John Redwood's Diary
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The Protocol Vote

22 Conservative MPs including myself voted against the Statutory Instrument on the so called Stormont brake. Some said it was also a vote  against the principle of the Agreement with the EU though that did not appear in the motion. It is reported that another 48 Conservative MPs abstained.  The Statutory Instrument carried with a massive majority with all the Opposition parties other than the DUP voting for the government proposal.

The government only allowed 90 minutes to debate this wide ranging Agreement and constitutional change. Several MPs  were unable to make speeches at all, several were limited to just 3 minutes and I only got a few seconds at the end. The Commons proceeded to an early adjournment at around 4.15 in the afternoon, showing that we could easily have had a four hour debate on this to accommodate more views and give the government more time to answer some of the many questions the SI raises.

The Labour spokesman wrongly accused me of supporting the Protocol in the past, unaware that on 30 December 2020 I spoke against the Protocol and fishing parts of the final EU/UK Agreement and refused to vote for it. I have been a long standing critic of the Protocol from inception.

There was no need to rush the Stormont brake  part of the Agreement through Parliament. The brake can only be invoked following a request by 30 members of the Assembly in session. As there is no Stormont Assembly because the Unionists cannot accept this Agreement there can be no use of this brake. It is also difficult to see when it would  be used were there in due course to be an Assembly in session, as the criteria are difficult for the UK government to trigger the process and for it to succeed without EU challenge.

All those interested in why I and others voted No yesterday should look at the legal advice I posted yesterday which was drawn up for the ERG.

Written Answer from the Department of Energy Security and Net Zero

 

To ask the Secretary of State for Energy Security and Net Zero, whether he has made an estimate of the additional grid capacity the UK will need in 10 years’ time to meet the increased demand for electricity and increased renewable supply. (160099)

Tabled on: 07 March 2023
Answer:

Graham Stuart:
Analysis set out in the Electricity Networks Strategic Framework[1], jointly published by BEIS and Ofgem, suggests grid capacity would need to increase to accommodate a peak electricity demand of between 85-90GW by 2033, up from around 60 GW in 2023.

[1]BEIS, 2022, Electricity networks strategic framework, Appendix 1: Electricity Networks Modelling, section 2.1, p. 12, figure 2, https://www.gov.uk/government/publications/electricity-networks-strategic-framework

The answer was submitted on 15 Mar 2023 at 14:42.

 

Comment

This is an insufficient answer. It implies limited roll out of electric vehicles and all electric heating systems. The Minister does not go into the issue of how much extra grid capacity is needed to take into account the heavy predominance of wind power from Scotland needing transport to the heavily populated parts of England, nor how much extra capacity is needed to handle switching from renewables to stand by fossil fuel power when the wind does not blow. There is little sign of sufficient investment in grid capacity or local network capacity to match the ambitions to switch large amounts of energy use away from gas, diesel, petrol to electricity. The bulk of our energy use today is fossil fuel dependent.

Written Answers from the Department for Energy Security and Net Zero

 

Question:
To ask the Secretary of State for Energy Security and Net Zero, what recent estimate he has made of the level of (a) oil and (b) gas production in the UK in the next two years. (160096)

Tabled on: 07 March 2023

Answer:
Graham Stuart:

The Department for Energy Security and Net Zero does not estimate levels of future UK oil and gas production. Projections are made by the North Sea Transition Authority and are published here: https://www.nstauthority.co.uk/data-centre/data-downloads-and-publications/production-projections/.

The answer was submitted on 15 Mar 2023 at 14:42.

 

Comment

This was an unhelpful answer showing a lack of interest in domestic oil and gas output. Surely the Energy Department charged with providing greater national security of energy supplies should be able and willing to inform people of the current energy situation and say something about how they intend to improve it.

 

Summary of the Windsor Framework legal text analysis

Please find a press release summary of the Windsor Framework as below

Press Release Star Chamber FINAL 210323

 

Press Release: 21 March 2023

The European Research Group’s Legal Advisory Committee’s Review and Assessment of

the “The Windsor Framework”

Commenting on the release of the legal assessment, ERG Chairman Mark Francois MP, said:

“I would like to thank the Star Chamber, Chaired by Sir Bill Cash MP and ably supported by Martin Howe KC, Barnabas Reynolds and David Jones MP for their diligent and thorough examination of the legal implications of the Windsor Framework.

“The Star Chamber’s principal findings are: That EU law will still be supreme in Northern Ireland; The rights of its people under the 1800 Act of Union are not restored; the ‘green lane’ is not really a ‘green lane’ at all; the Stormont Brake is practically useless and the framework itself, has no exit, other than through a highly complex legal process.”

