Liz Truss has replaced Boris Johnson as prime minister of UK. The first obvious step intended to show the direction the new government intends was a budget presented by new Chancellor Kwasi Kwarteng on Friday. Kwarteng fired the Treasury's permanent secretary in the preperation of this budget.
There is a cost of living crisis in UK driven by runaway inflation and massive increases in energy bills. Despite this, Truss and Kwarteng's budget benefitted the already stinking rich. The top rate of income tax of 45% for the highest earners was abolished so that the highest rate is now 40%. Clearly that's going to benefit the rich and the very rich most.
Despite denials, this is trickle-down economics with the idea being that the economy will be stimulated by the highest earners and that benefits will trickle-down to all. There is a simple, logical argument against trickle-down economics. It is that the rich already have money that they can spend to stimulate the economy and they're not doing it, if they're already not spending their wealth, why should they now start?
There is also an alternative, logical argument that to stimulate the economy it's best to instead help the poor. The argument is that the poor are desperate and that any money they receive to alleviate their wreched situations will be spent and therefore stimulate the economy.
It appears that Liz Truss and her Chancellor Kwasi Kwarteng are pursuing outdated, discredited and abandoned economic theories which are the exact opposite to what is needed. Markets responded poorly to the budget.
Britain will be plunged into an even worse energy crisis in a year’s time without an immediate plan to improve leaky homes and dramatically reduce demand for gas, ministers have been warned.
The UK ranks among the worst in Europe for the energy efficiency of its homes, according to new research outlining an urgent need to reduce the amount of heat being wasted. Experts are warning that while Liz Truss has bought the government time with her £100bn-plus package to cap energy bills, similarly expensive and unsustainable schemes will be needed unless substantial plans are introduced to improve homes and reduce demand.
Experts believe a serious energy-efficiency programme could have a real impact within a year. The institute pointed to Germany as a success story, where grants, low-interest loans, tax rebates and free expert advice have all been used, resulting in high take-up figures.
Government plans to reduce sewage spills in English waters fail to include hundreds of storm overflows into estuaries and the sea, according to new analysis.
In the government’s draft storm overflow discharge reduction plan the only coastal overflows that must cut spills are those near designated bathing sites, but it’s not clear what distance is classified as “near” one, according to the Marine Conservation Society.
Its analysis found that around 600 coastal sites therefore won’t have to reduce the number of times they spill sewage into the sea, some of which could be near Marine Protected Areas.
Meanwhile, for inland waters and designated bathing waters water companies must not discharge sewage more than an average of 10 rainfall events per year by 2050, according to the draft targets. A rainfall event is up to 12 hours of rain.
By 2050? Looks like UK government shits are quite content with UK swimming in shit. I suppose it’s only poor, insignificant people after all. Rich people can swim at European beaches of course …
Britain’s “despicable” dumping of raw sewage into the sea threatens human health, fishing grounds and marine life in the English Channel and the North Sea, says a French MEP leading a campaign to sue the British government.
Stéphanie Yon-Courtin told i that she was shocked by the surge in cases of Britain’s sewage overflows seeping directly into the sea, which “reflects the image of the government.”
“reflects the image of the government.” = full of shits
Raw sewage dumped into England’s rivers 375,000 times last year – BBC News
The Tory leadership frontrunner, Liz Truss, was responsible for cutting millions of pounds of funding earmarked for tackling water pollution during her time as environment secretary, the Guardian can reveal.
Truss, who was in charge at the Department for Environment, Food and Rural Affairs (Defra) between 2014 and 2016, oversaw “efficiency” plans set out in the 2015 spending review to reduce Environment Agency funding by £235m.
This included a £24m cut from a government grant for environmental protection, including surveillance of water companies to prevent the dumping of raw sewage, between 2014-15 and 2016-17, according to the National Audit Office.
Yet public ownership is opposed passionately by the Conservative government, while the leader of the opposition has said he is “not in favour” of it – despite his election on a platform that committed to “bring rail, mail, water and energy into public ownership to end the great privatisation rip-off and save you money on your fares and bills”.
Public ownership is on the media’s radar, too. When Labour leader Keir Starmer announced his policy to freeze bills this week, he was asked why he wouldn’t also nationalise energy, replying that: “In a national emergency where people are struggling to pay their bills … the right choice is for every single penny to go to reducing those bills.”
But so long as energy remains privatised, every single penny won’t. Billions of pennies will keep going to shareholders instead.
The energy market was fractured under the mass privatisations of the Thatcher governments in the 1980s. It contains three sectors: producers or suppliers (those that produce energy), retailers (those that sell you energy), and distribution or transmission (the infrastructure that transports energy to your home).
It is important to bear this in mind when we’re talking about taking energy into public ownership. We need to be clear about what we want in public ownership and why.
