only two forces providing a weak form of discipline on his rapacity:  (a) some customers (particularly industrials)[1] still had the ability to use alternative fuels, mostly oil of one grade or another; and (b) the Norwegians, at least, had alternative outlets for their gas.  Otherwise, he could generally have his wicked way with you; and he & his opposite numbers in equally monopsonistic European utilities used to swap notes gleefully on how roughly they'd rogered their victims.

That said, he was a perfect gentleman, and built a department consisting of three teams of negotiators to carry out his purchasing policy.  You need to know that these negotiations were for astonishing amounts of gas, since Allcock insisted on buying the entire quantity of gas in a given field, which might be producing the stuff for as many as 50 years[2].  So the amounts of money on the table were correspondingly stupendous; the sellers were very big companies themselves (basically, the '7 Sisters' of yore plus the Norwegians, and various hangers-on); and the negotiations were interminable.  Two years for the sale of a single large field's gas was par for the course. 

Each of his teams was led by another perfect gentleman[3] and some courteous juniors, whose conduct was extremely stylised in the oriental fashion.  There were three juniors to a team, and each had their allotted role.  #2 would occasionally get to speak out loud in the meetings; #3 might get to whisper something to #2; and #4 was silent, taking notes.  There would also always be one or more of BG's exceptionally proprietorial external lawyers, who did all the drafting.  Indeed, all the meetings were held at the offices of BG's lawyers, the then firm of Denton Hall Burgin & Warren.  This was to the advantage of all the participating negotiators, since lunch came in the form of a Fortnum's hamper, and the fridge was well stocked too.

Thus, it was possible to be thoroughly rogered by Allcock and his teams, and enjoy the whole process greatly.   One or two of the juniors might have been redbrick, but inevitably the main players on all sides (whichever oil company was selling its gas) were Oxbridge: even the US sellers, and in some cases the Norwegians, made sure to field the "right people" for this arcane negotiation ritual.  Literary references (which would sometimes find their way into the drafting) and Latin jokes were prized currency.

This stately and splendid abuse of BG's statutory powers lasted from the late '60s to the early 90's.  Allcock had to weather a couple of storms - which he did with panache - before eventually competition started developing for real, as I'll describe in part 2.  I'll also give some examples of the outrageous abuse of its monopoly BG perpetrated when this regime still had the power to do so.  

And, to cut to the chase for part 1, Allcock - in his urbane manner - fought the onset of competition all the way.  Given that BG retained a de facto monopoly/monopsony for years after it lost its statutory rights, and never lost its natural monopoly on the pipeline system until it relinquished it voluntarily by demerger, his powers to do so were baleful and very great.  But when, in the early 90's, it was manifestly almost over for his way of doing business, I had a drink with him one day and asked him this: why this stubborn rearguard defence, when the end-point was clear?  I drew the analogy with Germany's immense WW2 losses on the Eastern front: if they'd called it quits after Kursk, say, and fallen back in good order to the German border, Berlin may never have fallen to Russia[4].  As it was, fighting for every hectare they lost countless men for arguably a much worse result.  Likewise, BG was (at the time I posed the question) still mulishly refusing to concede market share, and using its enduring natural monopoly on the pipeline system to make life as difficult as possible for its new competitors, once they arrived on the scene, even knowing that there was every intention on the part of government to make sure the new entrants succeeded.  If BG had fallen back on its then-remaining de jure monopoly of the residential gas market (which it didn't lose until much later) - devilishly difficult for competitors to make inroads into, and not nearly as profitable as the infinitely more accessible industrial & commercial sectors - it could have held that till kingdom come.

He smiled, poured us another drink, and said: "Every day's delay is another monopoly pound in our pockets."

More to follow.  In the meantime: RIP, James, you old rogue. 

ND

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[1] For a sustained period until the late 1980s it was illegal in the UK, and in most of Europe and the USA, too, to use natural gas for power generation .  Bizarre, but true.

[2] The largest North Sea gas field, Leman, started production in 1969 and is still producing to this day

[3] In the early years, at least - things changed towards the end, but, no names, no packdrill 

[4] A counterfactual for the historians, obviously.  But it served my illustrative purpose.

Trump charts new extremes of human nature

At the weekend I read this short piece, entitled:

"Our Impossibly Small-souled President"

The author, one Jeffrey Blehar, is no great artist or philosopher - but his coinage, small-souled trashiness, is on point.  And mention of 'small-souledness' inevitably brings to mind the classic descriptive accounts of the Great-Souled Man, starting with the ancient Greeks - Homer, Plato, Aristotle - amplified by Shakespeare, Goethe (to an extent) and of course Nietzsche.  Let's keep the citations to a minimum and satisfy ourselves with extracts from Aristotle's canonical account: 

The great-souled man is fond of conferring benefits, but ashamed to receive them ... He returns a service done to him with interest ... It is also characteristic of great-souled men never to ask help from others, or only with great reluctance, but to render aid willingly; and to be haughty towards men of position or fortune, but courteous towards those of moderate station ... it is vulgar to lord it over humble people ... He must care more for the truth than for what people think ... he does not bear a grudge.

And so on.  It's not difficult to conclude that Trump embodies the exact antithesis of all this, in every dimension: quite an achievement.  Not in terms of great villainy - think Iago, Judas, or the Serpent - but great smallness!  And quite a remarkable state of affairs, that one such as he should be in the position he is.  Age, thou art shamed!  Rome, thou hast lost thy breeds of noble blood!

Of course, in literature the extremes of human nature are frequently documented in poetic depictions of tragedy.  We've no shortage of dramatic events in the flesh - but where is the great art that so often emerges from times of great turmoil?  If tragedy is the classic vehicle for depictions of the great-souled man, what is the medium for portraying his opposite?  Where is our Shakespeare, our Milton?

ND  

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Afterthought: though hardly a man of worldscale literary merit, we must note with dismay the passing of cartoonist Scott Adams, whose perspicacity in identifying Trump as The Man Most Likely To, way back before Trump's selection as Republican candidate first time around, was detailed, shrewd and very impressive.  All of a piece with the astute micro-insights delivered over the years by Dilbert.  Needless to say, the small-souled one managed to make his commentary on Adams' death all about himself.  Of course he did: I rest my case.