The full report can be found at:  https://lawyersforbritain.org/windsordealerglegaladvisorycommitteeassessment/

Principal findings: 

1.EU law remains supreme in Northern Ireland

Removal of EU law?  No EU laws will be “disapplied” or “removed” from Northern Ireland, contrary to claims in the UK Command Paper. Northern Ireland will remain subject to the power and control of EU law, the European Court (ECJ) and the European Commission on EU single market laws which govern the manufacture and sale of goods in Northern Ireland, and EU customs formalities and duties will still apply to goods sent from Great Britain unless one of the limited exemptions applies.

The deal makes only limited legal changes to the Northern Ireland Protocol, on the basis of temporary legal powers under the UK-EU Withdrawal Agreement which do not permit any changes to “essential elements”. Claims that this amounts to a new framework or structure are not correct.

Limited easings within existing Protocol structure.  The two different legal systems, (a) UK law in Great Britain, and (b) EU law in Northern Ireland, are the underlying cause of a border in the Irish Sea, with checks and controls required between those two parts of the same country. This underlying cause is not addressed by the Windsor deal.

Instead, there will be limited easings from the Irish Sea border customs and regulatory requirements for businesses in Great Britain selling goods into Northern Ireland. These easings will not benefit businesses in Northern Ireland. They will remain fully subject to all EU laws under the NI Protocol when making goods and when selling goods to Northern Ireland consumers in competition with goods of British origin.

Easings for very specific areas are to be made under EU law directly applicable in Northern Ireland, for medicines, some retail goods (mainly foods), pets and plants. Allowing  these easings to be done within EU law (rather than in a bilateral instrument) has adverse consequences:

  • Their interpretation, enforcement and validity is automatically under the jurisdiction of the ECJ rather than of the Withdrawal Agreement arbitration panel.
  • The UK has no legal remedy if the EU does not pass these easings into law in the form the Commission now proposes, or if the EU decides to amend or repeal them in future.
  • This creates an incredibly dangerous precedent of allowing the EU to make Regulations which apply only within the territory of Northern Ireland, a precedent which could be turned against the UK in future.

VAT and excise.  Ameliorations are made in EU rules on VAT and excise which will allow changes made (or shortly to be made) to VAT and alcohol duties since Brexit in Great Britain to be replicated in Northern Ireland. But there is no overall removal of VAT and excise from EU control, and the deal provides for a new “enhanced co-ordination mechanism” on VAT and excise. Changing tax structures or rates outside the boundary of the specific relaxations will involve negotiation with the EU and their permission.

EU State aid law and its “reach-back” into the UK.  EU State aid law, by virtue of Article 10 of the NI Protocol, is applicable in Northern Ireland and across the whole of the UK if aid might affect trade under the NI Protocol. Article 10 will not be amended, leaving the EU still in complete control of State aid within Northern Ireland. The Windsor deal will use a declaration (less legally secure than amending the treaty text) which seeks to limit (but not eliminate) the reach-back of EU State aid law across the whole UK, putting recipients of aid within Great Britain at risk of Commission proceedings requiring the aid to be repaid for 10 years after it is granted.

  1. The rights of the people of Northern Ireland under the Act of Union 1800 are not restored.

Different treatment under a treaty with a foreign power.  Unlike Great Britain, Northern Ireland will remain subject to the power and control of EU law, the Court of Justice of the European Union (ECJ) and EU administrative organs (such as the European Commission). Northern Ireland citizens will have no ability to vote to change or remove the body of EU laws which apply to them under the NI Protocol, unlike citizens in Great Britain who have to power to change or remove retained EU law.

Customs and restrictions on goods between parts of the United Kingdom.  Customs between Great Britain and Northern Ireland will remain unless a specific exemption applies. Larger businesses in Northern Ireland will have to pay EU tariffs on goods inputs from Great Britain if they do not satisfy rules of origin under the UK-EU Trade and Cooperation Agreement. Burdensome administrative requirements will apply to goods even within the scope of the specific easings; and outside those easings the full panoply of EU external border rules will apply to goods moved from Great Britain.

3.The ‘green lane’ is not really a ‘green lane’

Limited (and conditional) easings.  Limited easings from the full application of EU external customs duties and customs and regulatory requirements are to be made, involving reduced checks for certain goods sent within the UK across the Irish Sea which are accepted by the EU as destined solely for Northern Ireland and as not placing any risk on the EU’s “single market”.

These easings, which cover customs and certain goods standards, are highly constrained and carefully defined.

