Author: johnredwood

The governing elites are usually unpopular. They may have to make unpopular decisions. There will always be some who think they tax too much and others who think they give away too little.

The current governing elites of the EU are particularly unpopular. So are those officials, lawyers and other senior people in UK institutions that have a similar world view to their EU friends and opposite numbers. One of the reasons is the overarching bossiness, the we know best attitudes they strike on so many crucial matters.

There is first the discourse. They wish to talk about the road to  net zero, the need to be generous to migrants, the need to follow international Agreements and Treaties, the need to suppress or defeat populist movements. Many in the public want their concerns to  be heard. How do I get a better job? How do I pay the energy bills?  When can I afford a home of my own? Am I allowed to fly abroad? Can I use my car or van to get around without more charges and barriers?

The refusal of the elites to take  many of the popular issues seriously adds to the tensions. The populists cry humbug when they see elite players flying round the world to green conferences, staying at air conditioned hotels and ordering the best meat on the menu whilst telling the rest of us to do none of the above. The elites shout back that the people must understand the priority of cutting carbon dioxide , the need to accept dearer energy and more fossil fuel taxes to get there. They explain their carefully contrived legal framework which turns out to thwart populist ideas of how to improve more voters lives.

As a result of this process most of the major governing and opposition parties in the EU of the late last century have been destroyed or have shrunk in the face of populist movements of the right and left. The splintering of their votes reveals an inner unhappiness by electors.

 

 

Some large companies like banks seem intent on getting as out of touch with many customers as nationalised concerns do.  Just as the railway faces a hail of criticism for wanting to close its ticket offices, so the banks are intensifying their closure of branches.

The railways say they will redeploy the staff to be generally helpful around the station. They can be very helpful in a ticket and information office where they have a chair to sit on, computer access to all the details of timetables, travel options and fares and online knowledge of the state of play on the trains at or coming to their station. A staff member on the move around the platform has less easy access to the information, and may be more difficult to find for a worried traveller.

The banks do not promise to redeploy their staff. They want us all to spend our time wrestling with their on line systems which have to balance difficulty of access to make them secure with feasibility of access so we can move our money around. Security is much less of an issue if you go regularly to your local branch to bank, as they get to know you. Your face is your identity. Faced with the narrow systems of the computer you have to choose answers the computer has been taught rather than being able to describe what you want to do and get help from the bank. For commonplace transactions this usually works, but there are often glitches in the software. My bank’s  computer often fails to recognise people I wish to pay from past payments so you have to go through the new payment process each time.7

Government is now requiring banks to ensure we can all have access to cash from nearby machines. This is a minimal response to the retreat of the banks from most personal contact with their customers. Whilst most of us conduct most of our transactions electronically by card and by bank transfer there remain a number of needs for cash. Cash is a reliable resort when machines or the internet goes down. Cash is often quicker and more sensible for smaller transactions. You can always offer  cash even if your phone has run out of battery or the internet coverage has gone down or outdoors if the sun is shining so you cannot easily read a phone screen. No-one should be made to use electronic money if they do not want to.

It is a strange modern wish of some large institutions to want to distance themselves from customers, to cut themselves off from the flow of information and social contact which personal service brings. It breeds resentment amongst customers, sometimes  causes greater costs and delays and allows some to claim there is a big plot to make us go cashless so the government will be more in charge of our lives.

 

One of the world’s largest car makers has been speculating on the future of the car.

They see the future as all electric. They do not tackle the issues of range, charger availability, charge  time, lack of renewable electricity to recharge , CO 2 generated in creating the metals, minerals needed and making the batteries or the issues with scrapping.

They do see an evolution to more automated vehicles. They wish to excite future customers with more digital  displays and capabilities. They anticipate moving away from the old ownership model to more varied patterns.They expect  there to be car pools and systems to summons a vehicle when you need one. They anticipate much more use of each vehicle as a result.

There is also a parallel vision of owners of EVs seeing them as mobile batteries, using them to supplement the grid and then finding some time when they can recharge them.

The two interesting features of the commentary were the absence of  any research into what we the potential customers might want, and the lack of any analysis of what might be possible in terms of access to renewable power and chargers. There was no carbon accounting, just an overall  assumption an  electric vehicle entails less CO 2 than a petrol one. That would depend on where the electrical  power came from, how many miles the vehicles were to do, and how much CO 2 it took to produce the battery of the EV.

These companies are becoming very  detached from customers and practicalities. They have also lost a lot of volume with petrol and diesel sales down by much more than electric sales are up.  What is your vision of the future car you want?

 

As someone who embraced the coming of the first mobile phones, adopted the iPad and welcomed the scope the web offered as with this blog I am in principle happy with the idea of a self driving car that would leave me free to do other things on a journey.

As a legislator I will need some persuading we have reached the development point with self drive cars that is acceptable and will fit on our roads alongside cars with human drivers.

So far I have found the addition of extra computing power to my current car far from smart. It is often annoying, slows down using the vehicle and can conflict with your safe judgements as a driver.

