Monday 30 September 2013

Pots and kettles

The UK government, in the shape of the ex-Secretary of State for Wales, William Hague, has chided Iran’s leader for suggesting that Israel should sign the nuclear non-proliferation treaty.  It is, according to Hague, inappropriate for a country which has an advanced nuclear programme of its own to tell another country to give up nuclear weapons, unless it first does so itself.  So Iran must act first, was his basic message.
But if he’s right in his basic position, on what basis does a nuclear-armed state such as the UK, which is itself in breach of treaties over nuclear weapons and planning to breach them even further by building a new generation of weapons and delivery systems, have any right to tell either Iran or Israel what to do?

Thursday 26 September 2013

A marketing ploy

Miliband’s pledge to freeze energy prices if Labour are elected in 2015 is likely to prove popular, even if the policy seems to be unravelling somewhat at present.  The squealing of the energy companies is likely to be more of a help to him than a hindrance.  Standing up to what is perceived to be an unpopular bunch of fat-cats is hardly an unpopular position to take.
I’m not sure how much of a promise it is though.  If elected in May 2015, and allowing a little time if legislation is required (and I rather suspect that it is) a freeze until the start of 2017 is about 18 months, slightly less than the 20 being bandied about.
Many of the energy companies already offer customers fixed price deals for periods of 12 months at a time – extending that from some customers to all customers and from 12 months to 18 months doesn’t look like the big deal both the energy companies and Miliband are making it out to be.  That’s particularly so if we consider the way in which they achieve their fixed prices.
The price per unit for fixed-price customers is set at the level which the energy companies believe that they can sustain over the period concerned.  As a result, that price may be higher than it needs to be at the start of that fixed period – and lower than it would otherwise be at the end.  “Fixing” prices is not something that they do generously out of the goodness of their hearts – it’s a marketing ploy which they calculate will not adversely affect their profitability over the long term.  By giving almost 2 years' notice of intent, Miliband has given them time to ensure that the base price, at the start of the fixed price period, will be where they think they need it to be. 
Paradoxically, the promise to guarantee no increases for a set period in the future may just encourage higher price increases in the interim.  They won’t do it as openly as that, of course; they will merely take into account future expectations when they calculate the next price increases.  From a business perspective, that's a rational and prudent approach.  From Labour’s point of view it may even be good politics – it’s Cameron who will be blamed for the high prices in the interim – but it isn’t necessarily good economics or good energy policy.
And even if the energy companies don’t simply implement a pre-emptive price increase in advance, they will recover their position after the freeze period.  The only thing of which we can be entirely certain is that, over the long term, a period of frozen prices will not affect their overall profitability – they’ll get our money from us somehow.
The reason given by Labour for this policy is the most depressing aspect of all this.  The “markets are broken” they claim, and the period of frozen prices will give them time to fix them before competition is allowed to run free again. The underlying assumptions are firstly that the markets can be fixed, and secondly that if the market operates properly all will be well.  Would that life were so simple.  Politicians who were serious about controlling energy prices would never expect the free market to deliver that policy for them.  Politicians who were serious about tackling the high profits and fat-cat culture of the energy companies wouldn’t just be talking about a very short-term price freeze.
For all the hype, Miliband’s statement ends up looking like the fixed-price deals on offer in any event from the energy companies – it’s a marketing ploy; no more no less.  The only difference is that he isn’t marketing anything useful – only himself and his party.

Monday 23 September 2013

Bringing back socialism

While Labour’s leader was speaking on the streets of Brighton last Saturday in advance of his party’s conference, one member of the audience asked when he would “bring back socialism”.  Miliband’s response was “That’s what we’re doing, sir.  It is about fighting the battle for economic equality, for social equality and for gender equality too.”
Now I don’t for one moment question the importance of all three of those equalities.  I do question though whether they are enough in themselves to equate to “socialism”, which is the way Miliband presented them.  I’m sure that they are values which all socialists hold, but they don’t strike me as being an adequate and complete definition of socialism, or even a sufficient starting point.
I suppose it depends on how one defines one of the three equalities in particular – namely economic equality.  The economic system under which we live is ultimately based on power relationships - where power resides with those who have the economic wealth, not with those who do not.  Any meaningful move to economic equality has surely to tackle that inequality of power.  Without addressing that basic fundamental inequality of power, the words ‘economic equality’ are mere spin. 
To date, I see nothing in what Labour is saying which suggests they have any real intention of tackling that basic fundamental inequality.  And without that, “Bringing back socialism” is something we going to be waiting for some time to see if it depends on the Labour Party.

