An Open Letter to Ed Milliband

Dear Mr Milliband

Old Labour, New Labour, One Nation Labour…What does it all mean exactly?

I am old enough to remember when the political parties put forward their principles, ideals and aims, together with the policies they believed would achieve those aims. The electorate would then have the opportunity to choose the party which most conformed to their own beliefs. And I think that the last party leader to do that was Margaret Thatcher. (She wasn’t my choice, but it worked for her!)

Since then there has been a not too subtle change in approach, so that at best, the parties try to dress up (or dilute) their policies in a way which will appeal to as many different sectors of the voting public as possible; or at worst, try to discover what policies would most appeal, and then shoe those policies in to their own manifestos regardless of principle. (The immigration debate is a case in point.)

For some reason the policy makers believe that the general public don’t sense this; and tragically, these days, they are often right, not because voters are not intelligent, but because we have become bored with the institutional cynicism thus displayed.

What happens in other countries?
It is fascinating to compare our situation with that in other Western countries. For example, take infant mortality. The highest level (per thousand live births) is USA, and the lowest is Sweden. Child poverty: highest in USA (by a long way) and lowest in Denmark. Gender inequality: worst in USA, best in Sweden. Environmental sustainability: worst in USA, best in Nordic countries (and Switzerland). Income share of the top 1%: USA over 18%, Denmark 4%. And the point of all this? Where these figures are represented on a graph, UK come up roughly in the middle of the countries represented. But there is one more graph, which, significantly, shows that in all respects, the best performing countries are those where tax is highest as a percentage of GDP.

In the UK it appears that the two main parties are competing to achieve the lowest taxes per capita, and the result is the present misery and inequality. But the labour party have a very strong advantage in their ‘battle for hearts and minds’. It would not be against party dogma to increase taxes, and it would lose almost none of their core votes. Imagine how popular it would be, for example, if all those earning, say, half a million or more were to pay 90% on anything above that threshold. And how many of those will ever vote Labour?

The current tax regime in this country is one which favours the very rich. Thus the very rich have an enhanced influence on the direction of Government, which in turn has an adverse effect on democracy. It can be shown (in addition to the statistics shown above) that the greater the gap between rich and poor, the less notice Government takes of the opinions of the general population. This is evident at the moment, for example, in the ‘fracking’ debate, the GM food debate, the HS2 debate and many other areas. MPs, and MEPs, seem increasingly reluctant to engage with their constituents (although that is only my own experience rather than a statistical fact, and particular to some Conservatives and UKIP!)

Something to recognise is that people earning a very high income are generally uninterested in their pay packet, except as a measure of their success when compared to their colleagues or competitors. The level of tax is irrelevant to them when applied across the board. After all, they certainly have adequate spending money!

History shows that a regime which taxes high earners heavily does not drive a significant number of them to move away. They are generally motivated by love of their job and a competitive spirit, not a desire for another Ferrari! And when a few footballers or pop stars or even the occasional banker do depart, there are plenty more good people waiting in the wings. But the additional tax revenue can fund improved services, and very importantly, many new council houses (not available for sale to tenants). Employment would rise. Families would afford child-care, and mothers could go back to work. Benefit budgets would reduce. A cycle of increased prosperity could begin. SMEs would begin to prosper, and they are much more important to the average man or woman than the huge transnationals, who are only trying to please international shareholders, not British customers.

An enlightened approach, along the lines adopted by the prosperous and high taxed economies in the Nordic countries, could begin a steady climb to the sort of living standards which we all crave.

Our collective minds have been deadened by the oft-repeated mantra from both main parties that low tax is good for business and the economy – but the facts indicate this to be totally false. Back in the last century, when my father, a confirmed Tory voter, was paying ‘supertax’ at a rate of 19s 6d in the pound, the country was arguably in a worse state than we are now, but the welfare state and the NHS had been put into place after the war and the gap between the rich and the poor was at a completely reasonable level. Democracy was working.

Now look across the Atlantic, at the richest economy in the world, where infant mortality is the highest in the developed world, as is obesity, and the rich/poor divide; and tax revenue as a percentage of GDP is amongst the very lowest. This is not a situation we should wish to emulate.

My point is this, Mr Milliband. Go back to first principles. Stop trying to compete with the Conservatives, whose dogma-driven agenda will undoubtedly continue to fail. Austerity didn’t work in the great depression in the USA, and it was not what saved us after the Second World War. It is doing us untold damage now. Please, let us hear something new and challenging, not just more of the same! As things stand, I wouldn’t vote for any of the three mainstream parties (and UKIP are a joke!) and I am begging you to give us all a credible alternative!


