George Osborne and the Budget of Meh

Osborne is not stupid…

From George Osborne’s Budget speech:

Renewable energy will play a crucial part in Britain’s energy mix – but I will always be alert to the costs we are asking families and businesses to bear.

Environmentally sustainable has to be fiscally sustainable too.

The Carbon Reduction Commitment was established by the previous Government.

It is cumbersome, bureaucratic and imposes unnecessary cost on business.

So we will seek major savings in the administrative cost of the Commitment for business.

If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.

Gas is cheap, has much less carbon than coal and will be the largest single source of our electricity in the coming years.

And so my RHF the Energy Secretary will set out our new gas generation strategy in the autumn to secure investment.

I also want to that ensure we extract the greatest possible amount of oil and gas from our reserves in the North Sea.

We are today introducing a major package of tax changes to achieve this.

We will end the uncertainty over decommissioning tax relief that has hung over the industry for years by entering into a contractual approach.

We are also introducing new allowances including a £3 billion new field allowance for large and deep fields to open up West of Shetland, the last area of the basin left to be developed.

A huge boost for investment in the North Sea.

If this is the best Gideon can do it’s no wonder the markets have responded with a yawn of supreme indifference. This isn’t a Budget for growth. It isn’t a Budget for the squeezed middle. It’s a Budget of meh.

Osborne is not stupid. (At least not totally so). He knows damned well that renewables are a hopeless waste of space and money. He also knows as the second bit intimates that Britain’s abundant shale gas supplies are by far our best hope for a secure, clean, cheap energy future.

Unfortunately, he faces at least two major problems. One of them is the Guardian/green/Lib-Dem/BBC nexus, which is being given carte blanche to continue with its mendacious, junk-science claims that “fracking” and shale gas production represent some kind of major environmental threat. Last night’s lamentably misleading coverage of the issue last night on BBC Newsnight was a case in point. Nick Grealy, explains here why it was so bad.

The other problem is that though in private Osborne can sound as red-meat a conservative as Maggie Thatcher in her prime he entirely lacks her cojones.

It really, really, really isn’t difficult explaining why renewables are a disaster area and why shale gas and nuclear are our only hope of keeping the lights on and the economy alive. If Osborne needs a few tips may I recommend an excellent book. No, not Watermelons though obviously I highly recommend that one too. I mean Power Politics by Michael J Economides and Peter C Glover. A good starting point might be the section headed Ten Fracking Things Everyone Should Know. And then maybe The Myth of Viable, Industrial-Scale Renewable Energy.

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Cameron and Osborne are giving public schoolboys a bad name – James Delingpole

March 9, 2012

 

David Cameron and George Osborne

David Cameron and George Osborne: working-class heroes

“The problem is that policy is being run by two public school boys who don’t know what it’s like to go to the supermarket and have to put things back on the shelves because they can’t afford it for their children’s lunchboxes. What’s worse, they don’t care either.”

If this quote came from Vince Cable it could safely be dismissed as the peevish mutterings of a typical Lib Dem malcontent doing his damnedest to tar the Conservatives as a party for the spoiled, remote, arrogant rich.

But it doesn’t come Cable, it comes from truest of blue Tory backbenchers Nadine Dorries. And Dorries is absolutely right: under Cameron, Osborne (and with able assistance from yet another millionaire ex-public schoolboy Nick Clegg) the Conservatives really have become the party of the spoiled, remote, arrogant rich. So much so that it makes you wonder why anyone on an income of less than £200,000 a year would even consider voting for them.

Don’t get me wrong. I have no problem whatsoever with Cameron’s £4 million plus property portfolio, nor to Gideon “Despicable” Osborne’s vast wallpaper inheritance, nor yet to Nick Clegg’s estimated £1.9 million net worth; still less do have any issue with the fact that they were all superbly educated at Eton, St Paul’s and Westminster. But what I do seriously object to is the effect this cushion of comfort has on their policy-making. As Dorries correctly observes – and no matter how many ludicrous photo shoots Cameron arranges in order to be caught shopping at the fish counter of his local supermarket for sea bass, just like all the ordinary folk do – Cameron and Osborne (and, though she didn’t mention him, Clegg) simply have no idea how badly this recession is treating those struggling middle class families who constitute their core vote.

