The structure of Britain’s energy market is barmy. In seeking the best of all worlds in the shape of a decarbonised economy, a free and competitive marketplace for gas and electricity and low prices, the UK has created the ultimate instability.
It is not unlike consumer banking in the run-up to the financial crisis, when over-zealous lenders such as Northern Rock invented unsustainable structures to support 110 per cent mortgages.
As was the case when banking imploded, global factors beyond the UK’s control have brought the house of cards tumbling down.
Overload: In seeking the best of all worlds in the shape of a decarbonised economy, a free marketplace for gas and electricity and low prices, the UK has created the ultimate instability
This time, autocratic decision-making in Russia and Asian demand for liquefied natural gas have sent prices surging.
The UK simply does not have the storage or power baseload to fall back on. Germany still burns coal and France has an extensive, modernised nuclear network.
The turmoil has left previously thriving British cut-price energy upstarts gasping for breath. It is estimated that just 10 of the remaining 55 energy providers will survive the tempest.
A combination of turmoil in energy markets and the waves from a possible default by Chinese property behemoth Evergrande, with reported debts of £221bn, sank shares in Asia and on both sides of the Atlantic, with the Nasdaq hardest hit.
At the time of the banking crisis, Gordon Brown’s government reluctantly stepped in and socialised the losses by underwriting them with taxpayers’ money.
The result of the energy debacle is losses for investors in challenger firms, soaring prices, a bail-out for consumers and a strategy in tatters.
That should alert Extinction Rebellion, Greta Thunberg and the Green Party to the fact that the economic realities of carbon pricing are complex and the least well-off in society may suffer the most.
But don’t hold your breath.
Astrazeneca and its chief executive Pascal Soriot are heroes of the pandemic for the way in which they embraced Sarah Gilbert and the Oxford-Jenner science and turned it into a life-saving vaccine.
The company enhanced its capability with the £28billion takeover of Alexion in the US and just unfurled remarkable results for its breast cancer cure, enhertu.
The oncology breakthrough boosted shares by 6 per cent, placing a £132billion value on the group.
It is a pity that, with Astra currently such an exemplar for UK life sciences, relations with Boris Johnson’s Government are at a low ebb.
There has been an effort in Whitehall to dissuade Soriot from investing in a new facilities in Ireland, taking advantage of Dublin government tax breaks.
The Irish plan was said to be favoured by the group’s finance department. On the fringes of the G7 health summit in Cornwall in June, Britain hoped it had persuaded Soriot not to go to Ireland and offered £55million of support to invest in its Macclesfield site.
It would have been another small victory for ‘levelling up’. It was noted at the time that when Astra was feeling the heat from the EU over vaccine production delays, the Government did its best to help by providing help with vaccine export licences.
A rift between Soriot and the UK authorities became acute when Government health advisers decided to go with the Pfizer vaccine for the booster programme.
The decision was based on scientific advice and the likelihood that an improved Astra booster, adjusted for the South African variant, might not be available until next year. It was the decision to go with Pfizer which is thought to have persuaded Soriot to ditch Macclesfield for Ireland, causing irritation in Whitehall.
It is a huge pity that Astra, which is among the UK’s most innovative firms, should have fallen out with Government while the pandemic still rages.
Shaken, not stirred
The return of James Bond to the big screen, with a premiere of No Time to Die at the Royal Albert Hall scheduled for September 28, will be a boost for UK movies.
Details of the screening, replete with the presence of Prince Charles, Prince William and health workers, will signal a post-pandemic start for British film.
Confidence in recovery should be high as British acting in The Crown, Mare of Easttown and Halston swept the board at the Emmy awards.
The garlands ought to ensure that commitments to UK production, such as Sky’s new film stages at Elstree, should not go unrewarded.
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