Yours sincerely

A disillusioned voter

Tim Thomson

PS Much of the information I have referred to above has been stolen from a brilliant book by the Canadian journalist Linda McQuaig, with Neil Brooks, called ‘The Trouble With Billionaires’.

Do We Miss The Empire?

Are we still imperialistic meddlers? We (UK, our politicians, our Government) do so often come across as having tunnel vision – and furthermore the tunnel appears to have a bend in it a short distance ahead, cutting off any extended vision! We just don’t seem to be able to see the consequences of our actions.

Forget our interference in the Middle East from early in the last century, brought about by our desire for oil and our belief in our own racial superiority. But we invaded Iraq on the say-so of probably the worst President the US has ever had, and when Bush declared to the world that the mission had been accomplished, he clearly didn’t understand what he had started. And to this day Blair claims that Iraq is a better place now than it was under Saddam Hussein: there are many who disagree!

Afghanistan has been a more complex problem in many ways – certainly some reaction to the 9/11 attack was necessary. However when the US starts something it seldom knows how to finish it, and it seems likely that when we all pull out of Iraq, the nation building will go into reverse.

Syria: now that is a real mess. It seems that Assad was responsible for the start of the uprising, in conjunction with climate change. He failed to support farmers during extreme drought conditions and to survive, the farmers were forced to move to the cities, where work was scarce, accommodation limited and discontent was rife.

Meanwhile we went in to Libya with all guns blazing, to claim our bit of the Arab Spring. I don’t suggest that that particular action was not justified – many lives were saved. But in the aftermath, our rhetoric was not constructive, with the result that the Syrian ‘rebels’ assumed that we (the West) would do for them what we had done for the Libyans. We did very little to discourage that view, whittering on as we did about Assad’s time being up etc. etc. Because we made it very clear which side we were on, the rebels thought they were onto a winner, in the mistaken belief that the West had their back; and of course that drew in a few outside interests like Al Qaeda, and other wannabe jihadists – until gradually the rebels (or ‘opposition’) became an increasingly fragmented collection of groups, mostly with differing agendas.

What next? Oh, yes! We and the French vetoed the continuation of the European arms embargo on Syria! I don’t know who we think we are but a superpower we are not. All other European countries opposed this veto, but we knew bestand that veto certainly fired up the rebels. It also had a few other rather serious consequences. First, Russia indicated that it would consider it permissible to send arms to Assad’s forces. Then Lebanon became involved and Hezbollah sent in the troops to support Assad, which put the rebels in retreat. All this has increased the mass of refugees to neighbouring countries, who are scarcely equipped to cope. Another interesting consequence is that Austria has withdrawn her troops from the UN Peacekeeping force in the Golan Heights, making the border between Syria and Israel more vulnerable and sending out all the wrong signals. Israel of course is, as usual, a little paranoid as well as being well armed!

But why did we insist that the arms embargo be lifted? Oh yes, to send a signal which was supposed to make Assad come to the negotiating table! Yeah, right…As if he needs to! He has no scruples about wiping out anyone in his way – and if we do send in arms, who do we send them to? We just don’t know who is in charge or who will be in a week’s time. But by our grand gesture we have opened the floodgates, provoking an escalation in hostilities, and increasing the potential for neighbouring countries, with their sponsors, to be drawn in. Each side of the conflict is being brutal, and probably each side is using chemical weapons – why wouldn’t they? Assad is rightly confident that Obama’s ‘red line’ on that subject was meaningless.

If we had used different rhetoric after Libya, proclaimed our neutrality regarding Syria from the start, and worked to broker a deal from that neutral position instead of saying ‘Assad must go!’, thousands of lives could have been saved, thousands of refugees might still have a home, and neighbouring countries might have stayed at home.

But Assad’s approach to human rights is unacceptable! Of course it is, as was Saddam Hussein’s and Gaddafi’s, both erstwhile Western allies, loosely speaking, (remember the Blair embrace?) but so is Saudi Arabia’s, so is Bahrain’s. And consider the consequence of a rebel victory in Syria! I know what it would not be – peace!

We cannot remodel the world’s nations in the way some would like. It is presumptuous in the extreme to try, particularly in the light of a strong groundswell of opinion in England against letting anyone enter, or interfere with, the UK!

Our ‘special relationship’ with the USA has dragged us into no end of scrapes – why do we think it is so valuable? It is after all a two way street, isn’t it? Maybe we should just acknowledge the fact that the USA is on the way down and China is on the way up, and that we are a little peripheral country who ought to mind its own business! The only reason we are occasionally invited to the top table is because we are a nuclear power – and there seems to be a diminishing justification for that! It draws in the terrorists like moths round a flame, but if a terrorist went nuclear, who would we fire ours at? We would be like a blind man in a crowded room with a machine gun.