Dorries is also right about this: they really do not care.

As far as Cameron is concerned, the only problem with his wealth and entitlement has to do with negative image. That’s why he did his best to bury Horsegate, why he persists in being so embarrassed by that Bullingdon photograph and why he has been so slow in defusing Gordon Brown’s time bomb, the 50p upper band tax rate. For Cameron (as you’d expect from a PR man) it’s all about surface, about perception, not about doing the right thing. He could easily, very early on, have made the simple case that needlessly high tax rates cause revenues to fall not rise and that they jeopardise economic growth and deter mobile entrepreneurs from setting up shop in Britain. But he didn’t because he couldn’t bear the idea of the Conservatives being tarred as the party of the superrich.

But the Conservatives ARE the party of the super-rich. Not because David Cameron went to Eton or has an incredibly rich father-in-law or because Osborne goes on yachting-n-birch-twig-flagellation cruises with Russian oligarchs, but because this is the effect their policies are having.

Nowhere is this more evident than with George Osborne’s Quantitative Easing. Here’s how Nassim Taleb put it in the Spectator:

“Quantitative Easing is a transfer of wealth from the poor to the rich,” he says, “It floods banks with money, which they use to pay themselves bonuses. The banks have money, and assets, so they can borrow easily. The poor guy, who is unemployed and can’t borrow, is not going to benefit from it.” The QE process pushes asset prices up, he says, which is great for those who own stocks, shares and expensive houses. “But the state is subsidising the rich. It is the top 1 per cent who benefit from Quantitative Easing, not the 99 per cent.”’

Here’s how Bill Jamieson described “possibly the greatest gamble in British economic history.”

‘Low rates of interest are, of course, great news for a government which needs to borrow £4,000 a second — but not for savers who see the value of their nest egg destroyed by inflation. It hurts pension funds, so what we think we’re putting towards retirement will be worth far less. Companies see the value of their pension fund plunge — and have to top it up. This is what QE does: transfers wealth from savers to borrowers. If the Chancellor stood up and admitted as much, it would cause uproar. But because QE is a complex Bank of England mechanism with a boring name, no one much cares.We need not guess at its effects. The Bank’s own analysis has confirmed that the first £200 billion of QE pushed up inflation by anything from 1 to 2.6 percentage points. This was slipped out in the small print of a Bank report, barely making a ripple. Compare this to the political outcry which surrounded the 2.5 percentage point rise in VAT last January. Every household had to pay considerably more for shopping due to QE, too, and, as with VAT, it has hit the poorest households hardest.’

The Conservative party is traditionally associated with economic competence and with middle class aspiration. Between them David Cameron and George Osborne are destroying this tradition. When the core membership finally wakes up to what’s going on it’s not going to be happy. Indeed I think the damage these two remote, arrogant public schoolboys have done is already so great that they may well have destroyed the cause of conservatism in Britain.

Good show, chaps! Not.

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Cameron to Appoint New Personal Hygiene Czar

Concern about declining standards of personal hygiene have inspired David Cameron’s Coalition government to appoint a Personal Hygiene and Cleanliness Supervisor who will advise Britons on how to get the most out of their Personal Hygiene and Cleanliness routines, especially when they use the loo.

“One of the problems associated with toilet use is that people tend to consider it a private moment in their lives in which the government has no business whatsoever,” said the Prime Minister, yesterday, proudly deploying the word “toilet” lest anyone imagine he had been expensively-educated. “But we intend to change that. Without proper government scrutiny, we cannot be at all sure that people are wiping their bottoms properly or not dribbling on the seat or remembering to pull up their flies. The social consequences of this could be horrendous, especially in the run-up to the Olympics when the eyes of the world will be on Britain. We want to send out a clear message: skid marks have no place in the Big Society.”

