The shale debate
[Re: Britain needs to embrace the global shale revolution, Friday]
Britain must position itself at the forefront of the shale revolution. The US has had a head start because, firstly, its government has allowed extraction. Secondly, its main shale fields are in remote locations away from residential areas. Thirdly, it’s been developing the requisite knowledge and expertise since the 1970s. We should follow the American lead, and use shale as new source of jobs, investment, and economic growth. We mustn’t let this slip.
John Graham Ellis
The two main environmental concerns with fracking are a possible poisoning of water supplies – with potentially serious health implications – and the release of methane gas into the atmosphere. Earthquakes are a tangible third factor, but not the most worrying in the long term. At a conference last year, the UK government’s chief scientist Dr David Kennedy argued that shale “was a major threat to de-carbonising society”. While it may be a short-term solution for the economy, it still doesn’t look like a long-term solution for society.
Critics of shale pay too much attention to the danger of earthquakes. They are actually very minor tremors. Minor seismic activity is constant, while tiny tremors have always been associated with all forms of extraction or deep mining. Britain has hosted coal mines for centuries, but major earthquakes have been rare or non-existent.
I agree that shale has a part to play. But, however large it may seem, 10 per cent of the UK’s energy needs over the next 100 years (when the supply will run out) is nothing major. Wind power and other renewable sources already provide over 10 per cent of our electricity supply, and costs are coming down all the time. Further, the US shale industry is an interesting case study. Some US shale gas extractors are facing financial difficulties, as shale has become so cheap. And now the price isn’t sufficient to support continued extraction.
Lib Dem policy
[Re: The ideas emerging from Lib Dem conference dissolve under scrutiny, yesterday]
The Liberal Democrats continue to be the architects of their own destruction. They propose yet another bank, a state-owned bank this time (what are RBS, HBOS, and Lloyds?) to make loans to small businesses. They forget that there are countless people who already make a living supporting not just small businesses, but also distressed companies. The Lib Dems think that their job is to socialise economic losses. Not every start-up will succeed. In fact, most will fail. That is the unfortunate truth of business, and there’s nothing the government can do about it.
[Re: Britain needs more venture capitalism – not a state bank, yesterday]
Friedrich von Hayek was right about some things, but his belief that markets should be left to their own devices was rather naive. Recent behaviour in the financial services sector has illustrated why free markets must be regulated by a strong central government. Recently, a powerful elite – made successful by free markets – has been able to capture government and use it to its own end.
The recent behaviour of banks surely illustrates why Hayek was right. Capitalism is an honest trading system. If you let politicians in, they will end up destroying it.
Sustainable growth in a free market doesn’t depend on the participants being honest and fair. Rather, the market will drive out participants who do not offer anything that is, at least at the time of the transaction, considered valuable by both parties. In our current system, market problems are amplified by the power of the state. The government has promoted bailouts of failed banks by taxpayers – one of the biggest frauds imaginable.
[Re: Government must think fast and big to make Britain a tech haven, Friday]
It is great to see Chris Yiu make the case for a better environment in which start-ups can thrive. He notes that the UK start-up scene isn’t just focused in London, but across the country, and this is an important point for policymakers to consider. Another factor in the success of start-up hubs that Yiu did not mention, however, is the importance of low taxes. The ability of individuals, new businesses, and investors to save their own income and invest will enable and empower new start-ups. Recent arguments for more punitive tax regimes will only serve to disincentivise new technology firms and those who invest in them.
Chris Yiu is ceaselessly optimistic about the prospects for UK start-ups. But he fails to mention the role the public sector played in the development of some entrepreneurial hubs, notably Silicon Valley. Of course there are many horror stories – of failed government investments and of wasted taxpayer money. But the UK should be looking much more closely at how California helped nurture Silicon Valley, both directly and indirectly.
I have news for Lib Dems. Having a £2m home doesn’t make you “stinking rich”. Most houses are bought with fully-taxed income.
Nothing works with this coalition. Funding for Lending reduces costs to lenders by 0.5 per cent, but only 0.1 per cent is passed on.
Vince Cable is talking rubbish. A state-run business bank takes us right back to the 1970s. It’s a hilariously bad idea.
Nick Clegg and fiscal policy should never be mixed. He is becoming a serious political embarassment for the government.