Support your local grant farmer!

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Apparently there is a crisis of support for something called 'green industry'. This thing is our salvation and, of course, the planet's salvation too:

Green businesses and clean tech entrepreneurs are not receiving enough support from government, MPs will warn today, arguing the UK is at risk of missing out on a £3.4 trillion global market opportunity.

The report that has led MPs to "warn" us of dire things talks about the problems that 'green entrepreneurs' face transforming their planet-saving technological wizardry into part of that "£3.4 trillion global market". There is, we're told something called the 'valley of death' that prevents these whizz-kid entrepreneurs from bringing their product to market. Now Psalm 23 aside, this 'valley of death' through which the green innovator must walk seems to me a simple thing really - and indeed the 'entrepreneurs' concerned aren't real entrepreneurs either.

The first clue is from Tim Yeo MP, who (despite his substantial financial interest in so-called 'green industry') chairs the Energy and Climate Change Select Committee:

 "The government should be doing all it can to support innovative UK businesses in their efforts to access the growing global market for low-carbon goods and services."

And, of course, by support what Tim means isn't gentle encouragement but hard cash - the distribution of grants and soft loans. Indeed, the complaint isn't about the non-existence of these grants but that it's hard for budding 'green' business folk to get their mitts on the moolah.  So what MPs want is a simpler and easier way for people to access the cash - the very antithesis of entrepreneurship. It could even be said that any entrepreneur - regardless of hue - that requires government support to make the business work isn't displaying much enterprise or initiative.

The Department for Environment & Climate Change responds to the complaint, not by saying that 'green entrepreneurs' should do what regular entrepreneurs do and sink of swim in the real world of real markets, but by bragging about how much cash is lavished in grants on emerging 'green' technologies:

"...a DECC spokeswoman insisted the Department has beefed up its delivery of innovation programmes since 2010, with initiatives such as the Offshore Wind Accelerator highlighting how industry can pool resources with government support to address common challenges.

She also pointed to a £25m Energy Catalyst fund, which opened in May, to support technology development across the "valley of death" to commercialisation, as well as a Technology Innovation Needs Assessment process that allows LCICG to focus spending on those clean technologies critical to meeting the UK's decarbonisation and energy security objectives at the lowest cost."

We're not talking about real business here but what the Yanks call 'corporate welfare' - the business equivalent of the benefits scrounger. I prefer to use a different term for this activity - it's more evident in the voluntary sector (and what might be called the 'social economy') but what we see here is the extent to which millions of other folks' money is lavished on 'technology' start-ups. There is no 'valley of death' to cross - if the business plan is viable then there are plenty of ways to secure capital without holding out the bowler hat for a government department to fill it with gold.

I call this 'grant farming' - the process whereby ill-formed and barely viable technology projects can be turned into vehicles for attracting grant funding from government (local, regional, national and EU). There is an entire industry dedicated to processing and securing these grants and very little, if any, evidence that they result in new technologies reaching the market more quickly. Or in those technologies proving to be sustainable (in the true financial sense rather than the 'living-in-a-yurt' sense).

The 'green' economy has become the great cash cow for these grant farmers as millions is hosed at a thing called 'decarbonisation' (I'm sure my Dad used to do this to his motorbike once a year). And, since economic success isn't the aim, the resulting grants do not work to create a new 'green economy' but establish and exploit a sector wholly dependent on those grants or subsidies.

In essence Tim Yeo MP isn't urging backing for real business but instead crying out that we should support our local grant farmers. Not surprisingly Mr Yeo is one of those grant farmers himself!

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A comment on energy policy...

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We're still being peddled the myth that, in the medium term at least, promoting renewable energy will result in lower bills. It may be the case that in fifty years technology and ubiquity will make those renewable sources produce cheaper energy than burning fossil fuels (or running nuclear reactors) but right now they are significantly more expensive.

It may well be that it's right to prioritise renewables development - there's still a strong argument for this (although I am less convinced by it these days) given the scale of climate change's down side risks. But this means that for the sake of "the planet", this generation has to put up with higher bills in the hope that this will bring forward the technology and ubiquity of renewable energy needed.

In simple terms - although to listen to Ed Miliband and Ed Davey let alone the greens you wouldn't believe this - we have a choice between "decarbonising" energy production and lower prices. Pretending otherwise is both dangerous and deluded.

So folks your choice is between cheap energy and the planet! You can start fracking, stop the closure of coal fired power stations, scrap the green levy and abolish cross-subsidy of renewables - and get lower fuel bills for voters. Or you can carry on as we are and see those fuel bills rise.

