Wednesday, September 09, 2009

The EU commission stirs

a commission offical returning to work after its summer breakAfter their long summer break, the apparatchiks of the Socialist Republic of the European Union are slowly coming back to life – inasmuch as these zombie-like creatures can ever truly be regarded as "alive".

And right up front is agriculture commissioner Mariann Fischer Boel, indulging in a bit of crude populism, declaring that the zombie-in-chief José Manuel Barroso is to consider allowing member states to ban EU-approved GM crops.

The European Commission President wants to "look at whether we can give the member states more freedom on this issue," says Fischer Boel, adding that she would support this idea.

At the same time, apparently contradicting the supposed effect of this new "freedom", she also advocates speeding up market approval for new GM maize lines "to lift trade barriers that have a emerged as a result of asynchronous approval of GMOs in the EU and in GMO export countries."

But then come the weasel-words. A distinction must be made between the importation of genetically modified plants and those grown in the EU itself, she says.

Then she adds: "I know that cultivation is a very sensitive issue." Member states do not have the right to prohibit the cultivation of GMO crops on their territory once it has been authorised in the EU, except if evidence is provided that the GMO is harmful for human health or the environment – which, so far, no member state has been able to provide.

Nevertheless, because there is little or no public acceptance for GMO acreage among the public, a majority of EU member states are lobbying to change this practice and Fisher Boel is making soothing noises about letting them have their way.

But all is not what is seems – it never is with that lot. Having been unable to break the logjam and get the member states to accept EU law on GMOs, and with the WTO breathing down its neck, the zombies are trying to pull a fast one.

Basically, the deal is that, at long as the member states accept the import of GM crops from Monsanto-land in Brazil and the USofA – thus keeping the WTO off their backs - the munificent EU will allow them to ban their own farmers from growing them.

I can see this going down a storm with our own NFU, and then the greenies won't be too happy either. But with the poison dwarf also playing games, the Poles telling the commission to get stuffed (in Polish, of course, when even "please" sounds like a swear-word), the zombies are really over a barrel.

So the drama continues, dragging on into eternity, we wrote last year. Nobody in the media here really gives a damn, the Tories don't want to touch it because it sets the greenies and their EU-luvvies on a collision-course, the government is running so fast from it that you can smell the burnt rubber at the top of Whitehall, and nobody listens to the farmers anyway. They're always moaning, so they can safely be ignored.

For all that, this really is a delicious conundrum – greenies versus zombies. It doesn't matter who wins, as long as they tear each other apart in the process.

COMMENT THREAD

Tuesday, September 08, 2009

For the record

A major public speech by a shadow defence secretary of an opposition party which will in all probability win the next general election should, by any normal measure, be an important event. It is in that light that we approach yesterday's keynote speech from Liam Fox to the UK Defence Conference 2009.

We have summarised the speech on Defence of the Realm, with no detailed comments of our own, to avoid an intrusive "footprint" which might distort the message Dr Fox wishes to convey. This, presumably, is the platform the Conservative Party will present at the general election.

The main thrust of this "platform" – which will come as no surprise – is that a new administration will conduct a strategic defence review. Its purpose will be to define what Britain's strategic interests are and where they exist at home and abroad.

Unless you have clear foreign policy objectives you cannot have a proper defence strategy, says Fox. This will allow the strategic environment and the threats posed to our interests to be assessed within reasonably predictable limits. It will then determine the capabilities we need to protect those interests.

There is much sense in this approach. Defence capabilities – barring the insurance policy of home defence – should very much be the servant of our foreign policy, they being simply one instrument in a broader portfolio,

However, there is a significant omission here from Fox's speech. There is no mention of the European Union. Yet to a great and increasing extent, our foreign policy is determined either by or in consultation with the EU, yet we also have our own independent line, in relation to the United States.

Therein lies a major problem, in that this current government has been struggling (and failing) to resolve the conflict between incompatible and often conflicting foreign policy objectives. That Fox does not even acknowledge that conflict augers ill for any attempt by a Conservative administration to resolve it.

Further, there is no recognition that the UK no longer has (nor has had for some time) the capability for wholly autonomous military action. Any future action will either be in the context of a multi-national alliance, or with the material support of our allies.

Here, the conflict between the US and the EU presents the really difficult problems. In terms of physical and doctrinal interoperability, we can work with one set or the other – but it is very difficult to equip and structure our Armed Forces to work effectively with both.

Furthermore, each set has its own capabilities, the US bringing far more to the table than the EU. In that, effectively, we cannot provide a full suite of capabilities, our procurement programme and indeed our structures must be determined by our choice of ally. Trying to satisfy both leads to confusion, duplication and lack of cohesion.

We see, therefore, from Fox, a certain amount of evasion. He has identified a core issue, but he has not addressed it. Whether he will ever do so is a matter of conjecture.

COMMENT THREAD

Nice spot!

Congratulations to Pavlov's Cat on picking up the Daily Mail on a howler.

As he says, he is "possibly being pedantic" – but facts are facts. Where were the fabled MSM fact-checkers on this one?

However, this is more than pedantry. Time and time again – as we observed earlier, the media displays its technical illiteracy. And when it cannot even get something so obviously right, what price its ability to understand more complex contemporary issues?

It would be interesting to observe the reaction of the MSM if a blogger made such an egregious error, but in the gilded world of the "professional" media, such mistakes are quietly glossed over and the machine grinds on.

COMMENT THREAD

EU tax

Bruno did it yesterday. Klein Verzet takes issue with it. They've been trying it on for years and, in the fullness of time, will succeed – as they always do.

The great strengths of the EU are its persistence and its extremely narrow focus. It is useless at doing anything, except expanding its own powers and establishment, which it achieves with consummate skill.

But it only wins because we let it: because our political classes are too feeble, too introspective and self-centred to do anything about it, because the Great British Public can't be bothered, and because the media is in the entertainment industry.

Meanwhile, UKIP loses a treasurer and, according to some accounts, will shortly lose an MEP – a widely predicted outcome. All in the world is normal therefore – UKIP in turmoil and the EU goes marching on, waving its flag in all corners of the world at someone else's expense.

COMMENT THREAD

Barking

The spectre of a 4°C warmer world, with alligators basking off the coast of Sweden, a vast desert surrounding the Mediterranean and a largely uninhabitable mainland Europe, is to be presented to EU member states by foreign secretary David Miliband.

This is part of a "diplomatic push" by Britain to persuade rich countries to put climate change at the top of their agendas. Thus Miliband will address French, Swedish and Danish foreign ministries in the next 48 hours.

Then, heedless of the carbon footprint, he travels to New York where he will meet foreign ministers from other rich countries next week to hammer out details of a major treaty on global warming ahead of UN talks in Thailand, which will conclude at a crucial summit in December in Copenhagen.

A Foreign Office spokesman said using powerful climate change imagery to concentrate official minds was justifiable because the worldwide geopolitical implications of profound climate change were so enormous.

Meanwhile, a senior executive of Newcastle-based Grainger plc, Tim Nicholson, has claimed he was unfairly dismissed because his views on the environment conflicted with other managers' "contempt for the need to cut carbon emissions".

