A new economic policy – prosperity first.

As the new government sets out its aim to put prosperity first, and to spread higher incomes and wealth more widely around the country, it needs to alter energy policy.

Fundamental to faster growth and higher real incomes in the UK must be more and cheaper energy.

Scrapping VAT on domestic fuel as Vote Leave proposed would be a welcome start. People on lower incomes are particularly hard hit by fuel prices and taxes.

The decision to put Energy into a new Business department led by Greg Clarke is a good idea. It is important to understand the need for lower priced and more plentiful energy to business. The department needs to get to work on a new regulatory framework which will ensure more baseload gas combined cycle electricity generation. The UK also needs to tap into more of its reserves of oil and gas.

The loss of steel, aluminium, glass, ceramics, basic chemicals and other areas has reduced our industrial base. This has been speeded by dear energy.

With a background of very low interest rates and a plentiful supply of new bond finance, it should be possible to make faster progress with providing the new power stations and energy facilities we need. Out of the EU the department can review energy policy to ensure continuity of power supply, sufficient capacity, and more affordable prices. It was interesting that Theresa May reformulated the aims of energy policy in her economic speech just before becoming Leader. A new fleet of combined cycle gas stations may be the best way to offer industry the cheaper power it will need to expand, and to rebuild industrial opportunity across the country.

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82 Comments

  1. alan jutson
    Posted July 27, 2016 at 5:29 am | Permalink

    We certainly need more power generation plants to cope with any increased industrial capacity, let alone population/home building increase.

    A reduction in Vat will help a little on the domestic side with regards to cost, but this will not help business as they claim Vat back.

    Less expensive and more plentiful supply of energy sources are the key, and they are needed rapidly.

    • David Lister
      Posted July 27, 2016 at 4:26 pm | Permalink

      Agreed, our energy infrastructure is on its knees.

      All our nuclear energy plants are approaching end-of-life, and our coal-plants are being phased out. Our N.Sea gas supplies are in long-term depletion after peaking in the early 2000’s resulting in the UK being a net importer of fossil fuels, and with a weaker pound our trade-of-balance deficit will only increase.

      We need to massively increase investment in (1) renewables with open-cycle gas turbines to manage the intermittency, and (2) a new generation of nuclear.

      Prosperity is all very well but we can’t afford to bake the planet in the process.

  2. Nig l
    Posted July 27, 2016 at 5:53 am | Permalink

    And where does Hinckley Point C fit in? To an outsider it looks as if we are mortgaging our future for ever on questionable (dated?) technology.

    Incidentally a great piece with Reuters, thank you. Exactly what was needed. They always seem to be massive Remainers so I noticed that got their own ‘dig’ in at the end.

  3. Lifelogic
    Posted July 27, 2016 at 6:13 am | Permalink

    I have never found the ex SDP man Greg Clark to be much of a Conservative. He does not seem to have done any real jobs outside the state sector. He strikes me as being more in the Ken Clark mode. Perhaps he can reinvent himself as a real Conservative, in the same way I hope that Mrs May can. The first thing she need to do is to scrap he workers and customers on boards drivel.

    First they should cancel Hinckley Point (which is the wrong nuclear project) and cancel all the “green” grants for intermittent and uneconomic green crap. Get some new efficient, gas combined cycle generators, stop/delay the closure programs and get fracking.

    Why are sensible people like Peter Lilley and Owen Patterson left on the back benches?
    It is not very encouraging so far. Less than four years to go until the next election why are they so slow? Not even a direction of travel has been indicated yet.

    • Lifelogic
      Posted July 27, 2016 at 6:30 am | Permalink

      Why have the new government not even cancelled the absurd HS2 yet? Is there no one who can do simple sums in this government? The sooner HS2 is cancelled the more money we save, doubtless it is costing X million a weeks. Money that will be available for something more sensible and almost anything would be more sensible than HS2.

      Perhaps Mrs May should stop dashing about to Wales, Scotland, Germany and France and have a cabinet meeting where she can hammer out a sense of direction. Hopefully to show she has reinvented herself as a proper conservative. A low tax, cheap energy, bonfire of red tape, no EU one.

      • R.T.G.
        Posted July 27, 2016 at 5:24 pm | Permalink

        The question of whether or not HS2 should be built is, primarily, will HS2 will add commercial value to UK Ltd in due course.

        It is not one which asks, should HS2 fill a slot defined by the European High Speed Network or be a vanity project, reflecting glory on the UK or one which asks if those companies, whose directors and staff have spent time and effort to pitch for lucrative contracts, would be disappointed and out of pocket.

        The labour, intellectual and capital capacities required to build HS2 should be similar to the capacities to build and/or rebuild other railways, which would add far more value in a much shorter period of time; any perceived ‘interoperable’ benefit of HS2 is achievable only when the whole stretch is completed.

        As HS2 is an EU project tied in to the EU’s ‘interoperable’ 24/7 High Speed Rail System, cancellation of HS2 would demonstrate a sincere belief that Brexit will itself be on track.

        http://ec.europa.eu/transport/themes/infrastructure/studies/doc/2010_high_speed_rail_en.pdf

        https://www.theguardian.com/uk-news/2016/jun/07/hs2-the-zombie-train-that-refuses-to-die

  4. Brexit Facts4EU.org
    Posted July 27, 2016 at 6:19 am | Permalink

    “Scrapping VAT on domestic fuel as Vote Leave proposed would be a welcome start. People on lower incomes are particularly hard hit by fuel prices and taxes.”

    Agreed, and of course it’s our continued EU membership which is currently preventing the Government from doing anything about this.

    We ran two pieces on the topics contained in your above piece last month – one of them was a summary of one of your own items which you published here. Your readers can see them here:
    http://facts4eu.org/news_june_15-22.shtml#energy
    http://facts4eu.org/news_june_15-22.shtml#manufacturing
    They make interesting reading.

