Bruno Prior's blog

Two government bodies - Ofgem (the electricity and gas regulator) and the Energy Savings Trust (EST) - are consulting simultaneously on what to do about green electricity tariffs, those electricity-supply deals, like NPower Juice or Scottish & Southern RSPB fund, which allow you to think you are being green. Both Ofgem and EST are interested not in the fundamentals of whether these tariffs really are green, but how best to maintain the fiction that they are. I have sent the following email to both of them in response to their consultations:

The justification given by the Environment Agency for the bonuses taken by their managers is that they had achieved 42 of their 45 performance-related targets. There has been much debate about whether the bonuses were appropriate in the circumstances, but besides the important points of principle, has anyone checked to see what those targets consisted of?

For the benefit of our readers, I have now waded through them. They are listed with comments below, but in summary, it was 42 out of 59 (not 45), most of the 42 were insignificant, bureaucratic or suspect (often some combination of the three), some of the other 17 were more significant than the 42, and most of the 59 were inappropriate tools for measuring their performance regardless of success. Highlights included:

• Success claimed in influencing planning decisions in relation to development in the floodplain, in offering an appropriate flood warning service to properties in the flood plain, in getting more people to take their advice on flooding, and in delivering their flood risk management programme. If this is success, you've got to wonder what their definition of failure would be.
• They redefined their failure to achieve their targets for the number of houses protected from flooding and the condition of the flood risk management systems as "partial achievement" (in much the same way that teachers wanted to refer to failure as "deferred success"). This allowed them to leave these factors out of the consideration of their overall success in meeting their targets - their logic seems to be: "it's neither success nor failure, so we just won't count it at all". In the case of the flood risk management systems, this "almost success" consisted of a little over half the systems being in their target condition.
• One of the targets which they admitted they had not achieved was for emissions of priority pollutants to be going down. Just a minor part of the EA's role, but obviously not as important as their successes in increasing the proportion of ethnic-minority employees in their workforce to a full 2.7%, getting positive media coverage, putting "workforce plans" in place, and not having too many accidents.
• They have, apparently, made themselves more efficient, dealt with permit- and planning-applications on a timely basis, reduced the administrative burden that they place on business, and generally delivered such a great "service" that most of their "customers" are happy with them. Honestly. Why are you laughing....

Changes to EU rules may put many British winemakers out of business, The Observer reported yesterday. Britain being an inhospitable country in which to ripen grapes to their full sugary concentration, British winemakers often add sucrose or grape must to their fermenting grape-juice, to ensure a sufficient alcohol content. The EU intends to ban the use of sucrose, and stop subsidies on grape must. The EU will also continue its ban on planting more vines, thus preventing the recently British wine production from being expanded. Should we feel sorry for the British producers?

An eco-house in Pembrokeshre with a minimal carbon footprint is to be demolished because planners judged that it "failed to make a positive environmental impact", The Times reports. Of course, carbon footprints are a lousy way of measuring environmental impact, but any fool can see that not just the house but the way the occupiers live their life has minimal impact on the local or global environment.

Piers Corbyn, the man who has successfully forecast, weeks or even months ahead, much of this summer's extreme weather events, has issued a warning of further heavy rainfall on 5th-9th and 18th-23rd August. He also warns that there is a serious risk of flooding in London, as the floodwater from this rainfall hits the spring tides of 12th and 28th August.

I have no idea about the conditions required to cause flooding in London. We are often told (for instance by Ken Livingstone only this week in questions on the Olympics) that London is protected from flooding for at least the next fifty years by the Thames barrage. But given Piers's record (he was bang on with the rains of 12th-14th June and those of 24th-26th June, which caused the Sheffield and Hull flooding, but was out by two days in forecasting the recent heavy rain for 22nd-26th July, when it actually fell mostly during the period 20th-23rd July), and the less impressive record of the Government and the Met. Office, I would be inclined to take at least the weather forecast part seriously, and to ask questions of the Environment Agency about whether the conditions he forecast could really result in serious flooding in London.

The economic consequences, if Piers is correct, could be significant. He has written to Gordon Brown to warn him. We'll see whether the Government will take the threat more seriously this time, and take more decisive action to put preventative and rescue measures in place.