I know which choice I'd make right now.

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Tim Farron wants expensive fuel to go with the expensive food....

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You have to admire the populism of Tim Farron, president of the Liberal Democrats:

Mr Farron told The Sunday Telegraph: “I am afraid the Government has seen flashing pound signs, and has not considered the long-term threats fracking poses to the countryside. “I think this is a very short-sighted policy, and we will all be left to live with the consequences.”

Now this is a man who campaigned for expensive food. I know it didn't look that way but rather as an admirable campaign to protect the livelihoods of farmers (many of whom Tim represents). Nevertheless, the impact of his campaign - and his continued support for agricultural protectionism - will lead to higher food prices.

So now, in the interests of a headline, Tim is supporting expensive energy. I know it doesn't look that way. Rather it's portrayed as caring for the environment. But the effect of Tim's campaign - if it succeeds - against fracking will be higher energy prices. Meaning that less well off people (perhaps there aren't so many of these in South Lakeland) will struggle to heat their homes especially since Tim's campaigns already mean such folk pay more for their food.

Even worse Tim's campaign already misleads:

“With a wind farm you can actually choose where you put it; that is not the case (with) fracking,” 

Actually you can't 'choose' where to put a wind farm - to have a chance of viability turbines have to be in places where there's lots of wind, which isn't just anywhere.

And then, having misled, Tim scaremongers:

 This technology can lead to earth tremors and I’m particularly worried that buried nuclear waste in my part of the country could be affected.

There have been around 100,000 fracking wells drilled and the biggest tremor recorded from this is 3.6 on the Richter Scale, which is a bit like having a heavy lorry drive past the front of your house. Typical tremors are 1.3 to 2.6:

If there is an earthquake of 1.5, they have to stop. The British Geological Society says a tremor like that is not usually felt by anyone. It describes an earthquake of 2.3 as being like someone dropping a bucket of water. To put it in context, there have been three of those in Britain in the last month. 

So - getting a cheap headline, presenting misleading facts and scaremongering. A good day's work from the Liberal Democrat's president!

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Should we end the subsidy of newspapers?

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OK I hear you - what subsidy? There is no subsidy of newspapers and nor should their be.  Except that some people believe that newspapers (and books, and children's shoes and jaffa cakes) are subsidised:

Dwarfing this is an estimated £4bn p/a subsidy on the direct consumption of petrol, gas and coal through a reduction in VAT from 20% to 5%.

Yes I know, this author - drawing on a piece of egregious research from some folk called Oxford Energy Associates - is talking about domestic fuel. But I guess that is no different from the zero rating of food, publishing and children's clothing?

The truth is that this argument - used again and again by green sorts to excuse the actual subsidy of renewable energy - is a load of old cobblers. A subsidy is where I give you money to reduce your costs not where I reduce your (and lots of other businesses') rate of taxation.  Unless, of course, that rate of tax is set to be negative when it is a subsidy.

We do not subsidise fossil fuels not even a little bit. We give producers tax breaks on exploration and development just as we give pharmaceuticals businesses tax breaks on R&D and manufacturers tax breaks on investing in new plant. And these aren't subsidies either. Neither is a hypothetical (and doubtful) estimate of the externalities related to carbon dioxide emissions. These may well be such externalities but their existence is not a subsidy.

If we're to have a debate about whether energy should be subsidised (it shouldn't be) let's have that debate about the actual subsidies rather than some make-believe ones dreamt up by people with a direct vested interest in the continuing subsidy of renewable energy and the promotion of a particular policy response to climate change.

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Fracking and the legacy of the mines...

Harry Stone was a miner born
He worked to win his wages
Riding down the cages
And raging at the seams
He worked his stall from dusk till dawn
Sweet sweat and raw endeavour
Black diamonds bound together
By a strong and simple means

For two-hundred years and more England built its wealth and success, in large part, on the exploitation of its minerals  - as someone said we're an island of coal in a sea of oil. And, for all the machismo of coal-mining, it was a dangerous life and the winning of coal left great scars on the landscape, polluted the environment and created unstable landforms. The blasting of the coalface and the shifting to the tunnel-ridden rocks led to subsidence and even earth tremors.

Yet the coal ripped from the ground was the fuel for our industrial revolution. That coal provided the heat and light, the power to drag us from bare subsistence agriculture to today's warn, healthy and pleasant condition. Those men who rode the cages down into the dark - the ones who died in accidents, the one's who coughed up their lungs - they played a great part us us being wealthy.

