DBERR

I can't beat the beautiful job Richard Tyler did in yesterday's Telegraph on a classic example of winner-picking under our Lord and master's revived industrial policy, so I'll just quote bits of it. Click the links to read the articles - they are well-worth reading.

Staff at a company whose parent group was rescued by Lord Mandelson's taxpayer-funded venture fund have discovered that their pension payments have gone missing.

Chris Allner, head of private equity at Octopus Capital, one of two fund managers appointed by the Business Department to invest the £75m fund, said: "In respect of us investing taxpayer and bank money, we are comfortable that we did as much as we could to uncover all the potential and actual liabilities of the [KeTech] group."  

A spokesman for the Department for Business declined to comment on the investigation into the missing pension money but said the investment in KeTech would "help secure the future of more than 130 jobs which were at risk".

As some readers have commented on my blog, imagine owning and running a successful business, which still has bank support. Then you discover that your poorly run rival has not only been bailed out with public funds but it can now undercut you on price because they have been incentivised with cheap/free money to retain more staff than they actually need.

Lord Mandelson champions active government. He sees political mileage and economic benefit to be had from the state doing more. His "industrial activism" has industry excited. It likes the sound of central planning, certainty and government subsidies. But it wants to see how the strategy is to be implemented in practice.

Lord Mandelson tells me that his department can conduct surgical strikes that will ripple out and benefit the wider economy. "Our investments may be small but they can be disproportionately economically significant if those investments are taking place in the right, innovative, fast growing companies. That's how I would justify our activism," he says.

So I asked him if this meant heading back to a 1970s style of industrial policy where government tried to pick winning companies? He hesitated. "It's not picking winners. It's backing some winners but inevitably not all. Most will not need our help but those that do need our help, we should."

That's a "yes", then.

The press seem determined to ignore a crucial aspect of Peter Mandelson's accumulation of power. They are very interested in the symbolic and honorary aspects, such as the award of the titles of First Secretary of State and Lord President of the Council. But most of them are reporting that he remains in charge of BERR. He does not. BERR no longer exists.

The Department for Innovation, Universities and Skills has been merged into the Department for Business, Enterprise and Regulatory Reform to form the Department for Business, Innovation and Skills. I am all for reducing the number of departments. But the nature of the merged departments indicates something more important: the revival of industrial policy continues apace, and this department will be its powerhouse.

This government knows nothing about entrepreneurial innovation. Its only contribution to the field is the negative one of providing perpetual competitive advantage to corporate incumbents, who have vested interests in maintaining the status quo and disadvantaging innovative new entrants. This government couldn't distinguish a real entrepreneur (not the fiction-peddlers in the City, nor the publicity-hunting media-darlings, but the iconoclasts who try to build real, innovative businesses) from a trades-unionist.

Hence the appointment of Suralan (soon to be Lordsugar) as Enterprise Czar. This was presumably inspired by the huge success of Lorddigby (most recently seen marching in support of protectionism for our car industry). If the Government and Suralan understood entrepreneurialism, they would know that entrepreneurs do not want or need a Czar to represent them in government. They need the Government to stop meddling, micro-managing and picking winners, so we can have genuine competitive markets in which innovative ideas thrive or fail according to their merits, and not according to how well they fit with the Government's latest ideas of what the outcome of the market should be.

A department that combines responsibility for businesses with responsibility for the least commercial group in the world (academics), run by people (ministers and civil servants) who have absolutely no commercial experience themselves, will end up rewarding those who try to implement academic cloud-cuckoo schemes and punishing those who are more interested in commercial reality. This has been the effect of the various grant schemes in the energy sector (and probably elsewhere) since time immemorial, and yet these efforts to sponsor white elephants are about to be re-doubled, at a time when we can afford them even less than usual. The new department will throw money at grandiose schemes dreamed up by academics who promise the earth without the responsibility of having to put their money and reputations where their mouths are. And because these grandiose schemes will require enormous amounts of finance, the big corporations will be invited to participate, in exchange for providing that part of the funding that is not provided by taxpayers. The commercial advantage this will provide to big businesses, and ideas that would be uncompetitive without the public funding, will crowd out private efforts, genuine innovation, and the smaller businesses that have usually been responsible for real innovation.

