The principal driver of any upstream investment decision is the assumption about the oil price. And there is no more volatile and difficult to forecast factor than that. Obviously if the development costs of Cambo are exceptionally high then it requires a high oil price assumption to justify the capital expenditure. But are they?
My gut feel (no inside track !) is that it is not the “economics” at all but concern about the public reaction that is at the heart of this. Shell has become a very diffident corporation in recent times failing to robustly defend its business. Oil/Gas corporations like Shell do not (these days) create demand for hydrocarbons they supply it. This is not sophistry but reality. The criticism directed at the likes of Shell is mostly misplaced and ignorant.
The world needs oil and gas and until it stops doing so someone has to supply it. The need to reduce dependence on hydrocarbons is self evident but the main mechanism for this has to be government and consumer decisions.
If, over time, we continue to switch into renewables for power generation and to means other than oil fuels for our transportation on land, sea and air Shell, BP and the rest will lose customers. So be it, a good thing most of us would say. But for the foreseeable future we will continue to be hydrocarbon dependent. Shell should confidently state the reality of energy supply/demand and the part they play in it.
This is profoundly chilling. As it happens I did a degree which was vocational with subjects that helped me throughout my Business career. But that is far from the only way. University is about so much more than providing you with a toolkit for employment.
But it’s the “earning potential” which sent a chill down my spine. Maybe in Sunak’s world, heavily influenced by his time in the United States, success in life is measured by “what you make” – in American parlance. But don’t we need people who are motivated by more than their paycheck?
Perhaps it will come as a surprise to Sunak but millions of people in Britain choose a vocation rather than a job where they can maximise their wages or salaries. Teachers, nurses and a raft of other people across the public and private sector choose to work in a job to make a difference not to feather their nest.
Universities offer courses to equip people with a vocational bent to prepare themselves for careers where “earning potential” is way down the list of priorities. I have young relatives in teaching, nursing, midwifery and other professions who studied these subjects at university. They are probably all bright enough to have had a well-remunerated career, like Sunak, in Financial Services. But they preferred to work somewhere where they could make a difference.
When I extolled a career in the public sector because of its favourable pension arrangements a friend said to me that he disagreed because “someone has to create the wealth”. This is a common fallacy and one that Rishi Sunak seems to share. We live in a mixed economy where there is a mutual dependency between the Public and the Private sectors. Whatever job we are in we are part of the national wealth creation process.
Many years ago when I lived in The Netherlands the son of a Dutch friend of mine was studying the Poplar tree at University. He had done so as an undergraduate and was now going even deeper on a post graduate course. I don’t think that the “earning potential” for poplar tree experts was very high but this young man was very satisfied by this rather esoteric area of study. Mr Sunak would want to turn him into a banker. Which would’ve have been a shame don’t you think ?
Not everything in binary Britain is broken, but much is. The centre has not held. Privately provided public services are at a nadir of performance and an apogee of price. So are those, like the NHS, that are nominally in the public sector. The solution is not, necessarily, more public ownership nor more privatisation but more competence and efficiency.
On public services Keir Starmer has a huge opportunity to present credible alternatives. But they will come from the centre, not the extremes. Many in his Party are screaming an outdated “Nationalise it” mantra at a time when the Conservative Party’s leadership candidates are calling for a renewal of Thatcherism. They are both wrong.
Britain still produces 50% of its Natural Gas from British resources, mainly offshore. There is no reason why Government should not legislate that the (private) producers are paid the price they received before the escalation in world Gas prices. It’s our gas, we should be able to insist that it’s priced at a level that we can afford. The cost of half of our Gas supply would fall by more than half if we did this.
My proposal on Gas pricing is, I accept, a form of windfall tax. But why not ? The producers would receive a price they were once perfectly content with. Only the situation in Russia/Ukraine drove down supply and drove up prices – the producers did nothing to justify the windfall profits they are making. This proposal is not driven by Socialism or Conservatism but by a call for equity and common sense.
The NHS is a massive public/private partnership relying both on public sector employees and, some, private sector suppliers. The judgment as to who does what in the Service should be patient and cost driven, not ideological. Procurement of goods and services should not be dictated by old-fashioned ideologies of Left or Right. There is a “third way”.
I’m told by those closer to healthcare than me that there are many inefficiencies in our healthcare systems. I can believe it. This is not necessarily a consequence of ideology (though it may be) but of failed management. The case for “contracting out” should be properly made and tested but it should neither be promoted nor rejected for purely ideological reasons.
Throughout our society we have not just public service inefficiencies but downright scandals. Water supply is a private sector monopoly, the worst social model of all. Monopolies like this make money with few if any checks and balances. It’s a licence to print money at our expense.