In the first case of its kind, an employment tribunal decided that Nicholson had views amounting to a "philosophical belief in climate change", allowing him the same legal protection against discrimination as religious beliefs.

We are told that Judge David Sneath said at the employment tribunal: "[Nicholson] has certain views about climate change and acts upon those views in the way in which he leads his life. In my judgment his belief goes beyond a mere opinion."

The decision comes two years after the law on religious discrimination was changed so that beliefs no longer had to be "similar" to religious faith to receive protection in the workplace. Under the new law "philosophical belief" is protected by the law alongside religious belief if it passes a legal test requiring it to be cogent, serious and "worthy of respect in a democratic society".

Nicholson's lawyer said that the case reflected a necessary clarification of the law that would affect large numbers of employees.

"This is a case that will clarify the law for the ever-increasing numbers of people who take a philosophical stance on the environment and climate change, and who lead their lives according to those principles", said Shah Qureshi, head of employment law at solicitors Bindmans.

"These are often deeply held views based on the premise that without change humanity will suffer … people should be able to express such views without fear of retribution or discrimination."

Now then, I have this "philosophical belief" that warmists are the spawn of the devil, that their atheist creed is deeply offensive, that they should be banned from speaking in public about their religion, and that the sinister rituals which accompany their religion should be practiced only in private and then only between consenting adults.

Can I have a job please?

COMMENT THREAD

Monday, September 07, 2009

And then?

The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War.

And for a global currency, you need global governance – in exactly the same way that for a single European currency you need a single European government. And who will run that "government"? Why, the UN of course.

We have been here before, except that the World Government advocates are coming out of the closet and getting more daring. First it was global warming – where "pollution" knows no boundaries. A "global" problem requires a global solution, etc, etc ... And now a global currency as the answer to a global financial crisis.

Be it the EU or the UN, the rhetoric is always the same – like peas in a pod, they look the same and think the same, and have the same solution to every problem: more and bigger government.

COMMENT THREAD

Yon is wrong

A new piece from Michael Yon is usually followed by a rush of e-mails in my inbox, alerting me to the fact. On this one, however, there has been something of a hush. Perhaps it is because Yon writes ...

More on Defence of Realm.

God help us!

Now you know they are getting desperate. Interestingly, the URL for the piece includes the string: "global-warming-religion". That says it all. There is but one God, and she is Gaia.

The next stops, I suppose, are to declare the use of incandescent lamps a mortal sin and for priests to sell indulgences carbon credits - with the church taking a cut, of course.

COMMENT THREAD

Well I never!

As Westminster MPs lick their wounds, their European counterparts grow ever more confident, says Boris Johnson. And because the great Boris says it, it must be true.

The point is, it has been true for a long time, but now the gifted scribe has noticed. Not quite yet has he realised that we now have a parliament that cannot even ban light bulbs – or un-ban them. That we have a government that cannot decide its agriculture or fishing policy. Or even decide how many wash basins there should be in a slaughterhouse.

But he has noticed that, increasingly, Brussels decides on financial services regulation. We could have told him that ... we told our readers that many moons ago. But the great Boris didn't notice – or didn't care. But now he does.

And what is he going to do about it? More to the point, what is Dave going to do about it?

In truth, very little. Dave's Tories, like all Tories before them, will huff and puff, and roll over. Small wonder, Dave is finding it tough going - especially ooop North. Hundreds of miles from the Westminster bubble, they know a poser when they see one.

The EU issue and voting intentions are not directly related. In that sense, the pundits are right. The EU is not an electoral issue, in that people are actually thinking about Brussels when they vote. But what they perceive is an etiolated, powerless, irrelevant political class, where presentation has overtaken substance, because there is no substance. And there is no substance because the power has drained away to Brussels.

Boris might now have discovered this. But he is a long way from identifying the remedy. There is only one. We have to leave the EU. All the rest is talk.

COMMENT THREAD

The expert speaks

Reminding us of the days when men were men and newspapers actually had news in them, The Daily Telegraph has republished its edition for 4 September 1939, announcing the outbreak of war.

One could not help but smile, though, on reading the views of the paper's then resident military expert, Major-Gen A C Temperley, styled as the "military correspondent", who is asked to assess the calibre of the new German army.

Right up front, his view is expressed in the headline, which reads, "Germany lacks experienced officers" with the strap reinforcing the point, telling us: "limited number of trained reserves available". This Temperley works out from his assessment of the peace-time strength in 1938, when the Wehrmacht was said to have had 51 divisions.

On this basis, expanding to 120 divisions war-time strength would mean that many of the new divisions would lack a cadre of fully-trained officers. Temperley contrasts this unfavourably with the French army, which has a "solid block" of 5,000,000 soldiers "that have done their full service in the ranks". The lack of experienced officers will be one of Germany's great handicaps in the war, he concludes.

Helping him on his way to this conclusion is his earlier attendance at German manoeuvres in 1936 and 1937, when the only officers of seniority (that he saw) were the battalion and battery commanders. Apart from that, the officers were mostly "2nd lieutenants" and not more than one of them per company or battery.

What Temperley could not have known – and clearly did not know – was that every German NCO and officer was fully trained in the duties of the rank immediately above his own, an army built for rapid expansion, which meant that the officer corps was far stronger than he had anticipated.

Further, even as he was writing, he had grossly under-estimated the size of the Wehrmacht, putting the number of Panzer divisions at five, when there were already nine, with a number of independent brigades and attached regiments which were to form the nucleus of even more. And against Poland alone, Hitler had 60 divisions ranged, including seven Panzer divisions.

In retrospect, however, nothing more jars than Temperley's comments about the Polish army. The Poles are "no mean adversaries", he writes. They have a population of 30 million and 30 peace-time divisions. Their morale is excellent and they will fight to the very end.

Then does the great man tell us: "All recent fighting with the machine gun arm, increased as that has been, goes to show that the greater power lies with the defence and the Poles should be able to take full advantage of it. Their Army should render a good account of itself." A mere 24 days later, Warsaw had capitulated and it was all over by 6 October when the last Polish troops surrendered.

Temperley had, of course, failed completely to follow the writings of Fuller and Liddel-Hart (or ignored them - Liddel-Hart had written several times to Temperley), neglecting the power of the formed tank division. Neither does he mention the Luftwaffe which in doctrinal terms was a branch of the Wehrmacht, acting as its assault artillery.

With some insight, however, Temperley writes that "all wars now are wars of petrol and oil, which is for Germany a great difficulty. She has not got the petrol for a long war unless she succeeds in obtaining access to the Rumanian petrol supply or Soviet Russia is prepared to supply her extensive needs."

As it turned out, Stalin was more than willing to supply Germany, right up to the point when Hitler turned on him, but then his armies did succeed in "obtaining access" to the Rumanian oil fields. That, in the event, was to be Hitler's undoing, sending his forces south instead of putting all his energies into taking Moscow. But, with the capture of the Ploesti oil fields, we were in for a long war.