On the other side of the equation, industrial policy will appear to create jobs, and profits for those businesses favoured by involvement in government-approved enterprises. It will create the illusion of economic recovery, which is exactly what the government is reckoning on, whilst embedding uncompetitiveness and corporate influence further into our economy. Eventually, many years down the line, we will discover that we have created our own General Motors, just as we did with our nationalized industries.

Economic development is only sustainable and real where it allows genuine competition undistorted by government intervention, favour and planning. But a lot of people can be fooled otherwise for a long time, especially when they have forgotten or misunderstood their history. It wasn't public ownership that was the big problem in the seventies, but the protected position of favoured, and consequently lazy and ossified, enterprises. There are many ways to achieve that without full public ownership, but with just as negative long-term implications for innovation, competitiveness and the economy. The Government has been driving in this direction for many years in the energy sector, and probably many others. It is about to get worse.

The opposition parties do not have a significantly different attitude, as Tory policy on STEM (Science, Technology, Engineering and Maths) demonstrates. It is past time for entrepreneurs to get out of the country.

My policy of paying no attention to the news had been going well, and then the boss decided that we simply had to respond to an article in The Times. So it's temporarily back to banging my head against a brick wall, as you may have guessed from the appearance of this post.

The article in question was a Guest Comment by Sam Laidlaw, Chief Executive of Centrica, whose heading summarises his argument pretty well: "Put a price on carbon, but not a tax". This might seem to be a reasonable, even a liberal argument. Unless you are close to the energy industry, you would probably not realise how this was just another example of the way that energy policy has become a plaything for the energy corporates to try to gain commercial advantage. The Government's policy is practically being dictated by the positions of companies like Centrica, who are very clever in dressing up self-interested positions as plausible, apparently impartial and principled arguments. I will let the letter I sent to The Times explain how so in this case:

Sir,

Sam Laidlaw says that we must "put a price on carbon". He does not differentiate between sources of carbon, and rightly so. Our climate does not, and neither should we.

One of the many failings of cap-and-trade, unlike a carbon tax, is that it is not practical for highly-fragmented markets, such as the very large market for domestic heating. The domestic consumer of 'natural' gas (or heating-oil or LPG in remote areas) is therefore not "forced to pay", which reduces incentives for householders to act sensibly and to consider alternatives like renewables.

Mr Laidlaw opposes the intervention of government(s) in setting the price of carbon, but in fact such interventions pervade the system of cap-and-trade. In the absence of a carbon-tax, the only other levers that the Government can pull in the domestic sector are either partial, bureaucratic and poorly-funded grant-mechanisms (such as the Low-Carbon Buildings Programme, in which Centrica’s subsidiary British Gas has been given a privileged position), or regulations and obligations (such as the Energy-Efficiency Commitment, in which again only the major energy suppliers, such as Centrica, can participate).

Mr Laidlaw presumably prefers these mechanisms to a tax that is the only practical way of pricing carbon equally across all types of consumers, large and small, but he then must accept that most of his customers are insulated from the cost of carbon, an approach that he says is wrong. Policymakers and consumers ought also to be concerned that those measures embed the power of the incumbent energy suppliers, and inhibit innovation and competition from new entrants.

Yours,
etc.

It was not published, of course. I have no complaint - that is their prerogative. But more strangely, I also tried, when it wasn't published, to post this message (in two parts, because of the 1000-character limit) to their website, but it hasn't shown up there either. Another message that I posted afterwards, in response to another poster who suggested we should have a government-subsidised investment fund rather than carbon-pricing, has appeared, which makes me wonder why the earlier posts didn't show. Was this a technical hitch, or was it moderated? It seems unlikely to be a technical issue, as the later post got through fine, and it is strange for both halves of the first message to suffer a technical glitch that other messages did not experience. My guess is that it was moderated, but why?

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.

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.

