In this newsletter:
1) State of emergency in Kazakhstan, Govt sacked amid protests over soaring gas prices
Euro News, 5 January 2022
2) Kazakhstan declared emergency as protesters torch public buildings
Reuters, 5 January 2022
Reuters, 5 January 2022
3) Dasha Afanasieva: Kazakh gas revolt is timely canary in the coalmine
Reuters, 5 January 2020
4) Millions of British families may have to choose between eating and heating
Metro, 4 January 2022
5) Boris Johnson rejects energy bill VAT cuts to help struggling families
The Daily Telegraph, 5 January 2022
6) Tory MPs turn on Boris as PM rules out tax cut on soaring energy bills
Daily Express, 5 January 2022
The Daily Telegraph, 5 January 2022
6) Tory MPs turn on Boris as PM rules out tax cut on soaring energy bills
Daily Express, 5 January 2022
7) New energy crisis talks as cold snap sends gas prices soaring
The Daily Telegraph, 5 January 2022
The Daily Telegraph, 5 January 2022
8) Energy-starved France mulls burning more coal to keep lights on
Bloomberg, 4 January 2022
9) Reality check: Global weather and climate disasters 2000 to 2021
Roger Pielke Jr., 5 January 2022
Full details:
1) State of emergency in Kazakhstan, Govt sacked amid protests over soaring gas prices
Euro News, 5 January 2022
Kazakhstan's president dismissed his government and declared a state of emergency on Wednesday in response to protests over rising gas prices.
Protesters attending a rally in Almaty, Kazakhstan on Wednesday, after energy price hikes. Credit - Abduaziz Madyarov/Agence France-Presse — Getty Images
It comes after days of demonstrations that began in cities in the west and then spread through the sprawling Central Asian country.
The government had initially tried to calm protesters by conceding a reduction in the price of liquefied natural gas (LNG), setting it at 50 tenge (€0.1) per litre, compared with 120 at the start of the year — a significant increase in a country where the minimum wage is 42,500 tenge (€98.7) a month.
But that strategy didn't stop the protests. On Tuesday night police used stun grenades and tear gas to disperse a large demonstration in the economic capital Almaty.
Protesters, some of whom attacked vehicles, chanted anti-government slogans such as "Government resign!" and "The old man out!" in reference to former president Nursultan Nazarbayev, who, as the mentor of current leader Kassym-Jomart Tokayev, remains very influential.
The interior ministry reported that more than 200 protesters were arrested for "violations of public order" and 95 police officers were injured.
The protesters "indulged in provocations" by blocking roads and traffic and "disturbing public order", the ministry said in a statement.
Protests continued on Wednesday with police firing stun grenades at protesters in Almaty.
Full story
3) Dasha Afanasieva: Kazakh gas revolt is timely canary in the coalmine
Reuters, 5 January 2020
Kazakhstan has served up a timely warning to European leaders.
Euro News, 5 January 2022
Kazakhstan's president dismissed his government and declared a state of emergency on Wednesday in response to protests over rising gas prices.
Protesters attending a rally in Almaty, Kazakhstan on Wednesday, after energy price hikes. Credit - Abduaziz Madyarov/Agence France-Presse — Getty Images
It comes after days of demonstrations that began in cities in the west and then spread through the sprawling Central Asian country.
The government had initially tried to calm protesters by conceding a reduction in the price of liquefied natural gas (LNG), setting it at 50 tenge (€0.1) per litre, compared with 120 at the start of the year — a significant increase in a country where the minimum wage is 42,500 tenge (€98.7) a month.
But that strategy didn't stop the protests. On Tuesday night police used stun grenades and tear gas to disperse a large demonstration in the economic capital Almaty.
Protesters, some of whom attacked vehicles, chanted anti-government slogans such as "Government resign!" and "The old man out!" in reference to former president Nursultan Nazarbayev, who, as the mentor of current leader Kassym-Jomart Tokayev, remains very influential.
The interior ministry reported that more than 200 protesters were arrested for "violations of public order" and 95 police officers were injured.
The protesters "indulged in provocations" by blocking roads and traffic and "disturbing public order", the ministry said in a statement.
Protests continued on Wednesday with police firing stun grenades at protesters in Almaty.
Full story
2) Kazakhstan declared emergency as protesters torch public buildings
Reuters, 5 January 2022
ALMATY, Jan 5 (Reuters) - Kazakhstan declared emergencies in the capital, main city and provinces on Wednesday after demonstrators stormed and torched public buildings, the worst unrest for more than a decade in the tightly controlled country.
The Cabinet resigned, but that failed to quell the anger of the demonstrators, who have taken to the streets in response to a fuel price increase from the start of the new year.
Though the unrest was triggered by the price rise, there were signs of broader political demands in a country still under the shadow of three decades of one-man rule.
Nursultan Nazarbayev, 81, took office as president of the former Soviet republic in 1990 and only stepped down in 2019. He retained authority as ruling party boss and head of a powerful security council.