What is so striking about Temperley is that he gets virtually everything wrong. Yet, this man, of exalted rank who, after all had "been there" – in Germany, and seen the Wehrmacht on manoeuvres – doubtless was regarded with great respect as the authority of his day.

It is perhaps worth remembering that, not only were the Germans comprehensively underestimated, so too were the Japanese, a fatal error which enabled a force of 30,000 to defeat the British in Singapore with a force more than three times larger.

With the gift of hindsight, it is so very easy to see quite how wrong Temperley was. But, even at the time, there were people saying he was wrong. They were ignored. The Temperleys of that world were the "experts" and they had the ear of the high and the mighty. There are similar experts in a wide range of fields today, who are listened to with just as much respect. And many are just as wrong.

COMMENT THREAD

Sunday, September 06, 2009

The EU squeaks

The EU, via Swedish foreign minister Carl Bildt, whose country holds the rotating presidency, has been very quick to condemn Friday's disastrous air strike, reported to have killed over 50 people, after a US F-15E was called in by German forces near the northern city of Kunduz to destroy two fuel tankers hijacked by the Taleban.

Estimates vary, but up to two dozen may have been civilians unrelated to the insurgents, who had gathered around the tankers, helping to move them after they had become stuck on a small island in the middle of the Kunduz River. Others may have been there simply to help themselves to free fuel.

The alacrity with which the EU has acted may have something to do with allegations in the Washington Post that the German tactical team did not follow Nato/ISAF procedures before authorising the strike.

It is the German involvement, however, that may be particularly sensitive as this contingent – perhaps more than any other – is most closely associated with the EU. Its Army vehicles often sport the EU's "ring of stars" (picture), and Germany is fronting the EU Police Mission in Afghanistan.

With the close identification between the EU and German forces, there is a very real danger that the peace-loving EU is now seen as the killer of peace-loving Afghani citizens who had so innocently gathered at two in the morning to attend upon the stricken tankers.

Needless to say, the German forces have not covered themselves in glory, refusing to attend the scene until the following afternoon – after the dead bodies and other evidence had long been cleared from the site. And neither did they impress General McChrystal who, defying German suggestions that the area was too dangerous, drove to the bombing site to carry out his own investigation and hold a press conference.

Latterly, we are told that the British government has given up hope of any more Nato (i.e., EU) help in Afghanistan. Given their current performance, however, few will express any great disappointment, as – apart from a very few honourable exceptions – their "assistance" is proving more of a liability than an asset.

COMMENT THREAD

A grasp of economics

For all the false optimism about the reduction in opium production in Afghanistan this year (see video below), there is one writer who has got the point. This is Simon Jenkins, who writes in The Guardian:

"The Afghan poppy crop is largely a function of the price of poppies compared with that of wheat ... The crop has shrunk because the wheat price has risen and the recession has dampened European demand. It will rise again."

This is exactly as we wrote a few days ago, and Jenkins is absolutely right. Market forces have a far more powerful effect than anything our pitiful efforts might achieve.

Furthermore, the situation is even worse than that. The UN faithfully trots out statistics on the number of provinces in Afghanistan that are "opium free" – i.e., no longer grow poppies – as if this actually meant something.

Particularly fêted is the apparent success in the northern provinces, which used to be the heart of drug-producing territory but which are now largely poppy-free. But to claim this as a "success" is completely (and perhaps wilfully) to miss the point.



With growers of Helmand and Kandahar provinces (with production in the latter having increased) moving into the market, northern growers, who can produce only about 10 kg of opium per hectare, simply cannot compete with average yields of 56 kg/ha which can be obtained from the more fertile soils in the south.

Thus, the northern growers have done exactly that which happens in every other sector faced with a similar challenge. They have moved into "added value". Instead of growing poppies, their main economic enterprise is converting the raw opium into the much more valuable heroin, and acting as a conduit for the thriving export business (as well as serving the growing domestic market).

During the rule of the Taleban, much of the "added value" processing was done outside Afghanistan, in Tajikistan and elsewhere. Now the value remains in the country, while Tajik and other businessmen have compensated for the loss by expanding their arms-trading and other nefarious enterprises.

And into this mix do we blunder. Clearly, since one of the major control mechanisms on opium growing is the price of wheat, our interests are best served by keeping the wheat price high. This can be done be a variety of market intervention mechanisms, principally either by intervention buying (as in the EU) or by implementing a minimum-price guarantee, topping-up farmers' incomes if the wheat price falls.

These options, however, have apparently been blocked by the US – it seems on "ideological" grounds, although it is difficult to pin down exactly where and why there is this blockage. If this is the case, then we are looking at mass hypocrisy, with US grain growers benefitting from some of the highest subsidies in the world.

Without a support scheme, things are bad enough – but we seem intent on making it worse. With Brown's much-favoured "wheat not heroin" scheme, we are giving away free seed wheat and fertiliser to Afghan farmers, while much of the aid is directed towards improving irrigation.

The net effect of these initiatives is substantially to improve wheat production. In the absence of a developed marketing infrastructure, this leads to local surpluses and crashes the price of wheat, thereby altering the economic balance in favour of growing opium, issues we have explored in depth here and here.

Our policies, therefore, are actually achieving the precise opposite of what we intended. We are thus paying huge amounts of money and putting soldiers' lives at risk, escorting seed convoys and distributing seed and fertiliser, to make the situation worse.

Of course, no discussion about opium-growing in Afghanistan is complete without bringing up the issue of forcible eradication. Forget the economics, some continue to say – just burn, grub up or poison the illegal poppy fields.

However, bearing in mind that coalition forces control perhaps less than ten percent of the area in the southern provinces of Helmand and Kandahar, ground intervention might be difficult.

Aerial spraying is an option but then, there is no better way of driving hundreds of thousands of Afghanis into starvation, forcing them into the arms of the Taleban. The current level of insurgency would be nothing compared to what it would be.

In the long run, though, the economic solution would work. It has worked on a small-scale in Afghanistan and has been successful elsewhere in the world. But nowhere, ever, will any policy succeed when it flies in the face of the very fundamentals of economics, which is what we are trying to do in Helmand. We might just as well try to re-write the laws of gravity.

COMMENT THREAD

Go away ...


Just go away and read Booker.

The worst of this is that these people call themselves "scientists" and the media faithfully parrot the myth. They are rent-seekers, political prostitutes, snake-oil salesmen and out-and-out scaremongers.

Never more is it evident though that "climate change" is not about science. This is about "agendas" and control, a naked political coup to impose a "world view" on an unwilling and sceptical population. Like shouting "fire!" in a crowded theatre, "climate alarmism" should be made a criminal offence.

COMMENT THREAD

A "plot" exposed

A Labour plot to smear the new head of the Army, General Sir David Richards, because of his daughter's "crime" of working for David Cameron, was exposed last night.

Really?

This, apparently, is on the basis that unnamed "sources" said they had heard from Eric Joyce that he had been "disturbed" to hear Labour colleagues discuss Sir David's 25-year-old daughter, Joanna Richards, who recently became Mr Cameron's diary secretary.

"Well-placed sources" say Mr Joyce feared Labour was preparing to deploy more smear tactics against General Richards if he stepped out of line like General Dannatt. "He heard talk of Richards' daughter working for the Tories and did not like it," said one source.

