I’ve never ploughed through the thousand-odd quatrains that make up Nostradamus’ Les Prophéties, although I have skimmed through odd ones, just to prove to myself that people can be incredibly suggestible. Apparently, for the true believer, one can find the Fire of London, the French Revolution, Napoleon, Hitler, both world wars, Hiroshima and Nagasaki, and even September 11th, amongst much else. Incidentally, his first university career – in Avignon – was cut short after a year when the university was closed because of an outbreak of the plague; sound familiar?
Anyway, what made me think of Nostradamus was an idle moment’s speculation as to whether an interpreter could find a quatrain amongst them all that would foretell that in the twenty-first century, nations would come to be governed by fools, charlatans and incompetents. That thought in turn was inspired by looking at the price cap on domestic energy bills currently in force in the UK.
That policy was idiotic when it was proposed in opposition by Ed Milliband, it was idiotic when it was adopted by Theresa May’s government and it remains idiotic and in place under the current Boris Johnson government.
For those not familiar with this piece of UK policy, it is a scheme whereby the price at which retail energy providers can sell electricity to domestic customers is capped at a particular level. This is done so that the government can be seen to be concerned that consumers do not have to pay so much for their electricity that they cannot heat their houses or cook their food. Sounds OK, no? Well, unfortunately – and this is where fools, charlatans and incompetents come in – no, it’s not. Sadly for those who enacted this measure, capping the sales price while the purchase side of the energy suppliers’ business faces an international market where normal supply and demand considerations rule, simply spells potential bankruptcy for suppliers whose purchase cost is greater than their sales revenue. I think that’s one of the first things taught in Economics A-levels.
Of course, had there been an obligation upon the energy supply companies to hedge their forward transactions, perhaps – and I stress perhaps, because I’m still sceptical – some of the carnage could have been avoided. Instead, what happened is that a raft of undercapitalised minnows were set up, to “diversify the supply” of electricity away from the major suppliers (political subtext: major suppliers are greedy multinationals, and therefore by definition rip off their customers), and those minnows are now dropping like flies as wholesale energy prices in the global market soar, and yet their sales price is capped. The government is now in the position of having to beg or bribe the majors to take over the customers whose suppliers have gone bust. Something – I feel – of an object lesson for those on the political left who crave government controls.
This is a self-inflicted mess, and I stick with my earlier description of those who caused it.
Still, let’s be optimistic, step away from Nostradamus and be like Oscar’s Lord Darlington in Lady Windermere’s Fan: “We are all in the gutter, but some of us are looking at the stars.”