An Instagram live stream by a Kazakh blogger showed a fire blazing in the office of the mayor of the main city, Almaty, with apparent gunshots audible nearby. Videos posted online also showed the nearby prosecutor's office burning.
Earlier on Wednesday, Reuters journalists saw thousands of protesters pressing towards Almaty city centre, some of them on a large truck. Security forces, ranked in helmets and riot shields, fired tear gas and flash-bang grenades.
The city's police chief said Almaty was under attack by "extremists and radicals", who had beaten up 500 civilians and ransacked hundreds of businesses.
A presidential decree announced a two-week state of emergency and nighttime curfew in the capital Nur-Sultan - named after the former president. It cited a "serious and direct security threat to citizens".
States of emergency were also declared in Almaty and in the westerly Mangistau province, where protests first broke out.
Reuters journalists reported the internet had been shut down as the unrest spread. Netblocks, a site that monitors global internet connectivity, said Kazakhstan was "in the midst of a nation-scale internet blackout".
Though the unrest was triggered by a fuel price rise, there were signs of broader political demands in a country still under the shadow of three decades of one-man rule.
Footage showed police and security officials in civilian clothes breaking up a small group of protesters in the city of Shymkent, hauling away men and pushing them into a police car and a white van as some chanted "Nazarbayev, go away!"
Nazarbayev's hand-picked successor, President Kassym-Jomart Tokayev, accepted the Cabinet's resignation on Wednesday and ordered acting ministers to reverse the fuel price rise.
Tokayev also named a new first deputy head of the National Security Committee to replace a nephew of Nazarbayev. Nazarbayev himself has not commented or convened the security council since the unrest began.
Kazakhstan's reputation for political stability under Nazarbayev has helped it attract hundreds of billions of dollars of foreign investment in its oil and metals industries.
The unrest saw the price of Kazakhstan's dollar bonds plunge by nearly 6 cents, the worst showing since the height of the coronavirus market collapse of 2020. read more
Analysts said the veneer of stability has masked anger among a younger generation denied the liberalisation seen in other ex-Soviet states.
"I think there is an underlying undercurrent of frustrations in Kazakhstan over the lack of democracy," said Tim Ash, emerging market strategist at BlueBay Asset Management.
"Young, internet savvy Kazakhs, especially in Almaty, likely want similar freedoms as Ukrainians, Georgians, Moldovans, Kyrgyz and Armenians, who have also vented their frustrations over the years with authoritarian regimes."
Kazakhstan is a close ally of Russia. The Kremlin said it expected the country to quickly resolve its internal problems, warning other countries against interfering.
Full story
Reuters, 5 January 2022
ALMATY, Jan 5 (Reuters) - Kazakhstan declared emergencies in the capital, main city and provinces on Wednesday after demonstrators stormed and torched public buildings, the worst unrest for more than a decade in the tightly controlled country.
The Cabinet resigned, but that failed to quell the anger of the demonstrators, who have taken to the streets in response to a fuel price increase from the start of the new year.
Though the unrest was triggered by the price rise, there were signs of broader political demands in a country still under the shadow of three decades of one-man rule.
Nursultan Nazarbayev, 81, took office as president of the former Soviet republic in 1990 and only stepped down in 2019. He retained authority as ruling party boss and head of a powerful security council.
An Instagram live stream by a Kazakh blogger showed a fire blazing in the office of the mayor of the main city, Almaty, with apparent gunshots audible nearby. Videos posted online also showed the nearby prosecutor's office burning.
Earlier on Wednesday, Reuters journalists saw thousands of protesters pressing towards Almaty city centre, some of them on a large truck. Security forces, ranked in helmets and riot shields, fired tear gas and flash-bang grenades.
The city's police chief said Almaty was under attack by "extremists and radicals", who had beaten up 500 civilians and ransacked hundreds of businesses.
A presidential decree announced a two-week state of emergency and nighttime curfew in the capital Nur-Sultan - named after the former president. It cited a "serious and direct security threat to citizens".
States of emergency were also declared in Almaty and in the westerly Mangistau province, where protests first broke out.
Reuters journalists reported the internet had been shut down as the unrest spread. Netblocks, a site that monitors global internet connectivity, said Kazakhstan was "in the midst of a nation-scale internet blackout".
Though the unrest was triggered by a fuel price rise, there were signs of broader political demands in a country still under the shadow of three decades of one-man rule.
Footage showed police and security officials in civilian clothes breaking up a small group of protesters in the city of Shymkent, hauling away men and pushing them into a police car and a white van as some chanted "Nazarbayev, go away!"
Nazarbayev's hand-picked successor, President Kassym-Jomart Tokayev, accepted the Cabinet's resignation on Wednesday and ordered acting ministers to reverse the fuel price rise.
Tokayev also named a new first deputy head of the National Security Committee to replace a nephew of Nazarbayev. Nazarbayev himself has not commented or convened the security council since the unrest began.
Kazakhstan's reputation for political stability under Nazarbayev has helped it attract hundreds of billions of dollars of foreign investment in its oil and metals industries.