And that is the sum total of the "evidence" offered by the Mail on Sunday, allowing Tory defence spokesman Gerald Howarth to say of the "planned campaign" against General Dannatt's successor: "For Labour even to think about smearing General Richards and his daughter is absolutely despicable."

Can someone please tell me how they would characterise the evidential base offered by this paper, and what purpose is served by the conclusions drawn from it? The other interesting question is how many will believe this heavily-researched and well-authenticated piece of work, and repeat it verbatim, without any qualification?

As to the reality, Gen Richards is extremely highly regarded by ministers, is in constant contact with them and is working intensively on fleshing out the response to US Gen McChrystal's report on the Afghan strategy.

COMMENT THREAD

Saturday, September 05, 2009

Proud of ourselves?

For what it is worth, I had to record this.

An ICM/Guardian poll has found that support for the BBC has risen in the last five years with almost four out of five people believing it is an institution of which to be proud.

The poll showed that 77 percent were proud of the BBC, up from 68 percent in a similar poll from 2004. Some 63 percent thought the corporation provided good value for money, up four percent from five years ago. And support for the licence fee has grown from 31 per cent in 2004 to 43 percent.

Well, you can't fool all of the people all of the time, but this would seem to confirm that you can fool an awful lot of people most of the time.

Do you ever feel you are fighting a losing battle?

COMMENT THREAD

Why we're getting it wrong

Following on from Stephen Grey's critique of the campaign in Afghanistan, sociology professor Anthony King offers his own observations about the capabilities of the British Army, in a piece entitled "Why we're getting it wrong in Afghanistan".

King is an interesting observer, having carried out several studies of the British military, and he is thus better qualified than most to contribute to the ongoing – albeit limited – debate about the performance of the Army.

More on Defence of the Realm.

Hacking our money

We give far too little acknowledgement to the excellent site, Burning our Money, which toils away in the vinyard, coming up with some seriously good material which puts the MSM to shame.

Today Wat Tyler explores the difference between "hacking" and "slicing" – two different mechanisms for cutting expenditure in an organisation (such as the government). Briefly, one can be described as across-the-board cuts while the other is targeted reductions.

The cowardly – and wholly ineffective – way is "hacking". This simply passes the grief (and the decision-making) down the chain, resulting in unintended consequences. And rarely by this mechanism is there achieved any long-term savings.

Tyler's piece has such resonance because I can recall in local government service being on the receiving end of "hacking". Down came the instruction that there was to be a ten percent cut across the board and, since our biggest overhead was salaries, the axe fell mainly on staffing costs. A recruitment "freeze" was immediately instituted, which meant that no vacant posts were filled.

Now, like most hierarchies, our department had at the base of the pyramid the field workers, the inspectors and technicians who actually went out and did the job. They were supervised by senior officers, who in turn were supervised by divisional officers who then reported to the deputy chiefs who were responsible to the chief.

In the nature of things, the most fluid part of the pyramid was the base, where job mobility was high. Higher up the chain, people rarely left – they had high-paid jobs and many would never get an equivalent elsewhere.

Thus, in a very short time, gaps started appearing in the lower ranks. But none of the seniors left. Gradually, the department became unbalanced, with an acute shortage of field staff supervised by a proportionately greater number of senior officers, who of course never went out of the office to get their hands dirty.

As our field staff dwindled, the work stacked up and the complaints from the public about the poor service started flowing in, the bosses came up with the perfect answer. We would target the highest-profile jobs, where we were dealing directly with the public, and deliberately delay our responses by 24-hours.

Under this regime, instead of a same-day call, we would leave it until the next day, then turning up with profuse apologies, blaming the "cuts". It was not long before public pressure became so great that the recruitment ban was lifted and we were back up to strength, the departmental structure unchanged.

Under a "slicing" regime, the obvious solution would have been to get rid of the divisional officers, which would have saved a fortune and improved the efficiency of the department, freeing us from endless red-tape generated just to show the big boss how effective were the middle-men.

But that was never to be. That would have meant structural changes and unpopular decisions. Not even the rank-and-file – with their eyes on eventual promotion and an easier life – wanted them.

And so it is in every public sector department. When the axe is wielded, it always falls at the sharp end. In the NHS, it is the cleaners, the nursing assistants, the doctors and nurses who go. The useless mouths remain. Similarly, in the Army, the bayonets are sheathed while the Colonels and Generals report unfailingly for duty.

"Hacking" is the coward's way out – the easy way - and it never works. But that is what always happens because there are no rewards in public service for taking "tough" decisions. But the next time some bureaucrat "apologises" for poor service and blames the "cuts", you will know better.

COMMENT THREAD

Brown on Afghanistan

"I want to take head on the arguments that suggest our strategy in Afghanistan is wrong and to answer those who question whether we should be in Afghanistan at all."

So said Gordon Brown yesterday, in a widely trailed speech to the International Institute for Strategic Studies, under the general heading of "Afghanistan - National Security and Regional Stability."

More on Defence of the Realm.

Friday, September 04, 2009

Handing down the poison chalice

Having previously announced that he is to stand against speaker John Bercow in the general election, Nigel Farage has now announced that he is to stand down as UKIP leader, ostensibly to enable him to concentrate on fighting Bercow's Buckingham seat.

The decision to take on the Bercow is politically astute as, by convention, none of the main parties field candidates against the speaker. Although nominally Tory, Bercow is universally detested by his own side and, therefore, there is an outside chance that enough local Tories will break ranks and vote for the "cheeky chappie" to give him a run at becoming UKIP's first elected MP.

With Farage though, nothing is ever entirely what it seems. There are strong rumours that our Nigel has overstayed his welcome in Brussels and that the forces of darkness are not a million miles from feeling his collar, making his continued tenure as an MEP expensive and increasingly insecure. Reinventing himself as a Westminster MP – his lower salary fortified by his MEP pension - could head off the wolves and give him protection from impending disaster.

On the other hand, divesting himself of the leadership means very little. Farage still holds the leadership of the MEPs and thus the purse strings. As lead candidate for the general election, he will also be able to bask in more than his fair share of publicity.

Having assiduously driven out of the Party any potential rivals, he is left with little serious competition and will, most likely, be able to appoint a trusted placeholder to keep his seat warm. That will pave the way for his triumphal return at a later date, when his current batch of critics have dissipated their energies on his successor, and the membership is crying out for his hand back on the tiller.

Meanwhile, his temporary placeholder can hold the poison chalice, dealing with the divers unpleasantness which is about to hit the Party – not least some unfinished business with the electoral commission – leaving a squeaky clean Farage free to concentrate on his Westminster re-birth.

Should the "cheeky chappie" prevail against the loathsome Bercow, another of Farage's gambles will have paid off. Once more he will make Teflon seem like superglue as walks away from the wreckage of his own making, without a stain on his character. As a politician, it seems, Farage has what it takes to succeed, and he could just pull it off.

COMMENT THREAD

War porn

Are you going to write about Farage's resignation as UKIP leader? some of our readers have asked. The answer is yes, when we get round to it. For the moment though we have had something more important to review, over on Defence of the Realm.