Monday 16 September 2013

Not necessarily 5% of everything

When it comes to the way in which governments spend money, “need” - and I put it in quotes because although it’s easy to say, it isn’t at all easy to define – should be a more important driver than equality, a point which I highlighted in this post last week.  Ultimately that assertion is the basis of much of the argument for Barnett reform – Wales has greater need per head on average for those services which are devolved to the Welsh government and should therefore receive a greater share of resources.
It does not mean of course that that greater need is equally distributed across the whole of Wales (similarly, the English average is just that – an average - as well; it varies greatly across England).  It often strikes me as being incongruous, at the least, to see politicians arguing for a reform of the Barnett formula to give Wales a greater share, and then jumping on bandwagons about “postcode lotteries” within Wales when they see inequalities within our country.
Fairness is difficult to define when we look simply at revenue expenditure on devolved matters.  It’s even harder to define when we look at major capital infrastructure projects – such as HS2 for instance.
The call for a Barnett consequential for HS2 has a certain political appeal, supporting the narrative that Wales is losing out, but surely the nature of individual capital projects is that they will inevitably favour some areas over others.  The question of fairness is only relevant when looking at the total of all capital expenditure over a longer period rather than individual projects.
There’s a further complication as well – capital projects which impact major conurbations are likely to be more expensive in terms of £ per mile of road or railway than the same or similar projects in rural areas.  Does that mean that London “needs” more capital expenditure per head than Wales, and that a needs-based distribution should proportionately give a greater share to London?
Or what about the putative HS3?  If a line is built providing fast rail services to Bristol and Cardiff, what proportion of that expenditure should be counted as “Welsh”?  Probably 90% of the capital expenditure would be in England – but that would not reflect the way in which any benefits are shared.
I’m not actually arguing that London should get a greater share of UK capital expenditure; nor even that Wales gets her fair share at present.  But the simplistic response demanding our Barnett share of capital expenditure based on an arithmetical percentage of individual capital projects no more reflects need than does the current Barnett formula.  The question of fairness is far more complex than that.

Thursday 12 September 2013

Equal and fair are not the same thing

The issue of sharing out government spending fairly, on whatever subject area, is neither simple nor straightforward.  Fair shares are not the same as equal shares – if needs were equally distributed life might be a lot simpler.
Unequal shares are easier to identify and highlight than unfair shares; and putting numbers on the inequality makes a nice headline, which is why politicians are so fond of them.
Take this total non-story from yesterday’s Western Mail.  The Tories have been aided and abetted by the Western Mail in highlighting the unevenness of the distribution of grants for sporting activity across Wales.  But nowhere does the non-story even ask the question about whether this is fair or not.  Inequality is effectively deemed to imply unfairness. 
How far should we take this approach?  If every county in Wales received the exact same amount of money per head of population, I rather suspect that we would then have 22 Freedom of Information requests about the distribution within those counties.  They would show that some villages or towns get more than others – and some politician (choose whichever party you like here) would express his or her shock and horror.
Treating equality of expenditure as though it’s the same as fairness would mean – and I’ll admit that this is a case of “reductio ad absurdam” - that the government could just give us £11.23 – or whatever the right figure is – each and be done with it.
I don’t know whether the distribution of sports grants actually reflects the distribution of need across Wales.  And this non-story does nothing to enlighten me.  What I do know is that “need” is not evenly distributed.  I’d be far more suspicious about the fairness of an entirely even pattern than I am about an uneven one.