  • They cover certain aspects of East-West trade only. E.g. full EU customs checks and duties, if payable, will still apply to business acquisitions of input goods to be processed in Northern Ireland by larger companies.
  • The easings will not readily be available to smaller traders.
  • Registration will be required by UK traders and carriers.
  • Some elements of the new scheme require businesses to become authorised under a newly established mechanic, managed by the UK but overseen by the EU.
  • Some of the elements contain new, detailed application, compliance and monitoring processes, with restrictions on how the UK applies the scheme.
  • Declarations will still be required, as will compliance checks.
  • Precautionary usage of the “red lane” involving full checks is likely, and there is no reimbursement mechanism for duties where goods end up solely in Northern Ireland.
  • The scheme is not on a secure legal base vis-à-vis the EU, since it is vulnerable to suspension by the EU on grounds of suspected fraud, or termination by the EU on “diversion of trade” grounds.

These complex easings do not resemble a “green lane” where no checks are required and anyone is free to walk through. The schemes are burdensome and it is not clear if they will actually be better or worse than the way the NI Protocol currently operates with ‘grace period’ suspensions. These easings are not available to all businesses since smaller traders will find them more difficult to operate or even impossible. Nor do they cover all forms of business such as supplying plants direct to gardeners by mail order.

4. The Stormont Brake is practically useless

The ‘Stormont brake’.  A new ‘Stormont brake’ is to be inserted into the NI Protocol which gives a certain number of members of the NI Assembly the ability to call for the rejection of incoming EU laws. However, this only applies to future changes to EU law and confers no right to change any part of the existing body of EU laws imposed on Northern Ireland under the NI Protocol. The ‘brake’ is of very narrow application in theory and is likely to be useless in practice. It is a highly restricted version of a process contained in the European Economic Area (EEA) Agreement, and allows the EU to take “remedial” countermeasures. There has only been one attempt to use the EEA version of the brake, by Norway in 2011, which was abandoned in 2013.  Norway failed. (A flow chart for the Brake ie attached)

5.There is no exit from the framework other than through ahighly complex legal process

Doubling down.  The UK provides new commitments and undertakings which reaffirm and embed the status and structures of the Withdrawal Agreement and its NI Protocol.

  • The Government commits to new, tougher arrangements for market surveillance and enforcement under the NI Protocol. New commitments are made by the UK on “exports” from Northern Ireland to Great

Britain.

  • The Government commits to stopping the progress of the Northern Ireland Protocol Bill which, if enacted, would allow for the restoration of UK sovereignty in Northern Ireland.
  • The EU sets out how EU representatives will engage directly with Northern Ireland “stakeholders”, undermining the status of Northern Ireland within the United Kingdom.

The Windsor arrangement risks incentivising the UK and its future governments to copy future EU rules, and adjustments to existing EU rules, so as to avoid the imposition of new checks across the Irish Sea. Businesses in Northern Ireland will be denied the benefits of reformed post-Brexit UK law applied in Great Britain and will be faced in their home market with competition from goods supplied by mainland businesses which comply with UK rules without themselves being able to benefit.

 

The Government’s claims Analysis
Is this legally binding on both sides?

“It does what many said could not be done.., legally binding changes to the protocol treaty itself.”

 

The Northern Ireland Protocol remains  intact, supplemented by some additional easings. The UK cannot hold the EU to its commitments which will ultimately be governed by the ECJ.

Has it removed EU laws? 

“over 1,700 pages of EU law – with accompanying European Court of Justice (ECJ) jurisdiction – are disapplied,” (CP 806)

 

There is no evidence that 1,700 pages of EU law has been disapplied. Not a single EU single market law has been removed from Northern Ireland. At most there has been ‘keyhole’ surgery within the scope of these laws.

The Stormont Brake:

“It gives us control over dynamic alignment, through the Stormont brake, beyond what the [Northern Ireland Protocol] Bill promised.”

“these arrangements provide for the appropriate sovereignty in Northern Ireland for the Stormont Assembly to have that say. It is more than a say; it is an ability for the Assembly to block new EU goods laws as they come down the pipe if Assembly Members are not happy with them.”

“It is for us to make the determination whether the threshold has been met.”

 

The ‘brake’ is of very narrow application in theory and is likely to be useless in practice.

It covers a limited range of EU laws applicable to Northern Ireland. It does not cover laws on EU trade defence measures, State Aid, VAT, Excise, most of the Customs Code, or the Electricity market.

The UK cannot determine if the thresholds have been met. If the tests are not met then adjudicators could find against the UK and reapply the law.