Hollow power?

On the day that The Guardian was complaining of "Hollow power in Helmand", almost to prove its point, two more British soldiers were reported killed in the province.

The Times ran with the story, noting that both of them had died in the town of Babaji, focus of the five-week offensive, Operation Panther's Claw, where only 150 Afghans had voted in the election on 20 August. Ten British soldiers died in that operation.

More on Defence of the Realm.

Thursday, September 03, 2009

Rats and sinking ships

In what has been described as a "major embarrassment" for Gordon Brown, Eric Joyce, the parliamentary private secretary to defence secretary Bob Ainsworth, has resigned over the Afghanistan campaign.

An ex-Army officer serving with the Adjutant General's Corps, Joyce joined parliament in December 2000 after winning a by-election for Falkirk West. He recently gained the unenviable reputation for being the most expensive MP in the House, having claimed £187,334 in allowances and expenses in 2007-8. He was cited as the first MP to have claimed £1 million in expenses, and accused of evading capital gains tax on house sales.

Now, in a letter to the prime minister, he has called for an exit strategy for British troops in Afghanistan, writing that Britain needed to "make it clear that our commitment in Afghanistan is high but time limited". He added: "It should be possible now to say that we will move off our present war-footing and reduce our forces there substantially during our next term in government."

Joyce also warned: "I do not think the public will accept for much longer that our losses can be justified by simply referring to the risk of greater terrorism on our streets," going on to say that he did not think "... we can continue with the present level of uncertainty about the future of our deployment in Afghanistan."

He also criticised the contribution of other Nato countries in Afghanistan, adding: "For many, Britain fights, Germany pays, France calculates, Italy avoids."

The resignation comes ahead of a major speech by Brown at the International Institute of Strategic Studies on Friday, when he will seek to reinforce Britain's reasons for being in Afghanistan as opinion polls continue to show hesitant public support.

This is not the first time Joyce has broken ranks, however, having narrowly escaped a court martial in 1997, after publicly attacking the "snobbery and elitism" in the officer corps in an unauthorised article written for the Fabian Society.

The article also called for the setting up of an independent professional association for services personnel and an end to the recruitment division between officers and lower ranks. He then further provoked anger among the top brass by speaking publicly again, when specifically told not to - regarded by fellow officers as disobeying orders.

He was dismissed from the Army in 1999 after accusations that he was being protected by ministers. More recently, he escaped another sacking as Ainsworth's aide, having criticised the MoD for appealing against compensation awards for two servicemen, describing the action as "politically bonkers".

Reputed to be extremely unpopular in his own constituency, he is believed to be at risk of losing his seat at the general election, with some pundits suggesting his current motivation is more geared to personal survival than any great upwelling of principle. Brown's "embarrassment" may, therefore, be short-lived.

COMMENT THREAD

That dash for gas

Tony Lodge hits the Telegraph letters today under the heading: "Lack of strategic planning for energy policy means Britain is over-reliant on imported gas."

He points out that the prolonged lack of strategic planning on energy has allowed Britain to become overdependent on gas-fired power stations. No other kind of base-load power plant has been approved since 1997. One third of the gas we use, he writes, is now consumed in such power stations, exacerbating the run-down of our indigenous gas reserves from the North Sea, leading to overdependence on imports.

This will increase, as 90 percent of all proposed and ongoing power plant construction is gas fired.

Lodge argues that there is an obvious way out of this looming crisis. The Government must look towards an early derogation from the EU's Large Combustion Plant Directive, which rules that we must close more than 12 gigawatts of older coal and oil plant by 2015. The Government should also support the fitting of new pre-combustion carbon capture and storage technologies, which can capture a large proportion of the pollutants from older plants.

He concludes that it is most unlikely that Britain's new fleet of nuclear power stations will be on line by 2020, so the answer must be to renegotiate the directive and support available but unpublicised technologies.

The point, of course, it that this over-reliance on gas is very dangerous – having enormous price implications, and a significant effect on our balance of payments.

Lodge is also right to cast doubt on the scheduling for new nuclear capacity, so the quick way out – to avoid having to build even more gas capacity – is to seek that derogation from the LCPD. The chances of Mr Cameron doing that, however, is slight.

That leaves "unpublicised technologies". Lodge is a fan of in-situ gasification of coal, which is an attractive proposition. To kick-start that technology, though, will require government support – and that cannot be forthcoming because it would fall foul of EU state aid rules.

Every which way we look, the dead hand of the EU limits our options – the result of which is that we will have to pay until we bleed for our electricity. Yet, as Lodge points out, there is a way out. The problem is that neither this nor the next administration is likely to take it. We are doomed to poverty.

COMMENT THREAD

The government can




Put a Union Jack on it and it's just as true.

COMMENT THREAD

The same old mistakes

The Times ignores the obvious irony that, on this day of all days – the 70th anniversary of the declaration of war on Germany – it should come up with a headline: "The Army is making in the same old mistakes Afghanistan, say soldiers."

The irony is there in plenty as the first phase of the war against Germany was characterised by the Army making the "same old mistakes", starting with the disastrous campaign in Norway, the chaos which led to the retreat at Dunkirk, the shambolic Greek campaign, the unnecessary loss of Crete and the sequence of defeats in the Western desert, remedied only by el Alamein in 1942 when the 8th Army, fortified by huge stocks of US materiel, managed to prevail against a German force which had over-reached itself.

From a historical perspective, it is probably fair to say that we did not win the Second World War so much as Hitler lost it, not least by his determination to invade Russia, thus tying up 150 divisions which, had they been deployed in Northern France in 1944, would have thrown us back into the sea.

Almost – but not quite repeating history - in Iraq in 2003 – a victorious British Army, having so easily won the war – went on to lose the peace, not having learned, or retained the lessons of previous campaigns, culminating in our abject retreat from Basra and the expulsion of British forces earlier this year, the final act of which has yet to be played out. As before, only the timely intervention of the Americans saved us from a more humiliating rout, which has enabled us to pretend that our occupation actually achieved something.

But now, seeping into the public domain is the slow recognition by the Army that the occupation of Iraq was not "a glowing success, as some within Whitehall and PJHQ [the MoD’s Permanent Joint Headquarters] may try to claim."

That is the view of Daniel Marston, a former senior lecturer in war studies at the Royal Military Academy Sandhurst, articulated in the current edition of the British Army Review, a "Restricted" magazine that is not published openly but which Michael Evans of The Times has managed to obtain and report upon.

Thus does he convey the essence, that the Britain Army is failing to learn from the "military mistakes" made in Iraq in developing ways to defeat the Taleban in Afghanistan, according to a series of critical articles published in an internal army journal.

Dare we say it, but that is exactly the thesis we offer in Ministry of Defeat which, from the limited review that Evans offers us, goes far beyond that which the Army is yet ready to admit.

We do get from Marston, though, that "Observers expected that the British forces going into Afghanistan and Iraq, given their history of success in counter-insurgency, would automatically be better suited to waging wars among the people than their American counterparts."