Though David Cameron has attracted mockery from some quarters over the appointment of what cynics have christened the Poo-Poo and Wee-Wee Czar, he is adamant that it will give the British economy just the fillip it needs as it teeters on the brink of a new Great Depression. “No it will, really. Every street in Britain will have a Personal Hygiene Co-ordinator who will report directly to the Department of Cleanliness, which will create at least ten million new ‘Brown Jobs’.’

Mr Cameron insists that the scheme will be entirely self-financing and will not cost ordinary taxpayers a penny. “It’s brilliant. There’s this guy, right, that I, like, read about when I did PPE at Oxford and what you do is you just print extra money and all your problems just disappear into the future by which time you’re dead so you don’t notice. All the world’s top economists like Ben Bernanke and Paul Krugman say it really works and it doesn’t cause inflation or anything bad like that and even if it does your massive house in Witney or wherever just goes up and up and up.”

Mr Cameron added that the Department of Cleanliness’s shiny new headquarters in Mayfair would be paid for by a special supertax on “hedge funders, filthy rich entrepreneurs, City types, oligarchs and other fat cat capitalist running dog lackeys,” as well as from the proceeds from a new fairground attraction where members of the public can pay £120 to hit golf balls on a range at Mr (formerly Sir) Fred Goodwin. His chancellor, George Osborne, defended the decision yesterday against the suggestion that this might be seen as in some way anti-business and anti-growth.

“Anyone who thinks that is a total economic illiterate. And I should know because I’ve been on a bloody great yacht with Oleg Deripaska and Nat Rothschild. They know about money and stuff cos they’re really rich and though they didn’t actually say this because they were too busy being beaten in the sauna with birch twigs by men in pointy hats the impression I got is this: rich people around the world are desperate to do more good in society and have more of their money spent on their behalf by the government. We estimate that by raising the upper band tax rate to 70p, the number of rich people wanting to come to Britain will increase by at least 50 per cent boosting revenues up to 10000 per cent. Mr Cable has done the figures and he’s a real whizz. It’s a little-known fact which he doesn’t like to boast about, but he actually saw the 2007 crash coming, you know.”

Mr Cameron admitted yesterday he’d got the idea for the new department from his Health Minister Anne Milton. “When I saw her proposal to solve the problem of teen drinking by encouraging the breweries to water down their beer, I just thought: ‘Genius!’ I mean, for years Britain has been held back by the kind of selfish ‘me, me, me’ attitude whereby people think they should be free to spend their own money and do more or less what they want to so long as it’s “legal” and what this means is that everything gets frightfully messy and hard to control. What Anne has made me appreciate is that there’s no area of private life to which the state can’t make a real, benchmarked difference if it put its mind to it. And that’s why, I’ve created another new Department of Blue Sky Thinking which even now is working on new ways for the government to solve everything. We’re thinking a Tooth-Flossing Czar, a Fashion Advice Czar, an Organic Vegetables Czar, a Bee-Keeping Czar. Hugh’s very interested because he’s a mate who was, like, at School with me. But so’s Jamie and Jamie wasn’t even at School, which gives you an idea of the breadth of popular appeal some of these ideas have.”

But what about the accusation that this was more Nanny Statism of the most intrusive kind? “And what’s so wrong with Nannies?” asked Cameron. “Mine was top hole. She used to be Harold Macmillan’s and if it wasn’t for her I still wouldn’t know to this day that you never, but never, use a fish knife when eating pike in May. Well, not unless you’ve caught it with a dry fly, obviously.”

