The Economics of Sleaze

If Conservative MPs can spare a moment from watching porn in the House of Commons chamber they will find lots more ‘hot stuff’ calling for their attention in the world outside.

A vast swathe of South East Asia faces the hottest conditions they have experienced in over 100 years. Hot babes, hot kids, hot adults, hot elders – the hot stuff is everywhere. India, Pakistan, Myanmar and Thailand swelter in temperatures rising from

45°C to 65°C. Central Asia will soon join them.

What does this have to do with the British parliament? Answer: it is where today’s political economic obsessions are taking us. Trashing the planet will end up trashing ourselves.

The scariest thing is how little Britain seems to grasp the scale of this crisis.

The quality of leadership in parliament has sunk to a level perilously close to the “illiberal democracy” openly championed by Hungary’s Viktor Orbán.

Buried in sleaze, sex scandals and serial dishonesty, the British government deflects criticism largely by criminalising those who challenge it. The hit list runs from those making conventional but ‘noisy’ protests, to the ‘Just Stop Oil’ protesters who glue themselves to oil tankers and petrol station forecourts.

Rafts of anti-democratic legislation are being pushed through parliament. All provide cover for the sleaze economics at the core of Conservative policies. Behind this veneer, the poor (and the planet) continue to be exploited while the rich and ruthless get pampered. Government itself gets reduced to pimping for privatisation and profits.

Rentier Capitalism Rules

Energy is a classic example. Energy costs may spiral but Ministers never mention the 40% profits enjoyed by owners of the national grid. They obsess about inflation, but with no recognition that this is a problem inflicted on the poor, not created by them.

Let’s be clear: wage rises are not behind today’s inflation figures. External factors – the cost of fossil fuels and basic foods – are the drivers of price increases the UK cannot answer on its own. But one part of the inflation debate is well within reach of government policy.

Rentier capitalism – the largest source of Conservative party funding – is currently wrecking the British economy. As Christine Berry spelt out in The Guardian, Britain is not locked into a ‘wage-price spiral’ but a ‘profit-price’ one.

This profiteering covers everything from private rents to care home charges, from water bills to transport services and nursery care. In the midst of other crises, rentier capital has gained unrestricted rights to siphon money into its own pockets while others struggle to pay the bills. Much of the profiteering also demands the right to go untaxed, with the most limited obligation to deliver better standards (or reduced climate damage).

Nothing made this clearer than Water utilities bosses taking more than £15million in pay and bonuses last year, whilst increasing the amount of raw sewage they dumped into our rivers and seas by 37%.

This is a mindset gone mad, but it is how Ministers end up proposing cuts and lower standards (‘to reduce public costs’) rather than taxing those whose wealth has spiralled throughout the war and the pandemic.

The compassionate cartel?

So it was too that, with straight faces, leaders of big energy companies called for a government ‘deficit fund’ to pay the first £1,000 of energy bills facing those in fuel poverty. In evidence given to the BEIS Select Committee, they also asked for a ‘social tariff’ to cushion energy charges to the poor.

This may sound reasonable – compassionate even – until you register that energy bosses want the government/taxpayer to pick up the bill. None mentioned a contribution from the £7bn profits their companies pocketed over the last 5 years. None suggested Britain should follow Denmark, redefining energy as a not-for-profit service rather than a market. None wanted any focus on taxing the excesses rentier capitalism has enjoyed.

By humouring (and encouraging) such a focus, Ministers deflect attention from the sleaze economics they are locked into. The poor (and the planet) continue to get pilloried (and patronised) but exploitative rights of the rich go unchallenged. This is what’s turning parliament into the parody of a porn channel.

Rescuing the rich

We face an indisputable energy crisis, but it isn’t the public that the government seeks to protect. It is the power of the cartel. To stay on their political payroll, this is what Johnson (or any other Conservative Leader) will continue to deliver. That’s what made the government’s Energy Strategy statement so fatuously empty.

The Energy Strategy said nothing about using less energy, nothing about urgently cutting carbon emissions and nothing about radically changing the energy system. It was all about feeding the corporates.

This is also what lies behind recent attacks in both the Express and Telegraph on the idea of switching from gas to heat pumps. In Switzerland, Zurich may be permanently switching off its connection to the gas grid, but the idea seems a bridge too far for Britain. Newspapers lobbying for the oil and gas industry claim such costs are unaffordable; a claim only made plausible by a subsidy/tax system rigged in favour of fossil fuels, not renewables. To break the addiction you just have to reverse the link.

The Italian government allows people to claim back 110% of the costs of switching from fossil fuels to renewable energy and insulating their homes. They do so via tax allowances spread over the following 5 years. Britain could do the same. Alternatively, we could introduce a ‘Feed-in-Tariff’ framework for heat pumps, driving down unit and installation prices in the same way we did for solar roofs.

The trouble is that Big Energy would then no longer own the game. And that’s the sticking point.

Post-Carbon Democracy

Lacking any big picture plan, the government plays one technology off against another; limiting the scope for transformative change that might threaten corporate dominions. But if climate stability is the goal, the big answers lie in the sort of systems change that drove the industrial revolution.

For over a century, Britain’s networks – delivering gas, water and electricity security – were locality based. Municipal bonds were used to finance the provision of publicly-owned (and accountable) public utilities. Profits didn’t disappear to offshore tax havens. Instead, they funded the provision of local parks, museums, libraries, swimming baths and homes. Today’s smart technologies would allow us to do the same, but with radical reductions in carbon emissions as the ‘existential dividend’ we could all share.

The trouble is that Britain is trapped in a mindset that only caters for corporate solutions. Better thinking begins elsewhere. With 50-70% of energy being lost at the power station, it is a good time to re-think the idea of the Grid. A high voltage transmission/balancing network is still needed, but its role should revert to Labour’s original notion of the nation’s (not-for-profit) ‘strategic reserve’. Beyond that, todays clean technologies allow most of the balancing, sharing and storing to be done on a more localised basis.

Modern Germany has 560,000 local grids. They not only keep the lights on, but also drive innovation and employment. Denmark does the same, requiring local grids to run on a ‘combined heat and power’ basis. But ‘heat’ is the Achille’s Heel of corporate dominions.

Unlike electricity, heat doesn’t like to run freely around the country. It is more suited to localised solutions than national ones. Gas, of course, was the exception; especially if the grid itself could be turned into a privatised monopoly.

For decades, the Left and Right locked horns in debates about who should own the gas grid. Neither grasped that climate imperatives demanded the debate moved on. Labour should thank ‘Just Stop Oil’ protesters for pushing this debate into the saner spaces Labour struggled to embrace. Criminalising protestors only makes Labour look as time-dated as the Tories. Post-carbon democracy must find another starting point.

“A moment of madness”

Announcing his decision to stand down after his parliamentary forays into porn sites, Tory MP Neil Parish described his conduct as “a moment of madness”.

It is right for him to go. But the sleaze, lies and self-serving corruption he leaves behind depict a much bigger moment of parliamentary madness.

For Labour to be the answer, it too must step beyond the moment of madness. A better quality of insanity will not rescue the planet.

Nostalgic homages to New Labour are no answer to the climate crisis. The game is broken. We need a completely different one; simpler, more sustainable, more accountable, more inclusive.

Rather than criminalising the kids on the streets (and their grandparents) Labour needs to build a different vision around them. If there is to be a New Jerusalem, this is where we will find it.

Alan Simpson

May 2nd, 2022


1 Comment

  1. Susan Sanchez on May 4, 2022 at 4:09 pm

    Really excellent If the philosophy behind and the practises suggested in this were officially adopted by Labour it would be worth voting Labour again.

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