But then he says that: "The British Army, in practice, appeared to be losing its way in terms of practical application of key facets of COIN [counter-insurgency] ... Many officers and NCOs ... were apparently unaware of important operational and strategic aspects of COIN. The British Army cannot turn its back on a difficult campaign and disregard lessons, some of which are admittedly very tough to swallow ... ".

We also learn from Evans that there is condemnation in the journal of Britain’s strategy in Iraq, particularly the decision to withdraw troops from Basra in September 2007, leaving the city to be taken over by extremist Shia militia. This, we are told, echoes criticisms made by senior American commanders at the time, which were rejected by the Government.

But, if that is as far as the criticism goes, then they are not there yet. As we never tire of saying, the strategic rot started with the decision to abandon al Amarah in 2006 (the picture is from 2005 in Alamarah), which set the pattern for the retreat which continued into Basra. Yet so few people – even amongst the troops who were in theatre at the time – knew what was going on that it is unsurprising that the full implications of that decision are not yet fully understood.

Even with the limited and highly controlled criticisms in the journal, however, Gen Dannatt admits in a foreword that the articles "make uncomfortable reading" but, we are told, "he welcomes the debate." Of course, the debate has barely started and, if it was that welcome, the brave General might have done more to promote it while he was still in office.

He does "reveal" though that a review of doctrine applied in Iraq and Afghanistan, called "Operation Entirety", has already helped "to focus the Army on the enduring campaign in Afghanistan". That review will be published soon, we learn.

Yet this is the review that has been six years in the making and, to judge from the lacklustre strategy being applied in Afghanistan, by no means all the lessons from Iraq have been either acknowledged or learned. But since it would appear that only now is the Army beginning to allow muted criticisms in a "Restricted" document, it has a long, long way to go before we get to the bottom of the failures in both Iraq and Afghanistan.

With historians still chewing over the entrails of the Second World War, it may be some time yet before we get to grips with the extent of those failures, leaving Trooper David Maddock in the current journal to put down a marker.

He declares: "British forces in Afghanistan today are fighting an asymmetric war, a war we have fought many times before in Arabia, Malaya, Northern Ireland and Iraq ... If we have such a vast amount of experience, why are we not implementing the lessons learnt by those who have fought and died before us?"

But the last word has to go to US Colonel Peter Mansoor, who says that, "Only through a thorough appreciation of the mistakes it made in Iraq can the British Army turn defeat into victory as it fights the untidy wars of the early 21st century. It should not ... gloss over its recent experience in Iraq ... Although the conditions [in Afghanistan] are different, the lessons of Iraq are still relevant."

"The British failure in Basra was not due to the conduct of British troops, which was exemplary. It was, rather, a failure by senior British civilian and military leaders to understand the political dynamics ... in Iraq, compounded by arrogance that led to an unwillingness to learn and adapt, along with increasing reluctance to risk blood and treasure to conduct effective counter-insurgency warfare ... ".

That arrogance is still there, in spades, and all we are seeing is the smallest of cracks in the edifice. But it is a start, even if it risks being too little, too late. We cannot afford 70 years before we finally admit that mistakes were made. And nor can we afford the luxury of dwelling on those events all those years ago, while ignoring the present.

COMMENT THREAD

Hard times?

Putting two entirely different items together, on the one hand, we see from The Independent that the price of Kalashnikovs has doubled in Afghanistan and weapons are now fetching $600 apiece.

On the other, according to the latest UN report, wholesale (farm gate) prices in Afghanistan have fallen by a third in the past year: from $70/kg to $48/kg for fresh opium; from $95/kg to $64/kg for the dry variety while, in 2009, opium cultivation in Afghanistan decreased by 22 percent, from 157,000 hectares (ha) in 2008 to 123,000 ha today.

More on Defence of the Realm.

Wednesday, September 02, 2009

Those power cuts

Booker gets to follow-up on the "power cuts" story today in The Daily Mail.

Necessarily written in the breathless style for which that paper is so loved, you have to read well past the headlines and deep into the text to find the core of our piece yesterday. But Booker does tell us that the government hopes to save Britain's electricity supplies from disaster with a scramble to build dozens more gas-fired power stations.

This means, writes Booker, that we shall be looking to gas to provide anything up to 80 percent of our electricity ... at a time when world gas prices are likely to be soaring. He adds that, even if, by this extremely risky gamble, we might manage to close the energy gap now fast approaching us, it could only mean a further massive hike in electricity prices, driving millions more into "fuel poverty".

The price-hike is, of course, the issue. With the torrent of new CCGT plants coming on-stream (DECC estimates that there is 10GW new capacity in the pipeline), there is little real risk of power outages, especially if we see what amounts to rationing by price.

Against current estimates, we are likely to see lower than anticipated demand as high energy industries (such as aluminium production) depart these shores, while hundreds of thousands of people "self-disconnect" from the electricity supply.

This is a little-appreciated development in the electricity supply industry. While compulsory disconnections used to be an unwelcome feature of any downturn, these no longer happens. Instead, delinquent customers are issued with pre-payment meters. Thus, in theory, supply is maintained. Customers then "choose" to disconnect themselves when they cannot afford to top up their meters.

With the advent of "smart" meters – at an estimated cost of £7 billion – that facility will be extended, as suppliers will either be able to ration or cut-off customers entirely, at will, giving a new dimension to controlling supplies. Given an anticipated shortfall, consumption limits can be imposed on selected customers, enabling suppliers to manage peak loads better.

For this reason also, the 70s-style "power cut" is not likely to happen. The political cost of allowing the lights to go out "all over England" is too great and the impact will be thus "managed".

The big problems, as Booker indicates in his piece, is the longer term gas supply problem. While numerous industry sources report lower than expected demand, increased supplies and falling prices, long-term forecasts are pessimistic. A substantial demand-supply gap of more than 500 million tons of LNG is expected to develop by about 2012.

This is more of a financial than a resource problem, as infrastructure and development projects have been cancelled or delayed as a result of the "credit crunch".

The problems are solvable, but they are going to cost, all adding to the long-term price pressure on supplies. Add temporary supply miss-matches and spot prices could soar, just as the UK is increasing its reliance on the fuel. The price-hikes we have seen recently were only a rehearsal. The real crisis is yet to come.

It is instructive, though, to see how readily other media outlets and commentators have bought into yesterday's Telegraph story, although even that paper could not quite make up its mind as to who to blame. While the leader had Labour in the frame, Irwin Stelzer later put the responsibility at the door of all politicians.

Stelzer is closer to the truth, albeit that - despite the excitable scribbling that we have seen of late - it is price and not capacity that is the issue of the future. And that situation is unlikely to ease as long as the Conservatives are slaves to the green agenda – and the EU – and continue to support the fatuous wind-based renewable policy, as well as carbon capture which is holding back coal exploitation.

If the lights go out, therefore, it will be because we can no longer afford to keep them burning.

COMMENT THREAD

Another "perestroika" think-tank

Readers of this blog who have long memories will recall the excitement caused among Western politicians, journalists, academics and other analysts Mikhail Gorbachev's concept of "perestroika", otherwise known as reconstruction. It was a wonderful get-out clause for those who fought hard against all evidence about the Soviet system. Here was a leader who believed in that system but wanted to reform it.

