Wednesday, October 30, 2013

Another defeat for Workfare

In February 2012 I reported on the Court of Appeals judgement that Iain Duncan Smith's mandatory unpiad labour ("Workfare") schemes were unlawful on the grounds that the rules were unintelligible, and because Iain Duncan Smith had exceeded his powers by applying the rules without first seeking the approval of parliament.

Little did I know at the time that Iain Duncan Smith (with the collusion of the Labour party so-called opposition) would attempt to undermine the Appeal Court ruling by retroactively changing the law. The hastily scribbled piece of legislation (which was rushed through parliament in a single day) changed the rules so that had they been written that way at the time, they would have been intelligible, and they would have had parliamentary approval.

It is quite clear that using retroactive laws to undermine the courts opens the door to fascism, because it sets the appalling precedent that if the courts declare the government has acted unlawfully, the government can simply rush through legislation to retroactively change the law to make their unlawful actions lawful and nullify the judgement of the courts. This precedent essentially puts government ministers above the law of the land. It is absolutely appalling that (apart from a few objectors that defied the party whip to vote against it) the Labour so-called opposition went along with this appalling attack on the legal system.

Instead of simply undermining the court by retroactively rewriting the law of the land, Iain Duncan Smith also decided to go even further in order to put the courts in their place. On the very same day that his rotten piece of retroactive workfare legislation was rushed through parliament, he  launched a Supreme Court appeal against the Appeal Court ruling that his schemes were unlawful. He was clearly working on the assumption that the courts would have to accept that his retroactive 2013 laws applied, meaning that they would have to eat humble pie and declare his vicious mandatory labour schemes lawful.

Subverting a court judgement by retroactively changing the law of the land was bad enough, but attempting to humiliate the courts in order to demonstrate to all that he himself is absolutely above the law of the land was the act of a man that has absolute contempt for any authority other than his own.

The problem for Iain Duncan Smith and his minions at the DWP is that the Supreme Court defied him and upheld the Appeal Court ruling. Here is the full transcript of the Supreme Court judgement.

The Supreme Court explicitly recognised that the 2013 Retroactive Workfare Bill was a deliberate attempt to undermine the courts: "The 2013 Act was plainly intended to 'undo' the decision of the Court of Appeal" . They also reiterated that scheme was unlawful at the time "what Ms Reilly was told about her obligation to take part in the [workfare] scheme, as a condition of receiving Jobseeker's Allowance, was unauthorised and wrong as a matter of domestic law".

At the conclusion of the judgement the judges returned to Iain Duncan Smith's retroactive law, stating that had it not been for the retroactive lawmaking exercise, the ruling of the appeal court would have been fully upheld "Accordingly, were it not for the 2013 Act and the 2013 Regulations, we would have affirmed the order of the Court of Appeal" (which shows how much of a spectacular own-goal the Labour party scored by colluding with Iain Duncan Smith to rush the retroactive laws onto the statute book). The judges admitted that the passing of retroactive legislation adds a significant complication, and that they have yet to work out an appropriate response: "In the light of the 2013 Act and the 2013 Regulations, however, a more subtly expressed form of order will be required, and we would invite counsel to try and agree the appropriate wording".

Whatever the case, Iain Duncan Smith's decision to appeal the ruling of the Appeal Court now looks like a spectacular case of hubris, because not only was his appeal rejected, but there now exists a court ruling which explicitly states that he deliberately attempted to undermine the law of the land with his retroactive lawmaking exercise.

This leaves us with the question of what Iain Duncan Smith will do next. Given the brazenness of his response to the ruling of the Appeal Court, it wouldn't surprise me if Iain Duncan Smith and the Tories attempted to rush through legislation to retroactively abolish the Supreme Court so that this judgement never happened, and it would hardly be surprising if the Labour so-called opposition colluded with the Tories to help them rush their retroactive abolition of the courts through parliament in a single day, as they did with the Retroactive Workfare Bill in March 2013.


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Friday, October 25, 2013

Absolute equality and the pedantic left

There are some, that I call "the pedantic left" who seem to prefer the idea of a permanent neoliberal crony capitalist dystopia (where the cultural hegemony dictates the definition of "socialism" is akin to something like "pure evil") to the idea that they might have to compromise with other leftists that have slightly different interpretations of what "socialism" might actually mean, so that together they can build solidarity and fight back against the ever accelerating inequality imposed by the crony capitalist establishment.

In my view this abandonment of solidarity in order to engage in pedantic left-wing infighting is one of the big reasons that the right-wing crony capitalist establishment has managed to increase inequality so dramatically and to build and reinforce such a strong cultural hegemony in the first place.

Absolute equality


Distribution of resources

The subject of this article has been on my mind for some time, but an argument with a couple of socialists over the definition of the word "socialism" has pushed it to the front of my queue of articles to write.

The argument is this: I came across an American video on wealth distribution which defined "socialism" as absolute equality, where the poorest person in society gets absolutely the same as the richest person in society (see images). The rest of the video was quite interesting so I posted it on the Another Angry Voice Facebook page with a disclaimer about the absolutist equality stance being a complete straw-man misrepresentation of what "socialism" actually means. 