Lord Jones of Birmingham (try not to laugh) made his maiden speech in the House of Lords today, on the subject of the Energy White Paper. In a largely unremarkable spiel, most of which simply restated government position, the only comments that went beyond that position were the following:

"In the UK, we are used to being largely self-sufficient in terms of our electricity generation: the people are used to it. But times are changing, and they are changing at a time of rising demand and prices and at a time when energy supplies are becoming increasingly politicised. This is not a position anyone in this country will be comfortable with."

"If nuclear is not available to the energy market as an option, it is likely that in its place much of the new investment will be in gas or coal generation, which, of course, emits higher levels of carbon and leaves us increasingly dependent upon imports for this nation’s electricity generation."

So the argument is being warmed-up that nuclear power somehow reduces our dependence on imports and therefore increases our energy security. Let's have a look at that.

Firstly, nuclear power, as part of the portfolio alongside gas, coal and renewables, does contribute to the diversity of our electricity supplies. Diversity, it is widely recognised amongst energy-policy experts, is the key to security. I am not disputing that point.

But Lord Jones is going beyond that. He is slipping into the realms of autarky - the false economic notion that we are more secure if we are self-sufficient. Though it is a view that is slipping out increasingly often nowadays (I heard a Merrill Lynch energy analyst make the same error recently, before quickly retreating from it when challenged), it is a view that carries little weight amongst serious analysts. We were never more self-sufficient than when we produced most of our electricity from British coal. And our electricity supplies were never less secure, thanks to the dominant position in which this put the mining unions.

But even if it were a valid position, are Lord Jones's claims true? Are we "used to being largely self-sufficient"? And will we be less dependent on imports if we have nuclear rather than gas or coal?

The answer is "no" to both these questions. We import all our uranium for the nuclear power stations, and we have been importing a large proportion of the coal for our coal-fired power stations since the mid-1980s. We are not used to being self-sufficient, and importing uranium will not make us less dependent on imports than importing other fuels. And if it is "rising demand and prices" that Digby is worried about, he should have a look at uranium prices - a tenfold increase in the last few years makes the increases in fossil-fuel prices look insignificant.

This is not an argument against nuclear. This is only one small part of the issue. But it is an unfounded appeal to economic nationalism that ought not to be part of the debate. It makes one suspicious about the merits of the case for nuclear, if these are the tactics that Lord Jones and his political masters have decided to resort to.

Having had a meeting today with civil servants at the "new" Department for Business Enterprise and Regulatory Reform (i.e. the DTI with a bit chopped off and a bit stuck on), it is clear that their position on all issues is now that they (or their consultants) can predict the outcome of future developments with such precision that no uncertainty or dispute need be entertained (nor, logically, need free markets be utilised). It seems to me that a good test of this position (and an original objective of this blog) would be to see how accurate their past assumptions had been. I therefore went to the DBERR website (the DTI site no longer being accessible) to have a look at their old reports and consultations.

It seems that they are less than keen for people to review their past performance. Their archive holds only a motley collection of seven consultations - four from 2003, and one each from 2005, 2006 and 2007. This is a tiny fraction of the DTI's output. I wonder why these particular consultations merited preservation for public access? Are they the ones they got right (to within a tolerable level of error)?

For the other consultations by the DTI (and other departments, presumably), we are advised to find hard copy at the British Library (not enormously accessible to the majority of the population). Their website is to be your guide, but the search-term "DTI reports" yields very little, and nothing relevant online. Following a few link trails didn't do any better. Let me know if you have any more joy.

The slate has been wiped clean, records expunged, the history books tippexed. It's almost as though Uncle Gordo didn't want people to look back at how New Labour had performed over the past ten years. A bit like Uncle Joe and the NKVD.

Life just got worse for the little guy. Gordon has always believed that "business" = "the major corporates and City institutions". His understanding of the impact of his policies, and therefore the policies themselves, have been conditioned by the advice he has been given by the bosses of these businesses. Never ones to look a gift-horse in the mouth, these leaders have not been averse to steering their advice in the direction that suits their businesses. Hence the Government's support for failed and partial policies that favour the big incumbents, like the EU-ETS.