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George Osborne’s New Eco-Bullingdon Club

Grotesque and pointless quango

Green-wishes-230Imagine if a cabal of privately wealthy upper middle class and lower upper class public schoolboys got into power and began using taxpayers’ money to dole out special favours to all their rich friends: cushy sinecures for their banking and management consultancy chums from Goldman Sachs, Citibank, Merrill Lynch, Logica and the Oliver Wyman Group; subsidies for landowners like Sir Reginald Sheffield (father-in-law of one D. Cameron, Esq) to blight their local countryside; investments in companies almost 100 per cent guaranteed not to make a profit but nice, all the same, for those plutocratic rent-seekers who’ve been tipped the wink by their chums in government. (H/T Barrie James)

Imagine if this were found out. There’d be riots on the street, right?

WRONG!

This is exactly what happened in chancellor George Osborne’s latest budget. And almost no one noticed. So thank heavens for Andrew Orlowski of the Register:

Last week, Chancellor George Osborne announced a new body that would make loans and issue debt. In a harkback to the 1970s, poorly performing and deeply unprofitable businesses will be the beneficiaries – and investors in them will be rewarded for their poor judgement. So much for moral hazard.

The Chancellor even found an unexpected £775m from the Government’s sale of the HS1 rail link to kickstart the venture. £3bn has been pledged: £2bn from the sale of publically-owned assets, and £1bn from taxes. This is a considerable sum that could alternatively be used to pay off the government borrowing, or pay for public services.

Or indeed, pay for a new aircraft carrier. Or buy five squadrons of F-18s. Or pay for the share of the Portugese bailout so kindly imposed on Britain (with Cast Iron Dave’s tacit agreement) by Osborne’s even-more-useless predecessor Alastair Darling. OrWell I’m sure we can think of lots of more sensible ways a Chancellor of the Exchequer could spend £3billion of OUR money. What I seriously doubt though, is whether anyone could think of a worse way of spending £3 billion, than on the grotesque and pointless quango  that is the Green Investment Bank headed by Bob Wigley.

The point to note about the Green Investment Bank is that it is based on one massive lie, promulgated by everyone from David Cameron to Chris Huhne to Greg Barker to every other two-bit chancer who wants to get on the Coalition, viz: that green investments and green jobs are the future. (See this brilliant Dilbert cartoon) (H/T Philip Foster)

They are not. The reason private investors don’t want to invest in environmental projects is not that they’re frightened of making too much money, as this chart shows:

http://regmedia.co.uk/2011/03/25/ftse_stocks_2010_large.png

Can you see which category of investment comes right at the bottom? The one so abysmally poor that investors lost on average 52.3 per cent over the course of the year? That’s right. Alternative Energy.

Now imagine you had a Prime Minister who had a first in PPE from Oxford and a Chancellor who claimed to be a classical liberal. What kind of intellectual contortions must they have gone through to persuade themselves against all evidence that it makes any financial sense to use taxpayer’s money to bribe investors to allocate their scarce resources in companies that are so inefficient they can only possibly ever turn a “profit” through massive state subsidy (paid for by imposing a national energy tax concealed in electricity bills)?

And you don’t even need to be on the libertarian right, like me, to believe that this is a crying scandal. It is, as Orlowski notes, above all a conspiracy against the poor.

Osborne’s programme really a continuation of his predecessor’s as he invented very few of the policies – is a set of deeply regressive measures at which the Left has traditionally bridled. The Left has historically thought of itself as being on the side of the poor, and opposed measures which hurt the poor disproportionately. It likes to think of itself as being on the side of the weak against the strong, and so has traditionally favoured a redistribution of wealth from the rich to the poor. Yet the policies depend heavily on regressive taxation and more expensive essentials.

Forty per cent of the cost of a carbon floor price is paid for by consumers, the Treasury’s own documents suggest. The Budget measures alone add £17 to a family’s household energy bill. As even climate Jacobin George Monbiot has noticed, green measures distribute wealth from the poor to the middle classes: FITs are “extortionate, useless deeply regressive”. Not all on the Left are happy with this. Graham Stringer MP said Parliament needed to look much more closely at the policies, and the justification for them, because the measures hit the poorest people in the country. (He is MP for the North Manchester constituency of Blackley and Broughton.)