In my view socialism means that people should have equal access to fundamental resources like education, health care, welfare, energy, finance and sufficient staple resources like food and water. This means that such fundamentals mustn't be monopolised or commodified by rent seekers. To put this into very simple terms; my view of "socialism" is that society should provide people with equal access to opportunities and equal access to fundamental resources, not ruthlessly enforce absolute equality in everything (no matter how much or little the individual is prepared or able to contribute to society).


Several angry socialists came along to condemn my view of socialism as "facile" in defence of the absolutist equality position I was criticising. The problem of course is that the absolutist equality stance is obviously a lot more "facile" than a system that provides equal access to fundamental resources (health care, staple resources, energy, welfare) and opportunities (such as education and finance), but allows economic freedom to pursue non-fundamental commodities (consumer products, arts, literature, modern technology, entertainments, luxury goods, Pigovian products ...).

One of the very easy to grasp criticisms of the absolutist equality position is that some people want commodities that others don't. Some people want 64" flatscreen televisions and others don't (because like me, perhaps they barely watch TV or play computer games). I don't want a massive flatscreen TV, but I have absolutely no problem with others aspiring to ownership of commodities that I don't want. If they want to work a bit harder, or for a few hours longer to acquire the luxury item I don't want, then that's absolutely fine by me, just as the guy with the TV is probably quite happy that I work a bit harder or longer to acquire the science fiction books that he might have absolutely no interest in owning.

Under the absolutist equality definition of socialism either 64" screens (and my science fiction books) would have to be provided to everyone (even those that don't want them - a waste of resources) or they'd have to be banned (totalitarianism). The only other option would be to devise a system which determines how much relative utility is provided by each non-essential commodity, which would rely on the same kind of aggregation problems as neoclassical economics does, and would result in the creation of a vast and inefficient redistributive bureaucracy (is it even possible to determine how many science fiction books create the same level of utility as a big telly? Would a state administered system that expends resources on making such arbitrary determinations result in the most efficient use of resources?).

If you think equal access to basic resources, but freedom to pursue non-essentials is more "facile" than absolutist mandatory equality in absolutely everything, you either haven't thought about it very much or you've misunderstood the meaning of the word "facile".

The value of labour


The next problem with the absolutist equality stance is that it does something that no true socialist would accept; it reduces the value of labour to zero.

One of the most obvious problems with the idea of absolute equality is the fact that all labour would have to be given the same value. The workaholic manager would earn the same as the laid back shop assistant; the highly trained engineer would earn the same as the unskilled labourer; the educated expert would earn the same as the anti-intellectual that refuses to learn new skills; the worker in a dangerous or highly stressful job would earn the same as the worker in a safe or extremely relaxing job. To the vast majority of people, such a system would be transparently unfair. If your system contradicts the common-sense view that the hardworking deserve more than the lazy, the educated deserve more than the uneducated and that jobs in which the individuals risk their health or their lives deserve some form of danger compensation, then you will never be able to enforce such a system without resorting to totalitarianism.

The idea that all labour is equal is a huge problem, but there is a bigger problem still. If everyone is to get exactly the same whether they choose to work or not, then the value of labour is reduced to zero (in financial terms) because it classifies labour as having exactly the same value as no-labour. If the person that chooses not to contribute gets exactly the same as those that choose to work (in a difficult and dangerous jobs to fun and easy ones), then the value of labour is reduced to zero, meaning that there is no financial incentive to work at all. Why would anyone get up in the morning to go and do a dangerous or unpleasant job if they were entitled to exactly the same share of resources if they just stayed at home and did nothing?

The only way an absolutist equality system could possibly work is if labour was made mandatory (for those that are able), because without labour, society would cease to function. But how would it even be possible to force people to work in a system which explicitly prohibits financial coercion?

Absolute equality is the same kind of nonsensical and unworkable absolutist gibberish as the extreme-right view that deregulated markets are perfectly efficient, which is the reason that I choose to believe in a form of socialism that provides for people's fundamental needs, eradicates poverty and removes barriers to opportunities through education and access to finance, but which takes into account the value of the social contribution of the individuals and provides the individual with the liberty to acquire non-essential resources, which therefore creates the incentives to work and to contribute to society.

I believe that the absolute equality position is an absurd caricature of what socialism means. It is such an absurdly unrealistic stance that you're actually undermining the meaning of socialism if you believe in such nonsense and proclaim yourself a socialist. You're not a socialist, you're not even a Marxist (Karl Marx believed that incentives and class hierarchies would still exist within the socialist society) you're an absolutist egalitarian.


Absolutism vs compromise

Returning to the subject of "the pedantic left", it's fair to say that the market socialist (who has a somewhat similar definition of socialism to my own) and the absolutist egalitarian have something in common. They are both strongly opposed to the crony capitalist cultural hegemony and the discredited neoliberal pseudo-scientific economic models that are used to to justify the rent-seeking behavior and outright corruption of the wealthy establishment.

Surely it makes sense for the opponents of crony capitalism to put their differences aside and agree that the most important thing in the immediacy is to come together in solidarity to oppose the cultural hegemony of the establishment?

