Ships, Steel & Gas

Ships, Steel & Gas

I have worked as a London (or Thames Valley) white collar worker for all my working life but the GMB is strong in manufacturing and energy. We had several debates of special interest to Shipbuilding, Steel, and Energy, especially the Gas industry and there was also a motion on fracking. For more see below/overleaf.

Ships

The shipbuilding motions refer to public procurement policy and reference concepts echoed in the “Just Transition” movements, about not leaving communities nor workers behind. While looking for a picture to decorate this article, I came across an article, entitled, “Another RN supplier goes under – the closure of Appledore shipyard”, which documents the impact on the community but critiques Babcock’s commercial strategy. In reading the article, it makes clear that Appledore was part of the Aircraft Carrier supply-chain and so their commissioning prolonged the life of the shipyard. GMB Congress also highlighted the failure of the Government to “Buy British” for the latest generation of Fleet auxiliary ships. I have written several articles mirroring arguments about  what I consider to be the mistakes of renewing Trident and the building of the new Fleet Carriers. I think the Union needs to engage in these arguments i.e. what do we need and can they be built in multiple sites. It’s not just about how many hospitals could have been funded; what defence assets are we missing to fund the subs & carriers. The country needs to also address retraining and skills reuse. Labour’s promise of a National Education Service, with free, life-long learning available to all is an important part of keeping the UK’s skills relevant and renewing them. The debate can be found on youtube.

Steel

The fate of what remains of British Steel was also debated, and I reflected on this earlier this month on this blog. A motion had been submitted to Congress over the winter, again calling for a “Buy British First” policy and this was supplemented by an Emergency Motion calling for the Scunthorpe Steel Works to remain open. [Video of the moving, in several ways, speech]

 

Nothing was mentioned about the Government’s handling of tariffs. (A mistake I would have thought).

Gas

The future of the Gas industry was debated via Composite 15.

While in entering the debate, I assumed that I’d have a problem with the GMB position as too often Unions take a no change position, the composite is well argued and highlights certain critical facts, although not others. (Electricity cannot be stored at scale, Gas can, electricity leaks over the grid. Hydrogen is not a fossil fuel.)  The science of innovation with respect to the use of Hydrogen has not been documented either by the GMB branches nor by Friends of the Earth. (I am trying to chase it down; I have written to SGN who had a stand in the exhibition space.) There’s no question that if Momentum and Friends of the Earth get their motion to Labour Conference, the Just Transition Unions will vote it down, unless they compromise on Gas & Nuclear. The GMB motions states that there is scientific consensus that gas heating in the home is part of a transition to a carbon neutral economy.

I think we need a better understanding of the science.

I read a lot about this in order to write this report, and my notes are on my wiki.

Fracking

A motion on Fracking, basically opposing it, in the light of recently discovered facts and regulatory changes was withdrawn at the request of the CEC.

ooOOOoo

The words of the Gas and Fracking motions are posted on my notes are on my wiki. …

British Steel

Our minds have been distracted or mine has anyway, but British Steel became insolvent last week. Of course a huge blame game is started. Have the Chinese been ‘dumping’ steel on the rest of the world? Could the Govt. or the EU have protected it? Did the single market aid rules stop the Govt doing so?

Is China dumping? This article at the Conversation says “Yes”, big time!

This article at fullfact.org, “Is the UK calling for EU duties for Chinese steel?” deals with next three questions. The EU have raised duties but for many years the UK Government has been resisting more; they wished to avoid retaliation and for ideological reasons. There’s probably some “don’t give a shit” there too. It would seem that this is another policy area where New Labour failed to support its natural people.

The calls for renationalisation are now, rightly growing …

Creative Indusry exports or not

Over 6 months ago, I decided to see how true the proposition that Creative Industries are foreign exchange earners for the economy as claimed by British Music and the Shadow Culture team. I asked my MP to ask a written question and the replies are linked to in a comment on the above article. I asked for a broader range of industry classifications as I was interested in broader questions than just the creative industry.

I think this is validly constructed.

EMI was sold to Sony & Universal in 2012 and so their balance of trade position was reversed at that time and they were a competitively large music publisher at the time. I last looked at the structure of the global music industry a long time ago, pre-streaming, pre-Apple and pre-Spotify (which is incorporated in Sweden).

Five years out of nine, the industry was in deficit. The final year surplus is extraordinarily large, it would be good to see 2017/2018 and/or understand the reasons for this number. It is not historically true to say that the Creative industries are a net contributor to the foreign exchange account.

I should add that the aggregate trade current account deficit is run as at about minus £2.5bn /month over the period in question. …

Hiring Smart

This passed me by on my LinkedIn feed. They quote Steve Jobs as saying something allegedly wise against micro-management.

I wonder when he said it because I remember saying something similar in the 1990’s (while Jobs was at Next). It’s just as well that I wasn’t blogging or asserting copyright, although I might be richer than I am if I had. (It is however, merely a corollary of the “Theory X, Theory Y” model which was first stated in the “Human Side of Enterprise” by Douglas McGregor, published in 1960, which I commented on here …. , I also comment here … and also here … ) So even I was a bit late.