Venezuela through Russian and Chinese eyes

In the previous post I suggested: 

... the Venezuela adventure is ... forcing Putin to eat more shit as he is lamely reduced to asking that his tanker crew will be nicely looked after.  Yep, lots of random shit happens on Planet Trump ... both Russia and Xi are utterly dismayed, as ever, by the casual ease with which perfidious western nations sweep away years and even decades of patient strategic effort: this time Venezuela, the latest in a long series  

- that series including Libya, Syria and Iran-as-Middle-East-counterweight (and supplier of arms to Russia).

Taking Russia first: Putin really had set a lot of strategic store by Venezuela - proportionately, a lot more than Xi, for whom these things are merely road-bumps, however annoying and tactically unpredictable.  Ditto Syria, ditto Iran.  Putin is beholden to N.Korea, FFS, at the same time as trying to project a superpower profile, so these setbacks are pretty hard to swallow.  The Bear with the sore head is unlikely to cut anyone any favours on its western borders, witness the performative missile strike on Lviv; but he'll be watching Iran with an awful sense of déjà-vue doom.  Where to parade his plonker now, except in the Donbas?

China looks very different.  Xi pretty much believes in regional hegemony!  So Venezuela may be a bit of a setback to a maturing long-term plan, and oil is oil; but hey, Taiwan is the only thing he really cares about, period.  

Also, he's looking forward to wiping the floor with Trump - again - this year.  He played Trump brutally last year.  You say 'tariffs', Mr Trump?  Nope, and we raise you rare earth metals.  Now, hand over your very best chips, lots of them, before we reduce your remaining industries to rust and dust ... That's the way, Donald, there's a good boy.  Now run along.

And 2026 is the mid-terms ...  Venezuela, pffft.  Trump and Xi are scheduled for a couple of summits this year, and the Chinese will be expecting to ream him again.  What else of gigantic strategic value will Trump give away this time?  The dawning of the Chinese era stands to be accelerated materially in just a few months. Scary stuff. 

ND

UPDATE:  see thread below - this is getting complicated !  

https://www.theguardian.com/technology/2026/jan/17/china-blocks-nvidia-h200-ai-chips-that-us-government-cleared-for-export-report

Ukraine - more first drafts of history

Last year's Predictions compo invited short essays on Ukraine.  I largely ducked this one but there was a very decent effort by Caesar H, including: 

Trump comes up with a Big Deal that makes sense to him, Zelensky signs off on it begrudgingly, Putin doesn't. Trump, having paper thin skin, takes this badly ... by year end some of Russia's gains will have reversed, and there'll still be an embedded Ukrainian presence in Russia, and Trump will start suggesting giving them nukes in response to Russia's usual bellicosity about using them. Think of the geopolitical version of "I offered you a way out asshole, you slapped my hand away, so I'm going to crush your nuts until you cry like a little bitch".    I expect this theory to disproven by February of course 

Putting aside the nukes bit, it was actually a very fine prediction.  Putin seemed at first to be playing a decent hand with Trump, but his early political gains have been squandered (does anyone really know how to play Trump?  Even Netanyahu?).  I believe Ukr still holds a few square meters of Russian soil to this day; and although none of Russia's gains as of Jan 2025 have been reversed, several of their advances during 2025 have indeed been reversed - though the definition of "advances" changed during the year**.   

I have no idea what the collective western brainpower around the most recent "coalition of the willing" table thinks they've come up with this week.  They all know, for 100% certain  - even, or perhaps especially Witless, who's had several lengthy in-person lectures from L'il Volodya - that the idea of NATO boots on the ground / air patrols in Ukr airspace are an absolute Red Line for Putin, despite the endless red lines of his that the west calmly breezed through in 2022 / 23 / 24.  

Is it a Cunning Plan?  Designed to get a wholly predictable 'Неt' that will enrage the Orange One?  If so, the parallel Venezuela adventure is reinforcing the C-Plan nicely, forcing Putin to eat more shit as he is lamely reduced to asking that his tanker crew will be nicely looked after.  What a piece of serendipity that is!  Yep, lots of random shit happens on Planet Trump.

I don't have a conclusion on Ukraine right now, because a massive and fairly binary pivot-point looms (and of course may fade away again, as have several before).  Just a few observations:

• while there's still nothing to stop Putin having what he wants in terms of the Donbas (as I've said all along), he doesn't seem willing to pay the price (or at very least is understandably reluctant), and still hopes to get it on a plate via a 1-1 with Trump
• the only possible way he'll get more than just the Donbas (in terms of territory or in any other dimension) is also from Trump
• once again, both Russia and Xi are utterly dismayed, as ever, by the casual ease with which perfidious western nations sweep away years and even decades of patient strategic effort: this time Venezuela, the latest in a long series

We'll shortly have another post on this last point.

ND

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** Russia has more-or-less given up on even small-scale armoured thrusts (they all get eliminated piecemeal), or even the motorbike / quad-bike "dragoon" charges of 2024, settling instead for a pretty feeble doctrine of "infiltration on foot in 2s and 3s".  Sometimes this is genuine recce, but mostly it is simply for the sake of probing, and often for no more than raising a flag, having a quick photo taken by a drone, then the job's done, the map is updated, and nobody in the Russian command much cares for the subsequent fate of the probers.

On this last point, honest Russian milboggers are incensed by the endemic Russian practice of over-claiming territorial gains, in what they call "beautiful reports" from lower echelons to higher command and even to Putin himself.  They observe that "victories on credit" frequently result in carnage for the troops on the ground: they are either ordered to "make the maps true" by hurriedly and suicidally advancing into the falsely-claimed territory, and/or having resources taken away because, their having already "gained their objective", they no longer need them.  They also observe that promotions and medals are frequently awarded on the basis of "beautiful reports" alone.

2026 Predictions!

OK, so for 2026 we'll keep it easy ...