If you believe in the absolute equality definition of socialism, surely it is better to compromise with market socialists (and other left-wing factions), because a market socialism system is far, far closer to your absolute equality ideal than the vast and rapidly growing inequalities of the current neoliberal socio-economic paradigm.

The problem is that many on the left fail to see it this way, and refuse to co-operate with anyone else on the left who has strayed from their interpretation of "true socialism". One of the most visible examples of this is that way that several members of the new left wing group Left Unity have expended their energies attacking and undermining the Green Party, rather than concentrating on the development of a coherent set of left-wing policies and a powerful social justice narrative to promote their own party.

Instead as attacking the Green Party as "not left-wing enough", it would surely make more sense for Left Unity to examine what the Green Party have done right in order to break into the closed shop of orthodox neoliberal establishment politics that is Westminster, and to identify areas of agreement in which the two parties can co-operate.

If the left spends it's time and energy bickering and infighting, they simply allow the crony capitalist establishment to continue strengthening and reinforcing their cultural hegemony.


Leftist solidarity


There are many examples of diverse leftist groups coming together in solidarity to form powerful political organisations, I'll give a couple of brief examples.

Labour

The Labour party in the UK was born of co-operation between numerous trade unions and leftist political groups. Although Labour was never perfect, and has now been usurped by adherents of orthodox neoliberalism, it did achieve a number of important things that the vast majority of left-wing people can appreciate, including the establishment of the National Health Service, the massive improvements to the social safety net, legal aid, the post-war improvements in housing, and the establishment of the economic conditions that led to the unprecedented general prosperity and social mobility of the 1950s, 60s and 70s, which have subsequently been eroded away by over three decades of neoliberal pseudo-economics.

Syriza
The Greek political party Syriza (the coalition of the radical left) was formed as a coalition of various leftist groups in 2004. The groups that make it up include Social Democrats, Marxists, Trotskyites and the Green Left. In the wake of the Greek economic crisis and the economically destructive bailout conditions imposed by the IMF, the European Central Bank and the EU, they have risen to become the second most popular party in Greece and the main opposition in the Greek parliament. Since the last election in 2012 their popularity has improved again, meaning that if (when) the current coalition government fails, they will almost certainly form the next Greek government. Although they are extremely unlikely to impose a full-blownTrotskyite revolution, the Trotskyite faction must recognise that being part of a broad left-wing coalition is preferable to being a tiny minority party with no elected representatives at all.

The problem with co-operation is that when the views of several leftist organisations are aggregated, the result is not entirely pleasing to all of the participants. However, the result is usually a great deal better than a divided left bickering amongst themselves and allowing the right to maintain absolute control over society and the economy.

Conclusion

The self-defeating divisiveness of the left is deeply problematic but it is also amusing. The idea of representatives of a group called Left Unity expending their time and effort in attacking and undermining other left-wing groups is a laughable display of unintentional irony. Probably the most amusing parody of the factionalisation of the left is the famous Monty Pythons' Judaen People's Front scene from the Life of Brian, where they openly admit that the only people they hate more than their Roman oppressors are the various other anti-imperialist factions.

The only way that the left is ever going to be able to effectively fight back against the cultural hegemony of the neoliberal right, and begin reversing the trend towards ever greater inequality, is if we put our own differences aside and show some solidarity against the greater enemy.


Essentially, what I'm saying is that if you are unwilling to tolerate any left-wing views that are not almost identical to your own, then you're part of the problem, not part of the solution.

Another Angry Voice  is a not-for-profit page which generates absolutely no revenue from advertising and accepts no money from corporate or political interests. The only source of revenue for  Another Angry Voice  is the  PayPal  donations box (which can be found in the right hand column, fairly near the top of the page). If you could afford to make a donation to help keep this site going, it would be massively appreciated.



            

Thursday, October 24, 2013

John Major's "compassionate conservatism"


John Major is now the only living person to have led a Tory majority government (1990-1997). When he was selected to lead the Tory party in 1990 he was seen as a steady hand to lead the party through the difficult recovery period after the internal coup d'etat that ended the reign of Margaret Thatcher.

Perhaps you are old enough to remember some of the "innovations" that the John Major regime introduced such as "Black Wednesday", the hopelessly botched sell-off of British Rail, the decision to give the UK nuclear industry away for an absolute pittance, the privatisation of the UK nuclear deterrent, cash for questions, the propaganda campaign against single mothers and the Cones Hotline.

John Major was not a good Prime Minister by any stretch of the imagination, but it is probably fair to say that he was the least bad Tory Prime Minister since Harold MacMillan who served between 1957 and 1963. I conducted a pair of polls on the AAV Facebook page which confirmed that John Major was neither popular (right wing people have an unhealthy fixation with Thatcher and the majority of left-wing people went for Clement Attlee) nor particularly unpopular (people were split quite evenly between Thatcher and David Cameron as the worst PM since WWII), meaning that he ranked as very average indeed, which is probably fitting for a man that earned himself the nickname "the grey man of politics".

