Reaching our best-before date

As the world struggles with war, recession and global warming, Oliver Smith gives you another reason to worry yourself sick

Oil has an expiration date. Long have scientists claimed that we will see the depletion of oil in our lifetimes, but in reality we have a more pressing problem than this. It’s called ‘Peak Oil’ and many scientists think we may have already reached it.

Put simply, peak oil is the point at which our oil reserves have reached their highest output and after this point begin to decrease. And to put our current situation into perspective, 33 of the largest 48 oil-producing nations have already hit peak oil and are decreasing in their production of oil.

The debate around the timing of peak oil was kicked into overdrive a week ago when two whistleblowers from the International Energy Agency (the people who forecast our oil reserves and usage) revealed that the IEA had increased their forecasts so as not to scare the global financial markets. Three days later, researchers at Uppsala University in Sweden published a report that proves that the IEA’s forecast figures are wrong.

Unfortunately, it is difficult to accurately predict the remaining global oil supply as there are many different actors involved, all with financial interests best served by keeping the data secret. If the oil companies revealed their supply data giving us an accurate picture of how much is left, it is likely that we would begin to move away from oil as the supply runs out, resulting in lower oil prices. However, by keeping their supply secret the oil companies are able to charge full price until the last drop runs dry.

It is obvious that the IEA has lost much of its credibility in the forecasting of oil figures, and without a reliable source it will be difficult to plan for our future energy consumption. But what does peak oil mean for us in the UK? And assuming we are on the brink of peak oil, what can we expect to see in the near future?

The UK currently sits on the far end of an oil pipeline that comes from the Middle East. We have little oil reserves of our own and in a global energy crisis we will probably be hit sooner than those countries in central Europe. Already we have seen countries in similar energy situations as ours begin emergency measures to slash their dependence on foreign oil. The government of Cuba has ordered the closing of all non-essential factories and workshops throughout the winter, as they enter a “critical” energy situation.

Unlike America, the UK’s presence in the Middle East is unlikely to secure our supply of oil in a crisis. We have already seen fluctuations in the price of oil over the last year and these will probably continue and increase in frequency as the market responds to shortness in oil supply.

The future of oil is unsure. However, if the revelations from the two whistleblowers inside the IEA are anything to go by, our future dependence on oil is fast approaching an end. And as the crisis becomes more apparent over the next few years, governments around the world will be forced to take increasingly drastic action to secure their energy needs.

What a bunch of bankers!

As the government plans to sell on the banks it owns, Oliver Smith considers if this is just another bum deal for the taxpayer

Following the spending spree by the Labour government in October last year, the British taxpayer became the proud owner of a large stake in three of the UK’s largest high street banks. Now its time to sell up.

EU competition legislation, which bans governments from owning banks, will soon force the government to sell off its banking assets. But what effect will this have on the British banking system? And will the taxpayer be getting their money back?

In their current state the banks are undesirable to perspective buyers, so the first move by the government will be to split the banks up into profitable, desirable banks which will be sold, and ‘bad banks’, which the government will retain for the time being. There is speculation that prospective buyers could include Tesco, Virgin and other new entrants into the banking market. The government hope that this will boost “competition and choice”.

The proposed ‘good banks’ for sale include pieces of RBS, of which the government owns 70%, such as its Churchill and Direct Line insurance services, its Natwest branches in Scotland and its RBS-branded branches in England and Wales. Lloyds will suffer a similar fate with its good assets including its Cheltenham & Gloucester branches and its Lloyds branches in Scotland.

The Chancellor has called this move “a better deal for the taxpayer” and has said that the sale will only take place “when the time is right”. At the same time he has admitted that Gordon Brown was wrong by predicting that the UK would lead the world out of recession, though maintaing that we would be out of recession by the end of the year. But as the UK is still in recession (unlike France, Germany and the US), is this really the best time to be breaking apart banking groups?

Banking experts have described the move as a “big distraction”, during a time where banks should be working to support the economy and bring us out of recession. More criticism has been levelled at the foreign investors who look keen to buy up the ‘good banks’; names such as Santander and Zurich have been thrown around. In the high street this would represent another blow to the UK owned banking system as foreign investors continue to buy up UK banks.

In fact a lot of criticism has been aimed at the timing of the sale. Treasury spokesman for the Liberal Democrats, Vince Cable, thinks that there should be no urgency and that time should be taken to ensure that the best parts of the banks do not go to private investors and that taxpayers are stuck with the ‘scraps’. Peter McNamara, Managing Director of Alliance and Leicester, claims that selling off the banks now could be counter-productive:

“Half the banks in the UK are going to be reorganised when you could argue their day job is to support industry and consumers during the recession. Without that support, we are more likely to have a steeper rise in unemployment.”