The unrest saw the price of Kazakhstan's dollar bonds plunge by nearly 6 cents, the worst showing since the height of the coronavirus market collapse of 2020. read more
Analysts said the veneer of stability has masked anger among a younger generation denied the liberalisation seen in other ex-Soviet states.
"I think there is an underlying undercurrent of frustrations in Kazakhstan over the lack of democracy," said Tim Ash, emerging market strategist at BlueBay Asset Management.
"Young, internet savvy Kazakhs, especially in Almaty, likely want similar freedoms as Ukrainians, Georgians, Moldovans, Kyrgyz and Armenians, who have also vented their frustrations over the years with authoritarian regimes."
Kazakhstan is a close ally of Russia. The Kremlin said it expected the country to quickly resolve its internal problems, warning other countries against interfering.
Full story
3) Dasha Afanasieva: Kazakh gas revolt is timely canary in the coalmine
Reuters, 5 January 2020
Kazakhstan has served up a timely warning to European leaders.
The central Asian state’s government fell on Wednesday following protests sparked by the removal of a price cap on liquefied petroleum gas (LPG), a key fuel for cars. While the details of the implosion are peculiar to Kazakhstan, western politicians have cause to look on nervously. At first sight, the unrest read more seems odd for a country that in 2020 boasted 1.8 million barrels of daily oil production and 32 billion cubic metres (bcm) of gas, way above consumption levels. Yet LPG has long been sold at a subsidised rate below its cost of production, which incentivised exports and led to shortages. Hence the government’s idea to spur supply at home by hiking the price was logical, but has left some Kazakhs facing energy costs double what they were.
The LPG outcry has been a literal fuel for wider grievances. Kazakhstan's former president, Nursultan Nazarbayev, who ruled for three decades until his abrupt resignation in 2019, has dragged out a handover of power to nominated successor Kassym-Jomart Tokayev. Things may improve under Tokayev, who has ordered the LPG price cap to be restored as well as price controls on other “socially important goods”, but it was too late for the government led by Askar Mamin.
Europeans arguably have a bigger energy headache to Kazakhs. The 219 bcm of natural gas produced in Europe in 2020 was well under half the continent’s consumption, and European energy prices have surged to record highs amid tight supplies. Short-term wholesale electricity prices were last month almost 10 times their level the year before. On Wednesday, German utility Uniper (UN01.DE)revealed a new $11 billion credit line to guard against margin calls on its forward power contracts.
Energy bills represent a smaller proportion of household budgets in richer countries. But Spanish consumers have seen a doubling in the energy prices they pay since 2019, and UK bill payers will in the coming months be hit with a hike of over 50% in their annual bills.
Some European Union countries are lobbying for joint gas buying and strategic reserves, but the real headache is whether and how governments step in to shoulder some of the pain. Almaty provides a live example of what happens if they don’t.
4) Millions of British families may have to choose between eating and heating
Metro, 4 January 2022
Millions of families face ‘seismic’ energy bill rises this year — forcing many cash-strapped people to choose between heating their homes or eating.
The LPG outcry has been a literal fuel for wider grievances. Kazakhstan's former president, Nursultan Nazarbayev, who ruled for three decades until his abrupt resignation in 2019, has dragged out a handover of power to nominated successor Kassym-Jomart Tokayev. Things may improve under Tokayev, who has ordered the LPG price cap to be restored as well as price controls on other “socially important goods”, but it was too late for the government led by Askar Mamin.
Europeans arguably have a bigger energy headache to Kazakhs. The 219 bcm of natural gas produced in Europe in 2020 was well under half the continent’s consumption, and European energy prices have surged to record highs amid tight supplies. Short-term wholesale electricity prices were last month almost 10 times their level the year before. On Wednesday, German utility Uniper (UN01.DE)revealed a new $11 billion credit line to guard against margin calls on its forward power contracts.
Energy bills represent a smaller proportion of household budgets in richer countries. But Spanish consumers have seen a doubling in the energy prices they pay since 2019, and UK bill payers will in the coming months be hit with a hike of over 50% in their annual bills.
Some European Union countries are lobbying for joint gas buying and strategic reserves, but the real headache is whether and how governments step in to shoulder some of the pain. Almaty provides a live example of what happens if they don’t.
4) Millions of British families may have to choose between eating and heating
Metro, 4 January 2022
Millions of families face ‘seismic’ energy bill rises this year — forcing many cash-strapped people to choose between heating their homes or eating.
Experts predict the average annual bill of £1,277 could surge 46% to £1,865 when the energy price cap lifts in April, then pass £2,000 with a 20% rise at the next review in August.
With much of Britain set to freeze tomorrow after a record mild new year — and as charities warn the rises could add 2 million people to 4 million already classed as in fuel poverty — consumer champion Martin Lewis urged prime minister Boris Johnson to act quickly.
‘We need to look at what we can do now and how we can protect those people who will need to choose between heating and eating,’ he said. ‘There are already some are having to make that choice.’
Mr Johnson and his chancellor Rishi Sunak are under increased pressure from their own backbenchers to cut VAT on energy bills and suspend ‘green levies’ or risk losing key seats that could loosen the Conservatives’ grip on Downing Street.