1.  FIFA World Cup:  winning team;  golden boots winner(s);  will Wales / N.Ireland / Rep. Ireland qualify? 

2.  Seeing as the man disappointed us last year: date of  Starmer's first Cabinet reshuffle, per last year's definition**, with BPs for names etc

3.  Name of UK Prime Minister on 24.12.26

4.  Results of US Mid-terms 2026, both Houses

5.  Prices of Brent oil in USD/Bbl; gold & silver in GBP/oz on 24.12.26

6.  Joker: anything you have a canny idea is going to happen on the world stage in 2026, that can be expressed in a single sentence of ordinary length.

We'll skip Ukraine this time: strong likelihood of being too complicated to adjudicate.

Have at it below !

ND

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** "Cabinet reshuffle" = two or more changes to the Cabinet roster, unforced by resignation or death.  Splitting of an existing Cabinet post into two or more new positions doesn't count per se - only if accompanied by reshuffle as defined above.  By this definition there hasn't been one yet.

2025 Predictions Compo: results!

This one was probably inviting too many qualitative answers for easy adjudication, but here goes.  First, the factual aspects:

1. Name of first sitting MP defecting to Reform   Ans:  Danny Kruger

2. Date of Starmer's first Cabinet reshuffle, as defined. One bonus point for each correctly-named departure or clear-cut demotion. Two bonus points for any complete change precisely identified (named outgoer and named replacement) 

Ans:  there hasn't been one according to the definition, which excluded shuffles forced by resignation.  There was one of that type on 5 Sept (Angela Rayner).  It's arguable, surely, that the lack of a reshuffle is yet another signifier of Starmer's political weakness.

 3. Anything you care to predict about the German Fed elections    Ans:  the vanilla results may be found here.

 4. Composition of German government coalition by year-end   Ans: CDU/CSU and SPD

 5. Dollar / rouble exchange rate on Christmas Eve    Ans:  78 - 79 range

 6. FTSE100 on Christmas Eve   Ans:  9,890

Results:

1.  Nobody got this one.  (Wonder if any Tory MPs guessed?)

2.  Nobody technically on the money here either.  Several of us mentioned Miliband and it is rumoured he was indeed for the chop, but dug in furiously - and here he still is.  Mr Cowshed saw Rayner as perilously positioned, but not the cause of her exit.  He also saw Lammy as highly vulnerable - an excellent call.  SubOptimal got the timing right.

3 & 4.   Mr Cowshed correctly had AfD second, and Caesar H had the first three in the correct ranking.  CH and Sobers both called the coalition correctly.

5.  Sobers a comfortable winner here with 87 (though on incorrect reasoning, viz a Trump-enforced peace deal): everyone else had it higher & most had it >100.  The exact state of the Russian economy is a highly vexed issue, of course, with good data hard to obtain (FX, at least, is transparent).  Nabiullina is under colossal pressure from Putin to reduce the interest rate to 10%, which she has resisted thus far: it's at 16%, having blipped above 20%.  If she succumbs, and/or quits or is fired, let's revisit that FX rate again ...

6.  Nobody saw the FTSE rising!  Nul points.

From the above, there's a 3-way tie: with two ranking mentions each, it's Anomalous Cowshed, Caesar Hēméra and Sobers !  Well done all.

*   *   *   *   *

There was also a bonus wildcard essay question : at headline level, what will be the state of play in Ukraine at year-end?  We'll return to that one in a few days: but next up - the 2026 compo ...

HYN!

ND

Blogstats in a year of intense LLM "training"

Last year I noted the Top Six locations for C@W hits, as follows (in descending order):

Hong Kong / China / USA / Singapore / UK / Norway

2025 has been a bizarre year for blogstats.  Much as I'd like to think the upsurge represents long overdue global recognition for this blog, many other blogs have found the same and the widely accepted explanation is that the latest generation of LLMs, ever hungry for new "training" material, have been voraciously "reading" new bodies of text.  Obviously, the nearly two decades of flawless prose and compelling reasoning to be found on C@W make us a highly suitable educational experience for these eager students.

Anyhow, the "readership" has increased six-fold over 2024, with a mighty spike in June.  Someone in the LLM industry could doubtless explain this in detail.  Interestingly, while the spike has long since receded into the rear view mirror, it has left a pronounced tail in its wake**.  Presumably, the said LLMs keep coming back periodically to check on our latest gems: and I wonder if also their initial burst of reading resulted in a wider dissemination of C@W as a cited source, which ordinary ("human") www-browsers now access more than previously.

Anyhow, here is the Top 10 for 2025. 

1. Brazil - first by a good distance
2. Singapore
3. USA
4. Vietnam
5. China
6. India
7. UK
8. Japan
9. Bangladesh
10. Norway

Questions:

• Does this mean that electricity is cheaper in Brazil?  Or is it the cost of bandwidth?  I haven't heard of a rash of data centres being built there.

• To what body of hitherto untapped sources in the digitised world will the LLMs go for their next training binge?  What's left that is broadly literate, extensive, ignored thus far - and free?  The complete speeches of Stalin, Mao and Castro?  Might it be something of unspeakably awful content, such that LLMs will soon be effing and blinding like a docker and sharing pictures of nudified politicians ..? 

• May we hope that the wholesome diet of C@W wit, wisdom and literary excellence will raise the whole tone of AI output?  (*ahem*)

ND

PS: start thinking about your 2026 predictions ...

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** A company of my acquaintance that publishes a notable blog (as a promotional exercise) has suffered the opposite effect.  Its content having been extensively devoured in the same way, it now gets fewer hits, because AI searches give answers based on the LLM's reading and summarising of that blog.  These days, such searches do at least give links to the original source; but most lazy bastards go no further than the AI summary.  Which, to be fair, characterises much of my own use of AI - given the excellence of the summaries!  (Which is not necessarily a crass, circular assessment: when full reasoning & explanation are incorporated, you can pretty much judge that nothing salient has been omitted or "misunderstood".  And it's self-regulating, too: if the search is for an important purpose, obviously you dig deeper.)      

Some established business models are of course being actively trashed by the phenomenon - not to mention the upcoming fate of many professional, semi-professional and clerical-type jobs ... 