Even though his government introduced a number of catastrophically bad policies, he is quite clearly leagues above all of his successors as leader of the Tory party. William Hague became the first leader of the Tory party since the 19th Century to not serve as Prime Minister of the UK. His successor Iain Duncan Smith was so bad that the party removed him before he could even lead the party into a general election and his replacement Michael Howard was just as unelectable. The lack of talent within the Tory party led to the appalling situation that a transparently dishonest former PR man who had only been a Tory MP for a few years landed the top job. David Cameron was so desperately unconvincing that he failed to get a majority despite the fact that he was standing against an extremely unpopular Prime Minister, during the worst economic crisis in generations, and with the support of the vast majority of the corporate controlled mainstream media. This fourth successive failure to win a parliamentary majority meant that the Tories were forced into sharing power with the Liberal Democrats.

At first John Major was a vocal supporter of the Coalition Government, but as the years have gone on he has clearly come to realise that the current Tory leadership are a bunch of over-privileged and out-of-touch rich boys, who are driving the country towards economic ruin. He kept quiet about it out of loyalty to the party, but in October 2013 he reached breaking point as he saw Ed Miliband running rings around David Cameron on the issue of energy bills. Here's what he said:
"I do not regard it as acceptable that they [energy companies] have increased prices by this tremendous amount. Nor do I regard it as acceptable their explanation that they are investing for the future ...  [the UK] will probably have a very cold winter and it is not acceptable that many people are going to have choose between keeping warm and eating ... I suggest [George Osborne] imposes an emergency tax on the energy companies to claw back the money that we will have to give to people to see the winter in any form of warmth."
He didn't limit his criticism to the way David Cameron and George Osborne have refused to deal with the cost of energy crisis, he also laid into the Work and Pensions Secretary (and failed Tory party leader) Iain Duncan Smith, criticising his refusal to properly address any of the concerns of his critics and warning that "if he listens only to the bean-counters and to cheerleaders concerned only with abuse of the system, then he will fail."

He also made a long overdue apology to the victims of the Hillsborough disaster for having steadfastly refused to conduct an inquiry during his time as Prime Minister.

The former Prime Minister also spoke of the "silent have-nots" and "lace curtain poverty".
"Low interest rates are unavoidable, essential for economic recovery, but they crucify the prudent long term saver. For many elderly people now in retirement the financial crisis has destroyed security of mind as well as the value of savings ... There are too many people falling behind through no fault of their own ... They are not high fliers, not financially secure. They are the dignified poor or near poor and to the shame of politicians - and I include myself in this - there are still millions and millions of them."
I believe that these divergences from the position of the current Tory leadership are inspired by pragmatism and loyalty to the long-term interests of the Tory party. He can see that a bunch of out-of-touch and over-privileged millionaires dogmatically pursuing an ideological agenda to the detriment of countless millions of people (voters) is going to severely damage the long-term prospects of the party. By actively helping the rich to get richer (Millionaires tax cut, corporation tax cuts, below market value privatisations, dodgy outsourcing contracts to Tory party donors ...), whilst inflicting severe economic pain on millions of poor and ordinary people ( Wage repression, the VAT hike, "Bedroom Tax", Atos WCA regime, slashed in-work benefits ...) is terrible for the long-term prospects of the party he led for seven years.

Another telling point is the way that John Major described Ed Miliband's energy price freeze policy:

"Ed Miliband's heart was in the right place but his head has gone walkabout ...but he did touch on an issue that's very important. The private sector is something the Conservative party support but when the private sector goes wrong or behaves badly I think it is entirely right to make changes and put it right."
Firstly, I have to say that the accusation of the "heart being in the right place, but the policy suggestion being nonsense" is even more applicable to John Major's one-off energy windfall tax idea. The reason being, it is a short-term fix for a long-term problem. If the profits of the energy companies are recouped this year to help the millions of people living in fuel poverty, this will only delay the pain, because next year prices will still be sky high, and in fact, it is likely that the energy companies will further hike their prices to recoup their "lost" profits from the windfall tax. John Major is essentially saying "we can't let them freeze and die (until next winter)".

Secondly, both Ed Miliband and John Major are motivated by legitimate concerns over fuel poverty, but their solutions are both inadequate. The real, obvious long-term solution is a large-scale renationalisation of the energy sector, but since that conflicts with the neoliberal economic orthodoxy, and the competition laws of the neoliberalism riddled European Union, nobody apart from the Green Party and a few unelectable fringe left-wing elements are even going to dare suggest it.

Thirdly, the assertion that "Ed Miliband's heart is in the right place" contrasts very sharply with the vile Lynton Crosby inspired bullshit that David Cameron spouts. John Major is from the old school where civilised debate and a measure of respect for your adversaries were essential elements of doing politics. David Cameron has a different view, he believes the British public love to see childish mud slinging, at-the-man attacks, abusive language, outright lies and fact-free rhetoric from their political leaders. Hence his decision to lie about Britian having been declared "bankrupt" one week and then make the absurdly hypocritcal accusation that Ed Miliband is a "conman" the next.


