How to lose readers

Thanks are due to the Adam Smith Institute for their recent link to one of my postings. My reader figures have responded accordingly. This next post will probably scare most of them away again.

Never mind.

Nick Clegg has been regaling us with his thoughts on the profits made by electricity.

PENSIONERS sitting in coats, hats and scarves in their sitting rooms to keep warm. Others living the whole winter in their bedroom because they can only afford to heat a single room. Our senior citizens reduced to a choice between heating and eating.

And all the while, British Gas is raking in £1,000 of profit every minute of the day. The truth is, the only people who are cosy this winter are the companies who send us our ever-rising bills.

Statistically speaking this is a load of old cobblers. Pensioners, of course, have larger disposable incomes than pretty much anyone, although I accept that there may be exceptions.

However, Clegg is not only statistically wrong, but he's also wrong in about the profits of the utilities companies. The profits may look huge, but there is a reason for this. It's down to a quirk of accountancy which I will endeavour to explain. (With a bit of luck there might still be a couple of readers who will still come back to my humble blog after reading it through).

British companies are required by law to state their profits using the historic cost convention. That means you measure the profits on the basis of what you sold something for, less what you paid for it. This is fine for many businesses, but for a company which is experiencing fluctuating raw material prices, the effects of this rule is to make the profits fluctuate wildly. Let me demonstrate with an example.

Let's say you buy a widget for 10. It sits in inventory for a couple of months. At this point widgets cost 20 and you can therefore sell in the marketplace for 30. You report profits of 20 and Nick Clegg tells the Yorkshire Post you're a heartless capitalist, responsible for starving grannies to death.

When the market goes the other way though, things are different. You've bought another widget at 20, and again it sits in inventory for a while. But by the time you manage to sell it, raw widget prices are back down to 10. You can only sell for 15 and you've made a loss of 5 on the historic cost basis. At this point Nick Clegg would probably compound his error by writing to the  Yorkshire post and demanding you receive a subsidy. He would no doubt declare that your widget business was a key part of the economy. This would obviously just underline his woeful lack of understanding about what was actually going on.

In companies dealing with this kind of marketplace, profits are rarely measured against historic cost. There is too much temptation to give margin away to customers when prices are on the up. Customers never give margin back again when prices are falling. Instead companies measure profits against replacement cost - how much does a widget cost to buy from suppliers now, at the point of sale. This essentially means that they keep two sets of books. One is used internally to measure how the company is doing (the management accounts). The other is a load of old nonsense and it's this which is sent to HM Government (the financial accounts). The former is reasonably stable, while the latter will fluctuate wildly in line with raw material prices.

What we're seeing then is either ignorance by the LibDem leader, or perhaps he's turning a blind eye to the facts so that he can wallow in a little headline grabbing.

End of the consensus

Roger Pielke Snr has posted up the results of a survey into the opinions of bona fide climate scientists into the whole phenomenon of global warming. The actual work was performed by Fergus Brown, with the supervising team including both mainstream and more sceptical scientists.

The results were pretty much as I'd expected, and therefore seem to have been a surprise to some on the more mainstream side of the argument.

1. The largest group of respondents (45-50%) concur with the IPCC perspective as given in the 2007 Report.

2. A significant minority (15-20%), however, conclude that the IPCC understated the seriousness of the threat from human additions of CO₂ .

3. A significant minority (15-20%), in contrast, conclude that the IPCC overstated the role of human additions of CO₂  relative to other climate forcings.

4. Almost all respondents (at least 97%) conclude that the human addition of CO₂  into the atmosphere is an important component of the climate system and has contributed to some extent in recent observed global average warming.

There is a follow up thread on Fergus Brown's blog here.   

Fools of the Earth

Friends of the Earth 2004 

The Government should introduce a Biofuels Obligation, to stimulate a UK biofuels industry - as a lower carbon alternative to conventional transport fuels. The obligation would require that a proportion of all road transport fuels in the UK should be sourced from accredited renewable sources.

 Friends of the Earth 2008

Friends of the Earth hopes that the Government will now put the Renewable Transport Fuels Obligation on hold and demand a moratorium on EU biofuel targets. The real solution to Europe's rising transport emissions is better public transport, more provision for cyclists and higher standards for fuel efficiency in new cars

 Chaps, has it occurred to you that you might do less harm if you just, you know, shut up?

More on the Green Alliance

Friends of the Earth have issued a press release today, welcoming the appointment of the Climate Change Committee by the government.

We welcome these appointments. It is clear this is going to be a serious and heavyweight committee, which is much needed if we are to keep future Governments under pressure to bring down emissions from the UK. �What is now needed is for the Climate Change Bill to be amended to ensure that this Committee can advise on a target that takes all emissions into account, including those from aviation and shipping.

Oh dear, thinks I. If FoE are in favour it's unlikely to be a good thing.

