Mental Energy

Ed Miliband’s Net Zero plans don’t add up

I don’t know how Rachel Reeves occupied her time while Shadow Chancellor, but she clearly didn’t spend much of it doing her job.  A big part of which should have been to read tedious and boring reports from the ‘independent’ OBR (Office for Budget Responsibility) which set out, in full unalloyed detail, the dreadful state of Britain’s public finances.

The idea of the OBR is, after all, to restrict the government from enacting free market economic policies ensure government transparency.  Allowing anyone to check that the numbers add up.

So Rachel Reeves must have been slacking. Because supposedly it’s only since arriving at the Treasury that has she bothered to check in with the OBR, and ‘open the books’.

Where she claims to have ‘discovered’ a £20bn ‘black hole’ in the public finances.

This shocking revelation has compelled Reeves to make some ‘tough choices’, forcing her to reluctantly do exactly what she had intended doing all along.

Put up our taxes.

It also means that the government has no option but to make some painful and regrettable ‘cuts’.

Which is actually great, because under the guise of ‘acting tough’ Labour gets to dump a load of pretend Tory projects that were never going to happen anyway.

And so, it’s with a heavy heart that Reeves has announced she must shelve plans to build those forty imaginary new hospitals which Boris Johnson claimed he would magic out of thin air, back when he was the one in charge of lying to the British public.

It also means that the proposed road tunnel under Stonehenge won’t go ahead. Which has the twin benefits for Labour of saving a little public money, and shoring up that all important Druid vote. And why shouldn’t the Druids get a win for a change? They always seem to be the ones making sacrifices.

Meanwhile Home Secretary, Yvette Cooper, a woman who’s permanently pinched and pained expression makes even her political enemies consider taking pity, and slipping her some Senokot Max Strength Tablets, took scowl faced delight in canning the Tories’ flagship Rwanda Scheme, describing it as the ‘biggest waste of taxpayers’ money’ she had ever seen.

Suggesting perhaps that she was having a day off back when Tony Blair announced the Millennium Dome, or was on her lunch break that time Gordon Brown swapped Britain’s gold reserves for some Arctic Monkeys tickets and a bag of magic beans.

I’m quibbling. In fact I agree with Coops about the useless Rwanda scheme.

Like 96% of the population of Wales, it was never going to work. And the idea that it was already driving illegal immigrants oppressed asylum seekers to flee the evil clutches of the heartless British state and seek refuge in the tolerant, welcoming embrace of the Irish Republic, was a convenient fiction for all concerned.

Not that Labour has a better idea. Supposedly Starmer will ensure the sanctity of the UK’s borders by ‘smashing the gangs’ and simply ‘trusting the French’.  A policy which has failed to produce much of a dividend since 1415.

Reeves has also abolished the Winter Fuel Payment for most pensioners. So while Labour feverishly egged on the Tories to wreck the economy and destroy society in order to protect the elderly during the Covid lockdown fiasco, now it is in power, it seems happy to let them freeze to death.

Well they usually vote Tory anyway. So that’ll learn ‘em.

But credit where credit is due, taken all together, that’s a lot of savings.

So what does the Labour government plan to do with all the money it has just banked? Pay down some of the UK’s terrifying national debt? Fill up some potholes? Or God forbid, return it to the taxpayer?

Nope. None of those. In fact Starmer has already spent it. On pay rises for his client base hard working public sector workers.

But hang on naysayers, don’t jump to conclusions and assume Starmer is playing fast and loose with your cash. Far from it.

If there’s one thing wily fox Sir Keir knows how to do, it’s negotiate. Which is why this tough cookie, with half an eye on the parlous state of the public finances, has somehow managed to restrict junior doctors’ pay rise to a measly 22%, while showering public sector workers with barely an inflation busting 5.5% bump.

The adults are back in charge!

There’s a whole post to be written about falling public sector productivity, but let’s just point out that these pay increases aren’t even linked to any proposed reforms or performance targets.

