Sunday 26 August 2012 Saturday 25 August 2012 Saturday 25 August 2012 Saturday 25 August 2012
Booker: Gummer and a dodgy barrage
Anyone harbouring ideas to the contrary would soon be disabused by Booker's column this week, which records an extraordinary picture of the state of our public life that has come to light in recent days.
At the centre of the picture is David Cameron, who last month nominated Lord Deben (formerly John Gummer) as the new chairman of the influential and supposedly "independent" Committee on Climate Change, set up to advise government on energy policy under the Climate Change Act.
This is despite the fact that Gummer's array of environmental business interests includes chairmanship of Forewind Ltd, a consortium of four energy firms planning the world's largest, and most heavily subsidised, offshore wind farm in the North Sea.
Gummer's "suitability" will be assessed on 4 September, when he is interviewed by the Commons select committee on energy and climate change. This is chaired by Tim Yeo MP, a junior environment minister under Gummer when he was environment secretary in the 1990s.
Cameron has also lately taken a very active interest in a new £30 billion project for a tidal barrage across the Severn estuary, which he discussed at Downing Street last month with the former Labour Cabinet minister Peter Hain, acting on behalf of a consortium organised by a tiny Welsh company, Corlan Hafren – of which Gummer was until very recently a director.
Attention has lately been drawn to the declared business interests of both Gummer and Yeo – who last year earned more than £200,000, on top of his MP's salary of £80,000, working for companies mostly involved in "green" energy schemes.
The apparent exception was his role as "environmental adviser" to Eurotunnel, by whom he was paid up to £1,000 an hour. But Eurotunnel, it turns out, is planning to run a £220 million "interconnector" power cable through its service tunnel, to provide back-up from French nuclear power stations for the times when our wind turbines don't supply any power.
Turbines – of the type that earn Cameron's father-in-law, Sir Reginald Sheffield, £1,000 a day on his Lincolnshire estate – are so unreliable that they could never hope to meet our EU obligation to source nearly a third of our electricity from "renewables" within seven years.
That is ten times more than wind power generates at present. Hence Cameron's sudden interest in a new Severn barrage scheme (though the idea was rejected by the Coalition in 2010 as being far too expensive) and his talks with the peculiar little company Corlan Hafren.
The barrage, incidentally, we are told could supply "five percent" of our electricity needs by 2022 with a new version of the barrage, funded by more than £30 billion from "Kuwait, Qatar and other sovereign wealth funds".
Until last week, Companies House showed Gummer as a director of the company, which has registered assets of only £91. Listed among its shareholders, the largest of whom is a formerly bankrupt Welsh property entrepreneur, is another company, holding a sixth of the shares, with the imposing name of Sancroft International.
Thanks to diligent researches by readers of Bishop Hill, it emerges that the six shareholders of Sancroft, an environmental consultancy which also acts as a vehicle for the earnings of Gummer, are Gummer himself, his wife and their four children, one of whom, Ben Gummer, is a Tory MP.
All of this, you might expect, should focus further attention on the proposed Severn barrage itself, a vast concrete wall stretching eleven miles across the Bristol Channel from Somerset to south Wales, possibly incorporating a motorway and a railway, and also a thousand turbines.
And, to perpetuate the misinformation so often generated by renewable energy schemes, we are told that this monster construct would have the "capacity" to generate "6.5 gigawatts" of electricity.
But what is often not understood about tidal barrages – and deliberately concealed by some of its advocates - is that, like wind turbines, they only generate power intermittently, according to the tides. So the actual output of a Severn barrage, as confirmed in 2007 by Lord Porritt's Sustainable Development Commission, would only be 22 percent of its capacity.
In other words, the barrage's contribution to the grid would average out at only 1.43 gigawatts, which is roughly the same as the power produced, much more consistently, by one large gas-fired power station. That would cost only £1 billion to build.
Alternatively, a single nuclear power station, such as that proposed for Hinkley Point further down the estuary, could produce the same amount for a fraction of the same capital investment and with only minimal fuel costs. The barrage would thus be a ludicrously expensive way to produce a relatively small amount of electricity.
