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In Brief: The lamps are going out…  Dear Keith, leave this well alone

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The lamps are going out…

This morning I am reminded of the words of the British foreign secretary Edward Grey on the eve of the First World War: “The lamps are going out all over Europe, we shall not see them lit again in our lifetime.”  Not, in this instance for reasons of war, but for the more mundane – though ultimately catastrophic – observation that my local council has begun to randomly turn off residential street lighting in an attempt to save on its massive electricity bill.

From the viewpoint of the council’s finance department this makes a lot of sense.  They’ve already been ordered to hand back a £150 rebate on the Council Tax to people in the lowest valued housing.  And they will continue to be pressured to keep local tax increases to a minimum.  Indeed, in the (very likely) event that the energy, food and cost-of-living crises continue through next winter, they will face demands that they make real terms cuts to their budgets.  Turning off the streetlamps after midnight in residential areas is an easy cut to make.  Hell, they might even be able to greenwash the measure as part of their progress to the fabled “net zero.”

Consider, however, the not entirely unforeseeable consequences if local councils across the UK – or, indeed, the entire continent of Europe – follow suit, saving billions of pounds and euros on their electricity bills.  This will be happening at a time when perhaps 80 percent of the population will also be cutting back on their electricity use in an attempt to keep bills manageable.  Indeed, and despite the recent government relief package, many at the very bottom will be foregoing electricity almost entirely – using the additional government cash to pay for food and housing costs instead.  This, in turn, will add to the pressure on government either to abolish, or at least dramatically reduce the standing charge – the price we pay just for being connected to the grid, and which includes all of the Blairite “green” legacy costs through which the poor are forced to pay for previous subsidies given to the rich.

Businesses – which do not enjoy the relative protection of the energy price cap – are no doubt also doing as much as possible to cut their electricity use.  Indeed, this is one of the drivers for cutting office space in favour of having employees work from home – the cost of electricity falling on the employee rather than the employer (who may or may not offer an additional expenses payment for energy costs).  Worse than this, many businesses, reeling from the combined shocks of spiralling energy costs, supply chain-related transportation inflation, and declining consumer demand, will – by choice or necessity – go bust in the coming months… lowering their energy use and bills to zero.

Now consider the business models adopted by the energy companies.  First, there are the unrealisable plans developed by the myriad supply businesses whose existence is a product of the insane workings of former chancellor George Osborne’s mind.  Back in the day, Osborne changed the rules so that anyone with a spare £35,000 and a half-decent computer could set up as an energy supplier.  The belief was that a large number of such companies, each competing for customers, would be obliged to cut prices and to force the energy producers to cut their prices in turn.  It was these companies – including several set up and backed by local councils – which went bust in droves last autumn when wholesale gas prices shot up into the stratosphere.  Ironically, among those left standing were companies which explicitly charged higher prices for the supply of renewable electricity.  But even these are unlikely to survive the large-scale collapse in electricity consumption as hard-pressed households are obliged to rein in their spending.

Left standing – for now at least – are the second type of “vertically-integrated” energy companies – the descendants of the old “big six” cartel.  These are the multinational corporations which own the entire process of energy supply, from the gas and oil wells, the refineries and power stations, to the grid infrastructure.  Crucially, these corporations use the profits from their downstream and international activities to subsidise what would otherwise be a loss-making domestic supply.  That, remember, is a domestic supply division which is about to see its losses accelerate as households and businesses desperately seek ways of keeping their energy bills manageable.

Energy insiders along with the few journalists who have been paying attention, have been warning about the gathering “energy death spiral” for at least the last decade.  In the early stages following the 2008 crash, the main concern was that “green” energy subsidies were allowing businesses and affluent households to lower their energy bills even as the poorest households were cutting their use.  The fear, even then, was that the entire energy supply industry would eventually be rendered unprofitable if energy-saving measures became widespread…  which, of course, is precisely where we find ourselves today.  The lights are indeed going out across Europe.  And in the absence of some yet-to-be-discovered energy-dense and cheap energy source, we shall not be seeing them lit again in our – and indeed any future – lifetime.

