Red Ed: 'Return to Socialism............'

Now that the comrades’ gobfest is yesterday, we can begin to deconstruct Red Ed’s address to the faithful.

 

His audience received it with something approaching rapture.

 

So should Cameron. Not even he can miss this open goal, surely?

 

Let’s get started.

 

He is going to encourage local councils to expropriate development land on which the owners have not built. Presumably this will be at full market value. That in turn will require an increase in the public borrowing requirement of £billions. If and when the land is owned by Bevindon Borough Council will that guarantee rapid development for council housing or starter homes? Why was the London Docklands Development Corporation was created? Because the land owned by the local councils had lain fallow for ages and they were incapable of making any decisions because of political machinations.

 

And another thing.

 

All major developers need large land banks to meet their needs over a period of years. Development requires long-term forward planning before a single sod is turned; a major delaying factor is the planning authority, which will also become the developer under Ed’s addle-pated plans.

 

I wouldn’t be at all surprised if the asset values of the big developers took a hair-cut in the wake of Ed’s ‘return to Socialism’, as he has boasted.

 

Next, the most blatant piece of voter bribery since the Eatanswill election.

 

There will be a freeze on energy prices for 20 months after Ed romps home in 2015. Labour costs it at about a £4.5 billion loss to the providers. Another estimate is £7 billion. If the companies push up prices to counter this, Ed will blame the Tories.

 

It is not explained why that period is the magic bullet that will  fell the profiteers, but two things are certain.

 

The first is that there will be pre-emptive tariff increases before the General Election, so consumers will actually end up paying more than ever during that period.

 

The second is that capital investment will dry up almost completely at a critical time when Britain is running out of generation capacity and coal-fired stations are being closed. One of the ’big six’ energy firms plans to invest £30 billion in nuclear. Fat chance under Ed’s plans. Energy investment is by nature huge, risky and long-term. Political meddling is a disaster waiting to happen.

 

Ed says that the reason for these measures is that the customer is being ripped off; tariffs have risen by 30% in the past three years. That looks like profiteering. But it isn’t. Average profits of the power companies are around 4 - 5% tops. There are other reasons for the increases.

 

One is increasing reliance on gas-powered electricity generation; gas is expensive – three times more so than in the US, but then they have fracking! Another, which is rarely mentioned, is the huge cost of compliance with rules about climate change, and we are talking billions here.

 

The oddity about all this is that UK energy prices are well below the EU average, with France, reliant upon cheap hydro and nuclear generation, being a bit cheaper and Germany, Spain and Ireland being much higher.

 

So what would become of this? Energy firms say that this would result in job-losses and black-outs. One of the ’big six’ says that it might relocate elsewhere. Investment in renewable energy means that the greenhouse gas targets would be abandoned by Labour. Lack of investment would mean an energy crisis from 2014. And thus higher prices. Well done, Ed.

 

The puzzle is why Ed chose to launch these two proposals now, around 20 months ahead of the General Election. The Tories and the media have been given all the time they need to rubbish them. It has started already,

 

Why did he not keep these shots in the locker until the campaign proper, when they might have achieved their vote-catching aim? Perhaps it is all about restoring Ed’s approval rating to somewhere above abysmal. The polls suggest a blip in favour of Labour since the speech.

 

The conspiracy theorists hold that it was all  Ball’s, to discredit Ed and open the door to No 10 for the fragrant Yvette Cooper aka Mrs Balls. There might – just - be some credence in this. According to McBeast, the Labour Party exists in a constant state of plotting; they hate each other more than they ever hate the Tories.

 

So ‘Return to Socialism’ Ed proposes land grabs, price controls, and power cuts.

 

Déjà vu all over again!