Meanwhile, on the other side of the Atlantic, we are well into Hurricane Season, which officially begins on 1st June. So far, it seems to have been a pretty quiet one, though one wouldn't expect the big storms yet - they tend to be concentrated between August and October. The Season Outlook issued by the National Oceanic and Atmospheric Administration (NOAA) at the end of May warns that it is very likely (75% probability) to be an above-normal hurricane season. This is not, as will doubtless be claimed if the Outlook turns out to be right, because of global warming, but because of "1) the continuation of conditions that have been conducive to above-normal Atlantic hurricane seasons since 1995, and 2) the strong likelihood of either ENSO-neutral or La Niña conditions in the tropical Pacific Ocean." As La Niña conditions have been fingered for our bad weather, it looks like that part of the forecast has been fulfilled, which was expected to lead to more extreme events than if there had been ENSO-neutral conditions.

All-in-all, it looks like this year could be a humdinger of a hurricane season, if the US government agency's models are right. It's always possible that the weather confounds the models, or that the models are wrong. Even if not, the agency is keen to point out that the scale of damage is not necessarily proportional to the activity of the season, as the precise paths of the hurricanes are an important factor in the scale of damage, and these paths cannot be predicted accurately. But it's yet one more risk of a high-cost weather event.

It must already be a pretty bad summer for insurers, given that southern Europe is experiencing its own extreme weather, Eastern India is under water, Japan has been hit by the strongest typhoon on record for a July, while in China, they seem to be managing to have floods and droughts almost simultaneously. If either or both of these threats - flooding in London, or a hurricane-strike on another major American city - occur, it could cause significant difficulties for the insurance industry. And any circumstance where high payouts are a risk can only mean one thing - higher premiums. It's just one more thing to add to the ongoing squeeze on the budgets of most households and businesses nowadays.

Time was that the first questions that The Economist, confronted by a proposal, would pose were: "is it a good idea?" and "is it economic?" No longer, under the regime that has ruled there for the past eighteen months or so. They really ought to change the name of the magazine.

This week's edition reports on ideas for distributing and storing renewable electricity. The articles are placed in the Science and technology section, presumably on the basis that it takes science to do it, though the ideas on which the articles are based are over a century old. On this basis, their reports on the automotive industry ought to go in the Science and technology section too. It takes science to make the internal combustion engine work.

The ideas considered are that (a) we can smooth out the intermittency of certain types of renewable electricity if we have a big enough grid, and (b) we can store some of that intermittent energy, to use it when we want it rather than when it is available, by compressing air. Well yes, of course we can do it, but is it a good idea? All sorts of things are feasible that aren't worth doing.

I am much obliged to Paul Nollen, with whom I have been having a discussion about the Basic Income concept, for pointing me at Bernard Lietaer. Here is how Professor Lietaer's Wikipedia entry begins:

Bernard Lietaer is an economist and author who was one of the designers of the Euro. He studies monetary systems and promotes the idea that communities can benefit from creating their own local or Complementary currency, which circulate parallel with national currencies.

Here is what Professor Lietaer has to say about himself on the website of one of his organizations:

Bernard Lietaer is the author of the forthcoming "Of Human Wealth" and "The Future of Money" (London: Random House, 2001), has been active in the domain of money systems for a period of 25 years in an unusual variety of functions. While at the Central Bank in Belgium he co-designed and implemented the convergence mechanism (ECU) to the single European currency system. During that period, he also served as President of Belgium's Electronic Payment System. His consultant experience in monetary aspects on four continents ranges from multinational corporations to developing countries. He co-founded one of the largest and most successful currency funds becoming its General Manager and Currency Trader. He was Professor of International Finance at the University of Louvain; and is currently Visiting Professor at Naropa University in Boulder, CO. He is the co-founder of ACCESS Foundation, (www.accessfoundation.org), an educational non-profit whose objective is to communicate best practices in the domain of complementary currencies. He is currently a Fellow at the Center for Sustainable Resource Development at UC Berkeley.