Some of us maintained that it could not be done and we turned out to be right. In case anybody is wondering, there was no mass resignation of all those experts who turned out to be wrong.

It is, however, a very useful expression and there are many "perestroika" organizations, both europhiliac and eurosceptic. We used to refer in those terms to the Centre for European Reform, but that has changed in the last two or three years and become europhiliac without much attention being paid to any possible reconstruction though they do, from time to time, call for reform of something or other in the European Union.

Its long-standing director, Charles Grant, Jacques Delors' biographer, has now turned up in another "perestroika" organization, Business for New Europe. Actually, it has existed since 2006 but has now turned up on my horizon or, to be quite precise, in my e-mail inbox as part of the regular information I get from the Stockholm Network, a pan-European network of market-oriented organizations.

So what is Business for New Europe and what does it hope to achieve? It "is an independent coalition of business leaders articulating a positive case for reform in Europe" and its aim is "to support the UK's active engagement in Europe, and a reformed, enlarged and free-market EU". This is rather a muddled set of aims as there seems to be no difference in the minds of those who wrote them between Europe and the European Union. Furthermore, the "reformed, enlarged and free-market EU" is nothing much more than a pipe-dream even if BNE and its talented staff could define what they meant.

Going past all the various refugees from the short-lived "Business for Europe", ex-FCO people, including Sir Stephen Wall, and Charles Grant we come to those who, presumably, actually run the place. Well, decide on the policy, at least, as it is run undoubtedly by badly paid assistants and unpaid interns.

Zaki Cooper has been Director of Business for New Europe SINCE February 2006. Prior to that, he worked as the Head of External Relations for the Chief Rabbi, Sir Jonathan Sacks and in public affairs for One to One/T-Mobile between 2000 and 2003. He has also worked for a British MP and a U.S. Congressman. He has a BA in Politics and Parliamentary Studies from Leeds University and an MPhil from Cambridge University in Social and Political Sciences. As well as his role at BNE, Zaki is also an inter-faith consultant and commentator.
Vrey nice, too. All the right qualifications: degrees from good universities but dubious subjects; jobs in public relations and work for various politicians; inter-faith consultant (wot dat?) . I see no particular reason to suppose he knows anything about the EU but I may well be wrong. Certainly this letter to the Wall Street Journal, published on July 1, does not exactly fill one with any kind of faith (if I may use that word) in Mr Cooper's knowledge and understanding:
Wall Street Journal, 1 July 2009

EU Membership Is a Boon For Britain

It is ironic that there is still so much ambivalence and hostility toward the European Union at a time when the direction of travel has been toward Britain ("The Dis-Uniting Kingdom," State of the Union, June 30). Since 2004, the EU has expanded to 27 member states and has made progress on strengthening the single market, such as the services directive which liberalized services, accounting for 70 percent of the European economy.

Developments in the area of financial services illustrate that the debate has moved in a Britain-friendly direction. Britain's financial industry is an important component of the European economy and London has established itself as the leading financial market in the EU. The single market and in particular the free movement of capital has been integral to that process. The corollary of the single market is regulation, and again many of the efforts to coordinate the regulatory structure have helped the development of financial services. Obviously the financial crisis has necessitated some new thinking and changes to the regulatory system. But rather than a federalized single regulator, many of the ideas being considered aim to increase coordination as well as strengthen warning systems. Such measures could make the British financial services industry even more robust to withstand economic turbulence. While there are specific regulatory threats such as the directive on Alternative Investment Fund Managers, the EU can manage overall to help rather than hinder Britain's financial services dynamism.

Zaki CooperDirector, Business for New Europe
They do also have a Public Affairs Executive:

Arif Shah joined Business for New Europe in September 2008. Prior to this,he worked at Westminster for a Member of Parliament and a member of the House of Lords. Arif has been closely involved with various non-governmental organisations including Human Rights Watch, Médecins Sans Frontières and WarChild Canada. He has a MA in International Studies from Durham University and BA in Political Science from Dalhousie University (Canada).
A true denizen of the tranzi-world.

The Advisory Council gives us a list of all the usual suspects from the business world but it hardly matters. No think-tank ever asks for advice from its Council. They would be mad to do so.

What worries me more than anything is that I can easily imagine that the Conservative government, should we have one after May next year, will turn to organizations like Business for New Europe for advice because they are so on-message.

COMMENT THREAD

We thought of it first

Joe Borg, the EU Fisheries Commissioner, has called for an end to "discards". Instead, we are told, he believes that fishermen should be limited by "effort". For example limiting the number of days vessels can spend at sea or where boats can fish. "Replacing quotas by effort can be a very effective way of reducing the environmental impact of fisheries, and in particular of discards," he says.

This has been picked up by the BBC which retails the Scottish Fishermen's Federation welcome for the idea, although SFF chief executive Bertie Armstrong also warns that simplifying issues may not solve them. "The consequences of using days at sea as the only control measure will require a great deal more thought. It is at best unpredictable and may, for some fisheries create more problems than it solves."

"Nevertheless," Armstrong adds, "it is an encouragement that the Commissioner is prepared to be truly radical and look at all options. We will, therefore, be asking him as a matter of urgency for more detail on what he is actually proposing."

Of course, if you want more detail of how a fisheries scheme could work, you need go no further that look at Owen Paterson's draft, dated January 2005, which we heralded on this blog. In pre-eminent position as one of our recommendations was: "Effort control based on 'days at sea' instead of fixed quotas," with much more detail of how that system could work.

Although then adopted by the Conservative Party as policy, it was quietly dropped when Cameron ascended to the throne and has been ignored even since by the Party. Now, nearly four years later, the EU commissioner is coming round to our way of thinking. But it also says a great deal that what was urgent those four years ago is still urgent, and the commission is still just talking about "reform".

At least, though, the commission is talking, which is more than is the Conservative Party, which has long since abandoned the fishing industry to its fate. Our Dave doesn't "do" Europe, which is why some of the campaigners who were once at the forefront of trying to get the Party to move on this issue have given up completely – and voted BNP at the last euro-elections.

But, in another five years time, perhaps, when the commission finally get down to offering formal proposals, to deal with what is left of the fishing industry, Dave can dust off Owen's paper and pretend it was his idea all along. We thought of it first, he can say, and all the little Tory boys can cheer at their good fortune at having such a far-seeing leader.

COMMENT THREAD

Stop fighting wars!

The Armed Forces exist primarily to buy increasingly expensive equipment in order to keep high-paid industrial workers in jobs and to keep arms dealers (aka the defence industry) in the luxury to which they have long been accustomed. That much seems ever-more evident with the latest initiative from the Defence Industries Council (DIC) which is today launching a high-profile campaign seeking an increase in defence spending.

More on Defence of the Realm.