Former education minister Robert Halfon — among 20 MPs and peers to sign an open letter to them — said the environmental taxes were ‘25% of our energy bills’ and a cut could mean people saving £200.
And Craig Mackinlay, who chairs the Net Zero Scrutiny Group of Tory MPs, warned: ‘Elections are won and lost in people’s wallets and purses.
‘If we don’t get energy costs right we will suffer catastrophic political damage that will affect every constituency.’
He said key ‘red wall’ seats won from Labour to secure a landslide 2019 election win could be lost unless ministers intervened to ‘save millions of families hundreds of pounds’.
Wholesale energy costs have been soaring over the past year, following lower gas supplies worldwide and higher demand from China.
More than 20 UK energy firms went bust in 2021, forcing their customers to be transferred to other providers.
Energy sector specialist Cornwall Insight now expects average bills to rise from £1,277 a year under the present price cap to £1,865 — a 46% jump — when regulator Ofgem announces April’s revision next month.
And the company predicts another 20% increase to £2,240, when the next quarterly revaluation follows in August.
Mr Lewis, founder of consumer service Money Saving Expert, said: ‘What’s coming in April is a seismic hit for fuel bills which is going to be astronomical.
‘The Government has been meeting the energy industry but they’ve not been meeting the consumer groups -certainly I’ve not heard of any taking place. They have to sort this now because, if we leave this until it’s too late, it will be a disaster.’
Adam Scorer, chief executive of fuel poverty charity National Energy Action, has warned this year’s rising bills would be ‘pretty catastrophic for millions of households’.
And he urged ministers to exempt the poorest people from increased prices while also better insulating homes.
5) Boris Johnson rejects energy bill VAT cuts to help struggling families
The Daily Telegraph, 5 January 2022
Boris Johnson denied having misled voters with his remarks from May 2016, where he said he would cut VAT if Britons voted to leave the EU
9) Reality check: Global weather and climate disasters 2000 to 2021
Roger Pielke Jr., 5 January 2022
I’m starting a new feature at The Honest Broker Newsletter — a weekly graph from my work or the work of others that I think is worth sharing.
Today’s graph is based on data kept by EM-DAT in Belgium, which is widely viewed as an authoritative source for data on global disasters.
With much of Britain set to freeze tomorrow after a record mild new year — and as charities warn the rises could add 2 million people to 4 million already classed as in fuel poverty — consumer champion Martin Lewis urged prime minister Boris Johnson to act quickly.
‘We need to look at what we can do now and how we can protect those people who will need to choose between heating and eating,’ he said. ‘There are already some are having to make that choice.’
Mr Johnson and his chancellor Rishi Sunak are under increased pressure from their own backbenchers to cut VAT on energy bills and suspend ‘green levies’ or risk losing key seats that could loosen the Conservatives’ grip on Downing Street.
Former education minister Robert Halfon — among 20 MPs and peers to sign an open letter to them — said the environmental taxes were ‘25% of our energy bills’ and a cut could mean people saving £200.
And Craig Mackinlay, who chairs the Net Zero Scrutiny Group of Tory MPs, warned: ‘Elections are won and lost in people’s wallets and purses.
‘If we don’t get energy costs right we will suffer catastrophic political damage that will affect every constituency.’
He said key ‘red wall’ seats won from Labour to secure a landslide 2019 election win could be lost unless ministers intervened to ‘save millions of families hundreds of pounds’.
Wholesale energy costs have been soaring over the past year, following lower gas supplies worldwide and higher demand from China.
More than 20 UK energy firms went bust in 2021, forcing their customers to be transferred to other providers.
Energy sector specialist Cornwall Insight now expects average bills to rise from £1,277 a year under the present price cap to £1,865 — a 46% jump — when regulator Ofgem announces April’s revision next month.
And the company predicts another 20% increase to £2,240, when the next quarterly revaluation follows in August.
Mr Lewis, founder of consumer service Money Saving Expert, said: ‘What’s coming in April is a seismic hit for fuel bills which is going to be astronomical.
‘The Government has been meeting the energy industry but they’ve not been meeting the consumer groups -certainly I’ve not heard of any taking place. They have to sort this now because, if we leave this until it’s too late, it will be a disaster.’
Adam Scorer, chief executive of fuel poverty charity National Energy Action, has warned this year’s rising bills would be ‘pretty catastrophic for millions of households’.
And he urged ministers to exempt the poorest people from increased prices while also better insulating homes.
5) Boris Johnson rejects energy bill VAT cuts to help struggling families
The Daily Telegraph, 5 January 2022
Boris Johnson denied having misled voters with his remarks from May 2016, where he said he would cut VAT if Britons voted to leave the EU
Boris Johnson has indicated that he will not cut VAT on energy bills because it would help “a lot of people who perhaps don’t need the support” with rising living costs.
The Prime Minister on Tuesday night dismissed demands to enact the move to help struggling families, amid fears that residential energy bills could double to £2,000 in April when the price cap is set to rise.