This biased and blinkered attitude to business in the nation of shopkeepers (by which Smith and Napoleon did not mean Tesco and Sainsbury) has now been institutionalized, with the creation of the Business Council for Britain, and its proposed close relationship to the rump of the DTI, now known as the Department for Business, Enterprise and Regulatory Reform. Add to that the appointment of another ex-CBI, corporatist, third-way poodle - Sir Digby Jones - as Minister of State for Trade and Investment, and you have a government that is going to be run on the advice of and in the interests of big business, whatever Sir Digby might claim.

The BCB, populated exclusively and deliberately by corporate leaders, will have great influence over commercial and regulatory policy direction, and preferential access to No.10. Expect to see policies, mechanisms, incentives, and regulations change over time to further favour big businesses - for example, through imposition of costs that can be spread more effectively by larger corporations, but loosening of constraints that prevent them abusing their market power.

The balance of power and responsibility is revealing. DBERR/DTI's home-page tells us that "DBERR will provide support to the new Business Council for Britain. The Council, made up of senior business leaders, will assist the Government in putting in place the right strategy to promote the long-term health of the UK economy." DBERR will support the Council, not the other way round. And the Council will assist the Government, not the DBERR. What this means is that Gordon ("the Government") will run the economy on the advice of his City pals, and John Denham and the DBERR will be their gophers.

We knew that corporate capture of government would be escalated by Brown's arrival at No.10, but even to pessimists like myself, the speed of the takeover is breathtaking and depressing. The corruption and sell-out of Britain continues.

It was probably no more than a happy coincidence (for the Government) that the Planning and Energy White Papers were published on consecutive days. Nevertheless, as most people have noticed, the two are intimately linked by the need for a change to planning policy to enable the development of new nuclear power stations within the ten-year period that would be necessary for them to fill the threatened "capacity gap" in our power generation. Let's not worry here whether that capacity gap is inevitable (it is not) and whether the nuclear power stations will be ready in time, even with the Government's proposed measures, to replace much of the closing capacity (unlikely for much of it). What I want to consider here is the price that is to be paid in terms of the undermining of communities' rights to decide what they are prepared to tolerate in their area.

The Government's consultation paper on nuclear power proposes that, if they decide to enable a new generation of new nuclear stations, they will not intervene financially to support the technology, but they will introduce measures that are almost all focused on reducing the planning obstacles. They should be congratulated on their resistance to providing any direct form of financial leg-up for nuclear, and there is no denying that the Sizewell B enquiry was a circus that environmental groups used to filibuster the process. But are their proposed changes to the planning regime proportionate and consistent with our respect for the rights of individuals and communities not to have developments foisted on them?

The proposals, as listed on p.176 of the nuclear consultation document, are (in modestly truncated form, with emphasis added):

• improving the energy planning system for nuclear power stations by ensuring it gives full weight to national, strategic and regulatory issues that have already been the subject of discussion and consultation, rather than reopening them.
• running a process of Justification to test whether the economic, social and other benefits of specific new nuclear power technologies proposed outweigh the health detriments;
• running a Strategic Siting Assessment process to develop criteria for determining the suitability of sites for new nuclear power stations. This would limit the need to discuss in detail the suitability of alternative sites for nuclear proposals during the planning process;
• taking further our consideration of the high-level environmental impacts through a formal Strategic Environmental Assessment (SEA). This would limit the need to consider such highlevel environmental impacts of nuclear power stations during the planning process;
• assisting the nuclear regulators, to pursue a process of Generic Design Assessment of industry preferred designs of nuclear power stations. This would limit the need to discuss these issues such as the safety, security and environmental impact of power station designs, including waste arisings and radioactive discharges in depth during the site-specific planning process; and
• introducing arrangements to protect the taxpayer by ensuring that private sector operators of nuclear power stations securely accumulate the funds needed to meet the full costs of decommissioning and full share of waste management costs. This would avoid the need to discuss in depth during the planning process whether the taxpayer will be exposed to the waste and decommissioning costs of any new nuclear power stations that might be constructed.