I was hugely amused by the comment suggesting that Jobs didn’t actually pursue this strategy! …

Trade & Brexit

Trade & Brexit

A friend posted a link to Larry Elliot’s article, “Ignore the free-trade evangelists. Brexit can create a fairer economy“, suggesting its critique of international trade implied some sunny upland in a post Brexit world. The article is sub titled “Free market economics created a world fit for multinationals. But we need less frictionless trade and more local control”., using a global context argument and yet diminishing the regulatory power which we share with the rest of the EU. The EU have sanctioned Microsoft, Intel, Apple & Google. The EU killed the ACTA & TTIP trade agreements. (Although not CETA, the Canadian version of TTIP). That is local control.

In no post-Brexit world, where we will take years to join the WTO and make new agreements with the 92 countries whose agreements we will have voided, will there be a vibrant British or Sterling economy, Elliot, and his fans are with Prof Minford in permitting if not encouraging the so-called legacy manufacturing industry to off-shore.

We should note that our Balance of Payments has been in deficit for, well forever really but is current running at £100bn p.a. about the same size as the crisis debt/deficit level that the Tories, supported by both the LibDems and rump New Labour used to justify austerity.

The UK will be poorer, and this misery will not be shared evenly and people will get angry. Anyone, with their hand dirty will be blamed. …

Fiscal credibility, ptui!

Yesterday, I went to a meeting on Brexit, Free-movement and immigration; conversation in the bar afterwards segued from, “why did a Corbyn led PLP argue to abstain on the Tories Immigration Act?” via a  post match analysis of Lewisham Deptford’s Brexit/Anti-Brexit meeting to consider the radicalism of Labour’s 2017 Manifesto and the development of macro economic policy since then; it doesn’t do so well when compared with the Corbynomics of 2015. One of the key developments since then has been the development of Labour’s Fiscal Credibility Rule, which promises to only borrow to invest.

To those who think this is smart, I ask why so-called current account spending on education is not seen as “investing” in Human Capital, but this is not it’s main problem.

However, I awoke this morning to see one of Richard Murphy’s tweets where he is contending with Jonathan Portes & Simon Wren Lewis, the rule’s author’s it would seem. It got a little testy. Anyway, here’s Richard, detoxifying, or not the twitter spat, and making the point that the Fiscal Credibility Rule is not based on Modern Monetary Theory. because it acknowledges the monetary constraint, and not the real world one. Murphy refers to his earlier piece, A challenge to Simon Wren-Lewis on modern monetary theory and Labour’s fiscal credibility rule in which he critiques the Fiscal Credibility Rule. My precis of his position is that the rule is based on a neo-classical approach, fundamentally legitimises austerity and fetishises debt reduction. I had a look for the Portes/Wren Lewis original position and assume that “Issues in the design of fiscal policy rules” is it.

My research took me to this, which Bill Mitchell claims to be his last words on the Fiscal Credibility Rule, the article contains the following powerful line,

The problem is that this reinforces the narrative that deficits and public debt are in some way ‘bad’ and as I note below this will not turn out well.

One of the problem’s exposed by Bill Mitchell’s article is that it suggests that the Fiscal Credibility Rule is a bit like Lord Buckethead’s nuclear deterrent policy, it only works if the secret is kept, in this case that Labour does not believe that the Fiscal Credibility Rule is a necessary macro-economic constraint even if the economists that wrote it do so.

ooOOOoo

To some extent, this article is just a reading list, there’s not so much of me in it., but I have promised myself a precis of Chapter 7/8 of Fazi and Mitchell’s Reclaiming the State, which is a relatively simple and short exposition of MMT. …

Positive balance

The BBC are very proud of their contribution to the balance of payments through the licensing of their content. I decided today to see if they do, in fact, contribute once the rights payments to 3rd party companies is taken into account. I have asked the DDCMS but the BBC is subject to FOI questions. I need to think about how I phrase the question, but Heather Brook’s book, should help, if I can find it. …

Risk, bias and planning

Risk, bias and planning

A couple of years ago, I wrote a precis of the McKinsey Quarterly article, “Distortions and deceptions in strategic decisions”. They started with a review of the way human bias can adversely impact strategic investment decisions illustrating it with a story about a mega-merger which failed. They conclude the article with,

Companies can’t afford to ignore the human factor in the making of strategic decisions. They can greatly improve their chances of making good ones by becoming more aware of the way cognitive biases can mislead them, by reviewing their decision-making processes, and by establishing a culture of constructive debate.

The first half of the article examines the propensity to optimism vs. perceptions of loss aversion and argue that portfolio management is a better way to evaluate the risk as lossess can be compensated by other success. I believe though that British management and particularly public sector management is very risk adverse; there is a higher fear of getting things wrong than getting things right although how we end up with Universal Credit, the Boris “vanity lard bus”, his water cannons and his other “erections”, I don’t know.

What made me remember the article was it’s listing of what they call tools to isolate any human bias to me most importantly

Another technique is to request that managers show more of their cards: some companies, for instance, demand that investment recommendations include alternatives, or “next-best” ideas.

I wonder how many of these lessons need to be applied to local authority planning decisions.  Check below/overleaf for more …

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