Medicines: 

“it provides dual regulation for medicines. The UK’s regulator will approve all drugs for the whole UK market, including Northern Ireland, with no role for the European Medicines Agency. That fully protects the supply of medicines from Great Britain into Northern Ireland”

 

The UK MHRA will remain subject to EU law when authorising new medicines in Northern Ireland which fall outside these special categories.

The concession could be removed by EU legislation or withdrawn under the legislation if the UK is judged to have contravened its terms.

UK alignment with EU rules? 

“we have also committed to a range of other things to ensure that we protect against trade and regulatory divergence, including dialogue with businesses in Northern Ireland and also with the European Union.”

 

In practice, the Windsor deal will incentivise the

UK and its future governments to copy future EU rules (and adjustments to existing rules) so as to avoid the imposition of new checks across the Irish Sea.

 

“there are opportunities to do things differently across the UK to drive growth and prosperity,”

What that refers to very specifically is the work of the Office for the Internal Market, which we have strengthened as a result of the agreement and provided some extra detail about what we do in the Command Paper.

The UK will have to engage in an on-running system of negotiations via the Joint Committee or see the Irish Sea border harden and fall foul of its own legislation to ensure there is no further hardening of the Irish Sea Border.
Pets

“A pet owner travelling from Great Britain to Northern Ireland just needs to make sure that their pet is microchipped and then they will simply need to tick a box when booking their travel.”

 

The EU has allowed GB pets to travel to Northern Ireland if they are microchipped and have an accompanying travel document and declaration stating the pet will not go to the Republic of Ireland.

Green Lane

“Within the green lane, burdensome customs bureaucracy will be scrapped and replaced with data sharing of ordinary, existing commercial information. Routine checks and tests will also be scrapped. The only checks will be those required to stop smugglers and criminals. Our new green lane will be open to a broad, comprehensive range of businesses across the UK.”

 

Full customs formalities will remain for many businesses importing goods from Great Britain and complex Tariff Rate Quotas and Rules of Origin will complicate Northern Ireland Firms’ supply chains.

The ‘green lane’ is only available for a limited range of goods considered not ‘at risk’ and involves burdensome pre-registration and administration.

Northern Ireland’s place in the UK

“I can say with conviction that it does address the issues that were raised, and that it does secure Northern Ireland’s place in the Union and safeguard sovereignty.”

 

The Articles of of Union of 1800 have not been restored. There are serious questions regarding UK sovereignty in Northern Ireland and Great Britain.

Is the Protocol Permanent?

“it is a significant development that the Vienna convention on the law of treaties is in the political declaration”

 

The NI Protocol contains no viable exit or review clause. The “democratic consent” mechanism is not cross-community as it should be under the Belfast (Good Friday) Agreement. Even if invoked, the NI Protocol remains in place and governs any replacement arrangement.

Plants

“That is why today’s agreement will lift the ban on shrubs, plants and trees going to Northern Ireland”

The agreement only applies only to

“professional operators”, is subject to “the rules for their entry into the Union laid down in Regulations (EU) 2016/2031 and (EU) 2017/625″, and only applies to a handful of trees and shrub species that need to be accompanied by plant health certificates.

 

My Interview with GB News

My Interview with GB News, where I spoke about the Spring Budget, going for economic growth and particularly the need for lower taxes on small businesses and on people’s incomes.

You can find the interview below between: 1:17:14-1:26:57

Written Answer from the Department of Energy Security and Net Zero

 

To ask the Secretary of State for Energy Security and Net Zero, what estimate his Department has made of retirement dates for existing nuclear power stations. (160098)

Tabled on: 07 March 2023
Answer:

Andrew Bowie:
EDF has recently announced that Heysham 1 and Hartlepool Nuclear Power Stations will continue to operate until March 2026, an extension of two years. Heysham 2 and Torness Power Station are currently planned to generate until 2028, and Sizewell B is expected to continue generation past 2028.

The answer was submitted on 15 Mar 2023 at 14:42.

 

Comment

This is helpful, offering a bit more reliable power for longer as they review closure dates. It is a reminder that we need to build substantial new nuclear capacity urgently simply to replace what is closing.

Written Answer from the Department for Energy Security and Net Zero

 

Question:
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of how long it will take to place contracts to build new smaller nuclear power stations. (160097)
Tabled on: 07 March 2023

Answer:
Andrew Bowie:

The Government is committed to ensuring that the UK is one of the best places in the world to invest in new nuclear and intends to take one project to Final Investment Decision (FID) this Parliament and two projects to FID in the next Parliament, including Small Modular Reactors. As with any Government decision, this will be subject to value for money, relevant approvals, and technology readiness/maturity.