    Meanwhile, EDF and the French Government are having urgent discussions about the proposed new Hinckley Point reactor, after EDF’s recently-disclosed financial difficulties. Given that the proposed guaranteed forward rates for electricity supplied by this proposed reactor are extremely high, what are your thoughts on the cancellation of this project?

    Best wishes, the Facts4EU.org Team

  5. agricola
    Posted July 27, 2016 at 6:24 am | Permalink

    Yes cheaper energy is one of the keys, so lets see a real drive to fracking. With the North Sea on a low level of activity there are the highly skilled drilling personnel available so lets get on with it in the national interest.

    The second magnetic attraction is a low tax regime, so give some thought to an attractive rate of corporation tax. lets say we aim at 10 %. Maybe we need two rates, one for productive industry, by which I mean that which adds to the national wealth rather than that which provides cups of coffee in the high street.

    The key is speedy detachment from the EU with January 2019 as an absolute deadline. The doom merchants who think it can take seven years need to put up or shut up. However the building blocks can be put in place as of now, so that we are ready to roll in January 2019.

    • fedupsoutherner
      Posted July 27, 2016 at 5:52 pm | Permalink

      Agricola. Apparently it takes 7 days in the USA to get a fracking licence. It can take 10 years here and still get turned down by the local council!! Unreal. No wonder this country is poorer than it should be.

  6. Ex-expat Colin
    Posted July 27, 2016 at 6:28 am | Permalink

    Too little too late? And we wish!

    I cannot see much changing as regards energy security and more importantly reliability. I hope Mrs May heeds Lawson, Ridley, Lilley and yourself here. The Psycho’s have had their own way for far too long.

  7. Denis Cooper
    Posted July 27, 2016 at 6:40 am | Permalink

    Off-topic:

    http://www.telegraph.co.uk/news/2016/07/26/uk-faces-surge-in-eu-migration-before-brexit-unless-cut-off-date/

    “A Government Spokesperson said: “We have been clear that we want to protect the status of EU nationals already living here, and the only circumstances in which that wouldn’t be possible is if British citizens’ rights in European member states were not protected in return.”

    I don’t see why it wouldn’t be possible for our government to still behave with decency in this case even if some foreign governments did not.

  8. alte fritz
    Posted July 27, 2016 at 6:43 am | Permalink

    Mirabile dictu! Glaxo announce new investment in the UK. (Their CEO was a prominent Remainer.) If EDF decide not to back our new nuclear plant, maybe we should do it ourselves.

  9. Anthony Makara
    Posted July 27, 2016 at 6:48 am | Permalink

    Energy security, like food security, should be a cornerstone of the new Brexit economy. Our dependence on imported fuel is a badge of shame for a nation that was once the powerhouse of the world. As a nation we are blessed in having a rich abundance of natural energy resources which successive governments have allowed to fall into terminal decline for political ends. Our energy suppliers should be privately British owned with a mandate from govt to provide cheap energy for our people. Currently British consumers are forced to pay an exorbitant cost for fuel to foreign owned energy giants who show no mercy or sense of responsibility in pricing. It is time that we draw up a new strategy for energy as part of our plans for a UK Internal-Market. Such a policy would have knock on effects in creating jobs across numerous sectors but most important of all would be a statement of intent, to Europe and the World, that Britain is a strong and independent nation that can look after its own needs.

  10. Antisthenes
    Posted July 27, 2016 at 6:51 am | Permalink

    You have convinced me but I do not need much convincing. It is your colleagues in government that you have to convince and then of course you have the loony left and not just the loony ones. Once a section of society, vested interests and the like has driven government to adopt policies and practices that are harmful to us it is very difficult to change them. Knee jerk reactions, bureaucratic meddling, ideologies, pork barrelling and vanity projects(EU) all contribute in giving us government, laws and regulations that we do not need. Driving up costs and inconveniences, making us uncompetitive as a trading nation . Why are we so stupid that we allow this to happen? It is for many reasons from ill informed, confused and intellectually challenged thinking through to personal gain.

  11. Richard1
    Posted July 27, 2016 at 6:54 am | Permalink

    The Government should make a major push into shale. For those concerned with CO2 emissions this would have the side benefit of lower emissions than coal or oil. Hopefully in the coming decades a real economic alternative to fossil fuel, maybe nuclear fusion or economic solar power will emerge. Cheaper fuel would be a major boost to prosperity.

    • fedupsoutherner
      Posted July 27, 2016 at 5:49 pm | Permalink

      Richard1. Yes anything that doesn’t involve vast subsidies paid for by the poor and rich alike. Why should anyone pay for the energy produced by someone else’s solar panels???? They are more wealth than you in the first place if they can afford to install them. nuclear fusion is the way to go and China and India are way ahead with research into this type of energy. We have a ridiculous system now whereby nearly all types of energy will have to be subsidised.

  12. Ian Wragg
    Posted July 27, 2016 at 6:58 am | Permalink

    It’s time Hinckley Point was scrapped. Ludicrously priced energy with untried technology.
    When are we starting franking.
    The government could finance new CCGT power plants and lease them to operators but not the big six and only UK investors.
    I see we are expecting a surge in immigrants post Brexit.
    We could stop issuing N.I. numbers and forbid councils from giving houses to foreigners.
    Much to be done and another fat cheque due for Brussels.

  13. Jerry
    Posted July 27, 2016 at 7:10 am | Permalink

    Trouble is energy prices are only a part of the story, and until the AGW lie is buried nothing is going to change, a 5% cut in VAT on domestic fuel bills will be more than swallowed up in higher basic bills or third party costs that come with ‘green energy’ etc.

