This Tory plan for power and the climate is picking losers

Government industrial strategies are often derided as attempts to pick winners. The UK’s Conservative government has taken a different approach with its new energy strategy. In terms of dealing with the energy bill and climate crises, it’s picking losers.

Damian Carrington 

It is crystal clear that transforming the energy efficiency of the nation’s draughty homes should be the No 1 priority. After all, the cheapest, cleanest energy is the energy you no longer use and nothing can be installed faster than insulation.

There are huge opportunities – for example, just 40% of UK homes have sufficient loft insulation. But there is nothing new in the strategy beyond an advice website. Former Tory energy minister Charles Hendry calls this a “major misjudgment” that will “force large numbers of very vulnerable people to be cold next winter when they need not be”.

The next priority should be renewable electricity, now six times cheaper than that from gas-fired power stations. There are 649 wind and solar projects that already have planning permission. These would save more gas than the UK imports from Russia. But the strategy promises nothing to cut the planning regulations that David Cameron used to strangle onshore wind development and large-scale solar farms.

The vast majority of people, including Tory voters, back more wind power in their areas, polling consistently shows. But your future energy bills now will be even higher than they need to be because ministers are worried a tiny minority of people can’t cope with looking at turbines. There is a boost to offshore wind, a genuine British success story, but it is unavoidably more expensive than onshore wind.

The “big bet” Boris Johnson has chosen to take is on nuclear power. Business secretary Kwasi Kwarteng said this week that “there is a world where we have six or seven sites in the UK” by 2050. That world is never-never land.

Nuclear power is the only major energy technology that has increased in cost in the last decade and routinely suffers from massive time and budget overruns. Even Kwarteng acknowledges that France’s large nuclear fleet “cost a fortune”.

The gamble Johnson is making, with taxpayers’ money, is that nuclear power is a more reliable wager to secure clean future power than renewables and fast-developing energy storage technologies. It’s a long shot. Renewables and storage will develop much faster and get much cheaper due to the rapid learning that comes with small-scale technologies, unlike colossal projects like nuclear.

The Intergovernmental Panel on Climate Change’s (IPCC) report on Monday, produced by scientists from across the globe and signed off by 195 governments, mentions renewables, wind, solar and efficiency 67 times in its summary. It cites nuclear once (in brackets), as an example of a technology with high upfront costs.

The UK energy strategy also backs more drilling for oil and gas in the North Sea – which flies in the face of its own net-zero climate targets. Furthermore, the dwindling reserves that remain cannot lower the price of commodities, which is set by a global market. Don’t just take that from me; Kwarteng, energy minister Greg Hands and COP26 president Alok Sharma all agree.

On Monday, after the IPCC report, the UN secretary general, António Guterres, said: “The truly dangerous radicals are the countries that are increasing the production of fossil fuels. Investing in new fossil fuel infrastructure is moral and economic madness.” That is the UK he is now talking about. The only good news is that shale gas has been sidelined, with a review of safety a sop to the small group of noisy frackheads on the Tory back benches.

Another of Johnson’s “big bets” is on hydrogen, apparently in the hope that it can be used to heat a third of UK homes as an alternative to fossil gas by 2050. That is folly, not least as heat pumps will be much cheaper and less polluting.

Using fossil fuels could produce lots of hydrogen, but also cement our dependence on oil and gas, while belching out CO2. Green hydrogen – produced from renewables – will be very expensive for years, and the limited supply should be reserved for sectors that are really hard to decarbonise.

Why has the government got this so wrong? It’s partly short-term politics. An “ally” of the chancellor, Rishi Sunak, is reported to have defended the refusal to fund more energy efficiency by saying: “We have to be scrutinising every extra penny of taxpayer money that is proposed for spending because ultimately we want to do the Conservative thing and cut taxes for people.” That is, just before the next election.

It is also partly the adherence to the dogma that the only solution to problems is “our treasured free-market economy”, as Kwarteng described it on Tuesday. That is despite the warning in 2011 from the government’s own climate adviser that “leaving [energy efficiency] to the market has never worked anywhere in the world”. He was right. The first of two big failed efficiency schemes saw loft insulations plunge by 93%.