Sarah Bentley, CEO of Thames Water is paid a basic £750,000 a year and received a £3.1m “golden hello” over three years to compensate for loss of bonuses at her previous employer Severn Trent. It was reported in the Financial Times that a further £120,000 in pensions and perks could raise her potential package to £3.27m a year. Remember this company is a private sector monopoly with no competition!
The “Third Way” I am urging Sir Keir Starmer to adopt will no doubt be condemned from Left and Right as “centrist” which has become a term of abuse. Even worse it will be seen by the self-appointed guardians of socialism as “Blairite” ! Well if Sir Keir becomes a new Blair that’s fine by me, so long as he doesn’t start invading countries.
We went to see Uncle Jacob today. Mummy said “be kind dear, he isn’t normal but he is family”. “But he wears a suit in the garden”. Mummy shrugged and smiled wanly. “But is he ill ?” my brother George said. And Mummy said that in a way he is. He’s rather lost in time apparently and doesn’t get out much.
“What does Uncle Jacob do ?” I asked but Mummy wasn’t sure and said something about “embalmment” which we had to look up in the dictionary. Anyway we were brave and went to his scary castle. He was sleeping in a long velvet lined box and only when the sun went down did he wake up. Mummy gave him a mug of cocoa.
I asked Mummy if Uncle Jacob was a “black sheep” but she didn’t know. He didn’t seem very happy and couldn’t stop saying “Cardinal Manning was right”. He seems very religious, but not in a nice way. I’m going to warn all the other girls at school to take care.
“There’s also an argument that elections are always about character — that voters don’t have clear policy positions in mind, like Westminster geeks, and that they don’t care about substance at all. This is patent nonsense.” Rachel Wolf in “The Times” today.
Far from being “patent nonsense” it is indisputably true. It’s partly because voters “don’t care” and partly because they think they’ve better things to do than plough through Party manifestos. “I’ve read all the manifestos and having studied the policy positions I’ve decided to vote…” said absolutely nobody at the last election , or any before it.
The 2019 election was overwhelmingly about “character” – the electorate (collectively) liked Johnson’s and disliked Corbyn’s. And the character who won gave the masses one (just one) “policy position” and put it as a three word slogan on a bulldozer. Job done.
Whilst Johnson was adapt at playing politics to its “reductio ad absurdum” facile limits the modern past master of this was Nigel Farage. Unencumbranced by intellect or political baggage from the past he reduced everything to the level of a slogan, backed by symbolism and his buddies in the “Leave” campaign took their cue from him. We are where we are not because voters studied the “policy positions” but because they didn’t like foreigners and “Leave” encouraged their prejudice.
We live in the “Age of Mendacity” in which it doesn’t matter a jot whether what a politician says is true only whether the punters can be persuaded to buy it. Commentators on the Right, like Ms Wolf of Tufton Street, have never liked the fact that voters mostly respond to their gut rather than their cerebral cortex when they vote.
“Many Conservative activists are to the right of party centre and can usually be expected to back the more right wing of any two candidates. In this election, it is Sunak who was the original Brexiteer, but he has drawn much of his eventual support from the parliamentary party’s left, which voted Remain.”Paul Goodman in The Times today.
Note how Conservative Party politics are now defined by “Left” and “Right” (as they always were) but that now the go to policy area is “Leave” or “Remain”. They use the shorthand Left=Remain and Right=Leave. But in fact there is nothing remotely Left Wing about being a member of the European Union a quintessentially capitalist construct.
It seems that Brexit will play a part in the members’ choice – in which case the “Right” should go for Sunak who pre referendum was firmly for “Leave” – which Ms Truss certainly was not.
But in reality the referendum debate was primarily driven by xenophobia and nationalism. Note how the comfortingly white middle class girl next door surrounds herself with flags at every opportunity – expect more of this in the coming weeks.
I’m sure that Mr Sunak is no less patriotic than Ms Truss. But we are not dealing with a sophisticated electorate here. Some of the Tories’ ageing membership no doubt sympathised with Nigel Farage and a fair number voted accordingly. This may count against the Indian heritage Mr Sunak with his strong present day Indian connections – especially through his wife and her family.
Britain may well get its third female Prime Minister and is unlikely to get its first of Asian heritage. Whether this reflects the preferences of the country as a whole I’ve no idea. But as I say the electorate making the choice is far from representative of the nation at large demographically.
The last three Prime Ministers, all Conservatives , have been thrown out of office (or forced to resign) early. None was defeated in a General Election. Maybe this time at the end of the victor’s brief term in office we the people will decide in an Election who we want as our Head of Government. Maybe.
I may be flattering Ms Mordaunt (not my intention) but her use of the word “re-done” is actually quite interesting. I haven’t heard this terminology before. Let’s look at what it might mean.