The Government also intends to initiate a selection process in 2023, with the intention to enter negotiations with the most credible projects to enable a potential Government award of support as soon as possible.

The answer was submitted on 15 Mar 2023 at 14:42.

 

Reply This represent a slow rate of progress. The government says it is committed to Small Modular reactors, so it should accelerate the timetable for their development, approval and roll out.

The Northern Ireland Protocol

There is a Statutory Instrument on the order paper for the Commons to debate and approve on Wednesday concerning the so called Stormont brake. This is putting the cart before the horse. Parliament first needs to have a full debate on the draft Agreement. I reproduced yesterday some of the questions the European Scrutiny Committee poses over this complex set of changes to our constitution. I have set out before on this site my own concerns about what has been agreed.

The government has still to tell us which EU laws will apply in Northern Ireland, how wide ranging the powers of the European Court of Justice will be, what limits are placed on our ability to impose VAT and Excise taxes, why EU law on many items applies to trade between GB and NI and why it applies to factories and farms in the province not exporting to the EU. They have not yet released the forms traders will need to fill in to send goods from GB to NI or what are the terms of the trusted trader scheme which shippers will need to join and follow.

The brake itself is a burdensome arrangement. If two parties and the requisite number of NI Assembly members want to apply it, the UK government then has to decide if the criteria are met to allow its use and if they wish to use it, bearing in mind the ability of the EU to take retaliatory action. I can imagine UK government lawyers and officials urging caution any time some politicians wished to use the brake. When the EU built up the number of areas that could proceed by majority voting rather than  unanimity in the EU we were always told there was the Luxembourg Compromise. This was a self styled  emergency brake which we could apply to an item we disagreed with which had gained the necessary majority to become law. The UK never used it and in due course it was deemed to no longer exist. When I wanted to use it as the UK’s single market Minister I was blocked from doing so.  If we had enjoyed an effective legislative brake on laws we did not like we would probably still be in the EU today. Instead the railroading of laws onto us was one of the main reasons we voted to leave.

The Protocol should  not be embedded into UK and international law. The Agreement looks as if it leaves too many EU laws applying to NI, still places obstacles in the way of GB to NI internal trade and does not allow us either a veto over laws  nor a unilateral way out of this worrying Agreement.

Central Banks lurch from inflationary policy to banking squeeze

Readers of this site will know I was critical of the Bank of England, Federal Reserve Board in the USA and the EU’s ECB for continuing money printing in 2021 well into recovery. Coupled with interest rates  at zero it was bound to be very inflationary. So it proved. China and Japan did not do this and kept inflation down to around 2% despite importing a lot of dear energy.

They will also know that last year whilst agreeing with rises in rates I warned against Quantitative tightening, selling government bonds at ever larger losses to tighten money yet more. It was this policy announced by the Bank of England just before the Kwarteng  mini  budget that drove bonds down. The Bank of England had to reverse its policy the following week and buy up some bonds to restore stability. They showed they controlled the prices of the bonds, letting them fall too far then rallying them sharply. It was the impact of the falling bonds on pension funds including the Bank’s own that spooked them.

I also thought the Fed was overdoing the bond sales. Last week two US banks collapsed, and a third sought substantial financial help. The share prices of a few  US banks show investors are worrying  about  them. Losses on government bonds were part of the problem at Silicon Valley Bank when it went down.The Fed had to announce a large line  of credit for banks generally and pump liquidity into the markets to avoid further bank runs, reversing some of the excessive tightness of money brought on by bond sales. Just like the Bank of England with its pensions problems.

The ECB has only just started Quantitative tightening and says it has no bank troubles in its area. Credit Suisse was just over the border and said to be a one off. Nonetheless a few EU commercial banks have  suffered sharp  falls in share prices over the last week so the ECB should not be complacent. The main UK banks were much strengthened after 2009 and are not being fingered in the markets.

So why do these Central banks lurch from obviously inflationary policies to clearly over tight ones that threaten pension funds or banks in their areas? They ignore the growth rates of money and credit, failing to see that too much money usually brings on inflation and too little brings company and weak bank collapses.

The Central banks  now share a dilemma. Carry on tightening and they could cause another crash. Relax too much and they could reignite inflation. That is why they should aim for a steady moderate increase in money and credit to avoid inflationary and deflationary shocks. The Bank of England should not carry on selling bonds at big losses. Commercial banks will now be tougher over new loans given the fears that stalk the markets.

The ECB which was  very slow to try to curb the inflation it had encouraged needs to learn from the Bank of England’s bitter experience with the pension funds and from the USA losing a couple of banks.