Most depressingly, the energy strategy’s failings seem also partly due to Johnson’s penchant for big, shiny projects, rather than the hard graft of thousands of smaller ones. But the six or seven nuclear power plants he dreams of are likely to follow the same fate as his island airport, garden bridge, and tunnel to Northern Ireland.

Helen Clarkson, at the business-focused Climate Group, said: “We have tools and technologies already available which can radically reduce our energy needs and our carbon emissions now. Energy efficiency measures can deliver immediately in cutting people’s fuel bills and get us on the path to net zero in the longer term. There’s a huge opportunity for a win-win here which the government is passing up.”

National Grid to be partly nationalised to help reach net zero targets

First the railways and now the national grid to be effectively (re)nationalised by the Tories!

Owl has always been indoctrinated by them to repeat the mantra: private ownership good, public ownership bad.

Rob Davies 

The job of keeping the UK’s electricity and gas flowing will be returned to public control by 2024, under government plans for the effective nationalisation of a division of National Grid.

A new public body, the “Future System Operator”, will have responsibility for planning and managing energy distribution, with a focus on the challenges posed by decarbonisation.

The government said the plan, announced on the eve of the publication of its long-awaited energy strategy, would “drive progress towards net zero while maintaining energy security and minimising costs for consumers”.

The Department for Business, Energy and Industrial Strategy (BEIS) said the National Grid, a stock market-listed company since 1995, would be “appropriately compensated” in a transaction that will see the government take control of its Electricity System Operator (ESO), the part of the business that keeps the lights on. Gas distribution assets will also be taken into state ownership.

The National Grid’s chief executive, John Pettigrew, said National Grid “has a critical role to play in the decarbonisation of the economy to reach net zero, while continuing to ensure security of supply at the lowest cost to consumers”.

He said: “We have been working closely with government, industry and the regulator to create a Future System Operator that enables long-term holistic thinking, drives progress towards net zero, and lays the foundations for the regulatory reform necessary to deliver a clean, fair and affordable energy transition.

“We will continue to work closely with all relevant parties to ensure a smooth transition, subject to parliamentary approval and conclusion of the transaction process.”

The Prospect union said it was vital that the skills and experience of people who worked in the National Grid ESO division were retained.

“Workers need certainty on exactly what the new ownership model will look like, and on their future prospects,” it said.

“The government and National Grid should engage with unions to provide commitments and certainty as soon as possible.”

The effective nationalisation of the ESO division comes just three years after it was formally separated from the rest of National Grid, albeit within the same corporate group.

The ESO manages supply and demand on the grid to prevent interruption of supply, keeping the lights on.

The grid houses the infrastructure assets that support the system.

The Channel 4 privatisation is a dry run for the crushing of the BBC

Decision made public after the House went into Easter recess and Ministers not giving interviews.

Especially not Nadine Dorries, famed for her “car crash” interviews. (Owl posts a You Tube of her appearance, last November, at the DMCS Committee: Nadine Dorries still not knowing what Channel 4 actually is.)

Sean O’Grady 

There are many puzzling, not to say troubling, aspects to the government’s proposal to privatise Channel 4, but the most disturbing is the thought that it is a dry run for the crushing of the BBC.

Legislating the move will test the arguments, probe the strength of opposition, preview tactics in the Lords and by the opposition parties, construct a new looser regulatory framework, and construct bogus or flimsy public service obligations that will more than likely be safely ignored by any new owners.

Losing Channel 4 is bad, but it will embolden and educate ministers about the best way to kill the BBC’s journalism. All have profoundly damaging consequences for democratic debate in a country where much of the print and web-based media is in the hands of right-wing interests.

Everything about the Channel 4 privatisation is deeply disquieting, and suggestive that it is only the first of a number of moves to shift the media landscape in the government’s interests. The ultimately doomed attempt to install ex-Daily Mail editor Paul Dacre to neuter Ofcom was another, as was the creation of GB News and the forthcoming new Rupert Murdoch-backed channel. The new boss of Ofcom, Michael Grade, does at least understand broadcasting and business, but he has made disparaging remarks about “woke” Ofcom staff.