Brexit started immediately after the Referendum on 23rd June 2016. But the real start date was 13th July the same year when Theresa May took over. “Getting Brexit Done” may have been Mrs May’s successor’s slogan but it started with Mrs May – “Brexit means Brexit” as she put it.
So in theory if Brexit is to be “re-done” that could mean going back to the start – to when it began to be “Done” under Theresa May. If we do that then all the options in play at that time come back into play – including holding a second referendum.
The 2016 Referendum was advisory and many argued that a confirmatory second referendum would seal the deal. It didn’t happen, of course, but despite our having left the EU there is nothing to stop it happening now.
Let’s premise that to “re-do“ Brexit we need to first of all reconfirm that to leave the EU is still the will of the British people. The argument is hugely strengthened by the fact that now, in contrast to in 2016, we know what being outside the EU means. We have eighteen months of life outside the European Union to reference.
If a confirmatory referendum is held there are two possible outcomes:
(1) The public gives Brexit its continued support but to a “Leave” proposition strengthened by a presentation of Brexit benefits based on the experience of eighteen months.
(2) The public rejects Brexit and chooses to return Britain to EU membership.
In the event that (1) is chosen “re-do” has a firm foundation on which to act. The arguments of “benefits” versus “disadvantages” will have been thoroughly debated. Changes to the Withdrawal Agreement will have been considered and surely the EU would agree given that the British people have confirmed their wishes.
In the event that we choose (2) again there would be a very sound basis for the necessary EU negotiations. The detail would need to be worked out but again the direction is clear. In effect “Re-do” Brexit becomes “Undo Brexit”.
Brexit has bedevilled British politics for too long and Penny Mordaunt knows that. The public chose narrowly to leave the EU six years ago but there has never been a united “buy in” to this, even less so in these continued days of political turmoil and government mendacity. The argument that we need to “re-do” Brexit is a strong one. The only way to do this is with a confirmatory referendum.
We have (almost) rid ourselves of the turbulent priest – though what religion Boris Johnson is a priest of remains a mystery. There are few signs in his past of an intellectual struggle deciding which political belief he should embrace. He’s not Cardinal Newman, or even Liz Truss !
The “isms” are very confused these days. Socialism, Liberalism and Conservatism mean what the user wants them to mean, especially the latter. It’s partly because of the post war triumph of the “mixed economy”. Occasionally a politician pokes his or her head above the parapet and demands that we privatise, or nationalise, everything. They soon go away though and the norm toddles on.
On the Left one of the lesser terms of abuse is “centrist” by which term the user means Tony Blair. Jeremy Corbyn hated Blair and the “Centrists” far more than he hated the Conservatives. But Corbyn’s statist socialism went away – which is a bit of a shame because there was, and is, a pretty good case for tighter state control of many public services like gas and electricity, the railways and water. Victims of Margaret Thatcher’s anti state ideologies.
Jeremy Paxman refers in his Sunday Times article today to “Johnsonism” – I suspect that he is being ironic because he knows that there is no such thing. Of course Boris is a Tory in the sense that, for example, every home counties golf club bore is also a Tory. What else would they be? And posh people as well – I doubt that many in that infamous Bullingdon photograph became roaring Marxists, or even social democrats.
There has never been a Johnson ideology. His chance was to be a modern day John Ball and to appeal over the heads of conventional leaders and politicians with a populist message. Thereby the “Red Wall” was broken. Without Europe Johnson wouldn’t have made it to number 10! The “ism” of choice for Boris’s Conservatives became a xenophobic “Nationalism” the principal driver of Brexit.
The political world pre Thatcher was cosy. And to a large extent the cosiness returned after the Blessed Margaret’s reign. Major, Blair and Brown were not revolutionaries. And nor would David Cameron have been without Nigel Farage and Douglas Carswell. The former scared the pants off Dave and his complacent gang and the latter, and others, emphasised that the threat was within the Conservative Party as well as the “fruitcakes”, “loonies” and “closet racists” outside it.
In segueing to the Right by calling the disastrous EU Referendum in 2016 Cameron inadvertently changed Britain more than any other leader of modern times, not excluding Thatcher. And so Conservatives and Nationalists became the same thing. As Chris Patten has put it the Tories are now an ‘English Nationalist Party” – the “One Nation” Conservatives walked away or were sacked.
The years after the referendum paved the way for Boris Johnson. He had seen that a populist, nationalist movement of the Right could be his route to power. The Tories became UKIP Lite – and not that “Lite” either. Britain is traditionally a conservative nation with a nostalgia for the past and a love of patriotism and its symbols. The Union Flag became mandatory for every government minister on every occasion.
Boris Johnson is irredeemably shallow with no consistency in either his private or public behaviour. That he is unhinged is obvious but defining the nature of the obvious lack of balance is more difficult. I’ll leave that to others more qualified in mental health than me!
