Crisis hits North Sea oil search

Two articles in the last couple of days highlight the impact the current recession is having on the Oil and Gas industry and how it will impact Aberdeen and the North-East of Scotland in particular. The first in the FT is here and the second in the Herald is here.

As usual at the root of the causes is the way this government has such a short-term view on how to tax the industry and the time it takes them then to react to changes. Labour has consistently managed to ensure that companies regard the North Sea as a risky place to invest because of the ever changing taxes and rules that they apply. This is detrimental to the long term investment decisions that the Oil and Gas companies must make to develop new and modified sources of Oil and Gas and drives them to invest in other areas of the world where the fiscal model is more geared to the long term.

A year ago I had this to say on what Gordon was doing to the Oil industry. It seems that what I was saying then has come to pass quicker than even I expected. I reiterate what I said then

This just goes to show that despite our "Jonah" trying to sell himself as a wonderful Leader and former Chancellor is nothing of the sort. He has dug the UK into a deep hole and now has nothing to extract us from it.

Now, in this difficult period, we see the huge impact that this has on the Industry and its future in the UK. Investments dry up quicker than in other areas as risk is lower. As a result of this the government itself loses, not only just now, when the tax revenues are at their most needed, but also in the future, when we will need to pay off the huge debts that Gordon Brown has burdened the country.

It is worth reflecting on the fact that the FT quotes the fact that about 1 in 8 of the 400,000 jobs in the the Oil and Gas Industry may well go in the next two years, the majority centred around the NE of Scotland. If this does come to pass this will be a disaster for the area which has little other sustainable industries to fall back on. Urgent action by the Government is required, unfortunately, having taken and spent the money in the good times, they have nothing now left to fall back on, which gives rise to a pretty bleak outlook for the future of the industry and the whole area.

FT.com / Companies / Oil & Gas - Crisis hits North Sea oil search

Wot - No R word here says BBC

Sister Moonshine from the album Challenge, What Challenge by Supertramp.
I would have used The Meaning but I can't find a decent video of it

Mandy and that nice Mr Campbell must have on the blower to their old pals at the BBC to explain to them that the R word is forbidden. There is no R word and they must not use the R word. They will have explained that under Labour the R word it is not a R word but a "downturn", this is because as we know under Brown there is no possibility of "Boom and Bust". Also they are now turning a Crisis into a "Challenge". So officially for the BBC Friday when the latest figures appear it it will be a Downturn day rather than a R word Day. Will it also be D-Day for Brown.

As Matthew Parris says in the Times

Corporate challenge

Crisis? What crisis? I'm looking forward to catching out BBC newscasters and editors using that word. From tomorrow there is to be a corporation-wide ban on broadcast references to any “economic crisis” when discussing what our Government might prefer to call the “global financial challenge”. In place of “crisis” BBC staff have apparently been instructed to say “downturn” - the same word, incidentally, that Cabinet ministers are pointedly employing in place of “recession” or even “coming recession”. Friday is D (for Downturn) Day in corporation-speak.

Move along now no bias at the BBC.

Now that we've come to the crunch... | Matthew Parris - Times Online

Audit Commission loses 10 Million in Iceland Crash

Stunning the Audit Commission who really should know better, have apparently lost £10m in the Iceland Banks crash. Somewhat humiliating for a watchdog whose remit is

The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.

Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers, covering the £180 billion spent by 11,000 local public bodies.

As a force for improvement, we work in partnership to assess local public services and make practical recommendations for promoting a better quality of life for local people.

Apparently they have five strategic objectives as follows

• to raise standards of financial management and financial reporting;
• to challenge public bodies to deliver better value for money;
• to encourage continual improvement in public services so they meet the changing needs of diverse communities and provide fair access for all;
• to promote high standards of governance and accountability; and
• to stimulate significant improvement in the quality of data and the use of information by decision makers.

Number 1 appears to be a bust now!

Perhaps this will help the government to understand how LGA's manage to lose so much money investing in Icelandic Banks.