John Major is an old-school politician, with an old-school idea. He understands that a political agenda, administered by multi-millionaires, that drives countless millions of poor and ordinary people into greater poverty is likely to severely damage the Conservative party. He would prefer to see a more pragmatic and less ideologically zealous strategy; a form of "compassionate conservatism", where the Tories still overtly favour capitalist interests (as is their way), but will intervene when market forces push millions of people (voters) into greater poverty. It's still conservatism, but with a pragmatic pinch of social justice.

The other thing John Major is arguing for is a return to civilised and respectful debate and political balance. He clearly despises the playground politics of the current era, and hankers after the days when politicians called each other "honourable gentleman" rather than "conman".

The problem for the former Prime Minister is that neither of these objectives are remotely possible. With a clueless ideological zealot like George Osborne (who barely understands the neoclassical economic theories he ceaselessly promotes) in charge of both the Tory party policy and national economic policy, and a cabinet that is stuffed full of compensatory narcissists like Iain Duncan Smith and Michael Gove (people who have a siege mentality towards the slightest hint of criticism), the idea of "Conservatism with a pragmatic pinch of social justice" is an impossible pipe dream.

When it comes to grown-up and civilised politics, that also is never going to happen when the Prime Minister, and leader of the Tory party is taking strategic advice from a gutter dweller like Lynton Crosby.




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The Royal Mail sell-off

Tuesday, October 22, 2013

How to get rich in Tory Britain


The economy is still in recession for the vast majority of us, but a tiny economic minority are getting rich faster than ever, and the Tories are convinced that this enrichment of the minority equates to an "economic recovery". In this article I'm going to give you a sure-fire tip for escaping your worsening economic circumstances and getting rich too.

The reason that the economy is still in recession for the majority of us is an economic policy called income repression, which is being administered by the Chancellor of the Exchequer George Osborne. If you have a job that pays less than a six figure salary, the chances are that you are getting poorer, because every single month since the Tories came to power, the average wage has grown at a slower rate than the rate of inflation. This means that your purchasing power has been diminished every single month and you are getting poorer and poorer in real terms.

People on low wages have been affected particularly badly, because as well as their wages shrinking in real terms, George Osborne and the Tories are also repressing in-work benefits such as Working Tax Credits, Child Tax Credits, Income Support, Council Tax Relief, Statutory Sick Pay, Maternity Pay and Paternity Pay. These dramatic cuts in the social security payments that are used to top up poverty wages are driving millions of low-income workers into even greater poverty.

Some of the poorest working people have experienced terrible poverty on Zero-Hours Contracts (which have spread like wildfire since the global financial sector meltdown), growing numbers of people are working for less than the minimum wage and many tens of thousands of people a month have been compelled under the threat of absolute destitution to work for nothing more than their benefits at highly profitable corporations under Iain Duncan Smith's Workfare compulsory labour schemes. One of the side effects of these unpaid workfare schemes is that they further drive down wages and working conditions for other working people, especially in the retail, elderly care and low-skilled manufacturing and service sectors.

The number of children living in poverty has risen by 300,000 in just one year and the disabled, the unemployed, pensioners and students from poor and ordinary backgrounds have also taken an economic battering in the last three years of Tory rule.

Everyone who is not experiencing massive wage inflation is being hit by the effect of high inflation. It should be absolutely obvious that the official inflation statistics are misleadingly low. House prices in London are growing more per day than the average worker earns for a whole day's work, rents are up, utility bills are skyrocketing, public transport, food, fuel and childcare have all risen in cost much faster than inflation, yet the official inflation statistics are manipulated to show a relatively low level of general inflation. Then there's hidden inflation, the fact that your mayonnaise jar or cereal packet just got smaller but the price stayed the same, and the fact that your beef burgers and lasagnas have been filled out with cheap horse meat from Romania, instead of British beef. 


Whilst this has been going on, George Osborne has been slashing taxes for corporations and the super-rich. His unprecidented cuts in the rate of corporation tax have created an artificial boom in corporate profits, fueling record dividends and the obscene inflation of corporate pay. The directors of the FTSE100 companies took home an average 33% pay rise in 2010, a 49% pay rise in 2011 and another 27% pay rise in 2012. On top of all of these extra earnings, George Osborne also handed them a lucrative tax cut in April 2013, meaning that the 13,000 income millionaires in the UK get an average £100,000 boost in their spending power.

Then there's Quantitative Easing; the £375 billion Bank of England money creation scheme that provided 40% of the extra spending power to the 5% of richest households, and eroded away the wealth of people with savings and pension schemes. This isn't just idle speculation, the Bank of England's own research confirms it.

Well, I guess you're eagerly awaiting the economic tip I teased you with in the intro, so here it is.

I've spotted a correlation between a certain type of person and good economic fortune under George Osborne's stewardship of the economy. 


George Osborne's father-in-law benefited for a massive reduction in the corporation tax rate for fracking companies, because he works as a lobbyist for numerous energy companies with financial interests in the fracking business. Then the Hedge Fund that employs George Osborne's best man was awarded £50 million worth of undervalued shares in Royal Mail, landing them a whopping profit of £25 million within a week as the shares rose up towards their true market value.

It seems that being a guest at George Osborne's wedding is a key to economic success in "austerity Britain".