Today the land around the mines - 'scarred like the face of the moon' as the Cornish tin and clay mined landscape was once described - slowly recovers. Where once there were ugly, deep-grey heaps of waste and spoil, we now see young woodland, ponds, trails and fields. In places the structures of the minehead are preserved - a reminder of why the town is there and what men did in times past.

Today a new fuel is there for us to win, a fuel that can power our lights, our homes, our industry for a hundred years and more. It's a fuel that doesn't require men to crawl into dark holes, to destroy their health with dust and fumes. It's a fuel we can win from the surface without despoiling the landscape, without any significant - let alone long-lasting - damage to the environment. It's a fuel that can replace the last few coal-powered generators and ensure that we can all keep our homes warm at a reasonable price.

And the fuel is shale gas. Compared to the damage - to society health and environment - that coal-mining causes, the winning of shale gas is benign. Yet people living in places that have gained from the wealth of mining without the costs of winning that wealth would stop us all - including the children of those miners - from enjoying this benefit:

The prospect of fracking is what has unsettled Fernhurst. Towers burning off excess gas and oil wouldn’t fit in with Tennyson’s vision of ‘Green Sussex fading into blue’. Beyond that, there is a terror of toxic and radioactive leaks and long-term pollution of aquifers. Marcus Adams, leader of the Frack Free Fernhurst campaign group, told me, ‘I find it extraordinary that the government allows companies to use this fracking technology when we don’t properly understand it.’ Adams is no environmentalist, merely an ordinary if concerned bloke who has lived in the area for many years. He is convinced that permission to explore will lead to permission to frack, so he and some likeminded neighbours want to thwart Celtique’s initial proposal.

Compared to the cost of mining - a cost that people like Marcus Adams didn't pay although they live with the benefits of that mining - the impact of fracking is vanishingly small. And, short term. Part of me shrugs at the opposition - I'm sure the opposition would be there wherever the extraction took place - but another part is angry.

Angry that the twisting and misrepresenting of the facts by environmental campaigners, the frenetic lobbying of the 'renewable' energy companies and the scaremongering of media results in a risk that the benefit of a 100 years of cheaper energy will be denied us. That we should slide into a world of brown-outs, industrial decline and ever higher energy prices just to protect - for a few years - a few acres of Sussex.

If this attitude had prevailed in times past we wouldn't have dug those mines at Wentworth, at Heanor and in Ashington. Instead we'd have left it there and carried on burning wood and scraping a living - in a good year - from a third of an acre of poor field.  But we did dig those mineshafts and win that coal, it did help make us rich.

And the least thanks we can offer the miners who won that coal is to go and win the shale gas, to provide the fuel to power future generations and future industry.

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Killing off old people to deal with climate change - the real green agenda

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The long campaign by the greens and their fellow travellers to raise the cost of heating our homes has resulted in record numbers of old people dying unnecessarily in cold houses.

“We have seen the death rate in the past month alone quadruple since December last year and if the cold weather continues we could be looking at horrendous figures

“At the rate we are going, and if this extreme cold continues we could be looking at 30,000 or more.

“Many elderly health conditions are worsened by cold weather and there is a definite risk of the highest national winter mortality figures since 2008-09.”

Despite this our government is trapped in a hideous and pointless programme of closing down efficient means of energy production and replacing them with more expensive methods. Apparently this will save the planet. I guess the Greens - eugenicists to a man - are only too happy to see a few human casualties in their fanatical pursuit of reducing "carbon".

Don't be fooled by the chaff thrown around by these fanatics - the stuff about evil gas companies or wicked electricity producers from France. These people want higher fuel prices because it's the only way they can get the subsidies for wind, tide, solar and all the other twee green generation methods.

The greens have hobbled nuclear by pretending it's dangerous when it isn't, they've pushed the coal mining business to the brink of closure and they want to prevent the safe, low-cost gas that would come from frakking. And they've shoved up the price of fuel by subsidising inefficient generation.

The result of this is that old people can't afford to heat their homes. And too many of them die because of this policy. Those 30,000 deaths - the greens did that.

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"Energy Stealth Tax Doubles EDF Price Rise" - the headline that wasn't!

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The renewable and social obligations placed on energy providers provide a masterclass example of stealth taxation. Today we're urged to be cross with the big energy providers, calls are made for enquiries (although this is a pretty standard Miliband response these days) and even for windfall taxes.