Financial crisis: Oxford University and Audit Commission fall victim to banks - Telegraph

Mandelson the Bully

The attached article in the First Post shows another sample of Mandelson's behaviour in Government that should raise more concerns on his appointment as Secretary of State for Business, Enterprise and Regulatory Reform.

It looks at his "misjudgement" in being associated with Russian Billionaire Oleg Deripaska, and then looks at how he was bullying the tiny state of Guyana. The First Post says

One of Mandelson's last acts as EU Trade Commissioner was to threaten Guyana, one of the poorest countries in the world, with financial penalties that could amount to €70m a year because the Guyanese government has so far refused to join an Economic Partnership Agreement (EPA) between the Caribbean Community (CARICOM) and the European Union.

Guyana has criticised various "anti-developmental" conditions of the agreement, including the relaxation of barriers on foreign investment and clauses on intellectual property rights that would make it more difficult for Caribbean countries to patent their own generic medicines.

The First Post also comments that it is

No wonder that a report commissioned by the EU's rotating president, Nicolas Sarkozy, condemned the tactics - "pressure, paternalism and threats" - used by the EU commission during these negotiations.

So here we have Mandelson doing what he does best bullying and cajoling the "little" people into doing what he wants with various threats. This is exactly what he did in his previous times in British Government and why he has been brought back in a cynical move by Gordon Brown, to be the Labour Heavy after Gordon's failed attempts.

The report in the First Post also finishes off with the following

For Mandelson, ­ like the New Labour project itself, ­ symbolises the bullying arrogance of the neo-liberal creed that has dominated the world for the last three decades.

It is a world in which powerful countries prise open the economies of the poorest so that private corporations can control their food, their water and their electricity, where governments claim to be powerless to intervene in the workings of the 'free market' and yet are suddenly able to produce undreamt-of sums of money to bail out banks when they fail - our banks, not those of Russia, Argentina or Thailand which once went to the wall without receiving any bail-outs or offers of assistance.

We may well wonder at the motives of Gordon Brown for bringing one of his former political enemies back into the government. But as we shake our heads at the cynicism and moral blankness of the "prince of darkness" we might pause to consider that these vices are not just his: ­ they are part and parcel of the system that allows such men to flourish.

Not only should we consider how Mandy can be brought back but, why and how, our system can allow this to happen to a twice disgraced politician who appears to have sucked more bonuses from the system than many of the erstwhile bankers we have seen pilloried in the press in the last few days.


How Guyana brought out the bully in Mandelson | Opinion | The First Post:

La La Land - Monday's Report - Gordon saves the World

Today was apparently the day according to some commentators that "our" Gordon saved the world. Let's have a look at what he and his government have achieved today.

1. Spent 37bn of our money on second class banks, who are in a Financial Crisis, much of which was caused by the actions and then inactions by their "saviour" Gordon Brown
   
2. Lost a humiliating vote in the Lords when the 42 day detention plan was defeated by 309 - 118 votes.
   
3. Then released details of the plan to drop 42 days from the anti-terrorism bill and replace it by an emergency one-line bill to be used when Labour deem it correct.
4. Admitted the loss of 1.7 million, yes 1.7 million peoples data. They don't even really know how much, who or what has been lost.
5. A probe by the Speaker of the House of Commons into an allegation that the former Prime Minister deliberately misled the House over exemption of F1 from tobacco advertising bans.

So a great day for Gordon. On any ordinary day anyone of the bottom 4 would have been enough to bring about calls for heads to roll, but today Gordon has saved the world.

I can only wonder what he can achieve in La La land on Tuesday. The Universe beckons. Only a few problems though. The supplies are running out there is no money to buy more and borrowings getting a bit tricky these days without any collateral.

Will we own Second Class Banks?

The attached article from the Telegraph discusses why Barclay's has preferred to try and raise capital itself rather than go cap in hand to Gordon for some of our money to keep them in business.

As the article says

Barclays yesterday unveiled plans to raise £6.6bn of new capital from the private sector as chief executive John Varley warned that government ownership of rival banks will leave them "hobbled" and at risk of losing key employees.