You probably think that there's a glaring logical flaw in my advice; the fact that you weren't a guest at George Osborne's wedding in 1998. But don't worry, that's not a problem. In April 2013 the Tory party retroactively changed the law of the land in order to avoid compensating the victims of Iain Duncan Smith's unlawful mandatory unpaid workfare schemes. This means that Tories like George Osborne are quite willing to accept retroactive revisions to reality, so all you need do is retroactively declare that you were a guest at George Osborne's wedding in 1998 and then call him to demand your share of the economic favours he's handing out.


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Monday, October 21, 2013

Ed Davey's disappearing press release

In October 2013 the coalition government signed up to a ludicrous multi-billion pound price-fixing deal with a consortium led by the French state owned power company EdF, in return for their construction of a new nuclear facility at Hinkley Point C in Somerset. 


For full analysis of this ludicrous price-fixing deal check out this article:
               

12 Things You Should Know About ... The Nuclear Industry Price-Fixing Subsidies


One of the 12 points in the above linked article was a demonstration that the Liberal Democrat energy minister Ed Davey had performed a quite remarkable U-turn in order to support this absurd price-fixing scheme with comments like: 


"A new generation of nuclear power stations will cost taxpayers and customers tens of billions of pounds"
And
"This is an excellent deal for Britain and British consumers ... It will increase energy security and resilience from a safe, reliable, home-grown source of electricity"
I posted a link to an old Ed Davey press release from 2006 called "Say No To Nuclear" in which he claimed that:
"In addition to posing safety and environmental risks, nuclear power will only be possible with vast taxpayer subsidies or a rigged market"
The press release had sat there on his website for seven long years, but as soon as I started directing a bit of traffic towards it, it suddenly disappeared! What a coincidence eh? It's almost as if Ed Davey was so embarrassed at having his appalling hypocrisy exposed that he deleted it to stop people from seeing!

But since such a transparent effort to hide the truth conflicts so badly with the Coalition government's commitment to transparency and accountability, we must assume that there's been some sort of mistake.

It's a good job for Ed Davey that I had the foresight to take a screenshot of his press release and to make sure that it was listed on the Wayback Machine, just in case something should ever accidentally happen to it, and that I'm more than happy to share it around for him, considering he seems to be having such technical difficulties with his own website.




Please help Ed Davey out by sharing this content as much as you can. I'm sure he'd be more than grateful for your help in spreading this important Liberal Democrat message that has accidentally been deleted from his website.

 Another Angry Voice  is a not-for-profit page which generates absolutely no revenue from advertising and accepts no money from corporate or political interests. The only source of revenue for  Another Angry Voice  is the  PayPal  donations box (which can be found in the right hand column, fairly near the top of the page). If you could afford to make a donation to help keep this site going, it would be massively appreciated.
 

        
                                            

12 Things you should know about Tory nuclear price-fixing subsidies


Just a few short weeks after deriding Ed Miliband's plan to cap energy prices for 20 months as "price fixing" and "interference in the market" the Tory led government has signed up to a ludicrous 35 year price fixing deal with the French state run energy company EdF, in return for the construction of a new nuclear power station at Hinkley Point C in Somerset.

The Rip-off deal


The deal that has been agreed is an absolutely astonishing rip-off for the British taxpayer. The UK government has guaranteed to buy electricity from the new reactor at £92.50 per megawatt hour, which is almost double the actual market rate. The difference between the market rate for electricity and the strike rate of £92.50 will be made up by the taxpayer using Contracts for Difference (CfDs). This means that the electricity consumer will be paying for their electricity twice; once by buying it on the electricity market, and again through the taxes necessary in order to pay for the price fixing subsidies.


Dr Paul Dorfman, from the Energy Institute at University College London has calculated that these CfD subsidies will cost the taxpayer around £800 million - £1 billion per year. Over the 35 year life of the contract this will add up to a taxpayer funded subsidy of  £28 billion - £35 billion, which is double the estimated £14 - £16 billion construction cost of the entire facility!

David Cameron is lying again

David Cameron has such a shocking track record of lying to the public that it's got to the point where if Cameron says something, it's pretty safe to assume that the opposite is true. If Cameron says the NHS is "safe" in his hands, we know that it is in danger. If Cameron tells parliament that the UK has been "bankrupted", we can be sure that the UK is still solvent, and if he says that the Hinkley Point subsidies represent "an excellent deal for Britain and British consumers", we can be sure that we're getting an absolutely atrocious deal.

How divorced from reality would you have to be to state that a deal to pay £28 - £35 billion in price fixing subsidies for a piece of infrastructure that cost £14 - £16 billion to build represents an "excellent deal"?


Tory hypocrisy

I've already written a lengthy article exposing Tory hypocrisy over their opposition to Ed Miliband's energy price cap policy, so I'll be brief here.

If you are incapable of seeing how hypocritical it is to slag off Ed Miliband as a "price fixer" and "market rigger" for planning a 20 month maximum energy price to help electricity consumers, then within weeks agreeing a 35 year deal that guarantees a minimum energy price (at almost twice the natural market rate) to help energy producers, then there is something terribly wrong with you.