One overarching problem is that no minister from the Department for Digital, Culture, Media and Sport (DCMS) has been on the media to answer the many questions privatisation raises. The secretary of state, Nadine Dorries, once proudly declared that she doesn’t do news interviews unless she’s forced to (as if she were the head of MI5 or the Pope, rather than a workaday politician). There is also little chance of immediate parliamentary scrutiny. The decision was made public just after the House of Commons had gone into recess for Easter. Handy. So there’d be no pesky urgent questions from the opposition or invitations from the DCMS Select Committee to explain what’s up. Like with the earlier announcement on freezing the BBC licence fee, parliament has been ignored.

The £1bn that it is hoped will be raised from the sale will be placed in a sort of foundation for British independent production – even though Channel 4 disbursed this amount every year to its regional hubs in Leeds, Bristol and Glasgow. No longer: so, it’s problematic for “levelling up” too. Goodbye, creative hubs.

It also looks petty. Channel 4 is routinely accused (without much foundation) by Tories of being biased against them and against Brexit, even though Channel 4 News dutifully invites them on and they always refuse. Surely Jon Snow wasn’t that frightening? It was just such a no-show, by the prime minister for their 2019 climate debate, that saw him replaced with a globe fashioned from ice and visibly melting during the show, with Jeremy Corbyn, Nicola Sturgeon, Jo Swinson and other party leaders looking on.

It was a bit bold for Dorothy Byrne, head of news and current affairs at Channel 4, to call him a “known liar” and a “coward” at the Edinburgh Television Festival, though there is some evidence for both claims. Julian Knight, chair of the DCMS Committee, was honest enough to suggest that privatisation did indeed look like revenge.

The ostensible justification for the move – that it’s necessary to compete with Netflix and the like – is the most pernicious feature of this policy. Not only because it is nonsensical, given that Channel 4 has a different remit to Netflix and many of its hit shows feature on Netflix; but because it suggests that the privatisation of Channel 4 is a dry run for the much more ambitious project to crush the BBC. All the same arguments about the need to attract private sector capital and talent, to compete with streaming services and to neutralise perceived “woke” bias, can be applied to the corporation, and indeed Ms Dorries has referred to the “modernising” argument when she said that the abolition of the licence fee should be put out for debate. The privatisation of Channel 4 is the dress rehearsal for a much more important primetime battle.

It is difficult to believe that ministers are planning a wilful destruction of the nation’s most powerful soft power asset, and something cherished and admired the world over, just because they didn’t like the way the BBC covered the referendum. But the spiteful treatment of Channel 4 suggests that they really are that vindictive. “Cultural vandalism”, as the shadow culture secretary, Lucy Powell, calls it, doesn’t allow for how conscious and carefully thought through an act of destruction it all is.

There is comfort in constancy – like Nadine Dorries still not knowing what Channel 4 actually is

“And… so… although it’s… yeah… and… the… and the.”

Tom Peck (Extract)

This is the verbatim quote, in its entirety – not a word more or less – issued by Nadine Dorries, the actual secretary of state for culture, when, on live TV, she’d got to the end of a weird rant about Channel 4 not providing value for taxpayers’ money, only to be told, by fellow Conservative MP Damian Green, that it had never received any.

By the time she had got to the second “and the”, all she could do was frantically waggle her open palm at a civil servant sitting next to her, desperate for somebody else to start doing the talking before the entire room simply died of embarrassment.

It is, even by the new (and never lower) standards of today, rare for a cabinet minister to so obviously reveal that they do not know anything – anything at all – about the vast area of public life over which they yield significant power.

Nadine Dorries’ “car crash” appearance before the House of Commons DCMS committee meeting November 2021, not entirely on top of her ministerial brief but par for the course for the Boris Cabinet – Owl

Shell paid no tax on its UK oil and gas production last year – despite making a £14.7bn profit 

Taxes are for the little people – Owl

by: Sarah Wilson 

While millions of UK households face huge energy bill increases, Shell’s annual report shows the oil giant paid no tax on its North Sea production in 2021 – and even got a £92m tax refund from the government.

Shell paid no tax on its oil and gas production in the North Sea for the fourth year in a row despite soaring global energy prices and record company profits, new documents show. 