John Varley the Chief Executive says Barclay's can get the money privately and it will also stop dividends for a few years and raise further money through savings. If it can do this then it will not have to put up with any interference from the government nor any hobbling on their chosen strategies.

It is also worried that if it did take money from the public purse it could not retain top employees as they might feel constrained or perhaps they would not like the idea of following government instructions.

If this is so it means that if Barclay's survives the next couple of years it will be better able to perform and will have better personnel than banks who have taken the public money.

If this is so then we may well have just bought 37bn worth of second class banks. This could mean a greater loss on this high risk investment or a much longer repayment period. This means that the British public will suffer as we have less money for public spending and/or possible tax cuts.

Barclays in £6.6bn private fundraising to avoid constraint - Telegraph

More La-La from Gordon

According to Gordon who was speaking from his home in La-La land

... he was working internationally to reduce the price of oil, and that he'd like to see the winter fuel allowance higher, were it not for the need to balance expenditure.“I’d like the winter allowance, frankly, to be higher, but we’ve got to balance off the need to do other things such as increase expenditure on the health service and meet all our targets on the health service.

“I’m trying to get the oil price down, and get the fall passed on directly to people at the petrol pumps and then on to gas and electricity bills. “We are determined that just as people pass on the rise, they pass on the fall when the oil price falls.“We want to see more stability – I’m talking to OPEC members and telling them that they must not cut oil production now…they must act in a statesman like way to help the rest of the world by having a stable reduction in the oil price.

Translation. I'm about to try and bribe the voters but I've just found out I left my wallet at home so you'll have to wait a few days. After Saving the world from Financial Meltdown, I am now sorting out the final problem of Oil Prices over which I have no control, I think God consults me and my Beatification is now complete.

Men in white coats are now talking to the Prime Minister to explain to him he is no longer in control of the future of the UK.

Update: Spectator has this as Gordon's Canute moment

Politics Home

Join Gordon Brown in his La-La Land

The linked article in the Times is a must read for you to understand the fantasy La-La land our supposed Prime Minister is living in.

He is currently touring the country explaining to us how he has single-handily cured the world of all its financial ill's whilst inanely grinning at anyone who asks him a tricky question such as "What about the coming Recession?".

Now the Spectator suggests it's not even his own plan but comes from the G7/IMF World Bank Leaders.

He has obviously been told to look cheery in the face of the current crisis but his inability to work out what is appropriate during current times is beyond belief. This was again demonstrated at PMQ's this week when he managed to destroy any sense of the crisis staring him in the face by his inappropriate response to David Cameron's last question, when he was accompanied in his supposed joke by the braying donkeys of his supposed Government

As Gordon fêtes his five year 500 billion "stability and restructuring" plan, World Stock markets are dropping like stones for the seventh day in a row and countries, companies and our countrymen are going bankrupt at an alarming rate. Soon Gordon will not be able to sleep for his phone ringing as another company goes bankrupt, will he be laughing for much longer.

His inability to understand that the UK is uniquely badly placed to face this recession is now becoming a joke around the world. His belief that under his 10 years of stewardship of the economic well-being of the country he created a masterpiece immune to boom and bust has collapsed around him like the walls of Jericho but he remains convinced that it was nothing to do with him.

He has pissed the wealth of this nation down a drain of spending that we could not sustain whilst not even managing to sort out those problems his government promised to cure, back 11 years ago in the heady days of 1997. Now he is attempting to portray himself as Moses returned to deliver us from this Crisis of his own doing.

I am now seriously worried about our former great country, we have a leader who can't lead and is in a state of beatification, believing himself the great leader and curer of all ills, when in fact he is verging on delusional.

Our only hope, up here in Scotland, seems to be that Alex Salmond can bring forward his promise of Independence and we can lock Gordon away down in England. Time to vote SNP or have I now gone La-La as well.

We must lead the world to financial stability | Gordon Brown - Times Online