I try to live by this maxim; ‘Happiness lies in being content with what you’ve got.’ It works for me; perhaps it would work for Britain.

Full of Sound and Fury, signifying what exactly?!

The Eurozone is worried! Beppe Grillo has certainly stirred the pot. In the Italian election his ‘movement’ grabbed a quarter of the votes, propelling 160 or so non-politicians into politics. I believe the most pertinent question we should all be asking (and it is relevant to all of us) is why did the voters vote this way? Perhaps after the antics of Berlusconi (including passing laws specifically designed to exempt him from prosecution) and then coping with his rather grey successor who they never voted for, and who subjected them to austerity and mass unemployment, they took the view that to go through all that for the sake of some European intangible ideal was not what they wanted. Perhaps their frustration with the day-to-day political merry-go-round finally got the better of them. Perhaps they want to try something different!

Could this be the glimmer of the beginning of a shift away from the conventional growth-obsessed thinking of ‘the usual suspects’, and towards a carefully controlled steady state economy?

There has been plenty of corruption in Italy’s politics for years – but take a look at the politics of the rest of the world. We in the UK are always so smug about our ‘mother of parliaments’ image, but really we are no better than the others. Although ‘corruption’ is a word generally applied to the dishonest use of money or power in government, I would apply it more widely; to include, for example, politicians who misrepresent their motives and ambitions. We have had the Iraq war, clearly fought on a false premise, ‘cash for questions’, the expenses scandals, Chris Huhne’s ill-judged antics, all of which have caused us to question the integrity of our politicians. And now the accusations against Lord Rennard – concerning which we are still being ‘spun’ a dilution of the facts.

In the USA, the public are continuously misled on a grand scale – their Iraq war (again on false premises), the subjugation of their politics to Big Oil, Big Agriculture, Big Pharma, the NRA and other groupings (including religious ones) who continue to mislead on food safety, energy, sustainability, climate change, environmental issues and the manipulation of their tax dollars to favour those who least need help but who chase power and wealth.

The level of corruption in the African countries, Spain, Greece, South American nations and most others is a phenomenon we are frequently alerted to by the media – and certainly the media themselves are not above scrutiny.

Some more fanciful commentators have drawn a parallel between Grillo’s Five Star movement and the so-called Arab spring, suggesting that Beppe Grillo’s arrival on the political scene heralds the start of a Europe-wide anti-political movement. But in fact this trend became internationally visible a while back with the Occupy movement, although the anti-globalisation protests predated that. Because the Governments in Europe and the USA are in favour of free speech (at least superficially), the Occupy movement has a harder row to till; such movements thrive on opposition.

But consider for a moment the bye-election in Eastleigh, Hampshire, the seat vacated by the disgraced former Minister Huhne. More than a quarter of the vote went to UKIP. Why? I presume some people voted for UKIP for their stand on European membership and immigration. But that is a less convincing suggestion since David Cameron announced his intention to hold a referendum on Europe, which could potentially address both those issues. Very few people, I would suggest, are in sympathy with most of the other UKIP policies, such as their antipathy towards any kind of green agenda, so we must assume that it is another example of ‘a plague on both your houses’. (Interestingly, in a post-election poll in Eastleigh, most of the ex-Tory voters admitted that at a general election they would return to the Tory fold.)

However our UK parliamentary system does not readily lend itself to a ‘Grillo’ situation, especially since the complete mismanagement of the referendum on our voting system. (A good example of a question constructed to achieve the desired result!)

Perhaps our politics need some kind of purge. To many, our political systems in Europe are not fit for purpose any more. There are too many laws and restrictions, a proportion of them increasingly unenforceable and seemingly pointless, and many of them apparently designed to protect us from ourselves! Taxes take an increasing proportion of earnings to pay for top-heavy administrations and projects which most individuals see as irrelevant to their lives.

So what does Mister Average Voter want? Disillusionment with the well trodden political path taken by every party when in power, notwithstanding election promises or political colour, leaves him bewildered, bored and disinterested. Despite the rose-tinted publicity material spread through constituencies at election time, politicians just don’t have the charisma, imagination or will to do anything new. No matter what they say, we know that there will be no substantive change to the way our Country is governed, only, perhaps, a new and more polished way of presenting it.