When the King invests in the bubble

Not only do human beings have a marked propensity to believe in perpetual motion machines, nuclear fusion, price forecasts and sure-fire betting scams wheezes, they love investing in a good bubble.  When a bubble really gets going - the classic case study being the South Sea variant - almost everyone with any spare cash piles in, accompanied by eejits who've even borrowed to do the same.  And by 'everyone', we mean (in the South Sea case) the King, the Court and, for good measure, Isaac Newton.  Yep, the suckers' propensity has little to do with brainpower or status.

So now we learn that a Trump family enterprise is getting into nuclear fusion, with the AI bubble in mind and the correspondingly vast putatively future demand for electricity.  Has the Orange One finally taken leave of his senses?   Well, note that the story says "the move would 'create one of the world's first publicly traded fusion companies'" which speaks more to making a killing on the share price rather than actually producing anything tangible like, errr, electricity.  So maybe it's quite canny.  What's more, who'd be surprised to learn that the Trump "50% share" is in the form of carried equity?  I'm just guessing here: but after all, his big contribution is surely to act as the pedlar of the snake oil** to his millions-strong legion of sucker-followers for whom he can do no wrong.

Needless to say, the announcement goes on to claim: "the combined company planned to begin constructing the 'world's first utility-scale fusion power plant' next year, with further plants to follow".  Well of course it does: what else would they say?  "Starting construction", as any dodgy building firm will tell you, doesn't need to mean anything more than clearing a site.

Publicly traded, hmmm ... does this mean we'll be able to short the Hell out of this thing?   

Merry Christmas to all !

ND

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** The so-called Swansea Bay Tidal Lagoon, a dreadful scam that ran 2012-2018 before HMG finally put it out of its misery, provides a sobering lesson on such matters.  The promoter, one M. Shorrock, was evidently very good at getting people to part with their money.  Some of his investors were high-rollers (who definitely ought to have known better, shame on them) but he also persuaded hundreds of small investors to take a punt, frequently on the heartwarming pitch that it would provide lots of jobs and cheap electricity for the benighted town of Swansea.  In this way he raised, and spent, somewhere between £37m-£50m before the scheme went bankrupt.  You won't be surprised to learn that many of these millions went to others of M.Shorrock's companies in the form management fees and loan interest paid at 20%.  He has a very nice house in Gloucester.

Oh, and for his own shares in the enterprise (he held approx 23%), how much did Shorrock himself pay?  Answer:  £70.  Not £70,000.  £70 (seventy).  PS, had the scheme ever reached financial close (which, had HMG given it a 'green' subsidy, it probably would have - the banks were lined up), Shorrock would have been paid £14m.

It is not known whether he currently acts as financial adviser to D.Trump.  Possibly not, since he was last sighted selling solar panels in, errr, Vietnam.

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

Enron's plan for property-price derivatives market

Canary Wharf: cornerstone 

Following on from the post about the 'predictions market' & how various attempts to make financial markets in superficially prospective areas have sometimes come unstuck (water; bandwidth, weather): I'd mentioned that just before the Big Collapse, Enron was planning a property-price derivatives market, meaning futures / forwards at the outset, and ultimately options.

The rationale for there being demand for such a thing was this.  Many individual and commercial entities, as well as outright investors, can find they have a lot at stake as regards the variability over time of property prices in general, and the differences between property prices in different regions (technically, a source of 'basis risk').  Simple examples at the personal level: someone who hasn't yet sold their current property but has committed to buying a new one - needs a hedge against prices dropping while they find a buyer.  Someone who needs to move from London to Manchester for a couple of years but expects to return to London thereafter: needs a hedge against London prices outstripping Manchester over that period.  Someone who wants to lock in an attractive price they've seen the identical house next door fetching when it sold last week, but doesn't plan to move just yet: needs a hedge against local prices falling.  Etc etc etc.  

And of course once a market is established, speculators and punters can pile in: unlike weather (see previous post), people often really do have strong opinions about whether the property market is overheated or underpriced.

So how was Enron going to get the show on the road, back in 2001 at the time of the Collapse?  They put some of their best people on it.  Regionally specific price indices already existed - the sine qua non for derivatives.  Key to any market is liquidity, in turn requiring market makers and critical mass: and, with some aspects of derivatives, the ability to cash out into the physical.  They had a strong relationship with the Halifax (then a big property player and publisher of indices) and planned to start with the London commercial (office space) sector - and to ensure physical delivery, as an opening gambit they were going to buy Canary Wharf !

Sadly, we will never know how this would have panned out ...

ND

Kalshi billionaires & the "predictions market"

As fans of open markets, generally speaking, what do we make of the soi-disant "predictions market"? in which the firm Kalshi has made paper billionaires out of its youthful founders (one of which is the youngest ever female paper billionaire).

Well, first of all, good luck to them: I assume their investors are consenting adults, hopefully with a brain cell or two to rub together.  Investment bubbles help make the world go around: where would we be for railways if there hadn't been an "irrationally exuberant" railway-mania boom in the 19th C?  Just so long as it is private cash, hopefully not pension money, that someone can afford to lose 

But secondly, this is just a slightly exotic betting platform with good PR, right?  And will they ultimately prove correct in that it's possible to "monetise every difference of opinion"?

A story.  At the back end of the 1990s when Enron had triumphantly succeeded (against strenuous opposition) in becoming a highly profitable market maker in all manner of commodity contracts that nobody except them thought was remotely possible - indeed, some academics declared was a priori impossible - a lot of people in the energy sector and much-larger financial / insurance sector were looking for the Next Big Thing to commoditise, create derivatives on, and trade.  I could tell you an amusing but irrelevant story about the attempt to do this with water: and at the time Enron went bust (2001) it had a clever plan, never realised, for doing it with property prices.  But the one that's relevant here is weather derivatives.

It's clear enough that a great number of companies and individuals often have something of value to them that is riding on what the weather will be.  Ice cream manufacturers, energy companies, holiday concerns both buyers and sellers, brides-to-be, county fairs etc etc.  They often buy insurance, from long-established specialist insurers.  So what?