Starmer just agreed to hand over the money. No strings attached.

And if you think that’s the worst use of public funds that Labour has come up with in its first month in office then think again.

Ladies and gentlemen, I give you, Great British Energy.

Labour’s brilliant scheme to spend £8.3bn on massive new unaccountable, unelected, money pit of a super quango.

Which no less an authority than Wikipedia describes as

a planned British governmental investment body and publicly owned energy generation company ….. [which] would invest in renewable energy and own, manage and operate clean power projects.

Yes. I have no idea what that means either.

But I do question why the government feels the need to spend so much of our money on renewables in the first place.

If this Net Zero/green/renewable energy stuff really is the future, and the incredible financial opportunity, slam-dunk, sure fire bet that they keep telling us it is, then surely private enterprise would be fighting tooth and nail for the right to invest.

It seems not.

Last year the government held an off shore wind auction. But it was a complete disaster. No one was interested. The government failed to shift a single licence.

Apparently the costs of setting up a wind farm far outweigh the returns possible at the current unit price of electricity. Construction costs have also increased, along with the cost of borrowing, so the reality is that the numbers simply don’t add up.

If that’s the conclusion of the savvy business community, only an absolute idiot would think this type of project represented a good investment for the British taxpayer.

Step forward Ed Miliband.

Who needs switched-on private investors when you’ve got sixty six million taxpayers, ready and eager to be forced by government to throw their wages away on the mythical benefits of Net Zero?

Maybe I’m being unfair. Great British Energy isn’t simply wasting our money on uneconomic wind farms. According to Labour’s 2024 Manifesto,

‘The company will create jobs and build supply chains in every corner of the UK. Scotland will be the powerhouse of our clean energy mission’.

The thing is, we already had plenty of jobs in the UK energy sector. And loads of them were in Scotland.

That was until Ed Miliband threw those workers under the bus when he decided to accede to the eco extremists demands, cancel North Sea drilling licences, and Just Stop Oil.

And as for ‘clean’, well yes, North Sea oil and gas might not be as clean as wind power. (Especially if, like the eco lobby you tend to ignore the environmental impact of steel production, mining the necessary rare earth elements and pouring all that concrete)

But they are almost certainly a cleaner option than importing oil and gas from other countries. But we’ll need to do that anyway, because wind and solar are by their very nature intermittent, unreliable sources of energy.

Also, perhaps our government should prioritise Britain’s long term energy security over short term virtue signalling. Just look at the problems short sighted Germany encountered after entrusting its gas supplies to baddie Vladimir Putin (Boo!!).

And of course I wouldn’t be the first person to point out that 60% of the world’s wind turbines, and 85% of our solar panels are manufactured in China.

Which is not squeamish about powering much of its heavy industry with cheap, if dirty, coal.

OK. That’s a lot of negatives.

Regular readers will know I like to bring a bit of balance to my one sided rants, so let’s consider some of the positives.

During the election Labour claimed that Great British Energy would save consumers £300 on their bills.

I’ve done some number crunching. It’s maths yes, but hopefully it will be worth it.

A £300 saving for each of the UK’s 28.4 million households does sound pretty impressive.

Until you remember that those same households are on the hook for the initial £8.3bn cost of setting up Great British Energy in the first place. That’s if it comes in at cost.

Which is about as likely as Liz Truss winning this year’s Nobel Prize for Economics.

But anyway, let’s take the government at its word.

By the way, it doesn’t matter if that £8.3bn was raised from general taxation, borrowed off the bond markets (unlikely) or leeched from oil and gas companies in the form of ‘windfall taxes’.

If it is tax revenue it supposedly belongs to all of us, if it borrowed we are all liable for the debt. Either way it’s money we cannot spend elsewhere.

So it’s a cost to all of us.

The promised return is £300 per household. While the outlay, the investment we had to put in to get that return, is £8.3bn.