Dear Keith, leave this well alone

There are moments when public opinion is expressed in a manner which rises above the results of by-elections or opinion polling.  Moments when a visceral outpouring of emotion provides a clue to the political turmoil to come.  The crowd at Churchill’s campaign rally in Walthamstow during the 1945 general election pointed to a deep hostility to the peacetime Churchill and provided an early indication of the Labour landslide to follow.   A similar reception for George Osborne at the 2012 Olympic Games ought to have warned the political class that the austerity policies being pursued by this man were deeply unpopular and that under no circumstances should he be allowed near anything so vital as a referendum on Britain’s membership of the European Union.

Today it was Boris Johnson’s turn.  And the response to Johnson is all the more concerning because of the type of people who were doing the booing.  The kind of people who spend their mornings waving union flags at passing Royals are precisely the kind of people who make up the bedrock of the Tory Party.  Moreover, given the solemnity of the occasion, to actively boo the prime minister is all the more damning.  Forget the usual round of opinion polls and by-elections, this was the British electorate giving the firmest possible indication of which way they won’t be voting in the event that Johnson is still prime minister going into the next general election.

There is, no doubt, great temptation to use the booing as a weapon to attack Johnson in Parliament.  All the more so for someone who is the leader of an opposition in name only.  Consider, however, the way that, earlier in the year, turning partygate into a party-political issue caused Tory backbenchers to rally behind Johnson – some even withdrawing letters they had sent to the 1922 Committee calling for a leadership election.  Consider also that the opposition’s political fortunes lay not in drawing further attention to Covid rule breaking that Labour’s leaders also appear to have engaged in, but in developing a coherent policy program to address the growing energy, food, and cost-of-living crises.

Short of defeating Johnson at the next election, removing him is not within the opposition’s gift.  Assuming he doesn’t resign out of an until now lacking sense of morality, only Tory backbenchers are in a position to remove him.  And they are far more likely to do so if the issue remains a question of trust between Johnson and the British people, than if it comes to be seen as a device for party-political point scoring.

Tory backbenchers will have already seen news coverage of Johnson being booed.  And the footage will have sent shivers down the spines of those in the many marginal Tory seats.  Moreover, Johnson might well lose his own seat in the event that the Tory party cannot find a way to reverse their misfortunes.

The stumbling block until now has been the absence of any obvious successor as prime minister.  Historically, chancellors have tended to take over from outgoing prime ministers.  Beyond that, home and foreign secretaries are usually next in line.  But current chancellor Sunak’s reputation has been badly damaged by the lack of an early response to the cost-of-living crisis, by appearing out of touch after the March budget, and by revelations about his wife’s tax arrangements.  Home secretary Patel is considered to be too abrasive even to Tory insiders, while foreign secretary Truss has exposed herself as a dangerous warmonger over the Ukraine conflict.  Business, Energy and Industrial Secretary Kwartang had been tipped to become Britain’s first black prime minister, but his disappearing act while energy firms were going bust, and prices were rising into the stratosphere have likely ended his chances at an early run for the premiership.  Meanwhile, former chancellor Javid’s star is sinking with every new fatality in the back of a waiting ambulance as the NHS buckles from the consequences of two years of lockdown.  Transport secretary Shapps is going to be distracted by a national rail strike, while Education Secretary Zahawi is going to be busy with the growing financial woes of the university sector.

Nevertheless, it is now obvious that the public will neither forget nor forgive.  And for that reason alone, Tory backbenchers may fare better under any new leader than they will by sticking with Johnson.  But the choice is theirs, and opposition interference can only cause them to close ranks and rally behind the incumbent.

If I were leader of the opposition – and you can breathe a big sigh of relief that I am not – I would resist the temptation to even mention this morning’s booing.  Instead, I would reach out beyond my usual SPAD insiders both to understand and to develop a program to address the energy food and cost-of-living crises so that, in the event that the Tories do opt for a new leader, I would be in a position to provide some genuine opposition for a change.

As you made it to the end…

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