Economics / Politics

Lo-NRG

Energy sense is common sense.
British Government slogan, 1970s

A Government minister was on the receiving end of a bit of a duffing up at a discussion in London the other day. A metaphorical duffing up, I hasten to add, but a duffing up nonetheless.

The subject was energy, specifically its price and its availability, not least in relation to industry.

This was a private meeting, so I can say absolutely no more about it other than that the minister gave as good as he got.

But it did start me thinking that, post the Brexit debate, the topic of energy may be the next big battlefield pitting the forces of consensus and the international great and good against supposedly plucky (albeit well-funded and well-connected) insurgents.

If I’m right, this would be like the Brexit debate but with power-generation statistics and warnings of blackouts in place of claims about cash transfers to Brussels and immigration.

A theme common to both would be that a once-worthy idea is mutating into a wasting disease that can only destroy prosperity and democratic accountability and that, moreover, Britain is uniquely vulnerable to the effects of this sickness.

Fear not – I’m not going to wade into data about kilowatt-hours, the carbon cap-and-trade scheme or the ‘hockey stick’ graphs that prove (or not) the thesis of man-made global warming. Apart from anything else, the fact that I scraped a C pass at combined-science O-level, forty years ago, is not much of a qualification in that area.

Let’s start from a different place: the late 1980s and the end of the Cold War. The Berlin Wall has been breached, the Soviet bloc – starting with its East European satellites and then the USSR itself – falls apart. The triumph of the market economy is complete.

From a Leftist viewpoint, something rather strange (actually, horribly predictable) happened at about this point and has been happening ever since. The welfare states that had been the pride and joy of western European nations, and of other advanced economies including Canada and Australia, were mysteriously discovered to be ‘unaffordable’.

Only ‘radical reform’, i.e. cuts to entitlements, would stave off bankruptcy, we heard.

My first book, published nearly twenty years ago, devoted a lot of space to this phenomenon. It seemed to my co-author and me that the disappearance of ‘actually existing socialism’ had removed the need for that ‘third way’ between capitalism and communism, the social-democratic welfare state.

Funny, that.

Now, the new third way – a la Tony Blair – was to be a navigation between capitalism and social democracy, a clear shift to the Right. Part of this was the alleged unaffordability of the post-war welfare settlement.

What, perhaps, we didn’t appreciate was that a parallel grievance was making itself felt on the Right. While social democrats and socialists noted the effect of the end of the Cold War on social protection, some on the Right had a very different take on things.

Here, the ‘funny, that’ factor related not to the discovery that welfare was unaffordable but to the claim that capitalism itself was unaffordable in terms of the environmental damage it was said to cause. While market economists produced graphs ‘proving’ that increased longevity and other factors would bring welfare states to their knees before too long, others, thought to be unsympathetic to the market order, produced graphs showing the ice caps were melting, the oceans were rising and ecological doom beckoned in the absence of sweeping new measures to ‘green’ the economy.

This was as suspicious from the free-market perspective as was the ‘unaffordability’ of the welfare state from the Left-wing viewpoint. At the very moment that the superiority of the market system had been proved beyond doubt and its main rival vanquished, it turns out that the most successful system in history for creating wealth and raising living standards is actually ‘destroying the planet’.

As with last year’s Brexit debate, there are specifically British grievances, many based on the notion that only we play by the rules and have hobbled ourselves with a climate-change act so restrictive that households and industry will soon face rolling power cuts of the sort familiar in the poorer parts of Africa and elsewhere.

There are other similarities.

As with Brexit, David Cameron was a divisive figure – his ‘vote blue, go green’ invitation and his fondness for wind farms were seen by some as being elitist, in the same way as his determination to keep Britain in the European Union while claiming to be re-negotiating membership terms.

As with Brexit, there is a preponderance of expert opinion favouring the consensus view. Have people had enough of experts in this area too?

Finally, as with Brexit, Lord Lawson, Chancellor of the Exchequer from 1983 to 1989, is a high profile proponent of the non-consensus. Could the man once nicknamed in Private Eye’s ‘Dear Bill’ letters as ‘Mr Nicely-Nicely’ once again prove a bird of good omen from the point of view of those opposing the conventional wisdom?

I don’t know. Nor, as you see, have I taken sides on this question.

My only assertion is that, after Brexit, energy is the next big battleground.

You read it here first.

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