So, firstly, why has the idea of wasting so much money suddenly so seized Cameron that he has asked Oliver Letwin to liaise with Corlan Hafren in pushing the scheme, which we are told would be piloted through the Commons by Hain?
The answer seems to be that the man masquerading as our prime minister is now uncomfortably aware that he hasn't a hope of meeting that EU renewables target with wind turbines (and Brussels does not count nuclear power as "renewable").
Furthermore, what would be the biggest infrastructure project in our history might temporarily create, it is claimed, "30,000 jobs". What Cameron probably doesn't understand, because his advisers might not have told him, is just how small a contribution the scheme would make to our EU target.
What makes this even odder, however, is that the government could contemplate handing such a mammoth project to a company which is currently showing only £91 in its accounts, representing the contributions of its various shareholders.
The answer to this puzzle must lie in the central involvement in the company of Gummer who, in 2007, was commissioned by Cameron to produce a report for the Conservative Party entitled Blueprint for a Green Economy. Sancroft's current managing director is Adrian Gahan, formerly Cameron's adviser on energy and climate change policy, who played a key part behind the scenes in pushing the Climate Change Act through parliament.
There were signs last week that Gummer was anxious to distance himself from the controversy building up around his involvement with Corlan Hafren. He told The Guardian that he had not been a director since June, although this detail was only lodged with Companies House last Monday.
Returning to the question of Gummer taking over the Climate Change Committee, Booker asks whether it is really acceptable that in ten days' time the confirmation of his chairmanship of the most influential body guiding government policy on energy and climate change should be in the hands of a committee of MPs chaired by Tim Yeo?
This means that these two men at the centre of shaping our energy future are both involved financially with an industry which stands to make billions from what is, potentially, one of the most dangerous wrong turns in our country's history.
This, the Severn barrage, would not only be a grotesque waste of money, but would have a devastating affect on the ecology of the lower Severn estuary, damaging inter alia the tidal flats where huge numbers of wading birds feed. This has provoked opposition from an array of environmental lobby groups, including the RSPB, Greenpeace and Friends of the Earth, who claim that it would be illegal under the EU's Habitats Directive.
The new scheme, it is claimed by Corlan Hafren, would get round this by leaving more of the mudflats exposed, making it possible for us to claim to Brussels that we were providing the birds with "compensation" habitat for that which was lost.
The last time this trick was played, on a much smaller scale, was when a Cardiff Bay barrage was proposed in the 1990s. The government then got its way with Brussels by promising "compensation" feeding grounds further up the coast, by allowing the sea to flood a large area of the Gwent Levels, which had been reclaimed from it since Roman times.
The environment minister who negotiated this device for getting round the EU law was none other than John Selwyn Gummer. But it would be much harder to convince the EU that a barrage right across the estuary – putting an end, among much else, to the Severn Bore – was not in serious breach of the Habitats Directive.
How ironic it would be, then – says Booker - if a monster project conceived only to meet our obligations under one EU directive – since Article 5(2) of the Renewables Directive was originally drafted, on Britain's insistence, specifically to permit a Severn barrage, though it is now more generally worded – was found to be illegal under another EU directive.
For this and other reasons, Booker very much doubts that Gummer's pie-in-the-sky scheme will ever go ahead. But Gummer can always console himself financially with his earnings from that monster wind farm in the North Sea. It should provide enough for a chairman of the Committee on Climate Change to retire on quite comfortably.
COMMENT THREAD
Richard North 26/08/2012 Eurocrash: why do they keep getting it wrong?
"For purely political reasons", the paper says, "Greece is allowed to stagger on towards the next crisis summit, leaving the world's economy paralysed by endless uncertainty".
"Any further bailout", it adds, "which includes money from the British taxpayer, courtesy of an IMF that is exceeding its remit by trying to prop up a failing political project – will be throwing good money after bad". How much longer, it then asks, "must we wait for our pygmy political class to have the courage to acknowledge this reality?"
The interesting thing here is that, while the Mail can so readily see this political dimension, the same insight seems to elude the more "serious" press commentators – in what is becoming a running sore.