We could do with a Grillo to break the mould. Beppe Grillo has stated that his movement will not support any political grouping, but will act as an opposition party. To avoid instability and political break-down, the right and the left will be forced to work together. The potential ramifications of failure are huge throughout Europe, and particularly the Eurozone. After all Italy is not Iceland. The Icelandic Government takes credit for turning its back on its own banks (in response to a referendum vote on the matter), and allowing them to fail, despite protestations from Europe. The new prosperity in Iceland shows the virtue of that course of action. If Italy did the same (and exited the Euro) that would really give us all a good shaking. Perhaps that is just what we all need! There would certainly be plenty of misery, but perhaps it would be relatively short lived, and might free us from the chains of our present form of democracy, allowing us as individuals to relearn how to rely more on ourselves and our communities, and less on the State. Then we could start voting for what we want, instead of voting against what we perceive to be the marginally worse option!

The Grand US Energy Bubble

How did the human race progress from cave dwelling to space station in such a relatively short time? Is it through our ability to learn, to build on what we have learned and then to learn from what we have built? But in this modern world, many of us have allowed that ability to become dormant, in favour of a desire for power, wealth and acquisition. And so we perhaps should not be surprised that many wealthy bankers seem to have lost the ability to learn from previous experience. Back to this later!

There has been some publicity over the last couple of years on the immense gas and oil reserves discovered in the USA, to be accessed by miraculous modern technology such as ‘fracking’ and horizontal drilling. It is proposed that the tar sands being mined in Canada will further supplement the USA’s insatiable need for fuel via the Keystone XL pipeline. We are told (by bankers?) that the USA has become self sufficient in fossil fuel for the foreseeable future. Yeah right!

The Americans (by which, of course, I mean the North Americans!) are desperate. They do not want to remain dependent on external supplies of fossil fuel. So they (including President Obama) are pulling out all the stops to avoid that dependency, with the willing help of the banks, naturally.

Let us consider the tar sands in Canada; this is actually a fascinating subject on its own. The Canadians say to the Americans, ‘if you want the crude from tar sands you have to build a pipeline (the Keystone XL pipeline) to take the crude to your refineries, otherwise we can find plenty of other customers for the crude!’ The pipeline is going to cost around $7 billion, which in the scheme of things is small change.

But to process the tar sands to produce the crude, they need copious quantities of natural gas (about a fifth of Canada’s entire production). They also need a lot of water, and a lot of diluent. Diluent? OK – to allow the stuff to flow through a pipeline it has to be diluted with some kind of light oil, which at present they are importing at a rate of up to 200,000 barrels a day. They could produce it themselves, from the bitumen they are digging up, but that is very expensive too. And by the way, there is a limit to the amount of gas they can use, because they have domestic users, as well as a binding agreement to export a proportion of the gas they produce to America! So we can deduce that production of crude from these tar sands is incredibly expensive, hardly cost effective, and about as efficient as you can get at producing greenhouse gases! Unsurprising therefore, that Canada pulled out of the Kyoto protocol!

The President long ago expressed his support for the pipeline – the only reason for a delay has been the choice of route. But the Americans are grasping at straws – the product will barely supply 10% of their daily needs, and at a massive production cost and a very small net energy gain. Globally Canadian tar sands are a drop in the ocean at massive environmental costs, and because of the restrictions on production in terms of energy, water and transport, it is hard to see a long term future for the process.

But don’t worry, the USA has its own stock of tar sands (not much), shale oil and shale gas.

It seems that this ‘revitalisation’ of the American energy industry attracted the attention of the investment bankers. I don’t pretend to have the slightest idea how investment finance works; but evidently money was poured in to the extent that production amounted to four times demand – resulting in a catastrophic drop in price, and a desperate drive to export to where prices were higher. The result has been that production costs have exceeded prices by a significant amount, resulting in a phenomenal amount of business in the mergers and acquisitions market, and thus huge profits for the banks.

Let us switch for a moment to considering the traditional and diminishing oil industry. You may remember that a gentleman called M King Hubbert produced the famous Hubberts curve in 1956, a graph which he used to predict that American oil production would peak somewhere about the late sixties or early seventies. There was much criticism and disbelief, but he was proven correct in his thinking as American oil production peaked in 1970. Hubbert was able to apply his mathematics to individual oil fields, oil producing countries and by extension to the planet, predicting that world oil production would peak in the early 21st century. Nothing yet, not even this latest alleged US bonanza, has shown him to be wrong.