So this is the man who co-designed the ECU and the Euro, implemented the ECU, ran the Belgian EPS, and founded and ran one of the largest offshore currency trading funds (Gaia). He is also (according to his CV) a member of the Club of Rome, a Fellow at the World Academy of Arts and Sciences, a Fellow of the World Business Academy, and a Founding Member of the Global Futures Forum. He must be a pretty serious financial expert. Let's have a look at his intellectual efforts.

Andrew Pierce, Assistant Editor of the Telegraph, reviewing PMQs on Radio 5Live today, was laughing at how Brown had once again stolen the Tories' clothes (this time, on border police), leaving Cameron "standing naked at the dispatch box". He claims the Tories are furious about it, but have no option but to agree that Brown's proposals are a jolly good thing, if the proposals were theirs in the first place.

The Tories have brought this on themselves by seeking the managerialist "centre-ground". If they look to adopt positions close to Blair and Brown's Third-Way programme, they should not be surprised if the Government adopts their ideas. Now that they all share the same sizes and styles, their wardrobes are interchangeable. This isn't stealing, it's sharing, like co-habiting girlfriends. Stealing is selfish, sharing is mutual - Dave was today trying on Gordon's "56-day detention" outfit for size, though he's not quite sure whether it suits (DD was said to be sure that it didn't this morning, but then his taste is more conservative).

The only way to prevent this from happening, and to provide voters with a good reason for voting for a party other than the Government, is to adopt a philosophy and policies that are distinct from the Government's interventionist position.

I have been writing about the three irreconcilable branches of the Tory party - the social-democrats, conservatives, and classical-liberals. Brown will have no difficulty borrowing social-democrat policies - that's exactly his size and style. And, although people like to imagine that leftists are socially liberal, the working-class instincts of many of their supporters will have no trouble reconciling themselves with socially-conservative policies, so long as they incoporate sops to the poor and disadvantaged, which Cameron's social-democratic instincts and determination to stop the Tories looking like the "nasty party" oblige him to incorporate in any proposals. And as lefties from Lenin, Stalin, Mao, Mussolini and Hitler,* down to the modern-day Kim Il Sung, Kim Jong Il, Fidel Castro and Hugo Chavez have demonstrated, the left are enthusiastic adopters of authoritarian (and often even racist) positions - again catering to the prejudices of what they view as their core constituency (or class).

The one position with which lefties find it difficult to reconcile themselves is classical-liberalism. They can handle the social-liberal aspects of that (though in a meddling, "let's make everything perfect for everyone" rather than "laissez-faire, laissez-passer" kind of way), but the economic liberalism and individualism is simply incompatible with their beliefs. Brown and Blair have made a good job of pretending it is otherwise (and in the case of Blair, I believe there was a genuine modicum of belief in free markets), but scratch beneath the surface of almost everything they have done, and you find a corporatist, managerialist, effectively-socialist solution disguised as a market mechanism. They have coopted the large corporations and City institutions, and consulted economists till they (or we) are blue in the face, to maintain the charade of market-delivery, but they have at all times hindered the freedom of businesses large and small to respond freely to unbiased market signals.

The Tories should accept that Uncle Gordo will try to look as authoritarian as them (if not more so) on law-and-order issues. They should argue for what they believe is right on security issues (strong, well-funded defence of personal liberty, property, and nation - pretty much what DD has been promoting very effectively), and live with Gordon stealing the parts of that agenda that are more authoritarian and less liberal. But exactly contrary to the Letwin/Willetts brainbox-nonsense about "socio-centric not econo-centric paradigms", they should try to drag the focus back to the size of the state, whether in its intrusion into people's private lives, or into our economic activities. Those are clothes that Gordon simply couldn't wear comfortably if he tried to steal them. But it would require them explicitly to abandon the Letwin programme and to commit to cuts in government-funded activities and in taxation. Is Cameron brave enough, and could he carry it off convincingly given his position to date? If not, those who think that politics really is about the battle of ideas, and not just about who can best run other people's lives, should leave the Tories to flounder in Gordon's wake, and go off and set up a real alternative.

The Department for Transport (DfT) announced this morning that "Yorkshire commuters [are] at [the] heart of strategy for rail growth". Cleethorpes and Northallerton stations will be refurbished, bottlenecks around Leeds and Manchester will be tackled, extra carriages will be made available for Leeds and Sheffield suburban services, capacity on some routes of the Trans-Pennine Express will be increased by 30% by lengthening trains, and by "53% for peak hour commuter trains serving Leeds". Lucky old Yorkshire, being at the heart of the Government's plans.