Ed Davey's spectacular U-turn
 
Ed Davey has certainly changed his tune since he sent out
this press release in 2006.
The Liberal Democrat energy secretary Ed Davey has done a lot of bragging about this ludicrous deal, but it is certainly worth considering his boasts alongside some of his previous comments about nuclear energy.

Here's what Ed Davey said in a press release he sent out in July 2006:

"In addition to posing safety and environmental risks, nuclear power will only be possible with vast taxpayer subsidies or a rigged market"
Davey was also behind the production of a Document called "Where will Tony Blair hide his nuclear tax bombshell" which made several assertions about nuclear energy:
"Recent international experience of the cost of nuclear power shows it remains highly uncompetitive"
"nuclear power is unaffordable and unnecessary."
It is quite remarkable that a man that invested so much energy in opposing nuclear power and criticising it as environmentally risky and highly uncompetitive is now the energy minister responsible for pushing through this rip-off deal, and talking it up with statements like this:
"This is an excellent deal for Britain and British consumers ... It will increase energy security and resilience from a safe, reliable, home-grown source of electricity"
It is almost as if the man has absolutely no principles at all that can't be bought off with a six figure ministerial salary isn't it?

Ed Davey's lie

Aside from singing the praises of a scheme that he would have been bitterly criticising had Tony Blair announced it in 2006, Ed Davey is also guily of outright lying to the public. Here's what he said:
"For the first time, a nuclear station in this country will not have been built with money from the British taxpayer"
Even if we ignore the fact that EdF only agreed to build the plant on the condition that the UK government use money from the British taxpayer to subsidise the plant by paying over the odds for electricity, this statement is still factually inaccurate.

If we look at the policy announcement in which this statement is made, we see in point five that "Hinkley Point C had been pre-qualified for consideration for a UK Guarantee. EdF and HM Treasury are in discussions regarding the terms of a potential UK Guarantee".

What this means is that EdF will borrow the money to build the plant from the UK government. The government claim that these loans are designed to fund infrastructure projects that have stalled because the commercial banks won't fund them. 


However if the market isn't lending, then government claims that these loans are being made "at the market rate" are utterly fallacious because these if the UK Guarantee loans were being made with the same conditions as the private banks, they wouldn't be made at all. If the market won't lend the money at a reasonable rate of interest, but the government will, then no matter what they claim, the government is clearly lending at below the market rate.
 

Not only will the UK taxpayer subsidise the Hinkley Point C project by paying over-the-odds for electricity for decades to come, they also look set provide EdF with a cheap supply of cash for them to build it in the first place. This means that Ed Davey is either lying through his teeth when he says that the British taxpayer won't be funding this project, or he is so incompetent that he doesn't even understand the details of the deal that has just been agreed, nor the UK guarantee negotiations that are ongoing.

Subsidising the French government

EDF is 85% owned by the French state. This means that the French state will be the main beneficiary of this price fixing deal to pay way over the odds for electricity. Perhaps the French state will use the profits from this energy price rigging scheme to reduce the cost of energy for French businesses and French households?

The Chinese are coming
 

The fact that the state owned China General Nuclear Power Group is set to have a 30% - 40% stake in the Hinkley Point C consortium means that French state won't be the only foreign government to benefit from this energy price rigging scheme.

The UK is already dangerously over-reliant upon the Chinese manufacturing sector (after decades of industrial decline in the UK, imagine how badly the economy would be hit if the flow of Chinese imports was slowed down or stopped), so handing the Chinese government control over our energy infrastructure too seems like an insane move, unless the objective is to deliberately weaken the standing of the UK on the world stage.

The Inefficient state hypothesis


The fact that the Tory led government are so delighted with the "deal" they've signed up to illustrates one thing absolutely clearly, that their privatisation agenda is a sham. It is an article of right-wing faith that the private sector is always more efficient than the state sector, however this stance is completely undermined by the fact that the UK is now reliant upon the French and Chinese states to build our energy infrastructure for them. If privatisation is necessary because the UK state is too "inefficient" to run its own energy infrastructure, then how on earth are the state sectors of other countries not riddled with the same kinds of inherent inefficiencies?

If the private sector is so efficient, why are there no private sector players lining up to out-compete the French and Chinese states? The answer is obvious. The whole idea that the private sector is inherently more efficient than the public sector is an obvious hoax.

The absurd right-wing free-market mantra that the private sector is inherently more efficient than the state, which was introduced by Margaret Thatcher and endlessly repeated by all of her successors, has left the UK in the ludicrous position where it is now reliant upon a country with a left-wing government and a communist regime to build its energy infrastructure for it, because the private sector has mismanaged the UK energy sector so appallingly over the last couple of decades.

Instead of signing deals with the French and Chinese governments to build our energy infrastructure for us, surely it would make more sense if the UK government built it themselves. If it was done that way, then at least there would be a veneer of democratic accountability to the project.


Privatised energy infrastructure

The problem with the idea that the UK should fund and build its own energy infrastructure is that so much of it has been sold off that we no longer actually have the means to do it. Take the existing nuclear infrastructure; John Major's Tory government sold off 8 nuclear power plants in 1996 for the astonishingly small fee of £2.1 billion. These facilities were run by a consortium called British Energy for a few years before they were taken over by EDF in 2009.