  14. Ken Moore
    Posted July 27, 2016 at 7:17 am | Permalink

    It’s disappointing that John Redwood is advocating more of the same medicine that has made the patient sick…a continuation of high spending on the corrosive Blairite social agenda together with more spending for projects that can be broadly classified as ‘investment’. JR needs to ask himself why spending is so much higher than it was in 2005 and have the benefits been worth crippling debts ?.

    This all sounds much like Gordon Brown economics….Why not do the right thing and tell the country it needs to live within it’s means not perpetually ‘borrow’ to create an illusion of growth.? With the opposition Labour party divided between Blairites and a resurgent Left, the Conservatives pretty much have the field to themselves – so why side with the Blairites ?.

    It’s easy to advocate extra spending now to buy short term popularity..much harder to draw attention to unsustainability.

  15. Anonymous
    Posted July 27, 2016 at 7:25 am | Permalink

    “Spread wealth and higher incomes around the country”

    This is at the root of the disparity betwixt London and the wider UK in referendum voting. The EU clearly works for Londoners, who are there because they don’t mind overcrowding and can bear gridlock.

    Many London Remainers will be ecstatic that the EU has helped to inflate their house prices through overcrowding and Eurozone escapees.

    The London-centricity of politics is largely down to its effect on the metropolitan elite’s asset prices in the capital which is, in turn, a product of the economic disaster zone that is the EU.

    Good for Britain ?

    Not ALL of Britain as there is a clear dichotomy in both thinking and wealth. The smug London Blairist-rich rejoice in multiculturism but how much of this is the displacement of wealth-guilt by ‘look how non-racist we are’ virtuousness ?

    On many levels mass immigration works for them:

    – it inflates their house prices

    – it makes them PC pure

    – it gives them cheap nannies

    – it rubs the oiks’ noses in it

    London stripped the wealth out of the regions and flogged it off cheap. It owes big time. But seeing as it’s shown it would rather make things worse for its country cousins (there is even talk of a London breakaway from the UK) it should be told to lump it.

    Because it is successful in the EU it doesn’t mean that the EU isn’t a disaster zone. And to the those not in London the importation of poverty (mass immigration) might not feel any different to capital flight (the alleged doom that is Brexit.)

  16. Lifelogic
    Posted July 27, 2016 at 7:39 am | Permalink

    “Prosperity first” is a very good idea. Without it we cannot have sound defence, good health care, education systems, law and order and the likes. The sooner the government realises that it is this bloated and largely inept government that is the problem and not the solution the better.

    The government need to release the wealth generating sector from the endless tax and red tape that binds it and pushed business overseas. Mrs May’s wittering on about workers and customers on company boards does not inspire any confidence.

    The government needs to govern for the 80% of workers who work in the private sector for a change. The problem, as so often with government, is they are reasonably in touch with the state sector (on an almost daily basis) but rarely have any understanding of the private sector at all. All they ever do it mug it, over regulate it and inconvenience it. The state sector is often just inefficient, unfairly subsidised competition for the private sector in health, housing, education, banking and many other areas too. Killing more efficient suppliers of these services and subsidising inefficient ones.

    “Prosperity first and get out of the b****y way” might be and even better title.

  17. Ken Moore
    Posted July 27, 2016 at 7:51 am | Permalink

    JR needs to be careful not to welcome policies that favour the less risky speculative route to prosperity over the entrepreneurial. We need to reduce stifling regulation and taxes and stop backstopping the property market to tip the balance back in favour of the hard working entrepreneur. Neoliberal policies that favour corporatism and unrestricted private profit need to be shredded.

    It’s all too easy to side step the difficult business of setting up a business with all the risks and simply invest in assets that are being pushed up by the governments desire for cheap money…
    Why fight to save a business when the land it’s sitting on can provide a very good income for it’s owner for doing nothing because of zero interest rate policy… Government is unintentionally incentivising business to sell up…
    Why should capital gains be taxed at a lower rate than income ?

  18. David Cooper
    Posted July 27, 2016 at 7:54 am | Permalink

    “Scrapping VAT on domestic fuel…..would be a welcome start.”

    Indeed, and it raises a wider issue. Rather than wait for interminable talks to conclude, or for Article 50 to be triggered, can we please have an immediate “EU Law Disapplication Process” whereby any particularly harmful EU law can be suspended or repealed now rather than later if its repeal or suspension would cause no material disadvantage to another member state?

    The energy sector does, of course, provide us not only with the issue of VAT on fuel (and the EU assumption that once VAT is imposed, it cannot be removed), but also the Large Combustion Plants Directive which has caused major damage to the UK energy market without materially improving the lives of continental Europeans.

    Outside of the energy sector, has anyone ever thought how iniquitous it is for VAT to be charged on professional advice provided to individuals? An individual will only need to consult a solicitor or a specialist doctor out of necessity, in the face of serious personal detriment if expert advice is not obtained. It is insult to injury to have to fork out 20% to the Treasury for having done so. This would be a great chance for Mrs May and her government to show whose side they are on.

  19. David Lister
    Posted July 27, 2016 at 7:57 am | Permalink

    Hi John,

    I’m glad you have brought this to the forefront.

    Our Energy Policy is probably the single most important Industrial Policy that we have to get right. More Combined Cycle Gas Turbines are certainly needed, but so must we massively increase our fleet of off-shore wind farms with matching Open Cycle Gas Turbines in order for us to reduce the CO2 intensity of our energy production. We need to get on and build new nuclear urgently given that our existing infrastructure is end-of-life (in fact, already well beyond their original design specifications).

    We can not rely on gas alone, because we (the UK) are very much in a state of resource decline. Fracking is unlikely to compensate for the N.Sea decline, and it may not prove commercial at all in any significant volume. So relying on imported gas supplies with a weakening pound is not a good position to be in.

