Keeping the fires burning

The major energy suppliers are getting the very bad press they thoroughly deserve and are being shouted at by mid-level politicians, although Mr Cameron and Mr Osborne are merely ‘disappointed’ at the latest round of the year after year across the board unwarranted price hikes. Jacked up prices that are deliberately made to extract even more profit from ordinary consumers, much of the lucre avoiding tax and going overseas, and which make it impossible for many people to keep their heating on and the home fires burning.
But why on earth would Mr Cameron and Mr Osborne be ‘disappointed’? What other sort of behaviour did they expect from these captains of industry (captains in the sense of Costa Concordia that is) – kindness of heart and concern for the common good?
Perhaps the kind of ‘free market’ fundamentalist economics books that the PM and the Chancellor have evidently skimmed don’t choose to cover the subject of oligopoly – an ugly word to cover an ugly situation where an industry is dominated by a few large firms.
One step down from pure monopoly, oligopolies come very close to the rank exploitative behaviour of an untrammelled private monopolist by behaving as a cartel. A cartel is where a market is rigged either through profit sharing (very rare) or price fixing (very common, as we know to our cost).
There doesn’t need to be a written agreement – in fact this is one of the few anti-social corporate behaviours that are actually illegal. But who needs to write it down? It’s so simple and a nod is as good as a wink. It’s as plain as a pikestaff. They all ratchet up prices by similar percentages without justification and take it in turns to go first.
I’d love to know if GCHQ has been monitoring the phones of the chief executives or finance officers of fuel and power companies and if so why they’ve done nothing to protect people from this evident threat. And I wonder if these executives are members of the same clubs or play on the same golf courses. These appalling excuses for companies then have the nerve to write obsequious letters to consumers to ‘explain’ the price ‘changes’. Their lack of morality is as bad as the banks and they deserve to be held in the same public contempt.
All of this is obvious to anyone outside government and there’s something else that is obvious too but which is rarely mentioned – privatisation is a catastrophic flop, is against the public interest and should be put into reverse. I hope that some of the MPs who are shouting will have the courage to draw this obvious conclusion and press for public companies in the public interest. But I doubt that many will. Perhaps some of them are more angry at their re-election chances being ruined than at hard pressed consumers being ruined or passing away with hypothermia.
But there are signs at last that the opposition (and even some figures from within government parties) is finding its courage. Let’s hope this is a trend that gathers pace and brings initial positive results before the depths of winter. The power companies hope that the sound and fury will die down, but these are fires that also need to be kept burning.

The Sky at Night

Some very good news! The BBC has announced that its record long running series ‘The Sky at Night’ will continue next year.
If you signed the petition, thank you and well done. From February 2014 the programme will be broadcast in a new monthly half hour slot on BBC 4 with repeats on BBC 2.
This is a great result and it’s very encouraging to see a national organisation responding positively to a widely supported public campaign. Let’s give the Beeb our support too as it continues to come under partisan political threat.

Capital Economics (Part 3)

Money is the root of all evil, so the saying goes. Though I don’t use the word ‘evil’ myself due to its superstitious associations, the saying does have a ring to it and conveys a useful message about capital-ism in this country today.
Whether it’s the overblown share of the economy held by casino bankers and acolyte ‘services’, the foreign money poured in by speculators to London property, the corporate profits funnelled through tax havens, the spurious loans at exorbitant rates from foreign branches to make profits look less here, the all-too-real loans at exorbitant rates extorted by usurers from desperate people, the rise of the pawnbroker and the unredeemed and sickening excesses of profligate executive pay, the bonus culture, the evisceration of industry and jobs in pursuit of profit, tax cuts for the rich and penury for the poor, the cartelisation of utilities, the privatisation of profits and the nationalisation of debt, the flogging off of the last of the national silver at knock down prices, and so it goes on.
You’ll get my drift, and you can add many further examples no doubt. All of this permitted, protected, encouraged or implemented by the government in the capital.
And I’d also like to single out the lure of lucre that has pulled so many talented young people, faced with the threat of debt, away from useful careers such as in real engineering into crash and burn financial engineering.
With the export of jobs and the abandonment of real apprenticeships we have lost so many skills at a workshop level and we seem also to have lost not only the ability but also the desire to do big engineering for ourselves. So without a care for consistency the government brings in foreign publicly owned companies at breathtaking prices to build, manage and finance nuclear power stations. The French and the Chinese will be laughing all the way to their own banks having secured a huge base price and incredible index linking for 35 years!
And the mayor of the capital saw nothing ironic in the proposal by a Chinese group to reconstruct the Crystal Palace, the original of which showed to all the world the power and scale of our industry and engineering in an age when these things were valued.
Oh, but aren’t I forgetting about HS2? Certainly I’d like to forget vanity projects with incredible projections when the colossal sums involved (one of the few credible projections) could be invested in really productive transport and industrial projects. Still at least the government won’t have to invest public money in the Co-operative bank now that it will be falling into the no doubt benign and ethical control of American hedge funds.
So what’s good about capital-ism in this country today? Good question! Answers on-line please (whoops, forgot about the tax dodging).

Capital Economics (Part 2)

Amidst the government cuts and pressures on the National Health Service and the even deeper cuts that are eviscerating local government there seemed to be an encouraging moment recently when it was announced that Mr Osborne was fighting for something!
But wait – it was to protect bankers’ bonuses against the predations of those dastardly Europeans. I suppose that at least this has an awful consistency with the equally determined fight against a financial transactions tax that would have taken some of the casino out of capitalism and helped to pay down the debt by less punitive and partisan means.
But more importantly for ministers, along with any bonus reductions it would also have taken out some of the major financial contributions to conservative party coffers. Could there be a connection here? If ever a case was being made for reform of political party funding it is here. But are we likely to see it? Which will come first, putting country before party or a signal from extraterrestials? My money’s on ET!
Still on the fantasy front we come to HS2. What a colossal expenditure for so modest a gain. An acquaintance who was a senior executive in the rail transport field told me that the claims for jobs generated were totally incredible. What would all those people be doing? There are many regional rail transport improvement schemes (including at least two in Birmingham) that would make a huge and very real difference to local economies cut down on traffic pollution and reduce commuting times for many more people.
And finally in this second of three related pieces I note the excellent performance of the one rail franchise in public ownership. This was taken back after the private operator gave up, having failed to make a go of it. The result? Substantial profit to the public purse and highly satisfied passengers. The government view? Needs to be re-privatised as soon as possible!
When practical experience and good sense conflict with right wing doctrine, guess which prevails. It doesn’t matter what the public sector does; it will never be good enough. Such are the irrational strictures of capital economics.

Capital Economics (Part 1)

Ministerial pronouncements in the last week or two have made it doubly clear that even if the government does not exactly live on another planet then it certainly lives in a different land – Londonland – to the rest of the country.
Mr Osborne’s boasts about GDP getting up off the floor at long last, government policy notwithstanding, have no real substance.
And that is precisely the worry about GDP itself with declining living standards for all but the rich and worse working conditions – ditto. Growth itself puffs up on the back of consumer spending (much of it on imports) and the start of a housing boom, mostly in London timed, I imagine, to last around two years to the other side of the general election. Where have we seen this before?
We already knew that Business investment was down and we now learn that industrial production also fell in August with the biggest decline for nearly a year. Industrial output fell by over 1%. The major factor in this decline was a substantial fall in manufacturing output, 1.2% down on July - the biggest fall since September last year.
So do we have a re-balanced economy and a broad-based, sustainable recovery? Not outside London and not outside the fantasy world of capital economics.