You can apply Hubbert’s curve to almost any non-renewable resource; but it seems that the curve, which indicates a rise, a peak and then a decline in a roughly symmetrical format, doesn’t readily lend itself to these modern production methods. And the reason is this: the depletion rate of these wells is extremely fast, so instead of a gentle decline after the peak we have a cliff. To maintain production levels new wells need to be brought on stream all the time, at a cost of many billions of dollars. Required input annually to maintain current shale gas production in the States is around $42 billion. (Lucky we have those bankers!) Value of shale gas produced in 2012 was $32.5 billion! Shale oil is also horrendously expensive to produce and a well’s production rate will decline by in excess of 80% in the first 24 months. Tar sands produce oil at a cost of about $100 dollars per barrel, which leaves little room for profit! Many of the production sites of all these fossil fuel elements are already in decline. It seems unlikely that this 'foreseeable future' could last more than another five years or so!

The reason that Hubbert’s prognosis has proven so accurate time and time again is because, self evidently, the oil companies go for the easiest first. Thus the oil becomes progressively more difficult and more expensive to access, until you get to a point where it is no longer viable. Tar sands are not that far from that point of diminishing returns, and the great oil and gas bonanza so enthusiastically promoted by the bankers cannot possibly be other than a great big bubble!

The good news? Although carbon emissions from the USA continue to cause immense damage to our atmosphere in the short term, in the longer term that cannot continue because the bubble has to burst, and carbon emissions from the USA is certain to decrease!

And the bad news? Well… remember all that sub-prime nonsense when the house mortgage market collapsed? It is going to happen all over again with American oil reserves! I said we would come back to the bankers!

So what about our own UK shale gas reserves? I would steer clear of investment there if I were you! It will be better for us all if we just reduce our energy needs.






Data has been lifted from reports by Deborah Rogers of the Energy Policy Forum and J David Hughes of the Post Carbon Institute

The Sin of Optimism

We have all had a great deal of gloom lately. There are people losing jobs by the thousand, sound businesses going out of business through lack of credit, interest rates on new loans sky high – if they are available at all...

If Gordon Brown or his ministers come up with a plan, the other parties rubbish it. If David Cameron offers an option, Labour spokespersons tear it to pieces. All the politicians are very guarded when assessing the present situation, stating that they are doing all that can be done (or that the other lot are NOT doing all they can), and that there may be further measures needed later. Out in the country, the people whose interviews make it into the media are the ones who are suffering from redundancy, mortgage problems or lack of retail trade.

How sad I was to hear in the media today the response by Alan Duncan, Shadow Business Secretary, to a tiny and uncertain flame of optimism from a Government Minister.

Baroness Vadera, Business Minister, said, "I am seeing a few green shoots but it's a little bit too early to say exactly how they'd grow."

This was hardly earth shattering, particularly as she added, "Is this a positive straw in the wind, or should we say one swallow does not make a summer? It's too early to say."

Her comments reflected the fact that she had heard on Tuesday about a company which had successfully raised hundreds of millions of pounds.

Mr Duncan is the epitome of the smooth talker who has an answer to everything but a solution to nothing. So when he accused Baroness Vadera of being out of touch and insensitive, I felt that he may not understand that those of us who are on hard times may actually find comfort in a small spark of optimism. We all know that we aren’t out of the woods, that there is still plenty of misery to come, but when I heard the Minister’s comments my reaction was a cheerful one. When it was reported that a Tory was demanding an apology from Baroness Vadera, I thought that maybe the doom-merchants need to get a sense of proportion. I for one like to hear a bit of cheerful news from time to time, even if it doesn’t affect me.

We’re all grown up, Mr Duncan. We can listen to the news and understand what we hear. But if optimism is a sin, Mr Duncan, then let’s have a few more sinners amongst the politicians.

The Odd Behaviour Of Governments

There seems to be no limit to the bizarre behaviour of nations and their governments.

Recent news from the Arctic Ocean makes me think of a hungry wild animal fighting off others so that it can eat its own leg.

The expanse of Arctic ice has shrunk in both area and thickness to an unprecedented degree, so that it is now possible to circumnavigate the ice. The reduction in the ice area is caused by global warming which itself is caused largely by our profligate burning of various types of fossil fuel. As the area of light-reflecting ice reduces, the area of heat-absorbing water increases. The extra heat absorbed from the sun causes more ice-melt.... and so on.

I am a mere private citizen, and what seems obvious to me may not be as simple as I think it is – but logic suggests to me that the way forward is to burn less fossil fuel.

But logic suggests to national governments that we should take full advantage of this dramatic ice melt to tap into hitherto inaccessible oil fields to produce more fossil fuels so that we can melt the ice even faster!

Not only that – the nations concerned have already started squabbling over boundaries, borders, mineral rights and the like.

One good thing though – if we melt all the ice there won’t be a shortage of water (although it will mostly be in the wrong place)!