His intervention sparked a backlash among Tory MPs, who have insisted that slashing VAT from energy bills should be a “Brexit dividend” now Britain has quit the European Union, which mandates the tax is levied at a minimum of five per cent.
Speaking at a televised Downing Street press conference, Mr Johnson was challenged about a vow he himself made in May 2016 to scrap VAT from energy bills if Britons voted Leave.
He denied having misled voters with his previous remarks, but signalled that the Treasury would consider actions that were targeted only at the families most in need of support.
The Prime Minister said he was “not ruling out further measures” and acknowledged that the UK did now enjoy the “freedom to regulate our own VAT”, but set out his opposition to the proposal.
“The argument as you know is that it’s a bit of a blunt instrument and the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it. We need to help people who are in fuel poverty the most,” he said.
He said that the Government would listen to consumers and businesses, adding that Rishi Sunak, the Chancellor, was “very, very mindful of the increase in energy prices and the effect... on people up and down this country, and we are going to do all we can to help”.
His intervention came as the weather is about to get colder, with the first widespread frost of the winter expected this week, meaning families are likely to rely more heavily on central heating.
On Wednesday, Kwasi Kwarteng, the Business Secretary, will resume crisis talks with energy bosses about how to ease the pressure that soaring energy bills are also heaping on business, as a 25 per cent spike in wholesale costs dampened hopes the market was stabilising.
In April, energy bills are poised to rise 56 per cent or more, following months of soaring wholesale costs that have been exacerbated by Russia restricting supply to the Continent. The crisis has already caused a series of British energy suppliers to collapse and fuelled a growing cost of living squeeze.
‘VAT should be cut as a Brexit dividend’
Mr Johnson’s comments came after 20 Tory MPs and peers wrote to The Telegraph last weekend demanding that he intervene to address the cost of living crisis.
Craig Mackinlay, the Tory MP who orchestrated the letter, declared on Tuesday night that VAT on energy bills was a “backdoor tax on the ‘just-about-managings’” and said he was “disappointed” that the Prime Minister seemed to be “robustly against” slashing it.
Mr Mackinlay said: “VAT should be cut permanently as a Brexit dividend. Heating your home is as much of a right as buying children’s clothes. We don’t do it for fun. It’s a basic right and need.”
The MP, who chairs the Net Zero Scrutiny Group, also renewed calls for green levies to be suspended on energy bills, which analysts estimate could save households about £200 a year.
He warned that targeting support for poorer families through the welfare system would be “a disincentive to work, which is a very unconservative principle”.
Boris Johnson more ‘Heath than Thatcher’
Boris Johnson’s ‘big tax, big spend, big state’ government has been likened to that of Sir Edward Heath, the prime minister from 1970 to 1974
The news came as Liam Fox, a former Conservative Cabinet minister, accused Mr Johnson of being more like Sir Edward Heath than Margaret Thatcher over tax and spend.
Writing for the ConservativeHome website, Dr Fox said that he did not think that “all is well in the Boris Johnson premiership”.
He added: “For many Conservatives, including myself, the current government smacks too much of ‘big tax, big spend, big state’ – more reminiscent of Edward Heath than Margaret Thatcher.
Full story
6) Tory MPs turn on Boris as PM rules out tax cut on soaring energy bills
Daily Express, 5 January 2022
Boris Johnson faces fury in his own ranks after he poured cold water on calls for VAT to be removed from soaring energy bills.
The Prime Minister on Tuesday night dismissed demands to enact the move to help struggling families, amid fears that residential energy bills could double to £2,000 in April when the price cap is set to rise.
His intervention sparked a backlash among Tory MPs, who have insisted that slashing VAT from energy bills should be a “Brexit dividend” now Britain has quit the European Union, which mandates the tax is levied at a minimum of five per cent.
Speaking at a televised Downing Street press conference, Mr Johnson was challenged about a vow he himself made in May 2016 to scrap VAT from energy bills if Britons voted Leave.
He denied having misled voters with his previous remarks, but signalled that the Treasury would consider actions that were targeted only at the families most in need of support.
The Prime Minister said he was “not ruling out further measures” and acknowledged that the UK did now enjoy the “freedom to regulate our own VAT”, but set out his opposition to the proposal.
“The argument as you know is that it’s a bit of a blunt instrument and the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it. We need to help people who are in fuel poverty the most,” he said.
He said that the Government would listen to consumers and businesses, adding that Rishi Sunak, the Chancellor, was “very, very mindful of the increase in energy prices and the effect... on people up and down this country, and we are going to do all we can to help”.
His intervention came as the weather is about to get colder, with the first widespread frost of the winter expected this week, meaning families are likely to rely more heavily on central heating.
On Wednesday, Kwasi Kwarteng, the Business Secretary, will resume crisis talks with energy bosses about how to ease the pressure that soaring energy bills are also heaping on business, as a 25 per cent spike in wholesale costs dampened hopes the market was stabilising.