So who are these captains of science that have been drafted in to save us from the horrors of global warming? (As I write, it's bitterly cold and pouring with rain, so I could do with a little AGW right now.) The details come from 24Dash.

First up is Adair Turner, who is obviously a NuLab placeman.

Then there's Sir Brian Hoskins, a meteorologist and climatologist from the University of Reading. Among his many acheivements were a contribution to the risible Stern Report.

Lord May is the first interesting one. He's a physicist by training but carved out a career in mathematical ecology. This was followed by a second career as a professional green scaremonger, promoting major green issues from "limits to growth" right through to climate change. He's been described as a "serial alarmist", so I imagine we know what to expect from him.

Then we have Professor Jim Skea who had his first career as a director of a left-wing think tank, and is now head of the UK Energy Research Centre. He turns out to be a member of the Green Alliance, the campaigning group I mentioned in the previous post. No doubt his independence is unimpeachable.

Dr Samuel Fankhauser is an economist who contributed to the IPCC reports.

And lastly is Professor Michael Grubb, another economist, this time from the Carbon Trust. And rather interestingly, another member of the Green Alliance. I feel quite certain that, like Prof Skea, he is a man of independent thought who comes to this job with no preconceptions about conclusions he's going to reach.

The committee is described by Hilary Benn as "independent". The question is: independent of what? Most of them work in the public sector and owe their positions to government advancement. Overwhelmingly "green" in outlook, they've clearly been appointed because the government can be sure of the conclusions they're going to reach.

Deborah Mattinson and the Green Alliance

Last year, the esteemed Guido Fawkes published a piece about Deborah Mattinson, the dodgy pollster used by Gordon Brown to tell him he's the greatest. It went like this:

According to the front page of the Guardian Greenpeace, Friends of the Earth, WWF and the Green Alliance are claiming that the government is using Deborah Mattinson's Opinion Leader Research to distort the evidence and get the required result on nuclear power from bogus public consultations.

 Which is strange, because Deborah Mattinson turns out to be a trustee of the Green Alliance. Isn't that odd?

Posh kids in rough schools

Earlier in the week, the Times carried an article about a report on the research findings of Professor David James of the University of the West of England.

Middle-class parents obsessed with getting their children into the best schools may be wasting their time and money, academics say today.

They found that children from privileged backgrounds excelled when they were deliberately sent to inner-city comprehensives by parents opposed to private schooling.

Most of the children “performed brilliantly” at GCSE and A level and 15 per cent of those who went on to university took places at Oxford or Cambridge.

My alarm bells were set ringing by the claim that 15 percent of those who went on to university took places at Oxbridge. Why was this good performance limited to Oxbridge? Were the results for other universities similarly impressive? A classic way of lying with statistics is to subdivide your sample population until you get the answer you're looking for.

Later in the article we read that the sample population was 124 families. This would suggest no more than a couple of hundred children were assessed, so concerns about the statistical significance of the results appear to be fully justified.

The article on which the Times piece is based hasn't been published yet, but in the style so typical of modern "academics" the UWE has chosen to issue a press release and a short report on the projects findings before official publication. It's here.

From this we discover that the families and children assessed covered a range of ages. This significance of this is that only a fraction of those assessed will have actually reached university entrance age. Let's say that this was forty children.  That would mean that six went on to Oxbridge. If it had have been five then it would only have been 12%.

The idea that one could make any claims based on results of this kind is a joke. That the Professor is issuing such a misleading report is really rather reprehensible. It looks more like a piece of political propaganda than real research. 

MPs online

Ellee Seymour notes a couple of MPs interacting online. The thoroughly "with it" representatives are John Redwood and Tom Watson, and Ellee reckons they may be the first to do so.

Ellee's commenters reckon that plaudits are due to the two technoMPs, although I can't help feeling that to congratulate Messrs Redwood and Watson for interacting using a technology which is at least ten years old now is a tad unnecessary. To misquote Chris Rock

MPs always want credit for some shit they're supposed to do....Whaddya want? A cookie? You're supposed to interact on blogs you low-expectation-having m*th*rf*ck*r!

Still, we can hope that this is the start of something beautiful. Maybe parliamentarians will actually start to debate the laws they are about to enact online. Who knows maybe some of them will even read the bills before they make their way to the lobbies.

Cabinet Office accounts

Dizzy wonders why the Chancellor of the Duchy of Lancaster is avoiding answering the question of how much public money it paid to Capita plc (a major Labour party donor). The man in charge, Tom Watson says it's too expensive for his department to find out.

A cursory Googling reveals that the Cabinet Office's accounting system is Sun Accounts, and there seems to be an external procurement package running alongside it - from the linked document it's order processing only, which could mean that the invoice processing is done through Sun. 

It's possible that there are ancillary systems in, for example, Cabinet Office quangos which is probably how the justify the "too expensive" argument.

