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7 October 2023

Perversity

Tag(s): Politics & Economics, Business
This is my 600th blog.  I published my first in June 2009 and since then have written on many different subjects. I have a number of followers but don't know precisely how many as I do know that sometimes readers forward my blog to other people because I get feedback directly from some of them.

I resolved this year to try and write on more positive subjects because there was so much doom and gloom around and it was easy enough to read about that in the newspapers or elsewhere. However, on balance for this milestone blog I find myself needing to cover something which has perplexed me and that is the perversity of much that goes on in modern life particularly in our public affairs.

Let's take the example of electric cars. In the drive to net zero politicians have got the idea that persuading everyone to drive electric cars will reduce our carbon emissions. There are many problems with this. The first is that in manufacturing an electric car the carbon emissions are at least as high and probably higher than those in an ordinary petrol driven vehicle. That is because there are far more precious metals included in electric cars and they have to be mined. The battery in an electric car is particularly heavy and this increases the weight of the vehicle, and it has been estimated that the owner would have to drive 70,000 miles in the car before it became carbon neutral including its manufacturing record as well as its driving record. But then this is only true if the source of electricity on which the battery is charged is itself net zero and for 50% of energy in the UK that is not the case and will not be the case for a very long time.

Analysis by the University of Leeds shows that the average electric car more than doubles the wear and tear on roads increasing the risk of small cracks which develop into potholes. The government has brought forward the deadline by which petrol cars can no longer be sold to 2030, five years earlier than the previous commitment. There is no possibility at all that this will be achieved as the manufacturing capability is simply not there unless we’re going to import every car from China which doesn't seem like a good idea for any reason at all, particularly as China is not committed as the UK is to net zero.  We would just be importing their carbon emissions.

Another reason why this cannot be achieved is energy capacity. At present when most cars are driven on a petrol or diesel engine, every vehicle on average has half a tankful of fuel on board. With electric cars we lose all of that capacity. But more seriously if the cars are going to be charged from electricity from the grid there is nowhere near the capacity on the grid to satisfy that demand. In fact, we would have to increase it by a factor of four and since we haven't built a new power station in decades it's impossible to imagine how that can be achieved. Further, John Lewis Insurance is declining to insure electric cars because of the high cost of repairs.

My basic point is that governments commit themselves to these absurd targets without having a clue how they will get there. That they're allowed to get away with this is because we're talking about something far enough in the future that it can remain a talking point for most people over the next two or three general election cycles but increasingly people will find out that it is just talk and no serious action.

But if we are going to commit ourselves to these sort of targets and convert all energy to renewable energy such as wind power that is also not without its problems. Hambro calculates that building enough wind turbines to generate the same electrical output as a natural gas turbine requires 100 times as much iron ore, 25 times as much concrete, and ten times more speciality metals and minerals - and, if on land, vastly more space. Again, these ambitions are nothing short of perverse. They are based on nothing but bluster and false assumptions with no basis in fact.

Let's not think that it's only the UK government that acts in a perverse manner. Norway is regarded as a very stable and well-run country. Get this. In 2022, Norway 's richest man, Kjell Inge Røkke, left to move to Switzerland. More than 30 Norwegian billionaires and multimillionaires followed his lead in 2022, a bigger exodus of the mega rich than the total of the previous 13 years. Why? Following its 2021 electoral victory, Norway’s Labour Party made good on its promise to “soak the rich” increasing its wealth tax to 1.1%, despite warnings that such a move would trigger capital flight. That is just what has happened, leaving the Norwegian government with less revenue - an estimated $594 million loss from the wealth tax alone. Clearly perverse.

This should give all those pushing for wealth taxes in other countries such as the UK pause. Such taxes will just lead to a mass exodus of wealth creators. And if the tax is applied not just to the mega rich but also to the relatively rich such as those who live in valuable houses, well houses don't produce cash so if someone has a valuable home but not many other cash assets and they're faced with a large wealth tax bill, they will be forced to sell the house as will many such people thus forcing down the housing market. If they do have some extra assets which are probably invested in shares, they will have to sell some shares with the consequent depression in the stock market so both the property market and stock market will be severely damaged by a wealth tax which will be not only counterproductive in income for the government but actually almost certainly negative. Perversity indeed.

And what about the water companies that were privatised in the UK. Initially that meant most of the shares were held by individuals but now it means that most of them are held by foreign investors who extract massive dividends and pay the senior management huge salaries and bonuses even when the water company is losing money. Meanwhile just as there have been no new power stations in decades there have been no new reservoirs in decades. The water companies are regularly fined for pumping sewage into freshwater rivers and yet that doesn't really deter them, and they carry on doing it. Absolutely perverse.

I've had my own perverse experience with a water company; ours is Affinity Water and just this week I sent them the following letter.

Customer Service                                                                                                                                   2nd October, 2023                      Affinity Water, Tamblin Way, Hatfield, Herts, AL10 9EZ

Dear Sirs

You recently wrote to my wife and me detailing our meter readings and commenting on these and then giving suggestions as to how we might reduce consumption further. This is all no doubt good policy particularly because the country is short of drinking water despite the relatively high rate of rainfall. This is largely caused by the almost total lack of investment by the water companies while they pay colossal salaries to senior management and huge dividends to largely foreign corporations.

However, that is not why I am writing. My concern is that I find your analysis bewildering. You tell us we have reduced our water consumption by 112,000 litres to only 69,000 in an equivalent period. This is a colossal reduction and totally unrealistic. My wife and I have made efforts to reduce our consumption but to do so by 62% in only a year is incredible. You say our consumption is still high compared to an average family. But how do you know what an average family is? My wife and I are pensioners living on our own. Our children left the home some time ago and both live abroad.

Secondly, you give monthly figures which also do not relate to reality. For example, you give virtually the same figures for consumption in June, July and August this year. In June my wife and I spent the whole month at home except for two nights away at a family occasion. In July we took two overseas trips, one for 4 days and one for ten. In August we spent every day at home and also received a visit from our daughter, her husband and their two young children. We had another visit by my brother and his wife for one night.

So, 28 days at home in June, 17 days at home in July and 31 days at home in August with six people in the home for 8 days and four for one day, so August was the equivalent of 65 days of consumption.

We never take a bath, only showers. We never water the lawn. We never wash the car at home. We fill up water bottles while we are running the kitchen tap waiting for the water to warm up. We don’t run taps while brushing our teeth or washing dishes. I even follow the maxim of “If it’s yellow, let it mellow; if it’s brown, flush it down” though my wife is not too keen on that.

Please explain how you say we use as much water when we’re away as we do when the house is full of guests. Usually, when we go away, we turn off the water at the tanks.
Yours sincerely

Dr David Pearson



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