But here (courtesy of The Register) is an interesting little statement from EDF (emphasis is mine):

The company has seen a sharp increase in costs since the start of the year, with transmission and distribution charges rising by 9%, and the costs associated with the implementation of obligatory renewable, energy efficiency and social schemes increasing by more than 50%. The cost of buying energy has also risen by 4% for next year ... The cost of buying energy accounts for around 50% of a typical energy bill. The other half is made up of non-energy costs.

Now that's pretty clear although you won't hear Nicky Campbell running a phone in on how a government stealth tax - sold to us by Whitehall as not costing us a penny - is behind the ridiculous rise in domestic energy costs. Of that 11% rise, the lion's share is down to distribution costs and "renewables, energy efficiency and social" schemes.  As The Register comments:

This system of cranking up everyone's energy bill hits the less-well-off disproportionately hard: and it's also dishonest, as politicians and energy firms alike decline to tell you bluntly why your bills keep going up.

Just remember that, then, the next time you hear a politician stigmatised as a climate sceptic. A vote for that politician is a vote against this sort of vicious price rise, this sort of stealth tax targeted on ordinary folk who find their energy bills a significant cost - the sort of hit that most of us will find pretty painful, given the current economic climate.

Worse still, by tucking this information at the bottom of its statement, EDF are complicit in the fooling of the public. It should be the headline something like:

"Energy Stealth Tax doubles EDF Price Rise"

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On the cost of living and how it would be easy to do something about it...

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That starts - as these things do - with a quotation from The Sun:

Here’s the thing: cost of living is going to be THE political battleground for the next year as inflation continues to outstrip average wage rises. Next January alone, the Chancellor has to contend with a 3p rise in fuel duty, new hikes in energy bills, rail fares soaring and the withdrawal of child benefit for the well off, and ALL at the same time. In poll after poll, fuel duty comes up as the most hated tax of all in the Treasury’s vast array. 

Now I know all those clever sorts don't think inflation is a problem. But they are wrong - completely wrong. In terms of politics, the price of things - filling the car up, heating the house, turning the lights on, feeding the kids - is the thing that is bothering people. It isn't just those frequenting food banks but right across society where people are looking at stuff and thinking: "when did that get so expensive?"

The other evening, the BBC led its evening bulletins with food prices. Their focus was on the bad harvests following our rather damp summer accompanied with the usual nonsense about 'climate change'. But what matters here is that they saw the issue of price as not just important but the most important thing in the news that day.

And David Cameron earlier this week started a debate about energy companies and their rising bills. OK it was all handled in a somewhat cack-handed manner but the issue of energy prices (and energy supply) matters because we all buy it.

In the end political calculations have to place more emphasis on the cost of living especially when - as with train fares, gas bills and petrol prices - the choices and decisions of government directly impact on those costs. The problem is that both main political parties seem set on tinkering - gimmicks rather than substantial policies - instead of getting to the real point.

And worse still our politicians seem to want to have their cake and eat it. Low food prices AND something called "food security" (in economics textbooks it's call agricultural protectionism). Can't be done.

Loads of action on 'climate change' AND reductions in fuel poverty. Sorry guys, can't be done.

And achieving 'modal shift' in transport (better described as taxing us out of our cars) AND a thriving small business sector. Again, it can't be done.

Yet politicians, pundits and a whole host of clever academics try to tell us that you can protect farmers, rescue the "high street", provide food and energy "security" and save the planet without making the stuff we buy every day more expensive. This is a lie. And it will stay a lie even when it's wrapped up in sweet smelling weasel words.

If we want to do something about these prices how about:

• Ending all import controls and tariffs
• Cutting fuel duty to the same level as it is in, say, the USA
• Scrapping "green" imposts and special energy tariffs for renewables
• Promoting available sources of lower cost energy such as shale gas and nuclear power

Of course if we did this there'd be cries of pain from the vested interests who make millions from these regulatory costs and they'll enlist the greens and the unions - all the usual supporters of protectionism - to make the case against freeing the poor consumer from those who benefit from that consumer paying over the odds.

And these will be the same set of folk now shouting about fuel poverty, food banks and the price of petrol.

Perhaps we should just tell them to shut up and go away. Maybe, you never know, opt for free trade, free enterprise and free choice just for once!

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Quote of the day....

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On the threats to leave from big energy companies:

The departure of rent seeking tax farming parasites is rarely a bad thing for the people whose taxes are being farmed.

Absolutely.

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"One Million Pound A Vote" isn't quite enough for Labour to buy Green support....