So in the end it seems that the taxpayer will be left holding the toxic ‘bad banks’ while foreign investors could walk away with the prime cuts of the British banking system during a recession in a government plan that could even increase unemployment. Sounds like another raw deal for the taxpayer to me.

Guess who's back. Shady's back

Tony Blair plans to make a return to world politics. Oliver Smith explains how and wonders whether we want him back

The recent ‘yes’ vote from our Irish cousins has green-lighted the Lisbon Treaty to continue its unstoppable march towards Brussels, bringing with it a new role to the ever-growing sphere of European bureaucracy: the President of the European Union.

Not content to allow the identity of the holder of this position to be haggled over in the EU’s corridors of power, Gordon Brown has decided to throw the UK’s hat into the ring by backing his old friend as a candidate for the post.

He re-crafted the Labour Party into ‘New Labour’ following Peter Mandelson’s guidelines. He obediently followed George Bush into two separate invasions in the Middle East, a move that many blame for the ultimate demise of his premiership. But, not content to fade gracefully into the shadows, Tony Blair’s back.

After two years out of the public eye acting as the UN envoy to the Middle East, Tony looks set to launch his triumphant return to European politics. But with many people still viewing him as the Prime Minister who launched an illegal war in Iraq, there may be some hurdles for him ahead.

As the Chilcot Inquiry into the Iraq war kicks into gear, with Tony Blair as the chief witness, more awkward questions are going to be asked about his actions as Prime Minister. But, acting as Mr. Blair’s PR puppy dog, David Miliband has already jumped to his defense, downplaying his role in the inquiry as little more than that of a “retired prime minister”. Miliband announced his support for Blair’s candidacy declaring, “It’s not a time for shy retiring violets…Europe needs a strong, persuasive, articulate advocate.” According to Miliband, “Tony Blair would be good for Europe, and also good for Britain”.

Both the Conservatives and Lib Dems have criticized Blair’s candidacy. David Cameron commented that he stood against any form of office that took the “emblems of statehood” and applied them to the EU. Continuing that if there was to be a president of the EU then it shouldn’t be in the form of “some all-singing, all-dancing, all-acting president and I think I can see what sort of president Tony Blair would be”.

With Berlusconi attending, Sarkozi as a maybe and ‘still awaiting reply’ from Angela Merkel, Blair’s facebook group of supporters has real potential. So here’s the real question: is Tony Blair the “strong, persuasive, articulate” president that we need to represent us in Europe? Or rather will Blair be seen in Europe as the media-man, ‘all-singing, all-dancing’ but ultimately lacking the conviction to make the hard decisions?

Tony Blair has yet to comment on his candidacy, but it doesn’t look like he’ll have to say much. Supported by the key players in Europe, his position looks to be a foregone conclusion. But as Gordon Brown heads to Brussels to lobby support for Blair, the Iraq war inquiry will begin. And that might just be enough to cast some shadows on his candidacy. In the mean time, let’s hope we don’t get more Tony.

Bargain Brown's British boot sale

Gordon Brown is having a jumble sale to raise some quick cash and pay off his debt. Unfortunately the jumble sale is made from taxpayer’s assets, and the national debt he’s trying to pay dwarfs any possible returns from the sale.

Gordon Brown believes this sale will provide a short-term fix to the budget deficit. I disagree; what the country actually needs is a long-term strategy of debt reduction to see it through the financial crisis.

The sale by Gordon Brown is in reality the most recent in a long line of sales dating back to the privatisation of the Thatcher government in the 1980s, where she undertook the so-called process of ‘selling the family silver’.

The most valuable assets went first, starting with the utilities of water, gas and electric during the 1980s and continuing into the ‘90s with sales of all the major government-owned businesses and assets.

When Gordon Brown arrived on the scene in 1997 he found little had been left from the Conservative’s bouts of privatisation, indeed he was stuck with the assets which some have coined the ‘family copper’.

The Channel Tunnel Link, Tote Betting shops and the Student Loan Book to name a few. A group of assets that hold little value left in them, but might keep Gordon Brown’s election prospects alive, if he can manage to turn them into something of value.

While he may be positioning himself as the UK’s dependable salesperson, determined to get us a good price on the market for these assets, I think history has shown Mr. Brown is more akin to the ‘Del Boy’ dealer of Britain.