My suggestion would be to rephrase the question as: "how much was paid to Capita plc in each of year since 2001 via (a) the Cabinet Office's Sun Accounts system and, if different (b) the e-Pop system." This should pick up the bulk of the payments, but should be a trivial query for a semi-competent IT bod to do. Say 30 mins maximum each.

Anyone fancy giving an FoI a try? 

Nepotism in the mainstream media

The Guardian appoints a new travel blogger. Max Gogarty's going to write about his gap year. Oh yes, and he's the son of a sometime Guardian staff member. Cue much ridicule in the comments.

Meanwhile commenters at Tim W's place wonder how India Knight's writing justifies a Sunday Times column. The answer's in Wikipedia:

The media magnate, journalist, former editor of The Economist and News Corporation Director Andrew Knight is her stepfather..

Back to the seventies

Inflation, strikes, flared trousers and now they're nationalising the banks.

The answer to global warming

...is central planning and management by target. According to this LibDem, anyway.

Different worldviews

Via Instapundit comes the this Reuters story that Danish "youths" have been rioting for the seventh night in a row.

Bands of youths set fire to cars, buses and schools in Denmark on Saturday, the seventh night of rioting and vandalism in the capital Copenhagen and other Danish cities, police said on Sunday.

Four youths were arrested in the capital for suspected arson and at least 24 fires were reported across the country. Several youths were detained in Denmark's second city Aarhus in Jutland, and in Odense on Funen island.

I wonder what these "youths" were rioting about? There's a clue later in the article...

Authorities have arrested dozens of youths, predominantly with immigrant backgrounds.

And if you read nearly to the end of the article. 

Social workers said an alleged plot to kill a Danish cartoonist for his drawing two years ago of the Prophet Mohammad might have fuelled the riots. Danish newspapers reprinted the cartoon on Wednesday in protest against the plot.

Yes, I suppose it "might have" done.

Good to see that after seven nights of rioting, Reuters felt the story was newsworthy. What about the Beeb, though? Their take on the story is here:

Hundreds of Danish Muslims have been demonstrating in Copenhagen against the reprinting of a cartoon of the Prophet Muhammad they consider offensive.

"Demonstrating" eh?  I wonder if someone objecting to the licence fee burnt TV centre to the ground, the BBC would call it a "demonstration"? Perhaps not.

Does anyone find it slightly disturbing that these appear to be the only two UK-based references to this story on Google news? 

The political class and its enemies

Having recently read and enjoyed (if that's the right word) Peter Oborne's rather depressing "The Triumph of the Political Class", I've wondered, from time to time, which MPs aren't in fact fully paid-up members of the self-perpetuating oligarchy - which ones shouldn't be lined up and shot.

A few thoughts:

Conservatives

• Richard Shepherd (ignores the whip, I believe)
• David Davis perhaps? He had a real job once?
  

Labour

• Frank Field
• Kate Hoey
• Bob Marshall Andrews

Updated:

Independent

• Richard Taylor
  

And what about LibDems? I suppose it's possible that they might all be non-political-class. After all you don't become a LibDem if you've a great desire to wield power, do you?

Off the top of my head, I can't think of any others at all, so it's going to be a bit of a bloodbath. There must be some more. Any suggestions? 

Market share

There is much glee at the BBC over the Competition Commission's plans for supermarkets. Apparently the big four have too much market power and they're going to have to sell land to their competitors. Who won't be able to get planning permission anyway.

But hey ho, a few more bureaucrats will be kept in gainful (if not useful) employment.

The Beeb has a graph up on their website showing the sheer dominance of the big four supermarkets:

 

It's instructive to compare Tesco's paltry 31% of the grocery market with the BBC's 54% of the radio market.  If the BBC was privately owned, the competition authorities would have had it broken up long ago.

Why do we have to tolerate it just because it raises its financing coercively? 

Scraping the barrel

Do I hear the sound of the bottom of the barrel being scraped?

The educational authorities have excelled themselves today. For sheer fatuousness, it's hard to beat the initiatives they've come up with today.

First up is the idea of retraining ex-soldiers as teachers. Now don't get me wrong, there's nothing wrong with soliders per se, but you can't help feeling that the mindset of the military man and the pedagogue may be ever so slightly different. I mean, aren't soldiers meant to, you know, kill people who disagree with them? Or at the very least punch their lights out.

Mind you, unarmed combat skills could be useful in some schools.

Secondly is the bizarre idea to make children sit "creativity tests". Needless to say, a whole bunch of quangos (QCA, Ofsted, Creative Partnerships etc, if you must ask) have been running amok in schools throughout the land, and are now breathlessly reciting all the ways they have dreamt up to further pad their already grossly enlarged budgets. The latest wheeze, worthy of a PhD in creativity at least, is that somebody needs to measure children's creativity. Because creativity, like motherhood, is a good thing. So if you're in school, there's a whole lot more testing coming your way soon.

Just remember folks, if you can't measure it, it doesn't exist.

I do just wonder though whether they think (a) this will make any difference to anything and (b) whether anyone is paying any attention anyway.