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Windmills! Not sure about what I personally feel about them (although I'm unconvinced at their value as a solution to England's energy supply challenges - fracking and nuclear power look much better bets) but I do know that plenty of people aren't so keen on having them plonked in their back yard. Including a whole bunch in Denholme.

Right now Bradford Council is consulting on its 'Local Development Framework Core Strategy' which includes proposals for loads more windmills. Which will be sited (assuming the Council avoid the massive row that would come from putting them on Ilkley Moor) in Denholme and Queensbury where there's loads of wind. And residents in these places want to challenge these proposals.

However, it seems we needn't bother complaining since the Labour Councillor responsible for planning has already decided:

Councillor Val Slater, Bradford Council's executive member for planning, said: “Renewable energy ultimately means a cleaner district and less pollution. Although there is an increase in applications for wind turbines we don't actually receive that many.”

I guess this is part of the price that Bradford people will be paying for the backroom deal that led our three-strong Green group on Council to back almost everything the Labour Party propose! It seems that the "One Million Pounds A Vote" deal on renewable energy we saw at the budget council was only part of the payback for the Greens' support. They love windmills and the bigger the better!!

Councillor Martin Love, one of Shipley’s ward representatives and a member of the Green Party, said: “Any increase in renewable energy generation is to be welcomed.

“Something Bradford has got a lot of is hills and wind. We should utilise them for energy generation wherever we can. However, for Wind turbines to be effective we need bigger ones."

I will point out that the hills and wind aren't in Cllr Love's ward, of course!

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Can we reduce the "poverty premium" without repeating those sub-prime mistakes?

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Niall Cooper from Church Action on Poverty has written a piece of what he calls “fair pricing”:

And secondly, fair prices.  Much of the ‘logic’ of the way markets have developed in recent years is to move towards ‘risk (or cost) pricing’ and away from shared risk.  Some of the assumptions behind this are extremely dodgy:  The majority of high cost lenders claim that their premium prices are based on the ‘risk’ of lending to low income customers… any yet, when customers pay week after week, year after year, the cost doesn’t go down.  But fundamentally, is it socially (or morally) acceptable to operate ‘cost’ pricing models which force the poorest to pay most?  How can companies square all their talk in recent years of corporate social responsibility, with charging their poorest customers the most?

It has become a mantra of anti-poverty campaigners that poor people pay something they call the “poverty premium”:

Lack of access to the best online prices, bank accounts and managing their budget via cash all adds together to give the poorest families the worst deals around. The result is a poverty premium that costs the poorest families more for the same energy, cookers and household items, credit and insurance than their wealthier peers.

The two prime culprits for this premium are energy and financial services especially lending. In the case of energy this is mostly about methods of payment – the understandable reluctance of people on low incomes to use direct debit as a means of payment. So, in reality, the whole problem is – as Niall Cooper implies – down to financial services. Especially since the ‘food desert’ argument turns out to be a bit of a myth.

“The U.S. Department of Agriculture defines a food desert as a low-income census tract where a large number of residents are more than a mile from a grocery store…. [L]ess than 4.5 percent of the U.S. population [falls into that category].

The question then is how to make is easier for poor people to access affordable financial services given that those poor people are less likely to repay loans, more likely to over draw and live in places where car crime and burglary heighten insurance risks. For this Niall Cooper suggests intervening in the market:

And if individual businesses are unwilling to offer products to low income consumers at fair prices (not least by claiming they can’t do so if their competitors don’t), then is there not a role for market intervention?

The problem is that – certainly where lending is concerned – we have been down this route before. After all mandating lending to high risk borrowers was a central driver in creating sub-prime problems especially in the USA. And if you introduce price caps (as Stella Creasy wants) without mandating lending to poor people then you kill the market entirely. The consequence of this is to create an even bigger problem for which the only solution is unregulated and illegal lending.

Rather than looking at forcing price cuts on suppliers, we should instead consider whether block buying is an option. Social landlords could, for example, purchase energy more cheaply than tenants and have the systems to collect payments in place already. And, certainly for contents insurance, the same should apply. It would be interesting too to look at whether local councils or social landlords could broker other insurances such as third party car insurance helping to spread risks and reduce costs.

If we look to new generation mutuals such as credit unions there are perhaps similar opportunities to reduce costs and spread risks. What we can’t do is wholly eliminate those risks (something the world is finding out very painfully right this minute) meaning that poor people will continue to have problems with access and pricing in financial services. In using co-operative solutions we can ameliorate these considerably and, in market terms, safely. Mandating prices simply takes us back into the financial disaster of sub-prime lending.

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