One sees, for instance, the Great Roger Bootle, when advertising his own book, telling us with the utmost confidence that: "The eurozone's predicament is both financial and economic".
But the predicament is neither financial nor economic. It is wholly political, the result of ambitious men using the currency as a mechanism for achieving political integration, in defiance of all the known rules of economics.
Why the media, in the main, should so consistently get this point wrong is one of life's great mysteries. Partly, the problem is structural, which we see with EU affairs in general. Despite the Union being our supreme government, of which the UK government is part, it is still regarded as "Europe" and allocated to the foreign news desk.
Similarly, the euro is allocated to financial and business journalists, and it is fair to say that, as long as they fail to understand that the single currency is a political issue, they will always get it wrong.
On the other hand, if the econ-biz writers are out of their depth with the politics, the claque dealing with domestic politics are not even past first base. The political correspondents are immersed in the Westminster bubble and their horizons do not reach out over the Channel. The EU is a closed book to them.
But there must be something more profound than merely the structural issues. After all, if Mail can get the "political" bit, it cannot be too difficult for the editorial management of august titles like Then Times and The Daily Telegraph - to say nothing of The Guardian - to get the point.
Why they do not lies in the realms of speculation, but it would be easy to surmise that there is a certain arrogance at play here. These Top People do not see the point because they do not believe they are wrong - about anything. They know everything there is to know, and therefore, since they have nothing to learn, they end up being able to learn nothing.
On the other hand, this could be intellectual laziness – or even cowardice. "Everybody" deals with the issues the same way, so there is no need to be different. Why rock the boat? That, actually, would make it a conspiracy of idleness.
Certainly, "Europe" is difficult to deal with. They do politics differently on the continent, speak in a myriad of different languages, and have complex systems and procedures which take journalists far outside their comfort zones. It is much safer to stay with the crowd because then, when you get it wrong, everybody gets it wrong together and there is no harm to career or reputation.
That is possibly the most important dynamic on the block. Although the press need their customers to make a living, journalists look to their peers for approval and their accolades. And the one thing the herd – any herd - demands is conformity. No one must show up the rest.
And that's another reason why they're a dying industry.
COMMENT THREAD
Richard North 25/08/2012 Eurocrash: the Draghi "plan" bites the dust
Thus, anyone assessing Merkel's statements has to bear this in mind. She is a politician and what she says holds true only at the moment she says it. Tomorrow, as they say, is another day. By next week, the situation could have changed beyond recognition.
To then assess the state of play by measuring market reaction is not the brightest of ploys. Traders are not political analysts and are prey to the herd mentality, acting more often like sheep than sentient beings. And, as we have observed before, there is a tendency to over-interpret short-term market movements in the belief that they represent market sentiment.
One factor which also militates against this is trading volume, as we have also noted before. And, it appears, this is a very significant factor. Currently, international markets are trading at extremely low levels and there is copious reporting which suggests that this is distorting market signals.
In reality, traders are biding their time. They have no better knowledge than the rest of us and, until the politicians make their move, they are taking their money elsewhere. The politics are driving the economics, not the other way round. The traders will not predict events – they will, over time, simply keep the score.
Despite this, we get the Failygraph typifying so much of the media in placing undue emphasis on the market, as if its "signals" meant anything, at the same time trapped in a haze of ignorance brought on by their lack of understanding of the political issues.
Thus, we get "Chief Business Correspondent", Louise Armitstead, (how they do love their Ruritanian titles) today writing of a "sense of vacuum", which has been compounded by "revelations" that the ECB "is planning to delay the progress of its bond buying programme" until after the Karlsruhe ruling on the ESM on 12 September.
Yet, when on 2 August the consummate politician Mario Draghi announced his famous "plan", it wasobvious that it lacked substance and that the president of the ECB was indulging in theatricals. In fact, the intention was almost certainly an attempt to kick that famous can down the road, to avoid a major crisis during the holiday period.
Despite this - and even though, the day after, we recorded Die Welt dismissing the plan as "not much more than rhetoric", and Reuters was talking of an "action gap" - the English press has been prattling on about this chimera, without the slightest perception that it lacked substance.
