Monday 15th August 2022

[refitman]

Morning all

[frog222]

Morning refit

[frog222]

As @Sky wondered, Richard Murphy looked at this one yesterday--

Starmer’s plan has a direct consequence. Every household energy supplier in the UK would go bust, overnight. Whilst oil and gas companies are massively boosting profits at present the domestic energy distribution companies we buy from aren’t.
These companies buy energy in a wholesale market and if they are told to sell at a price well below that wholesale price then they will fail. Starmer faces two problems as a result.
First, he will need to work out whether it is legal to impose losses of this magnitude on companies. I suspect that at present it is not. Second, he will face massive claims for compensation from these companies that will enormously increase the costs of this scheme.

He's already been busy this morning,
https://threadreaderapp.com/thread/1559 ... 37312.html
but this one will run on all day,week etc !

[AnatolyKasparov]

Not everybody shares Murphy's outlook on this one, its only fair to point that out.

[Willow904]

I haven't read in detail but I get the impression that Murphy isn't really taking into account the fact that Labour have been proposing a much more significant windfall tax on producers than the Tories have actually imposed. So, in Labour's theoretical world, the retail arm pays the higher wholesale price to producers, the government uses a windfall tax to get at least some of it back and then give it to the retail arm to plug the gap created by freezing prices. The UK producers don't need the higher wholesale price because the energy isn't actually costing them any more to produce, it's a pricing anomaly caused by the global market. It's something that can be done quickly, which is what's needed at this point, and shouldn't be muddled up with arguments for long term energy reform, which is still necessary of course but is impossible to implement before October.

[refitman]

[gilsey]

Something that might be of general interest, or not, please yourself. Hosepipe bans are unheard of in NE England because Kielder Water. I was told at the time that it was built to supply industry on Teesside on the basis of projections which have proved to be massively wrong, but nobody's complaining. It would have to stop raining for something ridiculous like 200 years for it to run out.

One of their managers was on our local news at lunchtime, apparently it supplies water to the rivers Tyne, Wear and Tees as well as local reservoirs via a pumping station at Riding Mill, this year 820k litres/day against expected of 700k.

Last time Yorkshire ran out of water, mid-90s, they trucked water from a small reservoir on the A66 near Darlington for weeks and wore grooves in the road, it had to be resurfaced soon after.

Northumbrian Water also have a very good record on sewage discharges, etc.

(We live in Yorkshire but are on a private supply.)

[AnatolyKasparov]

I live in one of the few areas of England to have had at least close to normal rainfall this year.

[frog222]

£29Bn for the first six months and what about all the other six monthses after that ?
Oh and that was only for households !!!!

[AnatolyKasparov]

Well presumably there would be a review after six months?

And we perhaps shouldn't forget that Labour aren't actually in government......

[refitman]

Not being in government doesn't prevent them from coming up with good ideas.

[AnatolyKasparov]

Well this seems to be a pretty good idea overall, and popular. Its also telling that many of its critics seem to de facto favour means testing.

Its not a perfect masterplan in every detail, and indeed that's partly where not being in government comes in.

They can't actually *do* anything, just pressure those who can to do the right thing.

[frog222]

Well presumably there would be a review after six months?
And we perhaps shouldn't forget that Labour aren't actually in government......

Jolly good, a review, that will help matters
If there is no change in the worldwide market price for energy, let's do some more windfall-taxing and shake the magic money tree to keep the energy-distributor middlemen in business for another six months ?
And so on !
Some of those middlemen appear to be reasonable types cashing in on a nice little earner**
but others have been proven to be getrichquick shitehawks who've personally made off with millions while the taxpayer has to come up with a billion and more . For those weasels hedging was something to put around their newly acquired country houses .
( **I've read somewhere that no amount of hedging would have saved even the properly-managed who would not have survived those market movements without help . Not sure of my ground there on the help provided to them already ? )

In fact the whole system is a complete structural mess, and it turns out in the end that the state has to bail it out to some large extent, at the cost of great suffering and distress for some millions of people .

Of course if we have a world recession, well energy prices usually fall . Then there are other problems !

[RogerOThornhill]

Good evening.

I mean, we know Moylan is dim but this is off the scale...

[RogerOThornhill]

Oh, it gets worse...or better.

[frog222]

Oh, it gets worse...or better.

From the comments Moylan appears to have believed that America won the Vietnam War !

[frog222]

Very good short one from Nils Pratley !

” But a programme that costs £30bn for six months becomes vastly expensive if it has to be repeated for as long as wholesale prices remain high – a timeframe that is currently unknowable.”

Sneaky, he’s copying what I said above –

£29Bn for the first six months and what about all the other six monthses after that ?
Oh and that was only for households !!!!

OK, I’m joking but it ain’t rocket science
As @Sky wrote yesterday, it takes about five seconds thought ...

[AnatolyKasparov]

But that's not a "wounding critique" if you think universality is good.

Part of this - as was pointed out, to her great credit, by White's colleague Jessica Elgot today - is that lots of VERY RICH journalists who mostly mix with other VERY RICH types think there are far more VERY RICH people who "don't need" any help this coming winter than is actually the case.

And being pro means testing just to attack Starmer frankly appears a bit desperate and even brainwormy.

[Willow904]

I might be being a bit thick here, but what exactly are the government proposing for 6 months time when energy prices remain excruciatingly high and their spit in the sand to the poorest households runs out?
Indeed, what are the government doing to help business, that Labour are being hammered for overlooking but the government isn't?
And as for the obsession with means testing to make sure the undeserving rich don't get more than they should - if you're that worried about it just tax them more ffs!
I think it's possible that far more people are going to struggle to cope with such a sudden increase in bills than many in government and the media reporting on this currently realise. Even if most people cope, the knock on effect on the economy will be huge as money is diverted from elsewhere to pay for these rises.
And as for the ridiculous comment from Michael White about freezing prices at current levels not providing an incentive to save energy - where the hell has he been? People in all sorts of different income brackets are already struggling under the current price cap. There is already more than enough incentive to cut back from the rises we've already had. And the impacts of this crisis aren't evenly distributed according to income scales or social groups. A combination of factors are exposing some people to the impacts of the global price rises far more than others in ways that are quite random and arbitrary and almost impossible to fairly alleviate through targeted handouts.
Energy hasn't got any more expensive to produce so why should anyone, whatever their income, have to pay more for it?

[AnatolyKasparov]

And people on this board, at least, should remember the old maxim that "services just for the poor sooner or later become poor services".