Voodoonomics!

Fed up with yet another LibDem party political broadcast masquerading as Danny Alexander's regular "Our Man in Westminster" column in the Courier, I've sent in this letter to the editor. We'll see tomorrow if they print it!

Dear Sir

Having allowed Danny Alexander MP to use his “Our Man in Westminster” column in last Tuesday’s Courier (9 March) to put his case for Liberal Democrat tax policy, I hope you will give me the opportunity to respond through your letters column.

As always, the LibDems come up with ideas which sound great but fall apart when you look at the details. They are the ideas of a party which does not have to worry about the serious business of government and how it impacts on the lives of ordinary people.

Mr Alexander describes the LibDem’s “fair” tax proposals. The highlight of this is raising the income tax threshold to £10,000. Whilst this does indeed give back £700 a year to many people on low incomes, he makes no mention of Labour’s Working Tax Credits (WTC), which already does more than this for low income families. The LibDem’s have said they want to limit WTC because it helps families earning as much as £50,000. Shame that their new income tax threshold will benefit families earning up to £100,000!

The LibDems estimate that raising the income tax threshold to £10,000 will cost £16.5bn. They claim this can be paid for – at the same time as making “savage cuts” to public spending – through higher taxes on the well off. When you read their proposals in detail, however, it’s clear that this is made up of a ragbag mix of tax avoidance savings, new taxes on air travel and cutting various capital gains tax reliefs. Putting to one side the impact of the capital gains tax changes on our pension funds, this seems to depend an awful lot on closing the same tax loopholes which every government has struggled with. These feel like SNP promises in the making to me.

In the detail of LibDem policy, £400m is to be raised from a new “green” tax on UK domestic flights.

Now I am all for encouraging people to use trains and other forms of public transport but perhaps Mr Alexander would like to explain how this new tax will affect the price of flights from hard-pressed Inverness airport to the Islands, Edinburgh and the south-east?

Labour will continue to develop a tax regime which is fair to individuals and businesses and which uses tax credits and other reliefs to support those that really need it most.

In closing, I see that pillar of the Thatcher establishment, Norman Tebbit, has praised the LibDem tax proposals (www.libdemvoice.org on 13 Jan 2010). That says everything about which side of the political divide the LibDems now stand on, and who they may be likely to support in a hung parliament.

Yours etc.

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Hilltrack Campaign

Signed up for Sarah Boyack and Peter Peacock's campaign to bring the construction of hill tracks under better control. New intrusive mountain tracks on the Scottish uplands are damaging our landscapes. Hill walkers, ramblers and members of the public are up in arms about the problem. While farmers and crofters need to construct some tracks for their purposes mostly on lower lying land, action is urgently needed.

See http://hilltrackscampaign.org.uk/

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Merkinch Campaigning

Great morning's campaigning in Merkinch today. Our team was full of enthusiasm and we got round a load of doors. The decent weather helped as well.

Door knocking can be difficult sometimes, if people are not in the mood to talk or just want to take their latest frustrations with politicians out on the poor party member on their doorstep. But this was one of those days when the people we met and talked to reminded us all why we're Labour; the woman in dispute with her employer being backed up by her Union, the family needing some decent window insulation let down by council cuts, the pensioner who grew up in service and whose dad made sure she will always vote Labour, because we are the only party that really stands up for ordinary working people. And the 86-year old who is looking forward to going out and voting Labour again because she still thinks voting is a right to be cherished!

Days like today fire up the energy levels and make us even more determined to win the seat.

More pictures on Facebook at Mike Robb for Inverness Nairn Badenoch & Strathspey

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Broadband in the Highlands

I grabbed the opportunity to meet Stephen Timms MP on Monday, when he was in Scotland on a "research" visit in his role as Minister for Digital Britain. I caught up with him in Alloa and put the case for Broadband in the Highlands.

The Digital Economy Bill that Stephen is currently piloting through Westminster make a commitment to guarantee access to 2MB Broadband to every home in the UK. That won't do much for rural areas like the Highlands, however. Its still dependent on BT wires, so you will get a connection but if you live 15 miles up a strath the performance will be woeful. What we need is Next Generation Access - NGA - based on high speed optical fibre and wireless technology and offering speeds up to 100MB with assured service quality.

