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SPIDEREDNEWS 29 October 2008
By cartoonist Leon Kuhn whose work can also be seen on his own website http://www.leonkuhn.org.uk where postcards of some of his cartoons can be ordered.

See Leon Kuhn's page on "SpideredNews | Politics" at http://www.spiderednews.com/LeonKuhn.htm
BBC Fri, 12 Sep 2008

The government has admitted that it is powerless to stop energy firms passing on the cost on its fuel assistance package onto customers.

Business Secretary John Hutton said he could not stop firms increasing bills in response but said there would be "no justification" for them doing so.

The plan includes half-price insulation for all households and a freeze on this year's bills for the poorest families.

The measures have been criticised as "flimsy" and "disappointing".

Gordon Brown said he hoped for a "sea change in energy efficiency" and help for the poorest households this winter.

But anti-poverty campaigners say while the £910m package is a step in the right direction, it does not go far enough.

Mr Brown announced the package of measures, drawn up after weeks of negotiations with energy companies, to help people cope with rising energy bills.

The package is being financed by the companies themselves.

But Mr Hutton said the government could not fix prices to ensure customers did not end up footing part of the bill themselves.

But David Porter, chief executive of the Association of Electricity Producers, told the BBC earlier "It remains to be seen just how much of it ends up on the customers' bill in the longer run.

"Whenever people impose costs on an industry like ours the bill, to some extent, always ends up with the customer."

Labour MP Frank Field, who led a successful backbench revolt over the abolition of the 10p tax band, said after a summer spent "roaring about the package" the government had actually produced "a mouse of a proposal".

Another Labour MP, Alan Simpson, chairman of the Parliamentary Warm Homes group, told the BBC that an extra £74m pledged towards the Warm Front insulation scheme simply reversed existing cuts to its budget.

He said Britain should look to other European countries for a more radical approach - such as allowing price increases to be set by an independent regular.

"We have ducked this notion of intervening, and have gone to the industry sort of cap in hand," he said.

Gas and electricity watchdog Energywatch said the response to growing fuel poverty was "too little, too late".

Chief executive Allan Asher added: "The lack of political will to tackle fuel poverty is not just disappointing, it approaches negligence."

Help the Aged described the package as "flimsy and failing" which would do little to help the elderly while Tony Woodley, joint leader of the Unite union, said bigger steps were needed and promised a windfall tax a central theme of this month's Labour conference.

Lib Dem leader Nick Clegg said the government should have been tougher with the energy companies, adding: "These measures will not do nearly enough to help the millions of people who will struggle to heat their homes this winter".

And for the Conservatives, shadow business secretary Alan Duncan, added: "Despite all their grand promises of cash payouts, all Gordon Brown has been able to offer is to restore a budget which they cut last winter and a package of measures that should have been implemented years ago."


BBC Friday, 5 September 2008 09:12 UK

The government has been warned it faces a backlash over its decision to rule out handouts to households struggling with soaring fuel bills.

Tony Woodley, leader of the UK's biggest trade union, Unite, branded the move a "downright disgrace".

And backbench MP Fabian Hamilton said the consequences could be "very serious indeed" for Labour.

There were hopes the government would unveil handouts of up to £150 after talks with the power companies.

But they are now expected to focus instead on energy efficiency measures.

In a speech on Thursday, Prime Minister Gordon Brown said there would be no "short-term gimmicks or giveaways".

But the decision is likely to be savaged by union leaders at next week's TUC conference in Brighton.

Unite, currently the Labour Party's biggest donor, said "greedy" fuel companies had won out over struggling consumers and people needed an "immediate respite" to rising energy costs.

Unite general secretary Tony Woodley told BBC Radio Four's Today programme: "This is no longer about lagging the lofts, this is about looking after people who are going to be in very very serious trouble to heat their homes."

He said the government should introduce a windfall tax on the energy giants or go "even further".

"We need to legislate to cap these prices rises from these greedy utilities here so that we help the ordinary family in our country - if we don't do that then we would have betrayed our people and betrayed our party."

Backer warning

Left-leaning pressure group Compass, which has been campaigning for a windfall tax, said the real disappointment would be felt by the "fuel poor who will go cold this winter".

Labour backbencher Fabian Hamilton has warned ministers they could lose support from people who need help paying bills.

Mr Hamilton is one of more than a 100 Labour MPs to have publicly backed calls for a windfall tax.

"The consequences for Gordon Brown and the government could be very serious indeed," he said.

"They could further lose support from those people who look to the government for the help that they need right now."

Mr Hamilton also said support from Labour's strongest backers "might fade away considerably".

Permanent fix

It comes as research found the "big six" energy suppliers increased their shareholder dividend payouts by 19% last year.

The suppliers paid £1.64bn in dividends in 2007, £257m more than the year before, a study commissioned by the Local Government Association said.

Acting LGA chairman Sir Jeremy Beecham said the report "torpedoes" the companies' argument that they needed to protect their profits to pay for future investment in infrastructure.


SILVERBEARCAFE Fri, 30 May 2008
The US Federal Reserve would likely increase interest rates "sooner rather than later" if inflation worsens, even if the U.S. economy remains weak, Dallas Federal Reserve Bank President Richard Fisher said on Wednesday.

Fisher is one of the Fed's leading policy hawks, urging the central bank to focus more on the need to quell inflation, which he termed "a sinister beast."

He has tallied three straight dissents against the Federal Open Market Committee's moves to lower benchmark lending rates.

"Growth cannot be sustained if markets are undermined by inflation," Fisher said. "Stable prices go hand in hand with achieving sustainable economic growth."

At this point financial markets believe the FOMC will leave its federal funds rate steady at 2 percent in June. The rate has been cut from 5.25 percent since mid-September to shore up sagging economic growth. Markets also guess that the Fed will start raising rates in the fourth quarter.

Fisher did not discuss the near-term economic outlook but focused on "the mother of all financial storms" brewing from unfunded liabilities from Medicare and Social Security, and its intersection with monetary policy.

"Deficits ... create political pressure on central bankers to adopt looser monetary policy," Fisher said, vowing that the Fed would not cave in and "run the printing presses."

"Even the perception that the Fed is pursuing a cheap-money strategy to accommodate fiscal burdens, should it take root, is a paramount risk to the long-term welfare of the U.S. economy," he said. "The Federal Reserve will never let this happen. It is not an option. Ever. Period."

Fisher said the Fed's various term credit facilities launched since the global credit crunch erupted in 2007 "are helping restore confidence."

By contrast, he said, the long-term fiscal prospects for the United States, if not tackled head-on "will be unimaginably more devastating to our economic prosperity than the subprime debacle and the recent debauching of credit markets."

DALLASFED Thu, 29 May 2008
Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.

I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well. Let’s say you and I and Bruce Ericson and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks, so that all of us and all future generations could be secure in the knowledge that we and they would receive promised benefits in perpetuity. How much would we have to pay if we split the tab? Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of four—over 25 times the average household’s income.

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