Three minutes later, the DfT announced that "East Midlands railways [are] at the heart of strategy for [rail] growth". This strategy is now a bicardiac beast, which tends to be an unstable condition. But nevermind. They'll get longer trains in Nottingham and Leicester, faster journeys on the Midland main line, and "passengers will also see more punctual services as the Government is buying improved reliability". Very cheering, I'm sure, but what quality of service did the Government think they were buying before?

Another two minutes later, and the East has been added to the heart of the strategy. This beast's physiology is starting to look curious indeed. Guess what: longer trains, more capacity, better punctuality... At least this big heart will be beating as one.

Interesting post over at Bearwatch, on the recent purchase by the UK government of a huge quantity of US securities, and the risks to both the American currency, and to British reserves as a knock-on effect.

Most of the papers have been responsible enough not to attribute the latest bad weather to climate-change, but guess which one is the exception? The Independent's lead story today is titled "After the deluge - scientists confirm global warming link to increased rain". They have got hold of a report that won't be published until Wednesday, which they claim "supports the idea [that recent weather is caused by climate-change], by showing that in recent decades rainfall has increased over several areas of the world..." These claims are repeated at several points in the article, always carefully phrased to refer to Britain (or even wider regions) as a whole and to avoid consideration of seasonal patterns. For example: "The computer models used to predict the future course of global warming all show heavier rainfall, and indeed 'extreme rainfall events', as one of its principle consequences".

I have sent the following letter in response, which they won't publish, of course, because dissent from their version of climate-change dogma is not permissible:

Sir, Can you point to any climate models, including the one to be published on Wednesday, that predict increased rainfall in England in summer? All climate models of which I am aware predict reduced rainfall in England in summer. Any increase in rainfall is either for winter or an annual average, where the winter increase outweighs the summer decrease. Your opportunistic distortion of climate-change science to suit the story you want to tell undermines the credibility of that science.

-- Yours, etc

As those who have read my posts on this issue will know, I am not an arch-sceptic of anthropogenic global-warming theory (I accept that there is a risk that we ought to take into account), but I do despise prejudice portrayed as hard scientific fact.

The latest publication from the IEA landed through the letterbox yesterday (I can't say plonked or thudded, because the IEA publications are always of eminently digestible proportions). It is on one of the most important subjects of modern policy and economy - happiness.

There is an increasing tendency amongst academics and politicians to decry policies that deliver simple economic freedom, and to talk up policies that try to deliver social benefit, usually at the expense of economic freedom. The pretext is a growing body of work that argues that prosperity and happiness are not linked, and suggests alternative approaches to maximising happiness (most commonly, though with little empirical or logical justification, the reduction of income inequality). In these demotic times, what modern politician can resist the call to maximise the public's happiness? Certainly not most of our bunch of intellectual lightweights.

The IEA booklet, Happiness, Economics and Public Policy, by Helen Johns and Paul Ormerod, tackles this body of work head-on, in its own terms. It examines critically the statistical merits of the happiness data, and the claims that standards of living are unimportant to happiness, and that other factors such as economic inequality are more important. It finds most of the happiness literature wanting.

This is a necessary counterweight to the burblings of politicians like David Cameron and "economists" like Lord Layard on the need for policies to try to maximise General Wellbeing (GWB) or Gross National Happiness (GNH), rather than Gross Domestic Product (GDP). It is to be hoped (but not expected in the race to the wishy-washy centre-ground) that politicians will read this booklet and stop sniffing Layard's glue.

With a few exceptions contemporary commentators on economic problems are advocating economic intervention. This unanimity does not necessarily mean that they approve of interventionistic measures by government or other coercive powers. Authors of economics books, essays, articles, and political platforms demand interventionistic measures before they are taken, but once they have been imposed no one likes them. Then everyone - usually even the authorities responsible for them - call them insufficient and unsatisfactory. Generally the demand then arises for the replacement of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again. The universal desire for the interventionist system is matched by the rejection of all concrete measures of the interventionist policy.