It’s a hard one for many on the Left. The number of households in “fuel poverty” – where energy swallows up more than 10 per cent of household income – has trebled. In Wales, more than one in four households is in fuel poverty, according to Wales Online. Left to the market, energy prices would plummet: even with profiteering and heavy Government duties. Gas is cheap, and set to be even cheaper for years to come; gas requires no subsidies.

Really, honestly, I have absolutely no objection to living in a country run by people who’ve had the best education in the world and who belong to the kind of old aristocratic families which tend to take the long view on what Britain’s interests really are. What I do object to, though, is when they abuse their power by behaving like selfish, ignorant, caricature toffs out of a Guardian cartoon by Steve Bell or Polly Toynbee’s most perfervid class-war fantasy. It is precisely such weapons-grade pillocks who govern us now.

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Never mind the squeaky voice, Osborne: what have you got to say about THIS?

Paying to throw workers out of work

What are your government's energy policies, George? Despicable.

What are your government’s energy policies, George? Despicable.

Here’s an open letter to the Chancellor from Clive Francis, a reader of the Autonomous Mind blog. It’s so devastatingly right (* see below) and true I think it could become a bit of an internet hit, so I’m going to reprint it here. Why not send a copy to your local MP and see how evasive his response is? (H/T Old Goat)

Dear Chancellor

What a Nonchalant Way to Spend £400 Billion

The United Kingdom appears to be the only country in the world to have legislated against climate change. The Climate Change Act 2008 was enacted with only five Members of Parliament dissenting (in what Peter Lilley described as “a wave of self-righteous euphoria”) and without any prior attempt at costing. Some time after enactment the Brown government announced that the provisions of this Act would cost some £404 billion over the next 20 years.

Thus, apart from the Finance Acts themselves, the Climate Change Act 2008 is by far the most expensive piece of legislation ever enacted by Parliament – and completely without prior costing.

Are you able to detail the precise scientific facts on which the Government is relying to justify expending the £20 billion per year required by the provisions of the Climate Change Act?

I recently asked my MP to obtain from the Climate Change Ministry a detailed and logical analysis of, and for correction of any errors of fact in, a paper (enclosed) I had written which questioned the part mankind played in our ever-changing climate. The Minister for Climate Change, in replying, did not deny that 95% of the greenhouse effect was caused by water vapour, only 4% by natural carbon dioxide and only a miniscule 0.117% by man-made carbon dioxide.

However, instead of a detailed analysis or repudiation, the Minister responded in general terms and relying for his clinching argument on the phrase:

“The overwhelming majority of climate scientists agree that climate change is a grave environmental threat”.

Apart from his employment of argumentum ad populum, the Minister’s claimed “overwhelming majority” seems to have evaporated markedly last month when a number of irate climate scientists forced the Royal Society into an almost unprecedented and humiliating climb down by having to withdraw its own formal publication “Climate Change – a Summary of the Science”.

The Society’s Chairman, Lord Rees, then issued a statement “There is little confidence in specific projections of future regional climate change”. This is a telling swipe at the IPCC (International Panel on Climate Change), which has had to withdraw its dramatic forecasts on the melting of Himalayan glaciers, rising sea levels, flooding of the Netherlands and African crop failures.

The Royal Society’s new guide now admits, “The size of future temperature changes and other aspects of climate change are still subject to uncertainty and some uncertainties are unlikely ever to be significantly reduced.” What an astonishing and complete reversal of The Society’s earlier stance. This sober statement of uncertainty over mankind’s involvement in climate change now differs markedly from the present British Government’s melodramatic posture.

Undeterred by this fundamental alteration to the accepted science of climates, Britain’s Energy Secretary, Chris Huhne, subsequently made his pitch that the UK Government wanted to foster “a third industrial revolution” in low-carbon technology with policies based
on cutting emissions of carbon dioxide and other ‘greenhouse gases.”

So the Royal Society now openly admits it got it completely wrong but why does Chris Huhne have such difficulty in doing the same? His conviction is patent – but where are the facts?