    Our scientists also need governmental support. As it stands, the EU with other global entities fund the ITER complex based in France for Nuclear Fusion research. A critical part of Brexit will be to ensure that collaborative research with our EU partners is maintained otherwise our ability to shape, and eventually exploit, new technologies will be substantially undermined.

  20. Ken Moore
    Posted July 27, 2016 at 8:03 am | Permalink

    JR’ As the new government sets out its aim to put prosperity first, and to spread higher incomes and wealth more widely around the country’

    I have to ask what REAL higher income and wealth’. Is this the ‘wealth’ created from government borrowing that we like to call ‘ economic growth’. Why do we need to borrow and sell assets to plug a 6% current account deficit if there is so much wealth to share around ?….. Average wages in parts of Yorkshire are down 12% from 10 years ago because of open door immigration…

    Britain has foolishly exported many of it’s high income value creating jobs, sold much of it’s technology and manufacturing capability but crucially has failed to reduce it’s consumption. We are a nation living on tick..too poor to pay decent rates of interest…

  21. Mark
    Posted July 27, 2016 at 8:44 am | Permalink

    Did she tell Hollande that she agreed with the EdF engineers that the Hinkley Point project should not proceed, and that we should seek cheaper nuclear technology? Why has she not called a halt to the absurd fifth carbon budget, and promised an end to Osborne’s Carbon Floor Price tax? Why hasn’t she cancelled offshore windfarms? Why was every appointment to BEIS a known green sympathiser?

    I have no confidence that there will be any substantive change in energy policy until there is someone with a proper scientific/engineering background put in charge, with the Climate Change Committee disbanded. Perhaps a La Niña winter and some blackouts may change her mind.

    • turboterrier
      Posted July 27, 2016 at 5:23 pm | Permalink

      Mark

      I have no confidence that there will be any substantive change in energy policy until there is someone with a proper scientific/engineering background put in charge, with the Climate Change Committee disbanded.

      Too bloody true it has gone on for far too long. Climate Change, AGW it is all the same the tail wagging the dog. It’ something like the Emperor’s new clothes kids story. What on earth are we doing paying all these subsidies for turbines for? That coupled with the massive sums of money paid out in constraint payments is bordering on fraud. All the developers knew from day one the grid could not handle the increase supply but the governments stormed ahead in passing them and in Scotland it is now like a religion and the subsidies being payed out for all types of renewable energy is totally and utterly unsustainable. But they do not have to worry about who pays the rest of the UK props them up.

      There are enough experts with knowledge, passion and belief sitting on the back benches who could face up to the way this country has been totally stitched up by politicians who fell for the story and have totally ignored the destruction of our rural areas and ignore the millions in fuel debt and poverty and the number of jobs lost because of their beliefs.

    • fedupsoutherner
      Posted July 27, 2016 at 5:45 pm | Permalink

      Mark. ‘ Perhaps a La Niña winter and some blackouts may change her mind.’

      Bring it on. This country needs a cold winter to make politicians see sense. Can we please listen to the experts who have no vested interest but who do know what they are talking about.

      • Mark
        Posted July 28, 2016 at 2:27 pm | Permalink

        I think they’re watching me. Minutes after I posted that we had a power cut lasting about 10 minutes.

  22. Lifelogic
    Posted July 27, 2016 at 8:53 am | Permalink

    Prosperity First – yes please.

    The Osborne/Cameron agenda was to increase taxes and tax complexity endlessly and run a high energy price agenda for climate alarmist (and fake greenery political reasons) this while increasing red tape endlessly and thus rendering some industries totally unable to compete.

    The result is lots of lawyers, accountants, tax experts, bureaucrats, HR staff and other largely unproductive activities and less production per head. Thus destroying the ability of the UK to compete in the world. We need to reverse this absurd agenda as soon as possible. The IHT ratting and attacks on pensions, landlords/tenants and non-doms drives people and money abroad.

    Scraping the work place pension nonsense would be a good start too. In fact scrap almost everything Osborne has done in office. His compass was 180 degrees out.

    Allow business owners/directors run their businesses for a change.

  23. Mockbeggar
    Posted July 27, 2016 at 9:03 am | Permalink

    I heard a snippet on the news this morning that GSK are going to invest £250m plus in the UK after all having expressed doubts about post Brexit investment.

  24. DaveK
    Posted July 27, 2016 at 9:12 am | Permalink

    John,

    Isn’t it about time that the Secretary of State reviewed and amended the Climate Change Act i.a.w. Section 2, in light of new (19 years actually observed) evidence as opposed to computer models with little predictive ability? We need some common sense to limit the self harm our government(s) seem determined to inflict.

  25. David
    Posted July 27, 2016 at 9:34 am | Permalink

    Scraping VAT on building works would be the best first choice. It would make making uninhabitable homes fit to live in cheaper. It might cause builders etc wages to rise a bit.

    • alan jutson
      Posted July 27, 2016 at 4:30 pm | Permalink

      David

      Would also help the honest builders who pay tax and are insured to compete with those who would rather choose to work under the alternative economy.

  26. Stuart Saint
    Posted July 27, 2016 at 9:55 am | Permalink

    OK. So where does Hinkley fit into this? Surely this high cost white elephant has to be scrapped as part of the energy review?

    • fedupsoutherner
      Posted July 27, 2016 at 5:42 pm | Permalink

      Stuart. Yes, why don’t we follow France’s example and have smaller nuclear facilities all around the country? Hinkley will be expensive and will not save us money on our fuel bills. There has to be a better way. Energy should never have been broken up like it has. It should be re nationalised and run like it is in France. It is crucial to our wellbeing and our security as a nation.

  27. formula57
    Posted July 27, 2016 at 10:19 am | Permalink

    As you say, “Scrapping VAT on domestic fuel as Vote Leave proposed would be a welcome start.” . What precisely are we awaiting? Will anything happen before 2020? Is the government busy with other matters such that Brexit is down the list of priorities? Why are we content to spend c. £200 million a week propping up the rump EU whilst ministers dither?