Well, it's up

As promised that posting on the beginning of the Second World War. No, I am not early - fighting had been going for a couple of days by the time the Prime Minister, Neville Chamberlain made that broadcast. I have just been reminded that in the few weeks of fighting the Poles inflicted a good deal on the Germans, who lost around 50,000 men. But, of course, there was the other invasion on September 17, the rounding up of Polish officers and deportation of Polish civilians to Central Asia, whence many emerged in 1943 in unspeakable conditions. But that is for another day.

Round and round

In the latest instalment of that curious crime known as "carousel tax fraud", Reuters is reporting that measures to prevent fraud in carbon permit trading may not be working. A patchwork of unilateral actions by a few EU member states, it says, could serve only to push the activity into neighbouring states.

The news agency has carried out its own investigation into this scam and found that a mix of tax loopholes, lack of regulatory oversight and easy market access that could open the EU's $90 billion emissions trading scheme to abuse. Investment banks and brokers are thus worried they may have to foot unpaid tax bills left after any fraud or face legal action for having traded unknowingly with anyone charged.

It was early last month that we reported on attempts to rob the taxpayers of EU member states of hundreds of millions, and although the UK took quick action to head off the scam at the pass, its efforts to catch the crooks have been unsuccessful.

High-profile action by HM Revenue and Customs (HMRC), which raided 27 properties around London following a 7-month investigation into a suspected £38 million fraud, had nine people were arrested. All have since been released without charge.

David Bates, a director at emissions broker CarbonDesk makes the obvious point. "It's put the innocent intermediaries in a very awkward position of responsibility and liability, which isn't fair," he says. And that is indeed the case. By the time the authorities pick up the fraud, the original perpetrators have usually long gone, leaving the downstream firms, who have been unwittingly scammed, holding the baby.

The latest target is the spot trade in carbon permits, an unregulated market worth tens of billions of dollars. It is particularly attractive because of its tax treatment in the EU and lack of oversight by financial watchdogs. But the irony of it is that, while governments stand to lose shed-loads through fraud, they make nothing because the VAT is eventually reclaimed anyway.

Furthermore, as James Emanuel, a director at broker CantorCO2e, says: "Carbon permits are a tax on emissions, and applying VAT to them is effectively putting a tax on a tax, which is kind of ludicrous."

“Ludicrous" is not a bad name to apply to the tax as a whole, which is estimated to cost European taxpayers some £40 billion a year, with British losses in 2005–06 running to between £2 to £3 billion.

To stem the losses on carbon credits, France exempted carbon permits from VAT in June. In July, Britain and the Netherlands followed France's lead, altering their tax treatment of the permits. However, there is nothing to stop fraudsters moving on to other countries such as Spain and Germany, where large amounts of carbon permits are traded.

The EU Commission, of course, would not comment on specific countries at risk and other countries are keeping schtum. So too, with the notable exception of Reuters, is the media in general.

It has always been a strange facet of this gigantic crime that publicity has been sparse. It is as if the media simply cannot cope with the scale of the losses, or that fact that, arising from an EU tax, the establishment does not want to acknowledge by how much it has been conned.

Interestingly, wherever this tax system exists, there is fraud and, wherever there is fraud it seems, the perpetrators get away with it.

In the final analysis though, the ultimate beneficiary will be the EU. Virtually unreported in this country, the Council recently adopted a proposal to set up "Eurofisc": a common operational structure "allowing" Member States to take rapid action in the fight against cross-border VAT fraud.

Soon enough, there will be an executive agency to run this system, with more eurocrats to feed at the tit of public finance, tightening economic and therefore political integration even further. Once again, we see engrenage in action – first create the problem and then come up with a solution that requires more integration. And no one seems to give a damn.

COMMENT THREAD

Tuesday, September 01, 2009

When means now

As another two British soldiers die in Afghanistan – killed by an RPG - bringing the grand total to 210 – the coalition powers are now paying the price for grossly over-selling the Afghan presidential election.

Thus does The Times report today that "West faces losing battle over Afghan poll fraud", retailing an admission from "Western and Afghan officials" that that widespread and systematic fraud during the elections has tarnished the legitimacy of any future government and undermined the Nato campaign.

More on Defence of the Realm.

This is a tricky problem

Yes, yes, I shall be writing about the Second World War and the various versions of its beginning that are around (hint: the Russian President seems to think it was all the Poles' fault) but in the meantime, here is a posting about problems between Sweden and Israel. Enjoy.

Germany calling

With a message for our Irish friends.




A simple request ... vote "no" to Lisbon. Just do it!

COMMENT THREAD

Behind the curve

The front page lead in The Daily Telegraph raises the spectre of massive electricity power cuts, a subject Booker and I have been addressing for some time.

However, the author of the Telegraph piece – none other than Andrew Porter, political editor - plus the copious references to the shadow energy and climate change secretary, gives the game away. This is a "silly season" filler placed by the wonks in the Conservative Party HQ as a means of getting an easy publicity splash for an otherwise invisible shadow cabinet.

Needless to say, in full rah-rah mode, Tory Boy blog gives the issue full-frontal treatment, although the alarmist tone is somewhat deflated by one comment which notes that, apart from the Bridgenorth and Hatfield coal-fired power stations (3GW), there are several planned capacity enhancements at Barking Reach, Immingham, Damhead Creek, Kings Lynn and Sutton Bridge which will make up most of the shortfall.

Those many of us who have followed the energy market closely would tend to agree. Behind the scenes, in an unheralded and generally unnoticed shift in policy, there has been a dash for gas, with the very rapid building of extra capacity.

In theory, these new CCGT stations will provide back-up for the increasing number of windmills that we are supposed to be building. But since the renewable programme is never going to get off the ground, these gas stations will become the core of our primary generation capacity.

This, as we remarked back in June, is likely to be sufficient to ward off any prospect of power cuts, the issue having moved from one of shortage to one of cost. With a heavy reliance on gas, there will be times when supplies are tight and we will have to be buying off the spot market at inflated prices. We may avoid the cuts, therefore, but there will be a very high price to pay.

Using gas to produce electricity is in fact a waste of resource. This product is best suited for supplying domestic heating and cooking and to use it for a purpose for which there are other, better energy sources – such as coal and nuclear – amounts to criminal dereliction.

That is where there battle lines should now lie, with an urgent need to abandon the fatuous attempts at building more and more windmills – a policy which the Tories support – and an emergency drive to build rapidly new nuclear power stations.

However, with the Tories behind the curve, as always, expending their ingenuity in attracting "off-peak" headlines rather than producing off-peak electricity, it is unlikely that we are anywhere closer to developing a rational energy policy. But at least the Tories can congratulate themselves on achieving some cheap publicity, even if we would rather have cheap electricity.

COMMENT THREAD

Progress of a kind

It is ironic that, on the 70th anniversary of the German invasion of Poland, we should be reviewing an article in Der Spiegel which catalogues a tale of woe concerning the dire state of the German military in Afghanistan. How the mighty have fallen, one might observe.

In a dreadfully familiar litany, we hear that "German Troops Bemoan 'Critical' Deficits in Training and Equipment", with "damning reports" emerging from the forces in Afghanistan, claiming that cooperation with civilian agencies is abysmal, equipment is lacking and training is insufficient.

More on Defence of the Realm.