The oil giant instead received $121m (£92m) in tax refunds paid by the UK Treasury for the decommissioning of old oil platforms, its 2021 annual report revealed.

The reports have led climate and environment groups to call for a windfall tax on oil and gas companies to combat the cost of living crisis. Millions of workers in the UK face a hike in national insurance contributions, energy bills and a squeeze on daily essentials like grocery shopping.

The threshold at which income tax must be paid has also been frozen, meaning more people will pay income tax while pay rises could take employees into new tax bands. 

Dustin Benton, policy director at Green Alliance, said: “Oil and gas multinationals are making supernormal profits in the UK while ordinary people are struggling to pay their heating bills.

“Windfall taxes have been introduced before, including by Conservative governments. The case for a rethink grows stronger by the day”.

Oil and gas companies have made record profits during the energy crisis thanks to oil and gas prices soaring worldwide. During the first nine months of 2021, the largest companies made a combined $174bn (£132.8bn) in profits. Shell’s profits for the year totalled $19.3bn (£14.7bn).

Shell’s annual reports reveal this is the fourth consecutive year it has not paid UK tax on its oil and gas production in the North Sea, thanks to refunds for decommissioning platforms offsetting tax obligations. 

Since 2016, when then-chancellor George Osborne changed tax rules, oil companies have received bumper tax refunds for decommissioning oil projects, with Shell receiving annual payments of between $99m (£75.5m) and $141m (£107.6m) since 2017, when it paid $95m (£72m) in taxes. 

Shell’s largest decommissioning project is the Brent oil and gas field, which is made up of four oil platforms. 

Shell has been taxed for operations in other countries, with documentation revealing the oil giant paid $4.5bn (£3.4bn) in taxes, fees and production entitlements in Norway in 2021.

While countries such as Spain, Italy and Romania have implemented windfall taxes on oil and gas companies to ease the costs of energy for ordinary households, the UK government has repeatedly resisted calls to do the same.

Instead, consumers are now shouldering the burden of higher energy prices, with bills rising by up to 54 per cent this month as the energy price cap was raised. 

Chancellor Rishi Sunak’s Spring Statement was widely condemned by poverty charities for failing to deal with the cost of living crisis. The Resolution Foundation warned the “poorly-targeted” package will push more than one million people into poverty as prices rise. 

Danny Gross, energy campaigner at Friends of the Earth, said: “Big oil and gas companies can’t go on raking in record profits and paying zero tax at the expense of people across the country, not when energy bills have jumped by 50 per cent and are expected to rise higher still later this year.

“People want to see the government proving it’s not at the whim of corporate greed. It must seize its upcoming energy review as an opportunity to introduce a Windfall Tax on profiteering fossil fuel giants.

Shell has been approached for comment.

Councils work to bring refugees to East Devon

Thirty-seven households in East Devon have so far come forward to offer homes for Ukrainian refugees.

JOE IVES Exmouth Journal

East Devon District Council (EDDC) says its private housing team is undertaking property inspections and Devon County Council (DCC) is carrying out safeguarding checks.

Under the Government-run Homes for Ukraine scheme, upper-tier local authorities will be paid £10,500 for every Ukrainian refugee housed in their area, with a top-up to help support children’s education. Individuals who provide accommodation to Ukrainian refugees will be paid £350 per month for up to a year. Speaking at an EDDC cabinet meeting, John Golding, the council’s strategic lead for housing, health and the environment, said: “We are totally committed to playing our part in the scheme and are fully engaged in what is quite a rapidly developing project. “We are also appreciative of the generous offers from sponsors or host households that have come forward in East Devon to provide a home for people fleeing from the horrendous violence that we’ve been seeing in Ukraine.” Addressing cabinet, Trevor Leahong from the Ottery Refugee Response Group said his organisation was working to set up a local community support system to help arrivals. He also asked for an update on what EDDC was doing to help Afghan refugees, many of whom are still without homes after fleeing the Taliban last year.