In April, energy bills are poised to rise 56 per cent or more, following months of soaring wholesale costs that have been exacerbated by Russia restricting supply to the Continent. The crisis has already caused a series of British energy suppliers to collapse and fuelled a growing cost of living squeeze.
‘VAT should be cut as a Brexit dividend’
Mr Johnson’s comments came after 20 Tory MPs and peers wrote to The Telegraph last weekend demanding that he intervene to address the cost of living crisis.
Craig Mackinlay, the Tory MP who orchestrated the letter, declared on Tuesday night that VAT on energy bills was a “backdoor tax on the ‘just-about-managings’” and said he was “disappointed” that the Prime Minister seemed to be “robustly against” slashing it.
Mr Mackinlay said: “VAT should be cut permanently as a Brexit dividend. Heating your home is as much of a right as buying children’s clothes. We don’t do it for fun. It’s a basic right and need.”
The MP, who chairs the Net Zero Scrutiny Group, also renewed calls for green levies to be suspended on energy bills, which analysts estimate could save households about £200 a year.
He warned that targeting support for poorer families through the welfare system would be “a disincentive to work, which is a very unconservative principle”.
Boris Johnson more ‘Heath than Thatcher’
Boris Johnson’s ‘big tax, big spend, big state’ government has been likened to that of Sir Edward Heath, the prime minister from 1970 to 1974
The news came as Liam Fox, a former Conservative Cabinet minister, accused Mr Johnson of being more like Sir Edward Heath than Margaret Thatcher over tax and spend.
Writing for the ConservativeHome website, Dr Fox said that he did not think that “all is well in the Boris Johnson premiership”.
He added: “For many Conservatives, including myself, the current government smacks too much of ‘big tax, big spend, big state’ – more reminiscent of Edward Heath than Margaret Thatcher.
Full story
6) Tory MPs turn on Boris as PM rules out tax cut on soaring energy bills
Daily Express, 5 January 2022
Boris Johnson faces fury in his own ranks after he poured cold water on calls for VAT to be removed from soaring energy bills.
Prime Minister Boris Johnson will come under renewed pressure after he declared scrapping VAT was not the most effective way to help those under the greatest pressure, describing it as a "blunt instrument".
This is despite Boris Johnson vowing to cut VAT from domestic fuel bills during the 2016 Brexit campaign by Vote Leave.
His backtracking will spark fury in the Tory ranks after 20 Conservative MPs rallied to demand he step in to assist households facing huge hikes in energy charges.
Conservative MP Craig Mackinlay, behind a letter to the Daily Telegraph, said he was “disappointed” Mr Johnson seemed to be “robustly against” slashing VAT on energy bills despite it being a “backdoor tax on the ‘just-about-managings’”.
He told the newspaper said: “VAT should be cut permanently as a Brexit dividend.
“Heating your home is as much of a right as buying children’s clothes. We don’t do it for fun. It’s a basic right and need.”
But speaking at a Downing Street news conference on Tuesday the Prime Minister said scrapping VAT was not the most effective way to help those under the greatest pressure.
He said leaving the EU meant Britain now enjoyed the freedom to set its own VAT rates.
Mr Johnson said: ”It's slightly paradoxical that this is now being campaigned for by people who actually wanted to remain in the EU and still do when it would be impossible to deliver within the EU.
"I'm not ruling out further measures. The argument is that it's a bit of a blunt instrument. And the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don't need the support in quite the direct way that we need to give it."
Earlier the Prime Minister's official spokesperson said ministers would consider any proposals, but warned that the reasons for the rise in energy prices was global.
Mr Johnson’s decision comes despite his comments in 2016 where he vowed alongside Michael Gove and former Labour MP Gisela Stuart, now Baroness Stuart of Edgbaston, to “scrap this unfair and damaging tax”.
They said “In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive. EU rules mean we cannot take VAT off those bills. The least wealthy are hit particularly hard. The poorest households spend three times more of their income on household energy bills than the richest households spend.
"As long as we are in the EU, we are not allowed to cut this tax. When we Vote Leave, we will be able to scrap this unfair and damaging tax. It isn't right that unelected bureaucrats in Brussels impose taxes on the poorest and elected British politicians can do nothing."
According to some predictions, energy bills could be hiked by more than 50 percent in April for millions of households that are on a standard tariff.
Full story
This is despite Boris Johnson vowing to cut VAT from domestic fuel bills during the 2016 Brexit campaign by Vote Leave.
His backtracking will spark fury in the Tory ranks after 20 Conservative MPs rallied to demand he step in to assist households facing huge hikes in energy charges.
Conservative MP Craig Mackinlay, behind a letter to the Daily Telegraph, said he was “disappointed” Mr Johnson seemed to be “robustly against” slashing VAT on energy bills despite it being a “backdoor tax on the ‘just-about-managings’”.
He told the newspaper said: “VAT should be cut permanently as a Brexit dividend.
“Heating your home is as much of a right as buying children’s clothes. We don’t do it for fun. It’s a basic right and need.”
But speaking at a Downing Street news conference on Tuesday the Prime Minister said scrapping VAT was not the most effective way to help those under the greatest pressure.