By 2019, Labour had a detailed plan on how to do this – worked up by the teams around then shadow business and energy secretary Rebecca Long Bailey and then shadow chancellor John McDonnell. The plan is not the only way, but it illustrates what exists and how one could go about re-establishing a public energy ecosystem, run for people not profit.
The recent TUC report shows the cost of nationalising the ‘Big 5’ energy retailers – British Gas, E.ON, EDF, Scottish Power and Ovo – to be £2.8bn, which would go on buying all the companies’ shares. That’s a lot of money, equivalent to more than the annual budget of the Sure Start programme in 2009/10 (its peak year). But it’s a one-off cost, not an annual one.
And it’s not like the current privatised system doesn’t have its costs: since June 2021, the UK government has spent £2.7bn bailing out 28 energy companies that collapsed because they put short-term profits ahead of long-term stability – companies like Bulb Energy. We have spent billions of pounds already to get nothing in return. So £2.8bn is not a large amount of money to pay to gain these assets, rather than just bailing them out.
The big energy retail companies made £23bn in dividends between 2010 and 2020 according to Common Wealth, and £43bn if you include share buy-backs. What you choose to do with that surplus in public ownership is another matter: you could use it to invest in new clean energy or to lower bills or fund staff pay rises, rather than subject your workers to fire-and-rehire practices as British Gas did last year.
Labour’s previous plan also involved taking the distribution networks – the National Grid – into public ownership. This would end the profiteering at this level, too – with £13bn paid out in dividends over the five years prior to 2019. As Long Bailey said at the time, we need “public driven and coordinated action, without which we simply will not be able to tackle climate change”. Like previous nationalisations, the purchase of the grid and distribution networks could be achieved by swapping shares for government bonds. By international accounting standards, the cost is fiscally neutral as the state gains a revenue-generating asset, which more than pays for the bond yield.
The final part of the plan – and the most complicated – is production and supply. It would be impossible to nationalise the oilfields of Saudi Arabia or Qatar – and for good reasons we should want to leave fossil fuels in the ground, anyway, rather than contest their ownership.
And so what Labour proposed in 2019 was a mass investment in new renewable energy generation projects, with the public sector taking a stake and returning profits to the public. For example, under the ‘People’s Power Plan’, we proposed 37 new offshore wind farms with a 51% public stake, delivering 52GW alone by 2030, equivalent to 38 coal power stations. There were additional proposals for onshore wind, solar, and tidal schemes, as part of a 10-year £250bn Green Transformation Fund, which included other schemes like the Warm Homes insulation initiative.
Labour’s new shadow chancellor Rachel Reeves has promised a similar level of investment – a £28bn a year climate investment pledge.
Any surplus energy would then be sold on international markets, with a People’s Power Fund – a sort of sovereign wealth fund – to deliver public investment in local communities’ social infrastructure: a genuine levelling-up fund, perhaps.
Many people will say this can’t be done, but of course it has been before. The 1945 Attlee government nationalised energy and successive Conservative governments – including those of Churchill, MacMillan and Heath – were happy to have a nationalised asset. Harold MacMillan famously accused Margaret Thatcher of “selling off the family silver” when she privatised state industries.
When I was born in 1979, the National Coal Board, British Gas and British Petroleum were all publicly-owned or majority publicly-owned companies. Between them, they were the major suppliers of our energy. Our gas bills came from British Gas and our electricity bills from our regional electricity board (in my case Seeboard, the South Eastern Electricity Board), and coal and oil fuelled our power stations.
The regional electricity boards had been brought into being by the Attlee government’s Electricity Act 1947, when electricity companies were forcibly merged into regional area boards and nationalised. The Coal Industry Nationalisation Act 1946 and the Gas Act 1948 had together brought energy into public ownership.
Seeboard was privatised in 1990, and later became part of EDF Energy – ironically, the nationalised French energy company, whose profits from the UK’s stupidity are used to subsidise French consumers.
The French government has now fully nationalised EDF (previously it was 84% publicly owned), and household energy bills rose by just 4% this year – compared to over 50% in the UK and a forecast 200% by January 2023.
If Starmer doesn’t want to listen to me (or his own commitments from 2020), perhaps emulating the centrist Emmanuel Macron in this instance would be palatable?
From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources
In his later years, Robin Cook argued: “The market is incapable of respecting a common resource such as the environment, which provides no price signal to express the cost of its erosion nor to warn of the long-term dangers of its destruction.”
From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources. The market has also failed to decarbonise at pace, or to end the scourge of fuel poverty.
On the media this week, shadow energy secretary Ed Miliband said Labour is “continuing to look at what the right long-term solution is for our energy system”. It is up to all of us to campaign for that solution to be public ownership – whether that’s from within the Labour Party (like me) or from the outside.