We are (or soon will be) well rid of Johnson. This is not a time for “Après moi, le déluge” for unlike Louis XV (who he much resembles) Boris’s successor cannot possibly be worse than him. Can they ?
“Equally committed” ? Well we are seriously in trouble if “equally” is what we get. The missing words here (apart from even a hint of apology) is less commitment than ability. Being Prime Minister of the United Kingdom is not an easy job – the last four we’ve had (over just twelve years) have all failed , but none as catastrophically as Boris Johnson.
Is the system “Darwinian” ? Here Johnson is indulging in customary boastfulness. What Charles Darwin actually said was “This preservation of favorable variations and the rejection of injurious variations, I call natural selection or the survival of the fittest.” so what Johnson is actually saying is that the process that placed him in Number 10 did so because he was the “fittest” for the job. Nothing could be further from the truth.
Politics is a jungle and in the jungle Darwinian natural selection certainly takes place. The bigger or faster or smarter the beast the better his chance of survival. Johnson obviously sees himself as a superior primate swinging through the trees leaving his rivals behind.
The reality is more prosaic, it’s about judgment calls. David Cameron made the worst judgment call of modern times in calling a YES/NO referendum on Europe, which he then lost. In the jungle his species would have died out after that howler. And, in a way, it did, The “One Nation” Tories became an endangered species and under Theresa May, and especially Boris Johnson, they faded away. Arguably the “injurious variations” triumphed over the “favourable variations” if we hold on to the Darwinian analogy.
Otto Von Bismarck famously said that “Politics is the art of the possible, the attainable — the art of the next best.” Three successive Conservative Prime Ministers have tried to do the impossible and failed, but none as disastrously as Johnson. His approach was symbolised by the video of him on a bulldozer during the 2019 election. This was reducing politics to the pragmatic lowest common denominator.
The economist JK Galbraith expressed a negative view of political pragmatism when he said, “politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.” Johnson didn’t want to be “unpalatable”, he genuinely wants to be liked. But, as Max Hastings shrewdly observed “The only people who like Boris Johnson are those who haven’t worked with him”. Only “disastrous” was left.
Serendipity and chance gives us Prime Ministers not Darwinian selection. John Smith’s sudden and premature death gave us Tony Blair (he might still have made it of course, but much later). Major was not Heseltine , he wielded no big stick and went to the dentist until the hurly burly was done. Brexit gave us Johnson.
So what now ? Surely what we need is calmness and competence – a choice (Darwinian if you like) of the fittest for the job in today’s circumstances . That would be the likes of Jeremy Hunt, dull and diligent. We could do with a bit of “dull” ! But the ideologues of the Gestapo-like “ERG” are still around. Sinister men in dark suits who will surely try and finesse one of their own into the top job.
After the fall of the undeniably charismatic Margaret Thatcher the “system” gave us John Major. In 1945 the great War leader Churchill was replaced by Attlee, the man who famously “got out of an empty taxi” . That’s what we need now. If it can’t be Keir Starmer, who fits the bill perfectly but we’ve got to wait for an election, then Hunt will do nicely. Will the Conservatives in Parliament see this ? I doubt it.
Our country, visibly crumbling around us, is suffering from the actions of those with an overweening sense of entitlement. They inherit or acquire power and wealth and use it capriciously to their own advantage. They are all at it. Vulgar entrepreneurs with yachts and non domicile status. Corrupt politicians “rewarding” those who have helped them with contracts and peerages. Elected members of Parliament claiming massive expenses or employing members of their own family in sinecures. And now the Royals.
The Queen’s second son had to be bailed out to avoid his having to testify in a sordid court case. Her grandson plays the “Celeb” card for all its worth to fund a Californian lifestyle of wealth and privilege. And now the heir to the throne takes money laundered in a suitcase and uses honours to help bail out his failed business. Allegedly !
We have a Prime Minister with the morals of an alley cat, the attention span of a knat and the behaviour of a pre-revolutionary French aristocrat. He and truth have never been bedfellows – there was probably never room.
And yet despite the institutionalised dysfunction all around us we still muddle on waving our preposterous flags and celebrating our “glorious” past. They’ll be at in again hailing a mythical land of hope and glory and a phoney green and pleasant land at the Albert Hall in September.
The evidence of our fall from grace is all around us. Whatever reputation we once had as a credible player on the world’s stage is gone. We sit somewhere between laughing stock and pariah sad at our loss of Empire and desperate to find something to cheer. Pageantry is the best we can do. But behind the gloss of the golden coaches and the Gilbert and Sullivan uniforms it seems that our regal leaders are as corrupt and sordid as the rest of the grossly over-entitled mob in positions of authority and power. No surprise there then.