When these plants were sold off on the cheap, the UK state gave away its nuclear expertise to the private sector at a bargain basement price, then a few years down the line this expertise was handed over to the French state. Is it not amazing that eight fully functional nuclear plants were virtually given away for £2.1 billion, and now the UK is using price fixing measures to subsidise the French and Chinese states to the tune of £28 - £35 billion to build us a new one, and stumping up the cash for them to build it as well?

David Cameron has been bragging on about how many British jobs this price fixing scheme will create, but this is starkly contrasted by EdF themselves, who claim that most of the work can't be done by British companies because the UK energy market has been so badly neglected over the last few decades.


Here's what Ken Owen, the commercial director for nuclear new build at EdF said:

"There are a lot of critical components where quite frankly the UK has lost its capability. We don't mind that because we know there is capability from a global perspective"
The only parts of the contract that British companies are any good for according to EdF themselves, are the "muck shifting" elements. 

Had the UK invested in its energy infrastructure instead of flogging it all off on the cheap, perhaps Britain wouldn't be languishing so far behind high-tech economies?

Swimming against the tide

By commissioning new nuclear facilities the UK government is swimming against the tide. With the Fukushima disaster still ongoing, the Japanese are understandably keen to end their reliance upon nuclear power, but the French and Germans are also turning against nuclear power too. Germany has committed to ridding itself of nuclear power altogether, and even the nuclear fixated French are determined to reduce their reliance on nuclear power from 75% to 50% of their national capacity after a series of expensive cock-ups and nuclear shutdowns.

Perhaps such a massive investment in the nuclear industry might make some kind of economic sense if the UK still had a nuclear industry of their own and they were pioneering some kind of new nuclear technology, with a view to building up their national expertise and exporting nuclear technology to other countries, but using rigged energy prices to bribe the French and Chinese into building a nuclear power station for them makes no economic sense whatever.

  
Dirty technology 

The nuclear lobby loves to pretend that nuclear waste is
safely stored in high-tech underground facilities, but the
reality is that hundreds of thousands of tons are stored
in the form of Uranium Hexaflouride in open air facilities
like this.
As much as the nuclear lobby love to dress their industry up as clean and modern, the evidence is absolutely clear that it is a dirty and dangerous technology.

We only need to look at the ongoing catastrophe at Fukushima in Japan, which is still leaking radioactive waste into the ground and the sea two and a half years after the tsunami that crippled three of its reactors.

Even if we tell ourselves that tsunamis, earthquakes, other natuaral disasters or terrorist attacks are impossible in Somerset and look beyond the Fukushima disater, there's still the problem of nuclear waste.

Plutonium has a half-life of around 24,000 years meaning that it takes 120,000 years to become 3% as radioactive as it is today (still too dangerous to handle). Considering the fact there have been several major radiation leaks in the last few decades alone, the idea that the nuclear industry is capable of safely storing highly radioactive waste for over 100,000 years would be laughable if it were not so scary.
 
It is estimated that there are hundreds of thousands of tonnes of highly radioactive nuclear waste in temporary storage facilities all over the world. The only country in the world that is taking their responsibility to safely dispose of this waste with any degree of seriousness is Finland*. The rest of the world are happy to continue producing tens of thousands of tons of radioactive waste every year, without even bothering to plan for its permanent disposal.


For more detail on the nuclear waste problem see this article.

 Who will pay the clean-up costs?

One of the big issues that remains completely unanswered is who will be bearing the enormous cost of decommissioning the site at the end of its productive life, and who will be paying for the storage of the radioactive waste? The official government policy document makes absolutely no mention of either of these issues, so it is fairly safe to assume that under the Tory economic ideology of "Privatise the profits and nationalise the losses", the taxpayer will end up paying for the decommissioning and waste storage on top of the tens of billions in low interest loans and price-fixing subsidies that the government are so desperately obfuscating about.


Conclusion

The slightest amount of scrutiny shows us that this is an appalling deal for the UK taxpayer, which has tied them into paying over the odds for electricity for decades. The total cost of these energy price fixing subsidies looks set to dwarf the actual cost of the project.

The fact that the UK is now reliant upon the French and Chinese governments to construct its energy infrastructure is a damning indictment of the neoliberalisation process that saw our energy infrastructure transferred into the private ownership (mainly foreign interests) that neglected to invest in the infrastructure in pursuit of shareholder profits and lucrative executive salaries, safe in the knowledge that eventually the UK taxpayer would be forced to pay for the construction of the infrastructure that they couldn't be bothered to.

Now that the UK government's hand has been forced after two decades of private sector neglect, the fact that they have turned to the French government, and to communist China to build it is a crystal clear demonstration that the beloved
"private sector efficiency" mantra of the Tories is nonsensical and economically toxic gibberish.

The fact that this vast 35 year energy price fixing deal has come just weeks after the Tories bitterly slagged off Ed Miliband for proposing a 20 month energy price freeze must surely be one of the most brazen displays of Tory hypocrisy in history.


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