Saturday, August 27, 2022
The short-term thinking that could bankrupt us all
Already, a great many people I know are cancelling direct debits to their energy companies, prepared to withhold payment and go into debt, rather than see their bank accounts drained by an ever-increasing charge on their ability to keep warm and cook their own food.
The impact on businesses is incalculable. Many will try to push their additional costs onto their customers, fueling inflation even more, while many will go out of business altogether. It is a grim prospect caused by the escalating cost of gas and electricity at a time when the Russians are burning off gas rather than allow it to be exported to the west.
But was this crisis inevitable? Putting aside the causes of the Ukraine war and avoiding international politics for a minute, the situation certainly could have been managed better by the UK government if only we had planned long term just ten or twelve years ago.
When we compare our situation with other European countries, it is clear that they do not have it so bad. France for example has managed to keep its energy cost increases to just 4%, partly because the state owns their generating company, but mostly because 75% of their electricity generation is nuclear.
The last time a new nuclear plant came on line in the UK was in 1995. There were plans to build more back in 2010 but they were abandoned because of the decade or so it takes to bring a new facility on-line. If the government had gone ahead then, we would be using the electricity generated by those plants now, and would not be sitting helplessly as an economic hostage to Putin and Gasprom.
Instead of building those nuclear plants, the then Liberal Democrat energy secretaries invested in green energy production instead. That was a programme that was abandoned by David Cameron in 2015 leaving us almost entirely dependent on more traditional sources of generation.
Today only 3% of UK electricity needs is provided by wind, 2% by coal and a huge 60% by gas. No wonder things are getting out of control.
The impact on businesses is incalculable. Many will try to push their additional costs onto their customers, fueling inflation even more, while many will go out of business altogether. It is a grim prospect caused by the escalating cost of gas and electricity at a time when the Russians are burning off gas rather than allow it to be exported to the west.
But was this crisis inevitable? Putting aside the causes of the Ukraine war and avoiding international politics for a minute, the situation certainly could have been managed better by the UK government if only we had planned long term just ten or twelve years ago.
When we compare our situation with other European countries, it is clear that they do not have it so bad. France for example has managed to keep its energy cost increases to just 4%, partly because the state owns their generating company, but mostly because 75% of their electricity generation is nuclear.
The last time a new nuclear plant came on line in the UK was in 1995. There were plans to build more back in 2010 but they were abandoned because of the decade or so it takes to bring a new facility on-line. If the government had gone ahead then, we would be using the electricity generated by those plants now, and would not be sitting helplessly as an economic hostage to Putin and Gasprom.
Instead of building those nuclear plants, the then Liberal Democrat energy secretaries invested in green energy production instead. That was a programme that was abandoned by David Cameron in 2015 leaving us almost entirely dependent on more traditional sources of generation.
Today only 3% of UK electricity needs is provided by wind, 2% by coal and a huge 60% by gas. No wonder things are getting out of control.
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Short sightedness,political ideology,5 year electoral cycle drives our politicians NOT long term planning for the people and the country and it has to be profitable in a short period of time. Hence we are now having our nose rubbed in the dirt by Putin. Looking for a cheap fix,low costs so that shareholders can cream the money off GREED! has also raised its head.IT IS TIME FOR THE COUNTRY TO THINK AHEAD.
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