Monthly Archives: October 2013

Kiran Stacey

In the wake of the Labour party conference, hacks returned from Brighton with one question for Tory advisers: how will you counter Ed Miliband’s energy price freeze?

We won’t, came the reply. We don’t want to get into a micro-battle about who has the best giveaways for the public on cost-of-living. We will keep the focus on the big picture, on the nascent economic recovery – how that is the only thing that can sustain rising living standards and only we can be trusted to safeguard it.

That policy made sense, and was stuck to for a few weeks at least. During his conference speech, the prime minister resisted the temptation to promise a big giveaway, or really, any significant policy whatsoever. His critics said it was lacklustre, his supporters said it perfectly matched the tone of “steady as she goes”. Read more

John Aglionby

Bosses from eight energy suppliers and the interim chief executive of the regulator, Ofgem, are appearing before the House of Commons energy select committee amid public and political anger at recent inflation-busting price rises.

By John Aglionby, Emily Cadman and Guy Chazan

 

Kiran Stacey

Yesterday’s pledge by David Cameron to “roll back green levies”, made in the heat of PMQs, apparently caught his coalition partners by surprise. While the government had been discussing reducing certain levies, the Lib Dems had not agreed to anything specific and did not expect it to be made public.

This morning, Clegg decided to seize the initiative. Clearly irritated by the prime minister’s decision to float policies without checking them, he decided to float his own idea, as anathema to the Tories as reducing green measures is to the Lib Dems – raising taxes.

He told the Today programmeRead more

Janan Ganesh

We get the politicians we deserve, but politicians do not always get the reputations they deserve. None has been short-changed by history more stingily than Sir John Major, the former British prime minister still invoked in some quarters – including his own Conservative party – as a synonym for haplessness and weak leadership.

Not the least of his qualities is a grown-up disinclination to fight for his good name. He could, as Margaret Thatcher did and Tony Blair still does, hover about in public life, talking up his achievements, nudging his successors this way or that. Instead, he has gone for a kind of dignified elusiveness. All we can surmise about his life now is that he puts his name to some good causes and still enjoys a Test match. Yesterday, a wowing guest turn at the parliamentary press gallery lunch restored him to the headlines for the first time in an age. Read more

Jim Pickard

What has happened? The government has promised to pay tens of billions of pounds of subsidy to the Chinese and French governments to get a new nuclear reactor off the ground at Hinkley Point in Somerset. The £16bn plant will provide 7 per cent of Britain’s electricity for six decades or longer.

Really? I thought George Osborne was a fan of free markets? You could say it’s very “free market” to encourage investment into one of Britain’s most sensitive industries from almost anywhere – including Beijing. Maybe less so to pay them a guaranteed price through to the middle of the 21st century. Read more

Kiran Stacey

Danny AlexanderYesterday the Treasury announced ten rural towns that it is putting forward for consideration to receive five pence off fuel duty. Given the fact that these towns could come from anywhere in the UK, you might expect the majority to come from England, with a few in Scotland, Wales and Northern Ireland.

But no. Of the ten places chosen, seven are in the Scottish Highlands, where Alexander himself is from. What’s more, eight are in seats held by Liberal Democrats – two towns are in his own constituency and four in those of Charles Kennedy, the party’s former leader.

Here is the full list: Read more

Kiran Stacey

HMS IllustriousBack in 2011, the FT broke the news that the MoD was looking to do something no other country in the world has done: privatise its procurement arm.

You can understand why the government felt this was necessary: buying weapons and equipment for British troops has often gone terribly wrong in the past – just look at the saga of the aircraft carriers with no planes to land on them.

The idea is being pushed by Bernard Gray, a senior civil servant (and former FT reporter) in the MoD. Gray wants a particular model of privatisation, whereby the public would own the company that buys weapons on behalf of British forces, but private companies staff and run it. This model, known as a Goco, would run in the same way the British Olympics Authority did.

But the plan is starting to unravel. Two years after it was first floated, detailed negotiations between the government and two consortia competing to run the new company are starting to break downRead more

Kiran Stacey

At his 2011 conference speech, Ed Miliband argued there were two kinds of business: “predators” and “producers”. The speech was not well received, not least because the bluntness of the message was not even backed up by any concrete examples of companies that fell into either category. Miliband’s attacked was drastically weakened by the fact that he was not willing to name any specific targets it was aimed at.

Well now he has. Last week, the Labour leader told the FT that SEE, the energy company that is raising bills by 8.2 per cent, was engaging in “predatory behaviour”. Today at PMQs, he went even further – but even more interestingly, he argued against one of the central tenets of free-market capitalism.

Arguing against SSE’s action, Miliband said: Read more

Jim Pickard

State “energy and climate change” policies – including subsidies for wind farms and nuclear power stations – will add 41 per cent to the price of electricity in the UK by 2030 according to forecasts by the energy department.

Green measures including billions of pounds of subsidy for low-carbon generation will lift the price of electricity from £149 to £210 per MwH, the government’s own officials have predicted.

That forecast comes as ministers are poised to announce that they have struck a deal to guarantee the price of power from a new nuclear power station at Hinkley Point for decades into the future.

The energy department has predicted that actual bills will fall by 11 per cent by 2030 as household products become more energy-efficient millions of people insulate their homes, more than offsetting the rise in green subsidies.

But critics suggest this is optimistic given the paltry take-up of the coalition’s flagship Read more

Jim Pickard

From (almost) day one I have been arguing that the reforms to Labour’s union funding were not quite the seismic shift that everyone first thought.

The reasons why are a bit convoluted but I tried to explain it in this Q&A a while back.

In essence, the trick is that the millions of pounds flowing into the unions will stay the same.

What is changing is that the percentage of that cash which then automatically goes to Labour is set to decrease – presuming that many of the 3m affiliated members don’t sign Read more

Any new graduate wanting to learn about how companies should handle tough public policy questions should study how the energy companies have responded to Ed Miliband’s proposal to freeze utility prices in his party conference speech three weeks ago. Their actions and comments have been a masterclass in how to make a difficult situation worse.

We have had a mixture of denial (“they’ll never get elected”, “he didn’t really mean it”, “the lawyers will stop him”), mindless abuse (“I don’t think people want to live under Stalinism”) and fear tactics which usually mention the prospect of the lights going out. No one in the industry has bothered to think about why Mr Miliband’s comments have proven so popular.

 Read more

Kiran Stacey

Ed Miliband and his shadow cabinetDespite the protestations of those close to Ed Miliband, yesterday’s Labour reshuffle looked very much like a cull of the Blairites. Jim Murphy, Ivan Lewis, Stephen Twigg and Liam Byrne, figures associated closely with Tony Blair, were all demoted. For someone like Jim Murphy, who had been told what a good job he was doing by the leadership, that came as a surprise to say the least.

So it was no surprise when Dan Hodges, the Telegraph blogger, wrote this morning:

The biggest impact will be on Labour’s fragile, and mythical, unity. Until now the remaining Blairites in Labour’s ranks have been content to sit back and wait for Ed Miliband to lose the 2015 election, then pick up the pieces afterwards. They will see today as an act of war. Miliband has signalled there is no place for them in his party, and they will respond accordingly.

 Read more