That's an awful lot of subjects that need not (read, may not) be discussed in detail during the planning process. If locals fear for their health, or the impact on the environment, or the risk of accident or attack, or believe there are reasons why the location is unsuitable, or the economic risk-prevention is less than adequate, they are to keep their thoughts to themselves. The Government will decide for them and us what is in our best interests. It is inconceivable that anyone other than those involved in determining national policy could have a valid alternative perspective or come up with an aspect that has not already been considered. Truly, our national policy-makers are omniscient. Has history not proved their infallibility time and again?

The most chilling of those proposals is the Justification process. The name has an Orwellian tinge. The process is worse than the name sounds:

"It is an internationally accepted principle of radiological protection that no practice involving exposure to ionising radiation should be adopted unless it produces sufficient benefits to the exposed individuals or to society in general to offset the health detriment it may cause" (para 13.14, p.179). "It is not necessary to show that the class or type of practice is the best of all available options, but instead that there is a net benefit" (para 13.16)

Calculating the "net benefit" to society sounds superficially reasonable if one accepts (to use economists' lingo) the neo-classical fallacy that you can somehow aggregate interpersonal utility. But think what that means in practice. If you have something whose loss would be less important to you than its gain would be to me, there would be a "net benefit" if I stole it from you. Does that justify theft? Or, to use the example of which Murray Rothbard was fond, if 99% of the population can benefit from enslaving the other 1% of the population, does the excess of beneficiaries over victims justify the act? The "greater good" of "society" or "the people" has been used to justify appalling predations and impositions on minorities throughout history.

This is an excellent case in point. A reasonable person might judge that, whatever the benefit to him and to others, he is not entitled to do something that may inflict harm on someone else without their agreement. Some might add the caveat that there may be limited circumstances, where failure to inflict harm on some may cause harm to many others and where there is no alternative that avoids harm to all, where it may be reasonable to inflict that harm (for instance, where the only means to prevent a terrorist atrocity is to shoot dead the terrorist). But it takes a sociopath to argue that one is entitled to inflict harm on people even where there is an alternative that causes harm to none, or simply because there is a compensating benefit to others.

It seems, then, that we have a sociopathic government. If it is found that there is a risk to people's health, that would not rule out development. Instead, those people may be forced to accept that risk and even actual damage to health, if there is sufficient benefit to others. This is authoritarianism of the worst variety, and it does not belong in Britain.

One of the things that America does better than us Europeans is its inclination to give (at least in business) another chance to those who at first don't succeed. Whilst bankruptcy is seen in Europe as evidence that someone is not to be trusted with money, in America it is far less of an obstacle to raising money for another venture.

But not all failures are noble. A good test of whether someone who has failed deserves another shot is their attitude to the failure. An acknowledgement of mistakes made, and an understanding of the lessons learned and how to avoid repeating them, should be viewed as a mark of strength. Conversely, blaming others for the previous failure should be viewed as a warning of intellectual and moral weakness and the likelihood of repeat offending.

This came to mind when reading an interview in the Financial Times with Professor Robert Merton, Nobel-prize-winning economist at Harvard University. Prof. Merton was a partner in the Long Term Capital Management (LTCM) hedge fund, which imploded in 1998. I am sure that Prof. Merton is a clever and honourable man, but his explanation for that failure, as reported in the FT, suggests that one should be very wary of utilising the services of the consultancies (IFL and Trinsum) in which he is now engaged (notice that he is no longer risking people's money directly, but charging to advise other people how to risk their money). Many see the collapse of LTCM as symbolising "the perils of excessive speculation", but:

"The causes of the hedge fund's collapse, though, are widely misunderstood, says Robert Merton. While some observers blamed events on the faith that the fund placed in financial models - founded on a belief in rational markets - Prof Merton says the real problem was the way that LTCM's counterparties behaved. When the fund started to suffer losses, the counterparties did not behave as proponents of finance science - or rational markets - predicted. Instead, they sold assets in a seemingly indiscriminate panic, triggering market swings more violent than anything Prof Merton expected."