So wrote Ludwig von Mises in his 1929 book, A Critique of Interventionism. He could have been writing of the state of our political and academic debate today.

The Sunday Telegraph reports that "Gordon Brown is drawing up plans to vary the minimum wage region by region across Britain". The original intervention - a standard minimum wage for the whole country - has been judged by academic economists to be too blunt an instrument. Although the call is for more flexibility, the proposals are not simply to remove or reduce the minimum wage. Instead, they propose that we should tell each region the level of pay below which jobs should not be offered. That's an interesting definition of increased flexibility.

What the academics intend is that the minimum wage should be reduced in those parts of the country where a national-average minimum wage exceeds the level at which people might be willing to work and able to sustain a reasonable quality of life (though this is made literally and figuratively academic by the punitive nature of the means-tested withdrawal of nationally-harmonised benefits on the effective marginal rate of taxation). The objective is to allow some jobs to be created or legitimised, which currently cannot be afforded in compliance with the law.

Gordon, however, cannot reduce the minimum wage in those parts of the country, because the unions will not wear it. So it is suggested that, instead, he will raise the minimum wage in London and possibly the South-East. Because, from a socialist perspective, this is not about allowing people to find jobs, this is about micro-managing the economy to ensure that no one is getting more or less than they deserve.

The result, if implemented, will not be an increase in flexibility and the creation of jobs in areas of the country where costs-of-living are lower, but a reduction of flexibility and the destruction of jobs in areas of the country where costs-of-living are higher. Genius.

The Tories and LibDems, of course, now support the minimum wage too. I wonder what new interventions they will be drawing up to offer their refinements on this "improvement", and what all three of them will propose when these changes also fail to deliver the artificial boost to the incomes of poorer members of society that they all hoped they could compel by legislation, in contravention of the most basic laws of economics. It's so much better fiddling with this sort of superficial, bureaucratic, managerialist, economically-illiterate tinkering than actually doing something about the structural problems, most of which the politicians themselves have created, isn't it?

A couple of months ago, I suggested that the claims for the benefit of the Tory trip to Rwanda might be inflated. In the current mood of dissatisfaction with David Cameron, much of the media and many private commentators are making cynical observations about this trip. Much of this cynicism is simply gut-reaction to an apparently shallow publicity-seeker travelling on another foreign jolly in the immediate aftermath of the exposure of the hollowness of his claims to have transformed the electoral prospects of his party by abandoning principles and moving to the centre-ground. These are not unreasonable grounds for cynicism, but it is nevertheless possible that this trip has genuine merit, despite the troubles at home. It would be useful to be able to judge the trip according to the tests and claims that Team Cameron have set themselves.

You may remember from the earlier post that the key to this trip was that it is "a genuine two-way learning process, with each side leveraging the skills and knowledge of the other", with "targeted professional help in support of the development of Rwanda". The "importance of the projects' legacy" is emphasised. To ensure that the participants actually bring something useful to the trip, "there has been a rigorous interview process of prospective participants to ensure a correct fit between skills and assignments".

I questioned exactly what skills, useful to African development projects, most Tory MPs would bring. Helpfully, Adrian Yalland, the boss of the company organising the trip, responded to my challenge on Iain Dale's site, though he was unable to name names, to enable us to test the claims. We had to wait for the trip, and rely on the Conservatives to tell us who was doing what.

Well, the trip has started, and so far the Conservatives have not given us a list of participants and the particular skills that they are bringing to the projects. But it is possible gradually to extract the names of participants from reports on the trip. So, for instance, we know that Andrew Mitchell is leading the trip, which, as Shadow Minister for International Development, is entirely reasonable. Earlier suggestions that David Mundell and Hugo Swire would be involved have not been confirmed (Hugo may be less keen, now he has been dropped from the Shadow Cabinet). But we learn instead that "Tobias Ellwood, the shadow culture spokesman and former officer in the Royal Green Jackets, shared some of his considerable carpenting expertise with Brooks Newmark, a new whip". So that's another military man, like Swire, of which there is not a shortage in Rwanda. But at least Ellwood has carpenting skills (to accompany his military and City experience), which the Guardian seems to be hinting that Brooks Newmark, a former venture capitalist, lacks.

