It's amazing what passes for logic nowadays.

From Channel 4 News:

 

A new shale gas allowance will more than halve the tax rate for onshore shale gas production, or fracking, from 62 per cent to 30 per cent.(1)

 

Mr Osborne said: "We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that. I want Britain to be a leader of the shale gas revolution."(2)

 

But opponents warn that the process for extracting shale gas, by hydraulic fracturing rock with high-pressure liquid to release the gas, or "fracking", can cause earthquakes, pollute water supplies, blight the countryside and affect house prices...(3)

 

Andrew Pendleton, Friends of the Earth's head of campaigns, said: "Promising tax hand-outs to polluting energy firms that threaten our communities and environment, when everyone else is being told to tighten their belts, is a disgrace. (4) Ministers should be encouraging investors to develop the nation's huge renewable energy potential."(5)

 

1) First and foremost, these companies don't need tax breaks for this, they need permission to do it in the first place.

 

And the best way of taxing extractive industries is for the government to declare itself the owner of the stuff underground and to sell it to the highest bidder. If the profits are tax free, then this pushes up the amount the government gets from the auction and vice versa, so the tax rate doesn't really matter.

 

In practice - given the fluctuations in prices - the neatest solution is for the government to just pay the experts to extract it. So instead of auctioning off licences to extract and then taxing the profits - whether they relate to the real hard work of getting it out of the ground or to the unearned commodity value - at the same rate, the government would do best to do a competitive tender, and whoever agrees to extract it for the lowest price and hand it over to the government (who then sells it straight on again for its full market price) wins the contract. Again, there is no need to tax those profits afterwards.

 

2) Obviously, the Yanks are years ahead of us, but never mind, the technology seems to work so we could catch up pretty quickly.

 

3) Right, that settles it then, they've played the trump card which defeats all trump cards.

 

4) How much money would the government get from fracking if Friends of The Earth had their way? None whatsoever. So however much or however little they get, it's always going to be more than under Friends of the Earth's plan, hence it means a little less belt-tightening for the rest of us plebs (and lower heating costs, hopefully).

 

5) To paraphrase, "Promising tax hand-outs to landowners who agree to stick up a few useless windmills that threaten our house prices and wildlife, when everyone else is being told to tighten their belts, is a disgrace. Ministers should be encouraging investors to develop the nation's huge shale gas potential."

Chugger Fun

A young man knocked on my door just now, trying to rustle up donations for some 'initiative' by Friends of the Earth.

"It's a load of rubbish," I replied "They're subsidised by the EU, and I'm against the EU."

"No they're not," he retorted, "They are subsidised by the UK government."

FakeCharities, FakeProtests

As we know, one hallmark of an authoritarian government is 'spontaneous' displays of public affection for the regime, e.g. the burkah'd woman cheering on the successful 'revolution' in Iran in 1979; the kids waving flags when Tony Blair entered Downing Street in 1997; or school children being asked to depict Obama in various heroic poses to celebrate his inauguration in 2009.

The present UK government has gone one better and organises protests against itself in order to lend apparent justification for it then doing what it planned to do anyway. Prompted by a throwaway comment on Douglas Carswell's 'blog, I've had a closer look at those G20 Protests in London yesterday:

From The Grauniad:

They hoped for ten thousand but in the end more than three times that number turned out on London's streets today for the biggest mass demonstration since the beginning of the economic crisis. The Put People First march was organised by a "rainbow alliance" of 150 trade unions, church groups and charities including ActionAid, Save the Children and Friends of the Earth. The theme was "jobs, justice and climate" and the message was aimed at the world leaders who will be gathering for the G20 summit here next week.

Right.