This displays not only a staggering ignorance of economic history - has the bursting of a bubble ever been accompanied by anything other than "indiscriminate panic"? - but an equally staggering level of hubris. It is not the models that were at fault for failing to reflect actual behaviour, it was the people who were at fault for failing to behave as the models said they should have done. This is a man who sets altogether too much faith in models. That is a warning not to set too much faith in him.

As any psychologist can tell you, denial can manifest itself outwardly in destructive ways. I recently attended a workshop where a member of the British Government's Renewables Advisory Board (RAB) introduced himself as a serial founder of renewable-energy businesses. His explanation for why he had had to start again after his previous adventure in biomass-fired power-generation: the Government had failed to take account of the fact that his technology was more expensive than some, when it had created a competitive market in renewable electricity. Well, isn't that always the problem when businesses struggle - that the Government has failed to compensate for their lack of competitiveness?

It is a commonplace of economics that competition drives down prices. Economies of scale drive down costs. The combination of the two may achieve the lowest prices. But normally one would not expect cartels to deliver low prices, however much the privileged position of the cartel-members allowed them to achieve economies of scale. Rather the reverse.

Not according to this Government, though. In setting up Phase 2 of the Low Carbon Buildings Programme, they have consciously created a 7-member cartel in order to generate economies of scale. Here is the justification from the DTI website:

"Phase 2 has an innovative design – a framework-type arrangement has been set up in order to provide an element of certainty for those suppliers who successfully competed to be part of the framework. Recipients of grants will have to purchase their microgeneration technologies from these framework suppliers. This should allow those suppliers to offer lower costs (with the larger volumes bringing economies of scale) and, in the knowledge they will be receiving large numbers of orders, feel able to make the investments in the supply chain required to develop the microgeneration industry."

The £50 million scheme is limited to five technologies: biomass heating, ground-source heat-pumps (GSHPs), solar thermal, solar photovoltaic (PV) and wind. It is limited to projects of specific size (no more than 50 kW electrical or 45 kW thermal). It is limited to the public sector and charitable organisations. It is limited to seven "framework suppliers".

It does not even treat the selected technologies or suppliers equally (details obscured in the FAQ for the scheme). Some suppliers are eligible to supply some technologies, and some are eligible to supply others. Only one (British Gas) is eligible to supply all technologies. No more than three of the seven is eligible to supply any one type of technology. If you want a combination of more than one technology, your choice is likely to be down to one or two potential suppliers.

Even the technologies included within the limited range of options are treated differently. While some renewable technologies are excluded completely, even those technologies that have been included do not face a level playing-field within this very partial structure. Photovoltaics are eligible for 50% grants, GSHPs and wood-fired boilers for 35% and solar thermal and wind for 30%. The justification provided for this differential treatment is that "The grant percentages are based on analysis by the DTI." Very enlightening.

David Miliband has prepared (with the help of Alistair Darling and some big businesses) a manifesto for the development of the EU Emissions Trading Scheme (EU-ETS) after 2012 (Phase 3). He has circulated it to trade associations and big business (or "British industry", as he likes to call it, forgetting as usual about the majority of smaller businesses), asking them to endorse it. The manifesto and its covering letter are attached.

His attitude to "UK business" is summed up in the following sentence from his covering letter:

"Our initial impression of the level of consensus on EU ETS was confirmed when we met some key industry figures to discuss the manifesto in November."

How can you test a level of consensus by meeting some key industry figures? Isn't the definition of consensus that it includes the many, not just the few? If the few tell you that there is consensus amongst the unconsulted many, are you a wise politician to believe them? Even if it were the view of many, should you do what is wanted by the majority (or even the consensus) amongst a particular interest-group, or what is right without reference to interests? Most of us want taxes to be lower, but his Government seems to care less about the consensus on that subject. How do they decide which consensus to listen to and which to ignore?

It used to be said that "UK business" wanted us to go in to the Euro. Now it is said that "UK business" does not want us to go in to the Euro. What is meant is that the majority of bosses of big City institutions and major corporations used to think that the Euro would be good for their businesses, and now the majority think it would be bad. That is not the same thing as the opinion of UK business (even if the Confederation of Big Industry says it is). The Government's reliance on the self-interested, vacillating, superficial assessments of this "elite" is what makes policy so inconsistent and unprincipled. The attitude to EU-ETS and their alliance to produce this manifesto is just another example.