Brown’s dodgy deals began in 2001, when he decided to auction off more than half the country’s gold reserves one at a time when gold was valued at a twenty-year low.

Eight years later, the value of gold had trebled – he has lost the taxpayer an estimated £2bn. In 2003 the government sold its stake in defence firm QinetiQ. Gordon Brown along with the treasury pushed the deal ahead selling its stake in the firm at a weak point in the market.

Four years later, and the value of the government’s stake has increased nine-fold, once again at the taxpayers’ expense. And now, Brown is poised to unleash another wave of his dodgy deals.

In an economic climate so unstable that most people wouldn’t consider selling a house or a car, the UK is going to sell some £16bn worth of government assets. His critics have labelled this move a ‘fire sale’, akin to a desperate last play to keep the bailiffs away for just a bit longer.

Here’s the real question: can we trust Mr. Brown to be the shrewd businessman we need right now? Or will we in fact see ‘Del Boy’ Brown push through a series of dodgy sales, sacrificing high prices for quick money?

As the budget deficit of £175bn over the next two years has been clearly earmarked as a key election battleground, the announcement of these sales can only be seen as a political move from Brown.

A reactive move to an issue in which the Tories currently hold ownership, with their plans for spending cuts and public sector pay freezes.

The Conservatives, while not opposing the sale itself, have criticised its timing and called for long-term policy aimed at reducing the deficit, highlighting their own policy as the preferred alternative. David Cameron offered his words of wisdom to the PM: “If you sell something it can help you in the short term, but it doesn’t actually help you live within your means in the long term.” A message that I think Gordon Brown would do very well to listen to.

Agreeing with the Conservatives, the Liberal Democrats saw no issue with the sale itself, but again called plans to sell into the current market “barmy”. Instead, they suggest looking at far better ways of cutting the budget deficit such as cancelling the proposed renewal of Trident, which Greenpeace estimates will cost the country £34bn. Surely this will make a much larger dent in the deficit than a few bridges and tunnels?

And therein lies the real issue for Gordon Brown: a bulging welfare state, the cost of two wars and an occupation in Iraq have left the country with a bill that it cannot foot.

We are not living within our means, as David Cameron puts it. But if we want to alleviate the UK from debt and bring the country under budget, cutbacks are required, drastic steps that Brown is unwilling to make. Instead, he will attempt to deceive the country by using dodgy deals to cover up the problem.

Gordon Brown is foolish to believe in alchemy, and this stunt of turning worthless assets into those with value will most certainly fall flat. Previous governments have been able to pick at the government’s assets for short-term benefits, but the bone has been picked bare.

I don’t think Brown can substitute this meaningless sale in place of what the people want – long-term policy that gives the UK a plan to repay its debts and clear its budget deficit.

Attitude at Altitude

Stewardess and pilots involved in mid-air fracas

Two pilots have been grounded after they abused a stewardess and pushed her around the cockpit when she refused them ‘personal favours’ on an Air India flight.

Passengers of IC844 certainly got some in-flight entertainment they wouldn’t forget when a stewardess emerged from the cockpit at 30,000ft claiming that the pilots had attempted to ‘molest’ her.

A fellow crew member stepped in and a mid-air brawl between the pilots and cabin crew broke out following the allegation by the stewardess that she had been “abused, manhandled and assaulted in an undignified way”.

In the pilots’ defence they have argued that the claims of abuse are false, and that the subsequent fight was in fact started by a male member of the cabin crew.

Whichever version of events is true, the disagreement is said to have begun before the flight took off from Sharjah, in the United Arab Emirates. Luckily both sides of the disagreement managed to put aside their differences, and the flight landed safely in Delhi, India.

Air India has launched an internal investigation into the claims and counterclaims which have been received from both parties involved. Air India has also released the results of its preliminary enquiry into the brawl, stating that “the cockpit was not left unmanned,” and at no time were the passengers placed in any danger.

Delhi Police have received a statement from the female stewardess involved, with claims that she was ‘abused and pushed’ in the cockpit after she refused them ‘personal favours’.

The Joint Commissioner of Delhi Police, Satyendera Garg, has commented to reporters that the “air hostess sustained bruises and injuries to her hand”.

In the meantime both pilots as well as two members of the cabin crew have been grounded until further notice.

With so-called ‘air-rage’ becoming more common on flights and reports of mid-air brawls increasing, it would seem that even the crew are not above such behaviour.