£8.3bn divided by Britain’s 28.4 households comes out at £292 per household.

So the actual Year One return, in the unlikely event that the £300 claim is credible, is £8 per household.

Now I’m no Charlie Munger but that doesn’t sound like a brilliant deal to me. Especially considering the risks, and upfront costs, involved. You’d be better off sticking your money in an ISA.

Although you should probably hurry before Rachel Reeves closes down the ISA scheme because something something unearned income something something broadest shoulders something something greedy hoarders.

The reality is that whatever the figures, Labour’s stated goal of  ‘decarbonising’ the electricity grid by 2030, even if it was possible, which it isn’t, would be a complete waste of time.

A wilful act of self immolation. The biggest mass suicide since Jonestown.

I’ve used this graph before and I make no apology for using it again. It’s from The Spectator’s brilliant Data Tracker, and it sums up in one image the absolute pointlessness of this ‘ambition’, and the narcissism of the smug fools who are prepared to sacrifice our country’s economy, our existing infrastructure, and our children’s future, on the altar of Net Zero.

Compared to the rest of the world, and especially the big polluters like India, China and the US, the UK’s carbon emissions are so insignificant, that they have to have an arrow pointing them out on the graph.

We are a rounding error. We simply don’t count.

Trying to prevent global warming by reducing the UK’s carbon emissions is like trying to lose weight by shaving off your eyebrows.

It won’t work, and you end up just looking silly.

So why are we allowing Ed Miliband to spend of £8.3bn of our money on this nonsense?

Well, we’re not. We’re allowing Ed Miliband to spend £19.9bn of our money on this nonsense.

Because as well as the cash he’s going to sink into Great British Energy, Miliband has also committed the Labour government to shovelling a further £11.6bn of tax payer money out the door in the form of Overseas Climate Aid.

It beggars belief that a government which already spends 46% of GDP, and currently shells out over £90bn a year paying the mortgage on the National Debt, is prepared to borrow yet another £11.6bn from our grandkids, only to hand it over to other countries.

Maybe it wouldn’t be so bad if this cash was actually to be used to help needy people. But of course it won’t be.

Just like so much overseas ‘aid’ it will be swallowed up, siphoned off, and soaked up by useless NGOs, ‘charities’, action groups, climate initiatives, research bodies, activists, international agencies, think tanks, grifters, corrupt foreign governments, and rent seekers.

It won’t make the world greener. But it will make British people substantially poorer.

Don’t get me wrong. I believe we should do our bit to tackle climate change. I genuinely do. But surely it would make more sense for Britain to stop unilaterally destroying its own economy and instead announce a more sensible, proportionate course of action.

For example, and this is just an idea of the sort of thing we could potentially do, not a properly thought-out proposal, we could shadow the CO2 reductions of the big players like China, the US or India.

They reduce their carbon emissions by 20%, we aim to do likewise. Something like that seems a more reasonable approach to me. And it has the added benefit of keeping the lights on, while helping minimise the number of nanas dying of hypothermia in front of their own telly come wintertime.

Ultimately though, Rachel Reeves is correct. There is a gaping black hole at the centre of Britain’s finances.

It’s where our common sense ought to be.

*****************

Thank you for reading Low Status Opinions.

If you enjoyed this post then please give it a like, it helps Substack find me, and recommend LSO to others.

Obviously I’d love new readers to subscribe, and I’d double plus good love it if new subscribers opted for the paid option. It’s honestly pretty cheap at the moment. Something like £40 a year. And existing subscribers can always upgrade.

Plus there’s the Buy Me A Coffee button 👆 for anyone who’d like to offer commitment-free support. I’m incredibly grateful to all of you who do. It really makes a difference, so thank you.

It’s been a pretty grim week out in the wide world so I’m sending all my very best wishes to you and yours. Hoping you are all safe and well.

See you in the comments

Best

LSO