1. Trade Unions. Need I say more than union modernisation fund?

2. Church groups, especially the Church of England, are more or less part of the State anyway (tax-exemptions, subsidies, right to appoint senior members to the House of Lords etc)

3. ActionAid received £11.2 million from 'Governments, EU' (see pie chart on page 18 to the 2008 accounts). Admittedly this is only 16% of its income, but read on to page 19, "ActionAid’s accounts only show part of the total contribution from the UK’s Department for International Development (DFID) to the ActionAid family – the full picture is contained in ActionAid International’s financial statements" or to page 36, where they admit that they hid another £1 million from the Big Lottery Fund and Comic Relief under the heading 'Companies, trusts and NGOs' rather than 'Governments, EU' in the pie chart on page 18.

4. Save the Children "receive grants from UK and foreign governments, multilateral bodies such as the European Union, and international agencies such as the United Nations" worth £65.4 million (see page 2 to the 2008 accounts), which is 40% of its income.

5. Friends of the Earth are the archetypal fakecharity-cum-fakepressuregroup, whose raison d'être is to lobby the EU while being largely funded largely by the EU, see EUReferendum for more.

NB, ActionAid and Save The Children also get a lot of money from the Disasters Emergency Committee ('DEC'). According to its 2008 accounts, this particular body does in fact raise most of its money from proper voluntary donations, but then it dishes them out to fakecharities again.

Set the controls for the heart of the sun!

I reckon that this is the week that a recession was finally tipped over - quite wilfully - into a Depression. Replacing a lunatic corporatist US President with a lunatic socialist/protectionist US President would have been bad enough, but the last straw is the bail-out for UK car manufacturers.

This story contains just about everything I've ever railed against:

1. "The package includes a scheme to unlock £1.3bn of loans from Europe for car manufacturers and major suppliers."

It's not from 'Europe', it's from the European Investment Bank, an arm of the EU. I'm a Ukipper, 'nuff said.

2. "... the government would also guarantee up to £1bn of further loans."

That's a hiding to nothing, as I explained here.

3. But shadow business secretary Ken Clarke said the European loans were announced last year and called the whole package "pretty small beer ... I'm slightly disappointed..." the Tories had suggested loan guarantees for the finance arms of car companies in November. "Here we are months later and during that time sales of cars in this country have dropped by half whilst the government dithers," he told MPs.

And he said on the "key subject" of getting people who could afford it credit to buy cars - the government had only said it was "looking at steps" to address it.

Nulabour, Blulabour - can't we at least have the choice between a Big Government party which wants to nationalise everything and a small government party which doesn't? As I said before Xmas, "each party promises something more generous than whatever it was that the other party just promised, at the moment, government guarantees for such lending are top of the agenda." When I suggested that instead of just trying to prop up the housing market, why not do new car sales, I was being ironic, FFS.

4. He said the measures would boost the industry and lay "the foundations of its reinvention for a low carbon future". They include ... another £1bn in loans to fund investment in green-friendly vehicles. Regional development agencies and the Technology Strategy Board are to be invited to bring forward new research and development programmes into cleaner engines, lighter cars and "plug-in hybrids".

Ah, nice to see a couple of quangoes jumping on board. Again, as I said at point 5 here "Once The Quangocracy and The Righteous realise all this, they will ask 'Why should the banks lend money to young Arthur Simmonds with his climate-change-causing-car repair workshop? We think that the banks should lend to The Malcolm and Cressida Ethical Living Awareness Project.' That way lies chaos."

5. ... he said there would be "no blank cheque" and any schemes supported had to provide jobs, develop new technology and processes for the long term and provide value for money.

There, there dear. I'm sure that's what they said when the nationalised the constituent parts of British Leyland.

6. "Unite general secretary Derek Simpson told the BBC he was pleased the government had made a start in helping the car industry but questioned whether the loans would be enough."

That's another euphemism that annoys me - 'helping' instead of 'giving money to'. And The Unholy Trinity of trade unions, government and rent-seekers are gathering ...

7. "Friends of the Earth welcomed the announcement but said more needed to be done to make sure the car industry was building cars that used less fuel - and providing incentives for people to buy them."

Hurrah! Not just quangoes, but a fake charity (TM Devil's Kitchen) jumping on board.