  28. Jumeirah
    Posted July 27, 2016 at 10:21 am | Permalink

    Off Point
    There are few points that I’m not clear on as I have very little understanding on how this works in practice:
    1) Repealing the 1972 European Communities Act: does this require a Vote in the House of Commons and the Lords? Affirmatively how certain can we be that the motion will be carried in the Parliament bearing in mind that it is said that the majority MPs are against leaving the Single Market? IF it then has to go onto the Un-elected Lords can they return it and block it in which case can Parliament over-ride this and repeal the Act notwithstanding.
    2)Triggering Article 50: can this be invoked by the Prime Minister alone or will this also have to undergo due process through the House of Commons and the Un- elected Other Place.

    Reply Es, repeal requires Parly approval which I expect to be forthcoming in the light of the referendum result

  29. The Prangwizard
    Posted July 27, 2016 at 10:23 am | Permalink

    Let us hope that there will a far more robust response to the green lobby and anarchists who go far beyond any legitimate right of protest, in relation to fracking for example. The police are far too tolerant of illegal activity. Court sanctions are weak and are no deterrent. Majority rights and business activity must be protected against the widespread intimidation which goes on almost unchallenged.

    • fedupsoutherner
      Posted July 27, 2016 at 5:40 pm | Permalink

      Prangwizard. Wise words indeed.

    • Mitchel
      Posted July 28, 2016 at 9:09 am | Permalink

      I notice Russian-owned energy installations have not been troubled by activists since the last lot were arrested at gunpoint and put into a cold Russian jail for a month or so just before the Sochi Olympics.

  30. Brigham
    Posted July 27, 2016 at 10:34 am | Permalink

    All these ideas are good, but they cannot be applied until we have triggered article 50. This isn’t going to happen until next year. Even deals with countries outside the EU will be difficult to arrange until we are properly out. LET’S DO IT NOW.

  31. ian
    Posted July 27, 2016 at 10:43 am | Permalink

    I just have one question on this, why is it that the british taxpayer has to payout for new electricity generation and then hand the assets over to private companies to earn the money on those new assets, should it not be the private companies putting up the money or at least the british government earn the profits on those assets and keep hold of those assets till the private companies have paid for them in full.

    How can you call them private companies when all their big assets are paid for by the british taxpayer.

    • graham1946
      Posted July 27, 2016 at 5:24 pm | Permalink

      Exactly. Supermarkets put up their own stores etc. It was a privatisation con to privatise the profits and socialise any losses.

      We were sold a pup, buying what we already owned. Same with telephones. Public money paid for the lines and exchanges and BT et al get the profits.

      The whole thing was a con and the money long since pee’d up the wall. We have nothing but higher bills out of it all and mostly foreigners have the assets.

    • hefner
      Posted July 27, 2016 at 5:40 pm | Permalink

      A very pertinent question, and one that one of the best neoliberal privatisers of the ’90s might be able to answer.

  32. NickC
    Posted July 27, 2016 at 10:51 am | Permalink

    We are likely to get a couple of colder years in the future, initially because La Nina has now taken over from El Nino in the Pacific. However there is a further possibility of consistent colder weather due to a repeat of the Maunder Minimum type low sunspot conditions. The sun is remarkably quiescent at the moment. This natural cycle could last as long as 40 – 60 years. The UK is in trouble if it does.

    By foolishly closing coal fired power stations, and failing to build CCGT plant, at the behest of the Green lobby, the Conservative government has put the UK in a perilous position, as well as driving basic industries off shore. And that’s before factoring in the colder weather that looks increasingly likely. As an added twist, watch the blackouts blamed on Brexit.

    • fedupsoutherner
      Posted July 27, 2016 at 5:39 pm | Permalink

      Agree totally Nick c

    • hefner
      Posted July 27, 2016 at 5:58 pm | Permalink

      Thanks for your comments. Who said that a Maunder Minimum was coming?

      http://www.ncdc.noaa.gov/sotc/global/201602

      and these from measurements, not models. And by the way, the so-called flat temperature cherished by LL was from 1998, itself a El Niño year.

  33. lojolondon
    Posted July 27, 2016 at 11:10 am | Permalink

    John, this is a very good idea, but when? Am I correct in thinking that before we cut duty on fuel, we have to wait for Article 50 to be issued, then another 2 years? Or please explain if we can make changes sooner than that?

  34. CHRISTOPHER HOUSTON
    Posted July 27, 2016 at 11:18 am | Permalink

    When you have the French President declaring war on ISIS, his borders locked against an unknown enemy but with ISIS soldiers being what he considers his own people and already BEHIND the locked borders then Europe, the French economy, and as a knock on effect our economy is entering a gloomy dark age.
    Couple this with the inability of Germany stoically sitting eating sauerkraut and drinking beer, its citizenry calmly not reacting at all to axes being wielded and bombs blowing up before them then you must realise we are living in a world where dullness of head and goo-goo eyes is the new European.
    The UK has not and its people have not yet been attacked by President Hollande’s French citizens and any number of Mrs Merkel’s permanent guests, temporary guests and German citizens. So we are having preliminary talks with our potential enemies France and Germany about trade.
    We should tell them we will unilaterally cut all trade and very quickly if they do not restore order in their countries. They present a severe threat to us. We should not deal with nations who allow their citizens to attack and kill us.

    • fedupsoutherner
      Posted July 27, 2016 at 5:38 pm | Permalink

      Christopher, and we want freedom of movement of people???? Hellooo!