He said leaving the EU meant Britain now enjoyed the freedom to set its own VAT rates.
Mr Johnson said: ”It's slightly paradoxical that this is now being campaigned for by people who actually wanted to remain in the EU and still do when it would be impossible to deliver within the EU.
"I'm not ruling out further measures. The argument is that it's a bit of a blunt instrument. And the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don't need the support in quite the direct way that we need to give it."
Earlier the Prime Minister's official spokesperson said ministers would consider any proposals, but warned that the reasons for the rise in energy prices was global.
Mr Johnson’s decision comes despite his comments in 2016 where he vowed alongside Michael Gove and former Labour MP Gisela Stuart, now Baroness Stuart of Edgbaston, to “scrap this unfair and damaging tax”.
They said “In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive. EU rules mean we cannot take VAT off those bills. The least wealthy are hit particularly hard. The poorest households spend three times more of their income on household energy bills than the richest households spend.
"As long as we are in the EU, we are not allowed to cut this tax. When we Vote Leave, we will be able to scrap this unfair and damaging tax. It isn't right that unelected bureaucrats in Brussels impose taxes on the poorest and elected British politicians can do nothing."
According to some predictions, energy bills could be hiked by more than 50 percent in April for millions of households that are on a standard tariff.
Full story
7) New energy crisis talks as cold snap sends gas prices soaring
The Daily Telegraph, 5 January 2022
Kwasi Kwarteng is to hold crisis talks with energy companies on Wednesday amid pressure to prevent a further string of corporate collapses, after wholesale gas costs jumped 25pc as cold weather set in across Europe.
The Daily Telegraph, 5 January 2022
Kwasi Kwarteng is to hold crisis talks with energy companies on Wednesday amid pressure to prevent a further string of corporate collapses, after wholesale gas costs jumped 25pc as cold weather set in across Europe.
The Business Secretary is scrambling to head off fresh chaos in the market following the failure of 26 suppliers last year.
Consumer energy bills are expected to rise 56pc or more in April when months of soaring wholesale costs hit households, fuelling a growing cost of living crisis.
Wholesale gas prices had started to fall over the past two weeks as traders secured shipments of gas from the US, sparking hopes the worst might have passed. But they jumped 24pc to 214p on Tuesday, well above long-term averages of around 50p, as supplies from Russia to Europe via Ukraine fell.
The industry is pushing for measures ranging from removing the 5pc VAT charged on energy bills to setting up a £20bn loan fund so suppliers can spread wholesale costs over several years to lessen the impact on consumers.
Time is running short for the Government to put measures in place before February 7 when Ofgem, the regulator, will announce the level of the price cap on energy bills from April to October. It is expected to rise from £1,277 to £2,000 or more, with analysts expecting it to rise again in October.
Talks between Mr Kwarteng and major suppliers took place on Monday last week but no solution was reached. Greg Hands, the energy minister, also spoke with some smaller suppliers on Tuesday.
Wholesale gas costs have climbed more than six-fold this year amid a global supply squeeze as economies re-open from the pandemic. The price cap has prevented suppliers from passing these costs onto customers immediately, triggering a wave of bankruptcies.
Wholesale prices started to fall over the latest two weeks as traders secured shipments of gas from the US, but jumped 24pc to 214p on Tuesday - well above long-term averages of around 50p - as supplies of gas from Russia to Europe via Ukraine fell.
Russia has been accused of using the crisis to put pressure on Germany to approve its new Nord Stream 2 pipeline under the Baltic Sea, bypassing Ukraine.
Ofgem, the regulator, has already set out a plan for suppliers to raise third-party loans to pay for the burden of taking on customers from failed rivals - costs which are passed onto consumers.
Companies are also pushing for a broader private loan scheme which they can use for support.
The amount being claimed by suppliers for failures this year already runs to £1.8bn, while the Government has set aside nearly £1.7bn to run Bulb in special administration after it collapsed in November.
One source said: "There is an immediate issue of cash-flow here and if nothing happens bills will go up dramatically. Everyone is aware of that.
"A big hit all at once, or even over 12 months, is going to be unsustainable for a lot of people. There needs to be a financial mechanism to pay for this, which will ultimately be charged back to consumers.
"All of this could be provided by the energy companies, but that is a pretty big ask. The government won't want to provide it. So that leaves an investment opportunity to link those two together and create a pool of capital that will provide long-term loans indirectly to consumers."
City sources said pension funds may be able to invest in the loans if they are later securitised. Ofgem is running a consultation on the proposals for the costs of failed suppliers, closing on January 27.
Consumer energy bills are expected to rise 56pc or more in April when months of soaring wholesale costs hit households, fuelling a growing cost of living crisis.
Wholesale gas prices had started to fall over the past two weeks as traders secured shipments of gas from the US, sparking hopes the worst might have passed. But they jumped 24pc to 214p on Tuesday, well above long-term averages of around 50p, as supplies from Russia to Europe via Ukraine fell.
