Author: johnredwood

I mourn the passing of Nigel Lawson. He gave great service and lifted the  UK economy   after the bruising experiences of the 1970 s. He showed that lower tax rates, more competition and nationalised industry reform boosts living standards and opportunities for the many.

In 1983 I was appointed Head of Margaret Thatcher’s Policy Unit. I pressed successfully to merge the Economic Adviser to the PM job in with being Head of the Policy Unit. Alan Walters had departed leaving a vacancy for Economic Adviser. As I advised that the main policy task was making sweeping changes to the UK’s wider economic policy and performance it would be good to unite these roles. It was also necessary in my view to change the way the Economic Adviser role was performed. Alan had allowed or encouraged himself to be part of the public story. He got himself involved in the crucial relationship of PM to Chancellor in a way which made it difficult for the Chancellor. Stories of public splits were not helpful to either principal.

I was positive about Nigel’s appointment as Chancellor. I liked the work he had done as Financial Secretary to the Treasury to establish a new economic policy framework. Control of state borrowing allied to money and credit restraint would provide the best backdrop for low inflation and growth. I thought he would be a tax cutter, as big reductions in personal and business income taxes were essential to end Labour’s brain drain sucking talent and investment out of the country. Privatisation and wider ownership were critical to economic progress. Nigel as Energy Secretary seemed sympathetic to such moves, which would help pay for the programme whilst curbing the deficit.

I explained to a nervous Treasury I would give my views only to the PM. In order to be involved in budget planning I agreed to all those papers being excluded from general Policy Unit consideration. Budget secrecy was taken very seriously then. I was delighted with the big reductions in tax rates, which as I hoped brought in more revenue not less. Margaret and Nigel liked the proposals on privatisation, where I recommended John Moore as a Treasury Minister to drive a government wide programme of reforms, sales and wider ownership. Inflation came down and growth improved.

It then became apparent to me that the Chancellor had changed his mind about his Medium Term Financial strategy and had moved to a personal belief that the UK should join the European Exchange Rate Mechanism instead. I warned the PM in private  why this would be a harmful and destabilising course. She did not want to believe Nigel would do that,  but eventually accepted the evidence. It was such a pity, as their joint enthusiasm for lower taxes, more growth and wider ownership was so successful. The move away from a UK domestic financial discipline to trying to harness to German discipline by proxy spoilt their later partnership in office. Ultimately through John Major’s insistence on joining it led to another boom bust and the large Conservative defeat of 1997. The period of shadowing the DM as the main policy guide had itself given the UK an inflationary boom, as it led directly to creating more money to try to keep the exchange rate down. Meanwhile the German cornerstone of the ERM was based on a low inflationary Germany using domestic money targets to keep their own prices down.

Nigel Lawson went on to make a further important contribution to modern politics through the Global Warming Foundation. He sought to spell out the economic realities and challenges on the road to net zero to remind us that the policy comes with a price tag that needs to be affordable and fitted into a cogent economic policy framework.

Today’s Treasury could learn a lot from Nigel’s success with big tax rate reductions, incentives for more self employment and small business and transformational policies to major industries. He will be long remembered for his big contribution to UK economic and industrial policy.

The government says it wants to promote growth. Growth is one of the Prime Minister’s five aims. The latest budget confirming high tax rises on business will not help pursue this aim. I will write a series of pieces over the weeks ahead containing proposals for regulatory and tax  change that could assist growth.

The car industry is under pressure from the wish of the government to ban the sales of new diesel and petrol cars from 2030. This is a bad idea which will  mean premature closure of petrol and diesel car and van making facilities here, with more car companies taking their investment into diesel, petrol and hybrid elsewhere where there is no such time limit on the sales of the products. This ban should be lifted.

The government thinks an early ban will deliver more investment in all electric vehicles. This is proving difficult to land, with the car industry wanting to see established battery making lines here first whilst those considering battery investment want orders from  car companies to make their big investment worthwhile.

They all need more evidence of the wish of many consumers to trade in old diesels and petrol vehicles for all battery models. I continue to meet many people who think the current electric cars have too short a range, are difficult to recharge and too expensive. Our generating and grid capacity is not up to most of us switching to electric vehicles.

The government needs to work with the industry to see what improvements can be made in the electric offerings to make them more attractive to more people. They need a more realistic timetable for expanding the grid and reliable power generation to service more electric cars. A 2030 ban is a  very bad idea.

John Redwood (Wokingham) (Con)
Who will pay for CCS as it does not generate any direct revenue from retail customers?

Graham Stuart (Minister of State for Energy Security and Net Zero)
To decarbonise industry, we will need CCS and hydrogen. We are socialising the funding requirements across the piece to ensure that we deliver what is necessary to meet our carbon targets, at the lowest possible cost to consumers. This year we are also consulting on measures to prevent carbon leakage, ensure that we do not drive UK industry abroad, which I know my right hon. Friend is concerned about, and instead maintain our competitiveness as we move towards net zero.

John Redwood (Wokingham) (Con)
What would be the saving were the Government to raise the age by one year to 68?

Mel Stride (Minister of State for Pensions)
That is a beautiful question because it is precise; it requires an answer that one cannot duck. I will write to my right hon. Friend with that information.