      • stred
        Posted July 28, 2016 at 10:17 am | Permalink

        Funny that I can drive through the open customs post between Spain and France or Germany at high speed but will have to wait 15 hours going via Dover while one French customs plod check all British passports. Spain, Italy and Germany are in the direction of IS and have a far worse problem than the UK, as does France. I am trying to get the bird to cancel her expensive booking in the Riviera and take the ferry to Holland instead then go to Switzerland.

  35. ian
    Posted July 27, 2016 at 11:22 am | Permalink

    Nice to see that the economy grow by 0.6 in the last three months and GSK is investing 275 million pounds in brittan.

  36. Mark
    Posted July 27, 2016 at 11:29 am | Permalink

    I read that Juncker thinks he can appoint Barnier as Brexit negotiator. He has no such power. The appointment cannot be made until Article 50 is triggered and is in any case made by Council, not Juncker, in accordance with Article 218 (3).

    • hefner
      Posted July 27, 2016 at 5:45 pm | Permalink

      Barnier is appointed and will start to work from 1 October, I guess, independently of whether or not the UK has officially triggered Art.50. Maybe he will first have to try and get a common position from the 27 EU partners.

      • Mark
        Posted July 28, 2016 at 12:56 am | Permalink

        He cannot be appointed as negotiator by Juncker, who can only employ him as Brexit link person to the Council from the Commission, or perhaps offer him as a candidate for consideration. Only the Council can appoint the negotiator. I don’t think the Commission is in the least interested in anything other than its own position. Unfortunately for them, all they are permitted to do in the Article 50 process is to provide recommendations. All direction of the negotiation is in the hands of the Council, including the choice of negotiator, tactics/concession points/red lines, and approval of the outcome.

  37. Hope
    Posted July 27, 2016 at 11:32 am | Permalink

    JR, when do you expect May to act like a Eurosceptic and implement your suggestions! Do you expect Rudd to have changed her mind? Rudd the person who enacted a hate campaign against Boris Johnson on TV without any facts or debate on EU policy. Now she claims to want to stop hate Crime! She is at best deluded at worse scheming to prevent people from speaking out for not implementing Brexit ASAP. Hate crime, like most crimes will continue. Her behaviour is not in keeping to her behaviour. She should never have been selected for govt. It is people like her who create and promote hate. We saw her doing exactly that on TV in what should have been a debate about policy EU, she decided to to vent her venom and bile on Boris Johnson. What action has she taken to sop free movement, illegal immigration or make us safe? Has she taken the French to task over Dover fiasco?

    • Anonymous
      Posted July 27, 2016 at 5:33 pm | Permalink

      Hate crime (essentially name calling) is not nearly so hateful as the random acts of barbarous terrorism we have witnessed lately.

      The knee jerk of the Left – including the Tory party – in such situations is to brace against the booted white skinhead. (Seen one of those lately ?)

      Posturing against white bogeymen is all the useless Left have.

      They dare not criticise the real perpetrators of hatred in the west. I hear that the media in France is refusing to name and show pictures of terrorists in future in order to quell tensions.

      This is the road to hell.

    • fedupsoutherner
      Posted July 27, 2016 at 5:37 pm | Permalink

      Nice one Hope. Very observant of you. When is Amber going to do something useful??

  38. Lifelogic
    Posted July 27, 2016 at 11:37 am | Permalink

    Off topic and to show just how daft, absurd, damaging and incompetent governments can be. Today I received a statement of my daughters baby bond. The £500 Gordon Brown (electoral bribe perhaps) moronically taxed off parent then forced them to put it in a saving scheme for the new child until the child is 18 and they can spend it on university fees perhaps (just the youngest of my children get it though).

    The “expert” professional investors have finally made a positive return (in net terms anyway) the £500 has become £690.96 over 9 years. Had it be part of my investments (in property and other businesses) it would have at the very least doubled in real terms after tax over the 9 years.

    What on earth was Gordon thinking would be achieved by his moronic plan? It did not even help him in the elections, thank goodness. How much pointless admin, legal work and paper work did this absurd baby bond nonsense generate. All of which makes the county poorer and less competitive.

    • hefner
      Posted July 27, 2016 at 5:06 pm | Permalink

      Having “had” two grand children able to benefit from GB’s Child Trust, I did not follow the hint from the hospital to invest with so and so company and “put pressure” on the parents to choose a company I would have invested those myself. The result: one near doubling value in 10 years and the other going up 76% in eight.

      So it is easy to accuse the government, when one could have thought that a savvy grand/parent would have thought about a better solution.
      Funny how some are always criticising the Government and seem incapable to think for themselves.

  39. Newmania
    Posted July 27, 2016 at 11:47 am | Permalink

    …..To c ontinue with my ill-informed and disobliging invective …. when fuel duty was introduced Mr Lamont wanted to keep tax at 17.5 per cent ( it was only a defeated on a budget resolution ) it was eight per cent for several years . Nothing to do with the EU
    The tax nets about £4.8 bn to the exchequer which Mr Redwood is , as I understand it, proposing to cover with increased borrowing (?). As I have previously mentioned the sudden conversion of fiscal hawks such John to a policy of flinging quids out of helicopters in hopes of averting Brexit recession is one the few pleasures left in the blasted landscape of our tortured country.
    This cheap borrowing is a perverse and temporary consequence of a lack of confidence ( safe haven) .It would in my view make zero sense to increase our structural deficit by such a considerable sum by such irresponsible means. In general I find the willingness to acquire debts on behalf of the young unedifying .
    Fuel costs are currently low anyway due to ultra low oil prices but the affect of Brexit , is to increase them as the Pound is falling against the dollar. One dreads to think what will happen on the terrible day we press the final irrevocable button and climb aboard the Dark Ages Express.

    Reply we will cancel our contributions to the EU to pay for the tax cuts and spending increases, which will also improve our balance of payments. DO try and follow the plan.