Just what are the proven threats which our Government is trying to avert?

Every single hour the earth receives more energy from the sun than the entire human population uses in one whole year. The amount of solar energy reaching the surface of the planet annually is twice as much as will ever be obtained from all of the Earth’s non-renewable resources of coal, oil, natural gas, and mined uranium combined.

As for our climate, within the last two thousand years outdoor grapes were grown in Cumbria and on occasions the Thames has frozen over. The poles have had ice caps for only 20% of Earth’s geological history. Fluctuating sunspot activity leading to variable solar output, the Earth’s wandering axial tilt and eccentricity of orbit round the sun and were all shown (Kepler, Milancovic) to be the causes of the Earth’s cycles of widely changing climate and of the Earth’s successive and massive glaciations/deglaciations. This, long before industrialisation and carbon were even conceived as possible causes for our climate’s changes – changes far greater than those being presently blamed on carbon.

Whilst no one denies that the world’s industrialisation has increased considerably the output of greenhouse gases, to ascribe the current phase of our ever changing climate to one single variable (carbon dioxide) or, more specifically, to a very small proportion of one variable (i.e. human produced carbon dioxide – 0.117%) is not science, for it requires us to abandon all we know about planet Earth, the sun, our galaxy and the cosmos.

The conclusion of the scientists responsible for the draft of the first report of the IPCC was that:

“None of the studies cited has shown clear evidence that we can attribute the observed climate changes to the specific cause of the increase in greenhouse gases.”

This sentence was apparently omitted on political grounds by the IPCC staff from the published edition of the report and caused the resignation of the scientists involved.  As Professor Richard Lindzen of MIT said:

“Future generations will wonder in bemused amazement that the early 21st century’s developed world went into hysterical panic over a globally average temperature increase of a few tenths of a degree and, on the basis of gross exaggerations of highly uncertain computer projections combined into implausible chains of inference, proceeded to contemplate a rollback of the industrial age”.

TATA, the Indian steel conglomerate, is currently closing the Redcar steelworks with the loss of 1700 British jobs. It appears that TATA thus stands to benefit by some £600 million in EU Carbon Credits for stopping Redcar’s “Carbon Emissions”. TATA is currently expanding its steel production elsewhere in the world. Thanks to Chris Huhne the British taxpayer is now paying Europe to throw British workers out of work and, in the end, achieving nothing.

Just where are the solid facts to justify this unproven creed that mankind is altering the climate? The Minister for Climate Change cannot supply them, he relies on argumentum ad populum and is now finding himself running short of populi. In short, the Government is spending a prodigious amount of money trying to act like King Canute in attempting to stem the vast primordial external forces that drive the constant and cyclical changes to our climate. Thus, whilst the Government is asking us to tighten our belts, are you really content for it to wager £20 billion a year on a theory, now formally deemed as uncertain by the Royal Society, that mankind is causing or even capable of causing alteration to the climate?

As Professor Reid Bryson, founding chairman of the Department of Meteorology at the University of Wisconsin, remarked:

“You can go outside and spit and have the same effect as doubling carbon dioxide.”

Or, the Government can go on spending £20 billion a year and achieve precisely the same effect. However is this the best way to tackle the deficit or fund university education?

Yours sincerely

Clive Francis

* As m’learned friend Booker points out, the £400 billion figure quoted in the letter is a gross underestimate (based on feeble arithmetic published by DECC). The correct figure is nearly twice as much – £768 billion. Not of course that even the higher figure will dent the complacency of any of the MPs to whom you send the letter).

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One thought on “Never mind the squeaky voice, Osborne: what have you got to say about THIS?”

  1. Velocity says:3rd December 2010 at 2:39 pmGood letter.Gov’t response? Snake oil from snake oil salesmen.

    Westminster is the toilet of the country, a bin for idiot idealists, crooks and rammed to overflowing with cronies.

    Same as it ever was…

Comments are closed.