The excellent Bishop Hill has spotted an announcement by ScottishPower that they are looking to contract farmers to grow energy crops for their Cockenzie and Longannet coal-fired power stations. I can shed (I hope) a little more light on this announcement. It should not be taken at face-value.

The Government thinks that we should be using energy more efficiently. They are right. So guess which sector increased its consumption of electricity the most in Europe between 1999 and 2004. Industry? Households? No, it was the "tertiary sector" - in other words, government, state-funded services, the voluntary sector and commerce.

Industrial consumption was up by 9.5%, domestic by 10.8%, and the tertiary sector by a wapping 15.6%. Were our leaders and bureaucrats getting more wasteful, or were there just more of them? Or both?

If you find ways to save energy in your business, profits are increased and your career or business should prosper. If you find ways to save energy at home, you save money to spend on other things. If you work for the government and you find ways to save energy....you save other people (taxpayers) some money, and your budget gets cut. I wonder why government has been least successful?

Tim Montgomery at ConservativeHome thinks "support for nuclear power" should be a core Tory value. I think, if picking a technological winner like that is a core Tory value, that contempt for Tories should be one of my core values. I am quite prepared to see a new round of new nuclear power stations built if suitable guarantees of safety can be obtained and if they are the most economic option, including fairly-valued externalities, but without provision of subsidy, underwriting of cost, railroading of local opinion, or watering-down of competition. Are the Tories (and the Government) prepared also to recognise that our electricity system is no longer run by the CEGB, and that the only way that they can deliver nuclear, if removing obstacles and internalising externalities are not sufficient, is to subsidise it?

More news has come out today about recent nuclear problems, on which we have been reporting in the absence of press coverage. The Times has now picked up on the significance of the damage to the nuclear reactor at Kashiwazaki in Japan. They report that it is now being admitted, contrary to earlier claims that any escapes were minor and brief, that radioactive particles were being released into the air for three days following the earthquake.

Meanwhile, our own ageing reactors are suffering similar difficulties to those in Germany. British Energy announced today that they were having trouble bringing back on-line their Hinkley Point and Hunterston reactors, which had been closed after the discovery of cracks. BE's shares fell by more than 1% on the news.

Welcome to a new blog - ToryHome - that has been setup to put the Cameroonian perspective on stories in the news. It appears to have some relation to Chad Noble, the dormant Centre for Progressive Conservatism, and satiresearch.com.

Did you know that:

• yesterday's earthquake in Japan caused a fire, spillage of radioactive liquid in to the sea, and a complete shutdown at the Kashiwazaki nuclear power station?
• there have been two accidents in the past month, causing complete shutdown of the nuclear power stations at Kruemmel and Brunsbuettel?
• Vattenfall, the operators of Kruemmel nuclear power plant, lied to the public about the extent of the fire?
• Kruemmel has yet to reopen, and may never, on account of its age, even though it was only built 24 years ago (around half the claimed lifespan of nuclear power plants)?
• The operator of Brunsbuettel, which suffered an emergency short-circuit, is E.ON, who want to build new nuclear power stations in the UK?

Following my post on the story in the News of the World about a couple (Sean and Chloe Ash) who have been driven apart by the benefits system, someone has posted a reply in the name of Sean Ash, wanting to put the record straight. Of course, one cannot tell on the internet if someone is really who he says he is, but it reads to me like it really is Sean - read it and judge for yourself.

Given that the NOTW and ConservativeHome wanted to make this an illustration of the wisdom of Ian Duncan Smith's proposals, particularly with regard to the £20/week tax-break for married couples, the following comments by Sean seem significant:

"I was not fighting for married couples to get more money, I am not a greedy man and I am very religious and value life over money any day of the week."

"It [the reason Sean contacted NOTW] was more to do with married couples on sickness benefits looking to return to work being awarded low affordable housing.. not MORE money."

It's interesting that a member of the Murdoch stable has chosen to twist a story to favour a feeble Tory proposal, contradicting the views of the person whose story they were supposedly telling. This tells us something both about the propagandizing nature of the Murdoch press, and about the fragility of Rupert's relationship with Gordon.