    • fedupsoutherner
      Posted July 27, 2016 at 5:35 pm | Permalink

      Oh dear Newmania. Doom again?

    • Anonymous
      Posted July 27, 2016 at 5:53 pm | Permalink

      The Dark Ages Express is on it’s way here via Shengen.

      In my view it is – having been ignored time and again – why our people voted to leave the EU.

      There is nothing more unedifying than a middle aged professional – already securely on the housing ladder in a nice area – pulling up the ladder and leaving the young to overcrowding and the consequences of importing poverty in the form of lots of illiterate and pushy young men of fighting age.

      To the working man imported poverty feels exactly the same as capital flight. So he thought f*** it, I might as well vote to quit the EU.

      Brexit is your fault, Newmania. It is only right that your world should more closely resemble his, so stop moaning.

      In any case. A reduced economy might mean less immigration. In any case, I could never understand how our emission and consumption targets could be matched with our green commitments and power station closures.

      Why is never ending economic growth a good thing in a world of finite resources ?

      Time to wind down, Newmania. Whatever job it is you have you don’t have to do it. Simplify your life.

    • Ginty
      Posted July 28, 2016 at 5:34 am | Permalink

      Fear not, Newmania.

      We’re not leaving the EU. Mrs May is already making negotiations as complex and widespread as possible in order to unite our country and make everyone happy at the same time.

      She has promised not to trigger article 50 without Nicola and Martin’s say.

      So that’ll be sometime never when the button is pressed.

    • Mitchel
      Posted July 28, 2016 at 9:12 am | Permalink

      Actually,Newmania,historians now believe the Dark Ages were not really that dark at all.

    • Jack
      Posted July 28, 2016 at 4:24 pm | Permalink

      Governments are creators not borrowers. There is no economic need, in a floating exchange rate system, for the government to borrow back its own IOUs in order to “pay for” spending.

      Selling bonds, and paying interest on them, is a political choice. The ideal course of action for us would be to institute a permanent zero-rate policy at the BoE, therefore removing all concerns about “not being able to pay the interest on the national debt”, and then expand the fiscal deficit as needed to maintain full employment and maximum output.

      And no, a ZIRP does not mean high inflation, it’s actually the opposite. No more risk-free interest payments, people will have to move their currency into productive investments (which will yield substantial returns when we’re hitting 20% annual real GDP growth, mind you).

  40. John B
    Posted July 27, 2016 at 12:20 pm | Permalink

    “… its aim to put prosperity first, and to spread higher incomes and wealth more widely around the country, it needs to alter energy policy.”

    Socialism.

    How many tractors to produce?

    What the UK needs is a Conservative Government, but for that it would need a Conservative Party.

    • Ken Moore
      Posted July 27, 2016 at 4:21 pm | Permalink

      Socialism or Blairism …Unfortunately, the problem with socialism and Blairs combination of economic neoliberalism and social crusading is that it doesn’t work…

      Mrs May and most of the Conservative party are still stuck in a 1990’s time warp when Blair was popular and his policies considered ‘progressive’.

  41. acorn
    Posted July 27, 2016 at 1:39 pm | Permalink

    Once again, high UK electricity prices are nothing to do with the EU.

    “In spite of both supply and demand side factors, which pointed towards low electricity generation costs and subdued demand for power, implying low wholesale market prices, the UK remained one of the most expensive markets in the EU, reaching a price premium of 12 €/MWh in Q4 2015 and 16 €/MWh in Q1 2016 to France on quarterly average.

    In spite of the existence of permanent price premium over the continent, providing incentives to import electricity to the UK, the electricity interconnector with France seemed to reach saturation several occasions, as Figure 23 shows. This reflects the need of further upgrading electricity interconnections between the UK and continental Europe, as much cheaper source of power generation could assure good opportunities to import electricity if it is competitive vis-à-vis UK domestic electricity generation.”

    https://ec.europa.eu/energy/sites/ener/files/documents/quarterly_report_on_european_electricity_markets_q4_2015-q1_2016.pdf

    BTW. Someone has got to decide quickly, if the UK is staying in the EU ETS system and if ETS CO2 allowances will still have any value in the UK. Otherwise the UK will be buying electricity on the spot market if you can’t hedge what the carbon tax will be on a MWh.

    • hefner
      Posted July 27, 2016 at 5:21 pm | Permalink

      Figures 9, 10 and 37, 38 tell the whole story …

    • Mark
      Posted July 27, 2016 at 7:55 pm | Permalink

      In order for us to get electricity via interconnectors we have to pay more for it than it sells for in the market where it is generated. This is both to provide an incentive to sell it to us, and to cover the capital and operating costs of the interconnector. It is a way to guarantee our power prices are uncompetitive, as the reported premium illustrates.

      We should instead be investing in our own capacity based on the cheapest sources of supply for baseload and peaking requirements. Baseload can be capital intensive, but should be low cost on fuel and reliable (e.g. coal, nuclear). Peaking requirements need low capital cost, and excellent reliability and rapid ramp up capability, which is why gas is favoured, given our limited hydro capacity. Making room for renewables whenever they happen to produce just adds to costs.

      Osborne’s Carbon Floor Price was and is unhedgeable, and has done enormous damage to the UK power industry and to power prices. The EU ETS is entirely hedgeable, but it has proved largely unworkable, with prices collapsing as soon as there is oversupply. The real tragedy is that all this market manipulation is actually doing nothing to reduce global CO2 emissions at all – it is simply shifting them around the planet to places with higher emissions.

  42. Jack
    Posted July 27, 2016 at 4:16 pm | Permalink

    Because we don’t have a current account surplus to provide spending in the economy, the spending for GDP growth to occur must come from either government “borrowing”, or private borrowing.