Well, in principle we can identify all the technical factors required to establish financial derivatives.  Financial issues at stake in very large measure, impacting on a huge plurality of players.  Gains and losses related directly to uncertain but measurable outcomes.  Data on said outcomes that are objective and not open to manipulation or influence by the prospective winners & losers.[1]  So the weather-related derivative products were devised and a very large number of players from several sectors piled in with traders, marketing teams, software, complex stochastic analyses etc etc - all the paraphernalia of traded markets.  All these costly resources created, they sat back and started trading - mostly with themselves.  but surely, the genuine "natural counterparties" / end-users (entities with something at stake), the 'locals', the outright punters, would come along in due course?  What's critical in any such market is transparency (easy), clearing & systems, but above all else, LIQUIDITY.  

Well, nope: despite this huge global investment the weather derivatives market market never took off on anything remotely like the predicted and expensively planned-for scale.[2]  Why?  Because no bugger has any view whatsoever on what the rain is going to do next August 13th at noon, in any regions other than the Sahara or Antarctica (where there's no end-user business to be had).  Not even inveterate gamblers of the Sky Masterson variety.  Somebody may well have a horrible exposure to rain at that precise time, but no broker or market maker will be able to find anyone willing to take the other side of the bet - when there's a perfectly good insurance-based alternative.  (For those interested in the technicalities of financial risk management, insurance is a completely different paradigm to hedging, with different applicability.)

Why is this different to, say, the price of oil on August 13 next year?  Because there are very large numbers - sufficient numbers! - of people willing to take the other side of almost any number you care to put out there.  If I say $50/bbl, there will be loads of people with theories that say it'll be less, and loads who'll say it will be more.  The proof of this is the liquidity of the forward market for oil.  And any number of other commodities, as well as financial variables altogether more abstract.  Ditto big sporting events.

But weather?  Nah - or so it turns out.  Could this have been foreseen?  Some folks did, and saved themselves a bunch of time, money and effort.  But no so many.  Meanwhile, the perfectly healthy weather insurance market continues on its merry way.

So: a market in differences of opinion?  Well, sports and political betting are well known to be ultra-fertile ground for these things[3].  But if Kalshi is to break into new territory, it seems to me it needs to think of something a bit more interesting than "Will Trump attend another UFC event this year?" - and a heap less open to, *ahem*, manipulation.   (Guess who might be taking the other side of that bet?!  I think we can fairly be blunter: that kind of thing is really, really crass.)  

Nobody can rule out Kalshi actually finding a rich new seam of prospective punting.  But (a) this is a crowded field, and (b) it won't be hard for a load of other players to pile all over it.

Did I say "paper billionaires"?  They'd better try to cash out PDQ - as regards young(ish) female billionaires, I suspect Taylor Swift is the more solvent ...

ND

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[1] I am not interested in entertaining conspiracy theories about how weather data is systematically manipulated  by the Deep State or the Green Blob or whatever.  Obviously, forecasts are forecasts, and weather forecasts are substantially better than forecasts of commodity price & other financial variables forecasts which are seriously manipulated by vested interest all the time. 

[2]  Some AI disputes the notion that it never took off, suggesting it's a $25bn market.  That's derisory.

[3]  Is it unkind to laugh at Alasdair Campbell's son's sure-fire sports-betting syndicate?

Cost of Sizewell C, part 2

Part 1 was a qualitative summary of what the SZC deal looks like.  It isn't difficult to find more exact details - Mr W has provided several links & AI will yield more - though history suggests almost anything with a £ sign or a timeline will necessarily be a wild guess.  And even when apparently tied down contractually, EDF shamelessly just asks for more money / time whenever it feels like some, as the Hinkley Point experience amply demonstrates. 

We now turn to the questions posed in Pt 1.  

Why SZC's "identical design" won't cost less than HPC 

We've heard this story before: HPC would be a doddle, because Flamanville and Olkiluoto had blazed the trail for the EPR design.  But of course neither of those was remotely complete & commissioned before work started on HPC, so there was a distinct dearth of Lessons Learned from the outset.  Also, both had started development before Fukushima, so there were always going to be new considerations to contend with.  But EDF persisted with the "cookie-cutter = cost savings" promise: so now SZC will be even easier, even cheaper!  Nowadays, of course, with HPC being a complete fiasco in project management terms, they blame it on the UK regulators moving the goalposts / Covid / inflation etc etc.  Well, all those things to some degree[1]; but how about several outright, scandalous EDF failures along the way?  To give but one example: they failed to make an adequate geological survey of the HPC site, and thus missed systemic faulting in the bedrock.  Result: epic additional quantities of additional concrete being required for the foundations, and at least a year's delay.  There are several more examples of this kind which EDF - & HMG - find it convenient not to mention.  And it ain't gonna change: EDF is not remotely as competent an engineering concern as it ought to be, or as it claims, or as many would like to imagine.  

The other important factor to register is that the challenges for nuke projects on this scale are, in detail, very heavily site-specific.  It's not too much of an exaggeration to say that every big nuke is almost sui generis.  It's absolutely clear, for anyone following SZC in detail over the years as I have, that the Sizewell site poses a load of different engineering challenges that need to be addressed piecemeal.  And again, EDF has been doing this incompetently or, as many believe, deliberately skimpily so that it could keep down the early cost estimates and reveal the "unexpected problems" one by one over the years, thereby "excusing" the relentless increases in budget and timetable they'll drip-feed onto us.  To give just a few examples, of which 2 & 4 are outrageous:

1. HPC enjoys the benefit of an already-existing, conveniently close-at-hand dock for the import of very large items.  Sizewell does not.  SZB utilised a temporary jetty during construction: EDF has shilly-shallied about whether they need to do the same this time around.
2. Access to fresh water (needed in large quantities both during construction and in routine ops thereafter) hasn't been a big issue at HPC.  It's a massive issue in parched East Anglia, and the SZC plans approved by HMG (under the Tories) don't include a resolution of this issue.  (The Planning Inspectorate declined to approve the plans accordingly, but were over-ridden.)  We may be sure that whatever solution they come up with, it'll add significantly to the budget (or dumped onto general water bills!).
3. Faulted or not, there was at least bedrock close to the surface at HPC.  But just under half of the SZC footprint lies on a former marsh (a small river delta) with bedrock very far below surface level.  The piles that will need to be sunk will be very extensive and costly.
4. The coastline of Sufolk is subject to serious, constant, millennia-long erosion patterns - as eny fule kno.  Right now there is a shifting sandbar directly offshore Sizewell which has been protecting it for several years.  But it's on the move, and that protection won't last the 135 years (sic) that the site must cater for, such is the way decommissioning works for UK nukes [2].  So (a) the concrete platform on which SZC will be built, needs to be much higher than that of HPC: and likewise the sea wall.  Additionally, (b) there is a really obvious possibility of sea encroachment inland, on the north flank of the site (the marshy side - that old river inlet): the RSPB which manages that land reckons it'll happen within 50 years at most.  Experts have long told EDF they need an extension of the sea wall to the northern flank accordingly, as well as on the (east-facing) seaward side.  But only the latter is in the approved plans and the publicly-announced cost estimates.  Additionally, in the aforesaid 135-year timeframe, inundation of the whole area is inevitable, so a full operational plan is required for the contingency of the entire Sizewell site - SZA, B and C - operating in 'island' mode on its concrete plinth.  Again, this isn't in any published plan.  Diligent investigation by campaigners has recently revealed that EDF have known about this all along, and do in fact have unpublished "supplementary" plans for all of it.  But of course none of this features in any public "budgeting" or cost projections.
5. etc etc - I could go on.

Against all these cost-boosting special features of SZC, what are the much-vaunted cost savings we may expect from EDF?  Well, they sure ain't going into mass production for EPR reactor castings: they've vowed never to build another one after SZC.  Recently, EDF proudly announced - and the government proudly re-announced it - that they'd be re-using some rubble from a grubbed-up part of the SZA site, in the foundations of SZC.  Well pardon me if I'm less than bowled over by this astonishing feat of saving tax-payers' money.  

What else does all this leave us with?  Several things:

• As mentioned before, the government is clearly desperate (they know wind + solar + batteries won't suffice) which, coupled with the endless willingness to be bullied by the French[3], is a recipe for bad deals at the start of the piece and non-stop piss-taking by the French thereafter.  It's exactly what's happened with HPC, is still continuing with HPC, and has been happening thus far with SZC.  Why would it stop?
• Even if we reckon the SZC deals are struck and definitive now, think of the scope this cost-plus arrangement gives France to pass through, well, anything they think they can get away with onto the "Sizewell C" account!  Accountants are good at providing "alternatives" when it comes to cost allocation ...   Sizewell B costs;  general EDF engineering charges; "management fees" (much beloved of all "related-party" arrangements when one player pulls all the strings). etc etc.  Now EDF retains just 12.5% equity in SZC, so on any cost that would otherwise be for EDF's own account, but that its accountants reckon can be passed through the SZC books, EDF sees at least a seven-eighths reduction, or more: and that's if it's borne by the equity.  To the extent it's passed through on the cost base or the appalling overrun indemnity scheme, it could be anywhere up to a 100% reduction.   Moral hazard, or what?  
• One last thing: surely, you may say, there are audit rights for HMG to stop any such hanky-panky taking place?  Doubtless, this is true, in that the contracts presumably say so.  But here's the thing: when the astronomically-subsidised Drax was caught (by the BBC!) playing silly buggers with its fuels reporting, and was forced to admit to Ofgem and DESNZ that it didn't have adequate data to account for everything it was self-certifying, it got a rap over the knuckles (£25m penalty) but nothing more.  MPs clamoured for full audits to be conducted of everything before a penny more in subsidy was paid to Drax - we are talking billions, after all.  But at the Select Committee hearing, both DESNZ and Ofgem stated clearly that they had no resources to check everything Drax tells them in its self-certified reporting on its complex fuel-sourcing operation. 

Why do we imagine that with this new, multi-billion subsidy arrangement for another operation of enormous complexity, EDF won't be able to rely on the same shameless, shoulder-shrugging insouciance from DESNZ and Ofgem that Drax seems to enjoy.  Too big to fail - and too big to audit!  

What other reasons might there be for the charade?

There's a longstanding thesis, much peddled by the SPRU team at the U. of Sussex, that the unspoken motive for UK 'civil' nuclear policy is cross-subsidy for our military nuclear programmes.  This once seemed more of a conspiracy theory than it does now: read this, from Kier Starmer just last week - his "strategic steer to the nuclear industry".  

... Nuclear technology is vital to our country’s economic growth, energy security, and national defence. It delivers reliable, low-carbon electricity and supports our nuclear deterrent ... We are building on this legacy with clear commitments on the future of our nuclear deterrent, our submarine programmes, Sizewell C and the SMR programme. 

Surely, the only intended readership for this bellicose Starmerite "strategic steer" is one V.V. Putin.  I rather doubt L'il Volodya is quaking in his boots.

ND 

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[1] As blanket excuses go, Covid is particularly open to challenge.  Building works were never subject to lockdown, the reasoning being they are outdoors.  I know a great deal about another large construction project which was comfortably able to speed up its project schedule and reduce its costs during Covid, when (a) various restrictions arising from the need to work around nearby sites of regular employment were lifted, because these other sites were now shut down; and (b) labour costs came down because many construction-related trades found that much of their regular work dried up.  OK, maybe (a) doesn't apply so much in the middle of Somerset: I'm just saying "Covid" isn't a free pass on costs and schedules.   

[2] The way we decommission nukes in the UK involves taking away some of the radioactive stuff upon cessation of ops, then sheathing and just turning the keys on the rest of the site, walking away, waiting for cooling down & the half-life effect (venting into the atmosphere, BTW) to reduce the radiation enough for final clearance.  SZA is in that state right now; also HPA.  2160 is accepted by EDF as the relevant date for SZC.  There's no chance the Suffolk coastline stays as it is for that long: and some extreme scenarios suggest 2190 would be the date.