Wednesday 11 September 2013

Shifting the traffic

In recent weeks, the HS2 rail scheme has come under increasing and sustained attack from a range of directions.  At least some of the government’s problems on the HS2 project are entirely self-inflicted – they’ve been using the wrong arguments from the outset.
Building a business case for the project on the basis of the minutes shaved off the journey was always a dubious approach.  The claim that it would free up the time of businessmen and women to do other things was equally dubious – and I’m even more sceptical about the methodology being used to convert that time into increased GDP.  As Parkinson’s Law tells us, work expands to fill the time available: much of the “work” done - on trains or elsewhere, come to that - has little impact on anything.
It was also a mistake to concentrate so heavily on business travel.  Having used France’s TGVs on a number of occasions, I reckon that few of the passengers – on trains which always seem to be full – are travelling on business.  A fast – and cheap compared to UK fares – service attracts all sorts of people to use it; for leisure, for visiting family etc.
The debate, from the outset, should have been about capacity and the best way to provide it, and the government at last seems to be moving in that direction, albeit focused far too narrowly on rail capacity.  The case for building a high-speed rail network in the UK is based on the answers to two simple questions, in my view.
The first question is this: given that the demand for travel is growing inexorably, are we going to provide the infrastructure to accommodate that demand, or are we instead going to try and manage that demand downwards?
The “greenest” answer of course is to try and manage the demand downwards; take away the demand and there is no need for any new infrastructure.  In theory, that could be done; but I doubt that the will or the means exist do it consistently and over the decades of timespan which would be necessary to sustain such a policy effectively.
If the demand cannot be produced or managed, and more capacity is needed, that brings us to the second question: what is the best (or perhaps “least worst”) way of providing that extra capacity?
The “default”, if we make no attempt to plan and manage the demand, is that the number of road trips will increase, as will the number of short haul flights.  There are limits to the extent to which simply adding more cars to the roads and more planes to the skies is possible without more roads and runways, but we haven’t reached those limits yet.  Short-term, the effect of increasing the use of existing capacity is to increase congestion and make delays more likely, but there is no doubt that more capacity can be squeezed out of the system.
Eventually, however, continued growth makes investment in more infrastructure inevitable – hence the question “how?”.  Of the alternatives available, I’m convinced that electric railways are the “least worst” option, despite all the difficulties associated with building them. 
Do they need to be high speed?  Strictly speaking, and seeing them solely as a means of solving the capacity problem, the answer would have to be no.  However, if we see them also as an alternative to short haul flights, as well as an alternative to road journeys, speed becomes more important.  The faster the train, the greater the distance of the short haul flights which can be supplanted by rail travel.
And that ultimately is the attraction of HS2 – and HS3 and HS4 which I hope will follow.  Not as a single stand-alone project to cut a few minutes off journey times for businessmen and women, but as a long-term planned approach to shifting travel onto a less environmentally damaging platform.  Sadly, that aspect seems, thus far at last, to be peripheral to the considerations of those making the decisions.

Tuesday 10 September 2013

Or else...

Two short words often used by parents to children.  They don’t often work – the rebellious will ask “or else what?”,  whilst the even more rebellious will carry on and see whether any sanction is forthcoming or not.  Unless accompanied by a clear statement of the consequences – and a firm belief in the mind of the target audience that those sanctions will actually be imposed – it’s something of an empty threat.  Bluster and bluff.
Nor is that analysis is restricted to parents and children, as Obama, Cameron and others have discovered in relation to Syria.  Admittedly they face the not insignificant added complication of establishing beyond doubt that the miscreant is who they say it is; and given the past record of the UK and US governments in such matters, there will be some who will never believe even the apparently most incontrovertible evidence.
The lack of clarity about how to respond when their bluff was called merely underlines the extent to which the “or else” was indeed mostly bluff in the first place – it’s as though they believed that that the mere threat to do “something” would be enough of a deterrent in itself.
That isn’t the end of the confusion however – there also seem to be several elements of moral confusion involved in their thinking at present.
Horrific though chemical weapons are, and outlawed as they are under international law, the method by which Syrians are being killed daily is surely secondary to the fact that they’re being killed – from their point of view at the very least.  There is a real danger that the US, UK, and others are telling Syria that killing people on a large-scale is fine with the international community, as long as they use the “right” weapons to do it.
Further, the outrage at the use of chemical weapons is coming from people who themselves own, and want the rest of the world to believe that they would in certain circumstances use, weapons of mass destruction.  It’s not a particularly high ground on which to stand and moralise.
Outrage at the use of chemical weapons is understandable, and the desire to “punish” Assad for their use is also relatively easy to understand.  But in which way precisely does killing Syrian soldiers, and the inevitable civilian casualties which even the most precise “surgical” strike would kill, actually punish Assad?  As in all wars, those who suffer most are those at the bottom of the pile, not those at the top.
Then we have the US military elements who are apparently looking for ways to damage the Assad regime a little but not so much as to help the rebels win, given the influence of Al Qaeda in their ranks.  This is a recipe, if ever there was one, for prolonging the slaughter not ending it.
The inability of the international community to respond effectively to events in Syria is frustrating; the UN seems to be impotent.  The breach of international protocols in the use of chemical weapons is clearly unacceptable.
But the most unacceptable aspect of all is the daily slaughter which is taking place in the country, and none of those demanding “action” has given an adequate explanation to date as to how the “action” they propose will actually stop that slaughter, rather than simply add to it.