    Right now private credit expansion is slowly coming back, but that’s not necessarily a good thing. True, it will provide the aggregate demand (spending) to sustain mild GDP growth, but it is not sustainable per se – especially when the government is reducing its budget deficit. We’re nearing the point at which the government deficit may not be able to sustain the private credit structure, a la 2008.

    So it would great if JR could convince the new Chancellor of the need to implement large and wide-ranging tax cuts, starting with VAT, and also increases in government spending. It’s true that 2.2% annual GDP growth is better than nothing, but we can do so much better. The real resources and productive capacity is there, they just need more demand in order to be put to use.

    • Ken Moore
      Posted July 27, 2016 at 4:59 pm | Permalink

      If there is one thing that British governments have been good at it is increasing spending. If spending was the answer then the economy would be very healthy by now. More spending is just going to tip the economy further into a spiral of higher interest payments and broaden the gulf between the real and financial economies.

      I see a real lack of productive capacity in value creating manufacturing sectors although there is no shortage of ‘value-recycling jobs’ such as waiters, coffee sellers and estate agents. Borrowing to stimulate this part of the economy is the economics of the Ponzi scheme..

      A better way is to help rebalance the economy by taxing more heavily income earned from property to subsidise the abolition of business rates.

    • Jack
      Posted July 27, 2016 at 5:05 pm | Permalink

      Our retail sales figures are nothing more than outright depressing: http://cdn.tradingeconomics.com/charts/united-kingdom-retail-sales-annual.png?s=gbrretailsalesyoy&v=201607271415n&d1=20060101&d2=20161231

      Whilst China has had 20 to 30% YoY retail sales over the last decade, simply because they kept their aggregate demand maximised with state bank lending, consumers in the UK have been crushed from austerity and a lack of an understanding of our monetary system by politicians and the government.

      Retail sales are a good way to gauge the economy’s performance, too, since ultimately GDP is just total spending / sales. Without spending, the output doesn’t get sold.

  43. Ken Moore
    Posted July 27, 2016 at 5:09 pm | Permalink

    JR – ‘A new economic policy – prosperity first’.

    I’m amused by the word ‘new’ in this context.

    JR must know there is nothing ‘new’ here that hasn’t been tried already…and failed.

    If trillions of printed and borrowed money and zero interest rates haven’t worked…maybe they never will and fresh thinking is needed…

    Instead of borrowing more money wouldn’t it be more sensible to scrap HS2? and with it all the misallocated capital that goes with the whole wretched scheme..

    Similarly lets scrap Trident and instead use perhaps a squadron of aircraft armed with H bombs which would provide an equal deterrent effect for a fraction of the cost).

  44. fedupsoutherner
    Posted July 27, 2016 at 5:32 pm | Permalink

    I often wonder how this country managed to fight 2 world wars. Obviously, politicians were able to make important decisions and get on with the job in hand for the good of the country. Today, it seems no decisions can be made without some loony group complaining about it and our politicians wringing their hands in despair. For God’s sake let’s get a grip on what is wrong with the country and do something positive. Let’s invoke article 50 and get on with that. We have Brazil practically pleading with us to trade along with many other countries. Tell the EU to take a run and jump and come back to us when they are ready to do business. Get the business of energy going too. The situation in Scotland is dire. Wind farm after wind farm is going up and destroying precious landscapes, wildlife and driving people mad with noise issues. Selling houses anyway near to windfarms is nigh impossible. We talk about a fair society but how is it fair that landowners are reaping in thousands a year while the little people have lost out big time? No compensation offered either. It is a disgrace. Scotland has had the lion’s share of handouts yet again. And yet still they moan. On average the total amount on a good day that wind has produced up here, even though they have more wind turbines than England is a mere 8%. I reckon the wind farms here have received almost as much money turned off as when they are working. The whole of the UK is paying for this through their bills. We need to get fracking. Democratic procedures regarding planning in Scotland is ignored. You can get over 600 objections to a planning application only for it to be granted and the wishes of the local people ignored. If this is the case then why not fracking??? Local councils need to be told that fracking is important to the national security of supply and would be good for our economy. Unlike wind it would provide 24 hour secure supply. It is necessary for a secure grid and to ensure we have 24/7 power during a cold winter. What is the point of paying for all this solar/wind when we have to fund the back up facilities all the time anyway? Running our gas/nuclear/coal fired power stations in this way is not economical and does nothing to reduce CO2 levels. Let get real please and start living like a prosperous nation instead of heading towards a 3rd world country.

  45. turboterrier
    Posted July 27, 2016 at 5:41 pm | Permalink

    Just stop subsidies and all other handouts for renewable energy and fossil fuel and let market forces win the day on price, efficiency and ability to supply.

    Total madness to expect power stations to operate on 25% capacity just because the sun is shining or the wind blowing.

    Mother Teresa can perform the miracle by throwing out the climate change act and all the madness that goes with it.

    For far too long the country’s energy policy has been dictated by the speculating companies who saw an easy pound when it was presented to them ably supported by politicians who fell hook,line, sinker, rod and reel for what they were selling who in turn plated on the greed of landowners

  46. gyges01
    Posted July 28, 2016 at 7:51 pm | Permalink

    What are the chances that the North East could see a re-opening of the Alcan manufacturing plant?

    http://www.thejournal.co.uk/business/business-news/alcan-future-threatened-euro-pollution-4490242

  47. Rhys Jaggar
    Posted July 31, 2016 at 11:52 am | Permalink

    There is a corollary to what you say: there must be prison sentences for London and the SE for criminal theft of prosperity earned and deserved by those living elsewhere.

    I know what I am talking about. Conservative Head Office was stealing everything I said and did like parasites unparalleled. So was the City of London, Tony Blair and Imperial College London.

    The day that the electronic thieves get their comeuppance is the day prosperity can be spread to all.

    Do you have the gumption to rid your party of people like that Mr Redwood??

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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