Let's just do a bit of rough arithmetic. Prior to the downturn, people replaced their cars every ten years. About 30% of total pollution relates to the manufacture of a new car and the disposal of the old one, and 70% to petrol/diesel use. So that's 30 pollution-units ('PUs') to replace, and 7 PUs to run it per year (total one hundred PUs). In a downturn (like now) you could quite reasonably expect cars to be run for twenty years, not ten. So over the next ten years, that creates 70 PUs. If we are forced to replace a car, cost 30 PUs, the number of PUs emitted over the next ten years would have to be rather less than 4 per year if there is to be any reduction in PUs, or if your current car does 28 mpg, your new car would have to do at least 40 mpg for the next ten years for there to be an overall reduction. It is quite conceivable that Friends of The Earth are indirectly sponsored by European car manufacturers who make such economical cars, is it not?

8. Finally, isn't this all about preventing job losses? As this fine Readers' letter of the day pointed out ...

It doesn't take an econometric model to conclude that transferring wealth from the productive to the unproductive sector results in a negative-sum game. For every 10,000 jobs saved in the car industry, it is likely that 20,000 to 30,000 jobs will be destroyed in the sectors that are forced to pay for the bail-out.

Specifically, those jobs will be lost - or never created - in car repair workshops up and down the land who would have kept our motors going for twenty rather than ten years. If and when car manufacturing picks up, then they'd have a ready pool of skills, and so on, back and forth.

Warm words

Sometimes it's difficult to know where to start with propaganda like this, but let's pick up the thread here ...

The government says its aim is to insulate every home in Britain by 2020 - and energy companies, councils and voluntary organisations will be making door-to-door visits in deprived areas to promote the scheme.

1. Nulab will be out of gummint in two years' time at the latest, by 2020 they'll be an unpleasant memory.

2. The poorest people live in council flats. If councils want to insulate their blocks of flats properly, then good luck to them. From the point of view of a tenant, with a concrete floor, walls and ceiling, there aren't any 'loft spaces' to insulate, and they probably can't afford double glazing (even if that were an economically rational thing to do, which it isn't in most cases).

3. Just look at the list of meddling quangocrats and lobbyists in that article who'll be slathering over this; Warm Front (the BBC try to throw you off the scent by not capitalising it, Warm Front themselves try and throw you off the scent by having a co.uk rather than a gov.uk URL); the people at the Benefits Agency who decide who does and who doesn't qualify for the means-tested £25 a week; councils and voluntary organisations who'll be making the visits; the manufacturers of double glazing and lagging who think they're in for a taxpayer-funded bonanza; Help The Aged; the trade unions (foremost Unite); the National Housing Federation, who "represent 1,300 not-for-profit housing associations in England and campaign for better housing and neighbourhoods" (some of the UK's biggest subsidy junkies who are keen to get the taxpayer to shovel yet more money at them to enable them to do up their properties) i.e. not to be confused with the Home Builders' Federation, who can see a pretty taxpayer billion or three rolling their way but were too polite to mention it.

4. "Door-to-door visits"? Hmmm, now why does that phrase fill me with dread?

The BBC don't appear to have included soundbites from their taxpayer funded chums at Greenpeace or Friends of the Earth, but there's only so much crap you can squeeze into one article, I suppose.

"One in four facing fuel poverty"

Blah blah, this is the best bit:

"The charter, supported by Friends of the Earth, the Association for Conservation of Energy and National Energy Action ..."

Friends of the Earth? Whose European umbrella body "gratefully acknowledges funding from: EU DG Environment, EU DG Employment & Social Affairs, EU DG Development, German Ministry of Environment - UBA, Austrian Ministry of Environment, Dutch Ministry of Environment - VROM ..."?

The Association for the Conservation of Energy? Which appears to be some EU-approved industry lobby group, i.e. 'lobbying for subsidies'. Whose members include British Gas, E.On, EDF and Scottish power?

National Energy Action, who get £11m a year from the gummint, as previously reported?