Mr Golding said 55 Afghan refugees were still at a `bridging’ hotel in Exmouth, organised by the Home Office. He added: “Our housing responsibilities as a district council are pretty much limited to providing a safety net if arrangements fail in the bridging hotel. We work closely with Devon County Council, Exmouth Town Council and local voluntary community groups to settle Afghan evacuees into Exmouth. I think that’s gone particularly well.” However, EDDC has very few suitable properties and has directed the Home Office to housing association partners. Leader of the council Paul Arnott described the situation as ‘absolutely heartbreaking’. He said, despite EDDC’s own housing crisis and the long waiting lists for homes, ‘this council will do everything it can to help people from Ukraine and the existing and potentially future Afghan refugees’.

‘When will MPs take notice of the cost of living crisis?’

April Fools Day saw the biggest rise in gas and electricity prices in living memory. On average, we are now paying almost £60 a month extra. 

Martin Shaw, Chair East Devon Alliance

Even before this huge hike, many people in East Devon were finding it very difficult to keep their homes warm. 

Money Saving Expert Martin Lewis had warned that some people could ‘freeze or starve’ as soaring fuel prices combine with relentless general inflation – likely to reach 10 per cent this summer – to make life impossible for those on modest incomes.

Just imagine you’re trying to keep a family with young children together on low wages, like too many people in Devon, or on benefits, which Rishi Sunak – a multimillionaire married to a billionaire, who own together three huge homes and four cars – already cut by £20 per week last year. 

Or a widow or widower relying on the state pension to keep your retirement home comfortable.

Sunak has chosen to give people only minimal protection from the energy price rise, offering only a one-off grant of £150, i.e. a couple of months’ increases, to people living in lower council-tax-band properties. 

Boris Johnson has defended oil and gas producers like Shell and BP who are making huge windfall profits, and is refusing to take the obvious step of taxing these gains to subsidise people’s bills. 

Compare France, where the government has restricted rises to 12 per cent, not the astronomical 54 per cent we are having to pay.

On top of this, Sunak and Johnson have chosen to go ahead with this week’s National Insurance tax rise and have forced local government to implement council tax rises to pay for social care. 

Despite the Ukraine war making energy prices even worse, Sunak offered no further relief on energy bills in his recent statement. It seems as though he has no conception of what these rises mean for so many people.

Meanwhile the energy providers are doing their own bit to add to the misery. 

I wrote a couple of months back about British Gas trying to flog me a ‘cheap deal’ which was even worse than the price-cap rate. 

Now I find that, even though my account is substantially in credit, their app won’t let me reduce my monthly payments. 

Effectively they’re forcing me to pay up front for the energy they think I’m going to consume at the monstrous new prices.

Possibly, energy providers are worried that by the time of the next scheduled increase in October – which is likely to be closer to another £100 per month on top of this month’s rise – customers simply won’t be able to afford to pay if the companies haven’t collected extra money in advance. 

The government’s offer for October, when the weather gets colder again, is a ‘loan’ of £200, to be repaid when gas prices fall. By then, £200 is likely to be less than one month’s energy bill for the average household.

East Devon Conservatives are also adding insult to injury, pushing out a glossy leaflet to households (paid for with Russian oligarch money, one wonders?) which fails to even mention the cost of living. 

Instead of pressing their government to do more about the £60 per month people are having to pay, MPs Neil Parish and Simon Jupp are bravely hammering East Devon District Council for putting an extra 50p or £1 on parking charges – modest increases which most Conservative councillors supported!

Local businesses are indeed under threat, but not from EDDC. As well as facing the same increased energy costs as consumers, they are worrying that their customers simply won’t have cash to spend, or even to fill up their cars to drive into town.

This is the worst cost of living crisis in a century: when will our MPs take notice and make sure the government acts?

Revealed: Rishi Sunak’s millionaire wife avoids tax through non-dom status

Staggering – Owl

Anna Isaac 

Rishi Sunak’s millionaire wife has claimed non-domicile status in order to save on her tax bill while her husband was chancellor, The Independent understands.

Akshata Murthy, whose family business is estimated to be worth around £3.5bn, has continued to use the valuable tax status even after Mr Sunak was put in charge of setting taxes for the country in February 2020, according to two people familiar with her financial arrangements.

It is not known exactly how much has been saved by Ms Murthy but sources told The Independent it could have saved her millions of pounds in tax on foreign earnings over several years.