NGA could transform the rural economy.

The problem of course is that the telcos - BT, Virgin, Cable & Wireless etc - won't put the infrastructure into sparsely populated areas as there is not enough commercial return. Across the UK and northern Europe however, there are community-driven programmes springing up - based on mutual and social enterprise business models - which are finding ways to deliver NGA when government steps in with some seed funding to get the "backhaul" infrastructure installed

I think we really need to look at these models in the Highlands.

The Digital Economy Bill is proposing a 50p per month levy - just £6 per year - on every BT landline to go towards creating a £1bn fund to invest in just such infrastructure. What we need to do is make sure the Highlands get a fair share of that investment and that its directed to delivery models that make sense here. That will need communities, Highland Council, Holyrood and Westminster to work together. No mean feat!

Peter Peackock MSP has been doing great work on this, and I will support him from Westminster in due course.

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Labour IS working

‘ Jobcentres are doing well and the department extracted money from the Treasury for Labour market support during the crisis. Unlike in previous recessions people have not been shifted off the claimant count into other benefits; there has been a net flow into jobseekers allowance from lone parent and incapacity benefits.

Inflows into unemployment have been lower than in the last recession and people are leaving the register faster; 70% leave unemployment within six months, compared with 63% in the 1990s and 60% in the 1980s. Employers, having once written of the official employment service, now express more than 90% satisfaction with it.’

Not as you might have thought from a Labour Party press release but taken straight from an article by the Sunday Times Economics editor on Sunday 24th January, a paper which is not exactly a ‘friend’ of the Labour Government.

It’s always difficult to comment on unemployment numbers – to say they ‘aren’t as bad as feared’ is little comfort to those who have lots their jobs, and the many young people in particular who are finding it very difficult to get a start. But it is important to look at the position objectively – and to acknowledge that the Government’s intervention has had a beneficial effect.

We can see the impact in the Highlands where unemployment is still below the national average at under 3%, compared to over 9% under the Tories at the height of the last recession in 1992.

Keeping unemployment down, and getting the employment rate back up is not just of huge importance to the individuals and families affected, but is also crucial to reducing the Government’s borrowing. The same Sunday Times article quoted above also said:
‘ official calculations suggest lower than expected unemployment could cut public spending by a cumulative £17billion over the next five years.’

Tory emphasis on immediate deficit reduction, with a particular emphasis on the public sector would lead to higher unemployment and may not achieve the deficit reduction claimed.

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Questions to Hilary Benn

I had the opportunity to meet Hilary Benn MP - UK Secretary of State for Environment, Food & Rural Affairs - when he was in Edinburgh on party business last week. At a wide-ranging discussion with party activists and candidates I was able to raise with him my concerns about on-shore wind-farms. He is, of course, a strong and passionate supporter of the climate change agenda and the need to develop renewables, but my questions did give him pause for thought. He asked me to write formally to him at his department and promised to raise my concerns with Ed Milliband as well.

1 How do we ensure that construction of renewable energy schemes will get us to the point where we can stop building new gas and coal-fired power stations and reduce the use of existing non-renewable plant.

2. Does the Renewable Obligation mechanism need changed again in order to encourage more investment in large-scale offshore and small community renewable schemes, rather than on-shore wind.

3. The UK is leading the world in the development of off-shore wind and wave power technology, with major opportunities to exploit such technology around the north of Scotland. What do we need to do to make sure that this translates into long term, sustainable employment in the Highlands?

I shall publish his reply when I have it.  

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Are we getting it right on Windfarms?

Since going walking with the Dava Moor campaigners last year, I’ve tried to keep my promise to dig much deeper into the science of renewables and land-based wind-farms in particular.

I’ve often wondered when my Physics degree would come in useful. Well it certainly has now as I’ve ploughed through page after page of maths, statistics and power engineering science in the various reports authored by ”experts” on different sides of the arguments!

One of the key arguments made by those opposed to on-shore wind-farms is about variability; that wind is too unpredictable to be relied on as a steady source of energy, hence requiring major amounts of non-renewable capacity – mainly gas - to be available as “back up” for days when the wind isn’t blowing.