Everyone in the energy industry knew that last year's Energy Review was a fix. Now a judge has recognised it too, and told the Government to consult properly on the nuclear issue. Labour have such contempt for the public that they couldn't even pretend to be listening.

What is really revealing is Tony Blair's response to the decision. "This won't affect the policy at all", he says. So what exactly is the point of consultation, if the Prime Minister rules out the possibility that any submissions will present any argument or evidence that might affect his thinking?

The Department of Trade & Industry seems to be in a bitter and very personal battle with the Department for the Environment, Food and Rural Affairs to see who can fritter away the most public money. It seems the DTI have struck the latest blow with their low carbon buildings programme, designed to boost the installation of solar panels and wind turbines on houses.

Yet another token effort by the government to make it sound like they are doing something, when they are actually just paying lip service to popular issue of the day – achieving absolutely nothing and throwing away our money in the process. Do they really think £3.5m worth of solar panels and wind turbines protruding from a few roofs is going to stop anything (apart from the neighbours view)? They have managed to burn their way through their annual budget in just six months! That’s £3.5m spent on achieving absolutely nothing and it was all done twice as fast as they had planned to do it. Brilliant. Miliband has his work cut out.

According to the official figures obtained by the Lib Dems, many information technology projects across government have overrun their initial budgets by more than £260 million over the last five years. The Department of the Environment Food and Rural (Defra) was the worst offender with the highest proportional overruns. Defra managed to run over budget by an average of 46 per cent with one scheme costing the department 72 per cent more than anticipated.The Department of Trade and Industry and the Department of Education had such poor management systems in place that they could not provide sufficient data. The Treasury itself overran by 7.3 per cent on its own projects.

The Financial Times reported on Wednesday on the progress of two projects - Sigma Scan and Delta Scan - commissioned by the Horizon Scanning Centre within the Foresight Programme of the Parliamentary Office of Science and Technology (POST). You may not have realised that the POST (if you knew it existed) had a Foresight Programme, nor that that programme included a Horizon Scanning Centre, and probably not that that centre had commissioned Strategic Horizon Scans from The Institute for the Future in California on the future of science and technology (Delta Scan) and from Outsights (a management consultancy, surprise, surprise) and Ipsos Mori (the pollsters) on future social, political, economic and environmental issues (Sigma Scan). But rest assured, those civil servants are busy beavering away, working out how we'll all be living our lives in 50 years' time. How else would we know what to plan for and what to throw our taxes at?

Renewable electricity in the UK is supported primarily by the Renewables Obligation (RO), an obligation on licenced electricity suppliers to purchase a proportion of their electricity from renewable sources. Most types of renewable electricity are eligible, and every unit from every eligible project is treated as having an equal value to the environment. Until now, that is....

David Cameron and the Daily Telegraph think we should subsidise rural Post Offices to keep them open, even though 800 of them get fewer than 16 customers per week. It's funny how people who preach about competitiveness forget about their principles when it is their voters or their readers that would benefit from ignoring economics.

Back in the 70s, government picked a real winner: nuclear power. It was going to produce, they promised, power "too cheap to meter".

We know how that turned out. Rather than being too cheap to meter, nuclear turned out to be first too risky to privatise, and subsequently too expensive to run. Post-liberalisation, British Energy had to be baled out when it was revealed that they couldn't even cover their running costs, let alone their vast capital, risk, waste disposal and decommissioning costs at the prices delivered in a competitive market.

Age discrimination is self-defeating. Companies that employ less suitable people simply on the basis of their age will do worse than companies that employ the most suitable candidates regardless of age.

But that is not the same thing as saying that age and experience are not often relevant to someone's suitability for the job. Legislation trying to prevent companies from discovering the age of job applicants is not only bound to fail, but also ought to fail (Daily Telegraph, 26 Sept 2006, p. B7).