The Treasury declined to comment. A representative for Mr Sunak did not respond to multiple requests for comment.

In a statement issued after publication, a spokesperson for Ms Murthy claimed that she had to use non-dom status because of her Indian citizenship.

The spokesperson said: “Akshata Murty is a citizen of India, the country of her birth and parent’s home.

“India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”

The decision to pay less tax through non-dom status is optional.

So-called “non-dom” status is entirely lawful and can save an individual from paying UK tax on income from dividends from foreign investments, rental payments on property overseas or bank interest. The status also means that you avoid UK inheritance tax.

Meanwhile, most people who live in the UK must pay tax on all their income, wherever it comes from. Unlike non-residents, non-doms can live in the UK for 365 days a year.

Tulip Siddiq, Labour’s shadow economic secretary to the Treasury, called for Mr Sunak to “urgently explain how much he and his family have saved on their own tax bill” at the same time as raising taxes for millions of people during the cost of living crisis.

She said: “The chancellor has imposed tax hike after tax hike on the British people. It is staggering that – at the same time – his family may have been benefitting from tax reduction schemes. This is yet another example of the Tories thinking it is one rule for them, another for everyone else.”

The news comes as Mr Sunak’s popularity with voters plunged amid continuing debate over the government’s reaction to surging living costs.

A YouGov poll found more than half of Britons now have an unfavourable opinion of the chancellor, compared with 28 per cent who view him in a positive light.

Mr Sunak raised the tax burden on UK taxpayers to its highest level since the 1940s in his spring statement last month, even as living standards face their sharpest decline on record.

In the latest evidence of the chancellor’s personal wealth it was revealed on Tuesday that the couple donated more than £100,000 to Winchester College, the exclusive private school he attended.

Ms Murthy, who met Mr Sunak while the pair studied at Stanford University in the US, holds investments in a range of companies, and is the daughter of an Indian billionaire, Narayana Murthy.

The No 11 resident is also a director of Catamaran Ventures UK, which is described as “a family office” venture capital and private equity business that operates out of Bangalore and London. Her father is the chair of Catamaran’s Indian arm.

Alongside an MBA, Ms Murthy has a range of business experience and speaks four languages, according to her LinkedIn profile.

One of Ms Murthy’s investments is in Infosys, an Indian company founded by her father that is listed in New York, which generated billions of dollars of revenue last year and has drawn fresh media attention in recent weeks.

The company recently closed its operations in Russia. The step followed criticism about the contrast between its ongoing presence in the country and Mr Sunak’s public call on all companies to “think very carefully” about maintaining any investments in Russia, following the Putin regime’s violent invasion of Ukraine.

Mr Sunak has not declared his wife’s shareholdings on the Register of Members’ Interests and previously said he has ”followed the ministerial code to the letter”.

The ministerial code states that ministers “must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise”. It adds that on appointment, ministers have to provide a list of all interests that “might be thought to give rise to a conflict”, this should also cover “interests of the minister’s spouse or partner and close family”.

Dividends from Infosys calculated from Ms Murthy’s stake in the company, of 0.93 per cent suggest the payments could have totalled around £11.6m in the past year.

As a non-dom, Ms Murthy would not have had to pay tax on these dividend payments in the UK. That compares to an ordinary UK resident, who, paying tax on dividends at the so-called “additional rate” (for all dividend payments over the personal allowance) would have to pay tax of 38.1 per cent on the payouts.

The special status could therefore have saved her a bill of around £4.4m in tax, although she may have incurred tax liabilities overseas. There is no suggestion the chancellor minimised his own tax bill.

Yet despite the huge economic reward it can offer individuals, there is no statutory definition of what non-dom means. Instead, HMRC makes a determination taking into account whether they or their father was born outside the UK, or they have lived outside the UK for a number of years.

Notable examples of non-doms in public life have included former Bank of England governor Mark Carney, who is Canadian. Lord Goldsmith, minister for the Pacific, who faced controversy over his non-dom status when he ran in the London Mayoral elections in 2016, and Tory peer Lord Ashcroft who gave up his status to remain in the House of Lords.