[3]  I mean, what else can they do to us?  Take even more of our money and do even more nothing about the small boats - check.  Be even more beastly to us over any attempt to engage in ordinary trade & diplomacy with the EU - check.  What favours are we buying when we give them everything they ask for on HPC and SZC, with fat cheques included? 

Sizewell C - what'll it cost us? (part 1)

Spoiler alert: nobody knows; and it's not clear anyone cares who has agency in the matter[1].  We've written about aspects of this any number of times - see the tabs below if you're interested.

Recap on Hinkley Point C:  granted a long and very flexible CfD (there's an extraordinarily lax backstop date for start-up, which the government glibly extended when EDF requested, so it can't be reliably built into system planning - which negates the supposedly vital aspect of "reliable baseload power" which is nukes' raison d'être) with a handsome, index-linked strike price.  It doesn't even compel EDF to build the thing at all ! The one aspect that might have been seen as in our favour is that EDF bears 100% of any hypothetical the absolutely inevitable monstrous cost overrun.  But even that is irrelevant because again, when asked, HMG just gives them more money.

SZC:  EDF nonetheless vowed never again to do another nuke on HPC terms (wonder why..?), requiring instead that they be shielded from almost all construction cost risk[2], but again with no meaningful timetable for completion; and that they be funded throughout construction, even if over-running[3].  They also demanded their ongoing costs be met via the electricity price after they (hypothetically) commission the damned thing - it'll be something like a CfD with a rolling cost assessment setting the strike price: though for some reason HMG et al are loathe to use the CfD / strike price nomenclature.  Oh, and EDF have successfully demanded hard cash - billions - upfront from HMG to fund "development work" prior to taking the decision to go ahead, even after having said it'll be the same design as HPC AND they'd been working on it for 10 years already.

This subsidy approach is being delivered via a variant on the Ratable Asset Base (RAB) approach, beloved of US utilities for decades, the Thames Tideway Tunnel, LHR T5 etc etc.  Bottom line, we all get to pay in installments, starting right now.  Remind me again, when will it start up?  Say after me: Nobody Knows and Nobody Cares. 

Why was this agreed?  The ostensible reasons are:  (a) the nuclear lobby has persuaded successive governments we must have more nukes;  and (b) "it's much cheaper this way" - a material portion of the total HPC cost is financing charges.  [Why can't French-government-owned EDF finance more cheaply than the UK government?  Very good question.  Always bear in mind, though, that for the French the Whole Point of HPC and SZC is as part of their grand strategy to get other nations to contribute to their humungous nuclear liabilities - see this post from 18 years ago.]  

Oh, and over & above this notional cost saving via lower financing costs (real enough, if you accept the premise), they also promise cost savings via the cookie-cutter effect, because SZC will be the same design as HPC.  We return later to this delightfully simple notion confected for simpleton politicians.

You can readily research for yourself that when the damn' thing inevitably overruns its "budget" (hah!) the taxpayer + billpayer combo picks up most of the tab.  So what, then, are the incentives on EDF to keep costs down?  Errr ...   Seriously, this is a massive and excellent question we'll return to next time.

Here's the thing: in having thus devised featherbedding that's comfortable enough for feeble, state-owned EDF to be willing to go ahead and build the thing, it's equally attractive for other investors, who are joining the fun and taking equity.  Centrica et al are anticipating low-risk, double-digit returns in return for stumping up their own capital.  [HMG is taking some equity: but why not all of it, HMG with its even-lower cost of capital and endless ability to dump costs on bill payers?  Another good question - to which the answer is presumably: they don't like it appearing on the Treasury's books.] 

Yes, folks, it all smacks of desperation.  And there's nothing you can't (/ won't) do when you're desperate and you can write cheques on other people's accounts.

Coming next:  

• why SZC's "identical design" won't cost less than HPC
• what else does all this teach us?
• what other reasons might there be for the charade?

ND

____________

[1] Curiously enough, some of the people who care are (a) several of the rather diligent French authorities, and (b) the French unions.  They are ignored by the French government.

[2]  The HPC contract already substantially shields EDF from the risk of costs rising because of changing safety regs etc.  Obviously, the cost increases EDF wants to be protected against are those resulting from their own bad decisions, flawed engineering, poor project management etc - which have been legion at HPC. 

[3]  Most householders know you don't pay your builders up-front without stern performance conditions.  Of all the companies not to trust with this, EDF is up there with the dodgiest cowboys in the construction market, as all experience shows.  Never will the government be able to say "how could we have known..?"

Budget chaos - open thread

First things first: Jim wins the compo for most correct guesses at Budget content - by a decent margin, too.  Well done that man.  A (very temporary) job awaits you in Whitehall as official Reeves-whisperer.

The OBR-induced chaos is all very odd.  FFS, Reeves leaked half the Budget, in detail, yesterday - the 'final final' leaks, which once would have been anathema to Parliament and MPs' privileges on being first to learn these things, once jealously defended, not least by successive Speakers.  Hugh Dalton felt obliged to resign in 1947 for less (though some suggest the skids were under him already, and he was glad of the pretext to go).

Anyhow: obviously in the circs, Reeves / Starmer felt they couldn't do anything other than play to their own back-bench gallery.  Feeble politics though it is, I think we all understand.  How much time does it buy them?  Maybe enough, actually:  it might be nicely judged for that specific audience.

On the energy front, the EV levy was inevitable and we may expect it to rise over the years, to replace fuel duty.  (Did any EV user ever imagine otherwise?)  I'm interested in 'pay per mile' - does this mean they are tracking vehicle movements (like Musk and the Chinese do), or is it a self-declared matter on the income tax form?  I would have thought 'pay as metered' would be better - seeing as how smart meters can supposedly detect and discriminate different types of load.  But maybe home charging would represent an easy dodge, even with an SM.

I haven't yet seen the trailed shift of 'green levies' from electricity bills onto general taxation: and I believe they've ditched the idea of scrapping VAT on energy.  Will update when I find out.  Anyhow, it's pretty clear they've completely given up on the £300 bill reductions that were to be achieved via "cheaper renewables".  Not before time: Miliband really does have to ditch that crass rhetoric once and for all, and stop making his DESNZ officials parrot it every time they are asked about bills.