The industry is pushing for measures ranging from removing the 5pc VAT charged on energy bills to setting up a £20bn loan fund so suppliers can spread wholesale costs over several years to lessen the impact on consumers.
Time is running short for the Government to put measures in place before February 7 when Ofgem, the regulator, will announce the level of the price cap on energy bills from April to October. It is expected to rise from £1,277 to £2,000 or more, with analysts expecting it to rise again in October.
Talks between Mr Kwarteng and major suppliers took place on Monday last week but no solution was reached. Greg Hands, the energy minister, also spoke with some smaller suppliers on Tuesday.
Wholesale gas costs have climbed more than six-fold this year amid a global supply squeeze as economies re-open from the pandemic. The price cap has prevented suppliers from passing these costs onto customers immediately, triggering a wave of bankruptcies.
Wholesale prices started to fall over the latest two weeks as traders secured shipments of gas from the US, but jumped 24pc to 214p on Tuesday - well above long-term averages of around 50p - as supplies of gas from Russia to Europe via Ukraine fell.
Russia has been accused of using the crisis to put pressure on Germany to approve its new Nord Stream 2 pipeline under the Baltic Sea, bypassing Ukraine.
Ofgem, the regulator, has already set out a plan for suppliers to raise third-party loans to pay for the burden of taking on customers from failed rivals - costs which are passed onto consumers.
Companies are also pushing for a broader private loan scheme which they can use for support.
The amount being claimed by suppliers for failures this year already runs to £1.8bn, while the Government has set aside nearly £1.7bn to run Bulb in special administration after it collapsed in November.
One source said: "There is an immediate issue of cash-flow here and if nothing happens bills will go up dramatically. Everyone is aware of that.
"A big hit all at once, or even over 12 months, is going to be unsustainable for a lot of people. There needs to be a financial mechanism to pay for this, which will ultimately be charged back to consumers.
"All of this could be provided by the energy companies, but that is a pretty big ask. The government won't want to provide it. So that leaves an investment opportunity to link those two together and create a pool of capital that will provide long-term loans indirectly to consumers."
City sources said pension funds may be able to invest in the loans if they are later securitised. Ofgem is running a consultation on the proposals for the costs of failed suppliers, closing on January 27.
8) Energy-starved France mulls burning more coal to keep lights on
Bloomberg, 4 January 2022
France is considering a plan to allow electricity producers to burn more coal after the nation’s grid operator warned of possible power shortages.
Bloomberg, 4 January 2022
France is considering a plan to allow electricity producers to burn more coal after the nation’s grid operator warned of possible power shortages.
The government may raise the annual cap on running coal-fired power stations, plugging a potential gap in supply as an unusually high number of nuclear reactors halt for maintenance just as the coldest months get under way.
The country’s three remaining coal units may be permitted to operate for about 1,000 hours over the first two months of 2022, according to a draft decree on the Ecology Ministry’s website. That’s 300 hours more than the annual cap that was set in 2019 to help curb carbon emissions.
“This measure is necessary to ensure security of electricity supply,” the ministry said. “It raises electricity production margins only for the most problematic period of winter in January and February 2022, while keeping the target of a definitive halt of coal stations in mainland France.”
Under the draft decree, the cap would be lower for the rest of 2022 than for the first two months, and the annual limit would fall back to 700 hours from 2023.
The grid operator, Reseau de Transport d’Electricite, said last month that France risked an electricity shortfall in the event of a cold snap and insufficient wind energy.
Full story
The country’s three remaining coal units may be permitted to operate for about 1,000 hours over the first two months of 2022, according to a draft decree on the Ecology Ministry’s website. That’s 300 hours more than the annual cap that was set in 2019 to help curb carbon emissions.
“This measure is necessary to ensure security of electricity supply,” the ministry said. “It raises electricity production margins only for the most problematic period of winter in January and February 2022, while keeping the target of a definitive halt of coal stations in mainland France.”
Under the draft decree, the cap would be lower for the rest of 2022 than for the first two months, and the annual limit would fall back to 700 hours from 2023.
The grid operator, Reseau de Transport d’Electricite, said last month that France risked an electricity shortfall in the event of a cold snap and insufficient wind energy.
Full story
9) Reality check: Global weather and climate disasters 2000 to 2021
Roger Pielke Jr., 5 January 2022
I’m starting a new feature at The Honest Broker Newsletter — a weekly graph from my work or the work of others that I think is worth sharing.
Today’s graph is based on data kept by EM-DAT in Belgium, which is widely viewed as an authoritative source for data on global disasters.
The data show that from 2000 to 2021, the number of global weather and climate disasters declined by about 10%, which is very good news and completely contrary to conventional wisdom. The period since 2000 is viewed as the most reliable for data reliability, but it is safe to say that even since 2000, coverage has improved. So the 10% decline is possibly an underestimate. The trends reported here are consistent with independent, peer-reviewed research (e.g., this and this). Of course, don’t use data on disasters to say anything about changes in weather or climate — data on specific weather and climate variables are always more appropriate for tracking changes in climate.
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
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