The Department for Transport has provided the following answer to your written parliamentary question (174163):

Question:
To ask the Secretary of State for Transport, what steps he is taking to promote the uptake of electric cars by Government departments.. (174163)

Tabled on: 27 March 2023

Answer:
Jesse Norman:

Decarbonising road transport is critical to delivering the UK’s net zero ambitions and the Government has an important leadership role to play in driving this transition.

As of September 2022, over 25% of the cars and vans in the central government fleet were ultra-low emission vehicles, delivering this target well ahead of the Government’s December 2022 deadline. The Government is now going even further and has committed to its car and van fleet being fully zero emission at the tailpipe by 31 December 2027. Departmental officials are working with colleagues from the Crown Commercial Service and Energy Saving Trust to provide other government departments with advice and guidance to support them to deliver this commitment.

The answer was submitted on 31 Mar 2023 at 10:36.

In the last year Brexit Britain’s exports soared by 24%

Rejoiners who want to put our country down may wail, but the facts are the facts.

CIBUK Article : https://cibuk.org/in-the-last-year-brexit-britains-exports-soared-by-24-percent/

CIBUK Twitter : https://twitter.com/CibukOrg/status/1642073673216532483

CIBUK Facebook : https://www.facebook.com/CIBUKOrg/posts/165405233078578

Facts4EU Article:: https://facts4eu.org/news/2023_apr_big_brexit_win_3

Facts4EU Twitter: https://twitter.com/Facts4euOrg/status/1642050714326257665?s=20

Facts4EU Facebook: https://www.facebook.com/Facts4EU/posts/pfbid0241CwdiioGoteXX6Z7tJBjJgCUZGk965zKymJ5YVx3AFuYLbpiXzX82oikGmyi3gTl

Great news that last year UK trade surged and inward investment reached a new record. The BBC and the Remain campaigners push out errant forecasts and strange models to suggest post Brexit the UK will do badly, ignoring the reality of trade and overseas investment rising. Why do they always want to run the UK down? Why do they play down the significance of so much investment coming from outside the EU despite their dogma that our trade and prosperity depend on the EU? The USA is by far and away our biggest export market and we are doing well there. Services are particularly strong. Now we are out of the EU we are negotiating trade deals like the TPP one which include services, something the EU did not include in most of their deals.

Governments and all the UK parties in Parliament want to cut UK CO 2 output. I have been arguing against some the damaging self defeating policies they propose to do this. Stopping UK gas and oil extraction in order to import oil and gas increases world CO 2 as well as cutting our jobs and tax revenues. So does stopping food growing here so we import more. Blocking roads and deliberately creating traffic congestion boosts CO 2 from delayed vehicles. Today I will give my top picks on popular policies Ministers could follow to cut UK CO 2.

1. Reduce legal and illegal migration. Every extra person has a carbon footprint, and needs a  home and public service provision that also generate CO 2

2. Tell the public sector to substitute on line meetings for foreign travel to international meetings in most cases.

3. Install solar panels on most public sector roofs

4. Replace public sector gas central heating systems with heat pumps to create a market for them, which should then drive down prices and improve effectiveness of these unpopular products.

5. Step up bypass and better junction construction on roads to improve average fuel economy on journeys and remove more traffic from congested urban areas

6. Cancel work beyond current firm commitments on  HS2. It is very carbon intensive.

Windfall taxes make the things taxed dearer. They reduce investment and output in the items taxed, cutting supply.

We were told that the very high prices of gas and oil that resulted from Putin’s invasion of Ukraine and from the West’s decision to stop buying Russian energy were generating windfall profits, both by the fossil fuel companies and by the renewable generators whose prices of electricity reflected the gas price. Gas remains the largest fuel source used in UK generation.

It is true there were such windfall profits as the gas price soared. Today the wholesale gas price is 85% lower than the peak it reached at the worst point after the outbreak of war. The oil price is also down by a third from Ukraine highs. If you impose a windfall tax based on a one off shift in prices that gives companies a bonus, shouldn’t you remove the tax when that price change disappears? It was a weakness of the windfall tax that it did not describe the  nature of the windfall or seek to fairly reflect its size and duration going forward.

Few will be sympathetic to large energy companies who have recently been making large profits. However, if the UK perseveres with a level of taxation that is materially higher than elsewhere for energy, and demonstrates an unwillingness to remove windfall taxes after the windfall has gone, we will find it more difficult to attract the investment and jobs we need to produce more domestic energy. Customers end up paying the higher taxes and business will migrate to lower taxed countries.

The government is pressing ahead with carbon capture and storage projects. When I asked on Thursday who was paying I think the answer was taxpayers, though the Minister delphically said they will “socialise” the costs.

Normally when a business makes an investment customers pay for the output from the facility being installed. In this case the output is storing a lot of CO2, where the customer seems to be the state. It raises the question whose CO2 is it storing? Is that a cost of whatever caused the extra CO 2 in the first place? Some of it will indeed be CO 2 generated by the state itself, with all those heating systems in public sector offices and all that travel of public officials.

Overall the UK government needs to review just how much extra cost it is imposing through windfall taxes, carbon taxes and now these carbon capture schemes. It needs to get off the import best model. Current carbon accounting based on national boundaries still seems to encourage Ministers and officials to close down or drive out carbon dioxide generating activities in the UK, only to import the goods needed from abroad who can then account for the CO 2 in their national figures. This makes  no sense for controlling world CO 2 and is damaging to the UK economy and business.

The present international carbon accounting could have been designed for April 1st.