UPDATE:  here's at least part of the energy thing which, I reckon, needs more detail to make total sense of: 

She told the Commons: “The Conservatives’ ECO (energy company obligation) scheme was presented as a plan to tackle fuel poverty. It costs households £1.7 billion a year on their bills and for 97% of families in fuel poverty, the scheme has cost them more than it has saved. It is a failed scheme. “So, I am scrapping that scheme along with taking other legacy costs off bills. And as a result, I can tell you today that, for every family we are keeping our promise to get energy bills down and cut the cost of living with £150 cut from the average household energy bill from April. “Money off bills, and in the pockets of working people. That is my choice ... Not to leave working families to bear the brunt of high prices, like the Tories did. But to get energy costs down now and in the years to come.

So, yeah: no contribution from "cheaper renewables" (- how could there be?)  And on a quick calc (£1.7bn across approx 20m households), that's only £85.  So the remaining £65 must come from some other levy-tweaking.  We need yet another update.

UPDATE 2:  yes, it's a direct transfer of subsidies from bills to general taxation: easy when you know how. 

Energy costs will be reduced by the ending of the Energy Company Obligation, which is currently funded through bills, and through the government funding 75% of the domestic cost of the legacy Renewables Obligation for three years. This is on top of extending the £150 Warm Home Discount to a further 3 million of the poorest households.

So: 150 + 150 = 300 & they'll say they've delivered the £300 reduction promise - for "the poorest households", that is.  BUT, as I keep saying, Mili's manifesto claim was that it would be delivered by cheaper renewables!

UPDATE 3:  the EV tax - eVED - is indeed on a self-certify basis.  It is assumed that the 'honesty' rate will be 98.5%, based on the 1.5% default rate on VED.  Hmm.  That surely has to be optimistic: people pretty much expect to have their number-plate checked by ANPR these days, but who imagimes HMRC will check their milometer?

Have at it all in the comments.

ND 

Sizewell C post ... coming soon

As we await the Budget: our learned visitor Mr Wendland asked for a post on SZC and its subsidy regime.

I've done the reading, sir, and it's a-comin' soon ...

ND

Ukraine: Europe must step up, bigly

If taken at face value, the 28-point plan is clever[1].  In my assessment there's only one clause that, pragmatically speaking, should give Ukraine serious pause - and we're still talking "at face value" here, as well as "pragmatic" - and that's the surrender of the territory in the Donbas they still hold: it's militarily crazy.  But - on paper - there's even an answer for that.

BUT.  No-one but an absolute imbecile would trust Trump with their lives - or, likewise, Putin.  Neither man can be trusted to uphold even a full treaty.  We are well into "It is the last territorial claim which I have to make in Europe" territory.

Trump, presumably, will be telling Zelensky he either signs or forgoes US support.  Well, he's a negotiator (of sorts), he expects a bit of to and fro.  

To me, they key is that even were he a man of his word, Trump couldn't deliver the "US side" of this unilaterally - it requires Europe to fall in line.  No Europe, no G8 nor several other clauses in the 28.  So now is the time for Europe to step in with some serious bargaining: we've seen the clear limitations of Team Trump, who evidently can't see the weaknesses in Putin's hand.  Once, it seemed, the EC was capable of pretty hard-nosed negotiating - but that was before the pathetic showing over tariffs.  Surely, there's someone who knows how to play serious, calculating power-politics in the whole of the continent?  Surely?

Trump needs to pay for his Nobel prize, not only with serious ongoing support for Ukraine, but with a conditional set of levers on him and Russia explicitly granted to Ukraine - and Europe[2].  Russia needs to pay for all that territory it has illegally seized with an oversight regime and a structure of tripwires that will keep Putin within his (new) borders.

For completeness, let it be said that the indemnity mooted for Putin and his war crimes sticks in the craw.  But that, I think, is one for Zelensky to chew on.

Finally, you gotta laugh at the implicit belief, written through this plan, that tying Russia closer with TRADE will act as some kind of guarantor of peace.  Ask Merkel about that one.  And - just who was it it who pointed that out to Germany in the UN ..?  Yep, it was the Orange One.

So: where is Europe's unblinking hard man?

ND

___________

[1] 'Clever' in the sense that Witkoff, apparently an accomplished businessman but patently devoid of the slightest sense of geography, history, Realpolitik, naked evil, or his own extreme gullibility, has done a plodding, comprehensive job against a long list of desiderata: there's an answer for (almost) everything in there, provided you make a load of truly heroic and optimistic assumptions about some deeply untrustworthy individuals.  He's clearly in that archetypal category of naïve-but smart Americans who see no malice in anyone and proceed in a purely rationalistic manner to address all difficulties piecemeal and with diligence.  They often achieve big things (vide the grand history of the USA).  But there are some things that are completely beyond them.  

[2] How to define "Europe"?  Well, whatever is the body of entities that is required to deliver all those clauses, that can't be done by the USA unilaterally.  In fact, we could say "the other members of the G7" too, were that not to include China.

Mahmood, fairness, and blunt speaking

Has any politician from any parliamentary party - I include Reform - spoken so plainly and indeed bluntly in Parliament on the topic of illegal immigration and "asylum" as Shabana Mahmood?

The Tories, in particular, must be wondering why they didn't come up with a package of measures along the lines of hers, several years ago.

If Polanski wants to carve out a metro-bedsit-space on this issue for the Greens, well, he'll find it isn't as big in electoral terms as he imagines.  

[Gotta feel a bit sorry for "Your Party": they'd love to be all over this and use it as a recruiting sergeant - but they can't prise their own fingers away from the throats of their comrades long enough to write a press release.] 

Let's see how Labour splits when it comes to a vote.  Plenty of abstentions, but not so many outright 'noes', I'm guessing.  They know what their own constituents are saying: they just hope the matter doesn't get raised in Parliament and polite society.

Both sides claim to be guardians of the British Sense of Fairness.  My very early experience as a junior officer in the Army is that what the middle classes think of as 'fair' can be starkly different to what the workers think.  You can  stub your toe badly on that.

ND