Its true the wind is highly variable, but I’m convinced by some very detailed work by National Grid that the UK energy network is designed to deal with such variability and will do so. There is also significant backup-generation capacity already connected into the grid, designed to deal with failure of large scale generators such as a major coal or nuclear plant. Wind-energy by itself does not seem to require substantial additional backup.

What I am far less convinced about is how far such schemes will go to actually reducing CO2 generation from non-renewable sources (the big gas and coal-fired power stations).

On shore wind farms have a relatively low “capacity credit” (the amount of non-renewable generating capacity that can, in theory, be turned off when such wind-farms are working normally). This is because their “load factor” - their actual level of energy production - is way less than their usually quoted maximum capacity, in large part due to wind variability.

The financial economics of big coal and gas-fired power stations mean that the energy companies which operate them seek to run them at close to maximum generating capacity at all times (so as to be able to sell the maximum amount of energy to pay for the huge investment needed to build them in the first place). Will the capacity credit generated by on shore wind farms be enough to offset this financial pressure? Do we need to do more to make sure that generating more electricity from renewable sources leads directly to a reduction in use of non-renewable capacity?

A second concern is whether we are getting the balance right between different forms of renewable energy generation.

Off-shore wind and wave power suffers far less from variability (compared to on-shore wind) with a much higher load factor. These schemes really can provide high-capacity renewable generation with a much higher “capacity credit”. Such developments will also have far less impact on our visual environment. At the other end of the scale, community wind-power schemes have the potential to liberate rural communities from supply constraints and energy-poverty.

Energy generators are incentivised to construct commercial scale renewables through the Renewal Obligation scheme (RO), through which they can earn significant revenues – often more than for the electricity itself - by selling the corresponding certificates (ROCS) to the energy supply companies . The energy supply companies need to have sufficient ROCS in order to show that they have met their legal obligations to supply a given percentage of their electricity from renewable sources (they get fined if they don’t). In 2010, energy companies are required to supply 10% from renewables.

This mechanism is fine in theory. However, the original scheme does not distinguish between different types of renewables, so guess what happens? Since on-shore wind farms are the least expensive to build, but still earn huge revenues from the sale of ROCS, then many energy companies can easily enter this market. Big landowners also stand to benefit from selling land to the energy generators. Are these financial factors distorting the market in favour of constructing so many land-based wind farms – with their much lower capacity credit - instead of the longer term investment needed in more beneficial off shore and community schemes?

A modified version of the Renewable Obligation scheme came into operation in 2009 and puts more emphasis on of-shore generation. Will the market work by itself or do we need to do more?

On-shore commercial wind-farm capacity is necessary and there are many areas of our countryside which are ideal for such schemes. Given the cumulative impact on our countryside, however, I think that we need to take a far more cautious approach until we are clear that the capacity credit of such schemes will actually translate into serious reductions in non-renewable generation.

Finally, this is not just about an abstract argument about the best way to reduce carbon dioxide emissions, important though that is. It’s also about economics, and in particular the ability of the renewable energy industry to create jobs. The development, manufacture and operation of renewable technology can create just as many high-quality, sustainable jobs as the oil industry has done. The north of Scotland in particular has a rich potential for off-shore wave and wind power and we need to encourage the investment in infrastructure and services that will bring the technology and energy companies here, with the jobs and economic prosperity that will follow.

Ultimately, that’s why a development like the Beauly Denny Power Line is so important. Not just to provide essential additional connectivity but to send the message that the Highlands are open for investment in these crucial new technologies.

So here are three questions which government at all levels - UK, Holyrood and Highland Council – need to consider:

1. How do we ensure that construction of renewable energy schemes will get us to the point where we can stop building new gas and coal-fired power stations and reduce the use of existing non-renewable plant.

2. Does the Renewable Obligation mechanism need changed again in order to encourage more investment in large-scale offshore and small community renewable schemes, rather than on-shore wind.

3. The UK is leading the world in the development of off-shore wind and wave power technology, with major opportunities to exploit such technology around the north of Scotland. What do we need to do to make sure that this translates into long term, sustainable employment in the Highlands?

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