Now we get the amazed Lord High Chief Business Correspondent telling us that "investors and economists had hoped ECB Draghi would use a press conference on 6 September to announce a radical intervention plan". But, Armitstead writes, "the timetable is now sliding towards the next deadline for a Greek default".
Was it really going to be any different?, one muses as Armitstead then cites Robert Halver, at Baader Bank in Frankfurt, who grandly declares: "We need clear decisions. There is a possibility that Greece will leave the euro zone in October. Preparations for a Greece exit, and a subsequent domino effect are running. Markets need to know what the face of the new eurozone and policy will be".
Well, Mr Halver is going to have to wait like everybody else. The politicians will make their decisions when they are good and ready, and in the meantime will play the market commentators for the gullible fools that they are. It is, after all, so easy to do – did anyone say Facebook?
All they need is another "plan" from a prestigious persona, and the scribes will be as happy as larry, until yet another deadline passes and the grand aspirations drain into the sand. It really is that easy.
COMMENT THREAD
Richard North 25/08/2012 Eurocrash: French silence on the euro-debate
What actually goes on in these meetings is anyone's guess, but it is a fair assumption that, even if anything drastic was planned, it would not be revealed publicly during this round of meetings.
But what has emerged, of considerable interest, is the remarkable contrast between France and German in their attitudes to the crisis. For several weeks now, we have been charting the explosion of media coverage in Germany, with real debate amongst politicians, economists and commentators. Yet, as Die Ziet now observes, in France, the Greek drama has hardly registered as an issue.
The day after the discussions between Merkel and Hollande, the paper says, the lead in the capital newspaper Le Parisien was that that one in four French people had getting back into the groove after their holidays. Libération dealt with the search for the identity of the Socialist Party almost four months after the election.
Le Monde failed to carry anything significant and the business newspaper Les Echos reported on expected tax increases. Only the conservative Le Figaro did a halfway decent story on the Merkel-Hollande meeting.
This, in fact, is nothing particularly new. One finds of the French – and particularly their politicians – an extraordinary ignorance of the ways of the EU and, in a tightly controlled media, coverage of EU affairs has always been slight. And certainly, there is nothing in the way of eurosceptic comment that we occasionally see in the UK.
Pointedly, Die Zeit cites Claire Demesmay at the German Council on Foreign Relations in Berlin, who specialises in the relationship between Germany and France. "The French are only concerned with themselves, with their national problems", she says.
But there is another factor here – one that the paper has missed. Back in June, we picked up a piece from Le Monde which noted that, in France, devolution of public administration had refocused public investment, giving local authorities real power.
This contrasted with the national parliament where, through a combination of EU law and a powerful executive, individual MPs had very little real power or influence. For an ambitious MP, therefore, local politics was the place to be.
Thus, in effect, the EU has been partially responsible for driving its own agenda off the news pages. Politicians feel that have no power or influence over the EU so they simply do not talk about it. And, in the absence of political input, the media too is silent – until, of course, it starts to have a direct impact, as in Greece.
To an extent, that is what is happening is this country, although not to quite the same degree. But it is certainly the case that UK media coverage, even of late, has only been a fraction of that seen in Germany.
And the difference probably proves the point. In a country where the Bundersbank is still perceived to be a powerful institution, and the only one in the eurozone capable of challenging the ECB, and where chancellor Merkel is considered to be a major player in the EU, a debate over policy issues is worth having – and worth reporting.
But if proximity to power and the degree of engagement are important factors which drive the political debate, that bodes ill for the "colleagues" in Brussels. Much as they have sought to encourage a "European" debate – and spent a huge amount of our money on so doing - they very fact that the power centre is so detached from mainstream politics in most countries condemns EU politics to obscurity.
When politics is local, there is a degree of vibrancy to it. When issues are shoehorned into a transnational forum, they disappear.
COMMENT THREAD
Richard North 25/08/2012
Sunday, 26 August 2012
In part, this explains why the media hates independent blogs so much, but the bigger issue is the ability of the media to shut itself off from reality and push the same old narrative, year after year, without budging an inch. They started off wrong, and they're determined to finish wrong - that's the way its going to be.
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