In the morning the computer display says Good Morning. There is no point in saying Good Morning back, and it delays being able to tell the sat nav where I am going which needs to be done before driving off . I drive to a local shop, leave the car for 5 minutes and then it wishes me Good Morning all over again with no sense of irony!

You are driving along on a sunny day -remember those?- and go briefly into shade. You can see perfectly  well. The car puts the lights on. Why? I didn’t tell it to.

You are in heavy London traffic on one of those junctions where your turn gets a few seconds on green. You follow the car ahead closely but safely at a slow speed to get round before red and the car screams at you.

You choose to stay in third gear because you foresee the likely need to stop at lights a few hundred yards ahead. The car tells you to change to a higher gear in blissful ignorance that you will need to slow down.

The sat nav tells you you will arrive in Westminster at a stated time. You estimate it will take a quarter an hour longer because the last three miles are always impossible thanks to the anti motorist street layouts, lights and road blocks. The sat nav is nearly always wrong and never learns from the repeat errors.

The other day the car told me I needed to download additional software. I complied when the car was parked overnight. In the morning it needed more time to complete. It had for no good reason hidden icons I needed to access easily, so I had to waste more time before setting off trying to rescue items that would be useful.

It has a fuel use/ environment programme. However you drive the vehicle the accelerator rating plunges from 5.0 to 1.0 as soon as you get the car moving. The brake and speed ratings make more sense and help give you better consumption figures for restrained  driving.

Car producers need to keep in touch with what buyers want. Not all technology is good. Touch screens in cars are difficult to read when the sun shines on them and when they get finger marked. They do not always respond to touch. It is dangerous to look at them  when you need to be very alert watching everything going on on the road around you. It is very annoying when they do not respond to first touch. It is therefore important the touch screen  does not contain controls you need when moving. Switches and knobs on older cars always work first time  and do not require you to look away from the road ahead.

 

The leading advocates for going faster down the road to net zero assure us it will be good for growth. They tell us about all the new jobs that will be created to make batteries, wind turbines, solar panels, electric cars and heat pumps. They stress how much investment must be put into energy transition.

All this is true, but we need to know how many of these jobs are likely to come to the Uk and how many of these items will be imported. So far the West has let China build a huge lead in making batteries, securing the supplies of minerals for battery making, in wind turbines and electric cars. How will we get better at doing these things to create the well,paid jobs here?

We need to know how we will replace all the large tax revenues that come from taxing extraction of our own oil and gas, from using petrol and diesel in our vehicles, and taxes on domestic gas? What taxes need to be imposed on the electrical alternatives?

We need to know how much capital has to be written off prematurely as we close car factories, petrol stations, refineries and oil fields? We need to know how much public subsidy will be available to compete with the US and the EU in attracting green investment and getting many reluctant consumers to switch transport and  heating systems.

A proper costed programme with options and assessment of cost benefits would make for better decisions and more popular buy in to the programme.

There would also need to be honest assessments of which measures did serve to lower world CO 2 rather than just diverting it abroad and making us import dependent.

Those who campaign most strongly to reduce CO 2 and other greenhouse gases always want to the UK to do more but are usually quiet about the countries that produce most and are increasing their output. The UK has halved its output per head of CO 2 since 1990 but is given no credit for this by its green critics, who will never be appeased.

Using the figures set out in the EU 2022 Report on each country, the world’s big five producers of CO 2 are China, the USA, the EU, India and Russia.  Three of these led by China are still increasing their output. They account for almost two thirds of world emissions.

Total CO 2 output 2021

China 12,466 m tonnes

USA   4,752 m tonnes

EU 2,774 m tonnes

India   2,648 m tonnes

Russia 1,942 m tonnes.

World 37.8 bn

In the next grouping down there are Japan, Iran,  South Korea and Saudi Arabia, all above  500 m tonnes.

If we look at per capita CO 2 output the UAE at 20 tonnes per person a year and Saudi at 16.6 are high, reflecting their output of oil. China, the Netherlands, Poland, Germany and Japan are all around 8 tonnes per head, the USA is at 14 and South Korea at 12. The UK is now down at 4.95.

Any analysis of these figures based on  the  wish to get the total down would mainly direct attention to the big five as they are so dominant. China in particular is a major part of the problem. China’s growth in CO 2 each year typically exceeds the UK total output.! If you also wish to take into account fairness issues attention should turn to CO 2 per head, where taking the larger countries with high figures down to the UK level would enable the world to hit the green targets.

I appreciate some readers do not wish to see CO 2 reduction pursued as a main policy. I am accepting the fact that all the main world governments do wish to limit greenhouse gases and have baked this into their global and  national policies. They should study the figures more to see which countries produce most , and they should question the advice more to avoid adopting products and policies which fail to cut world CO 2 in  the way they hope. Only when China, India and Russia curb their output will the world have a chance to go to net zero. Why don’t the campaigners concentrate more on that challenge?

 

The very clear pledge to stop the small boats should unite the nation. Sone of the methods to stop them can also do so. Disagreement comes between those who want to stop the illegals from gaining entry in due course, and those who think many of them are asylum seekers who should be flagged through and treated well.  This too is more a disagreement about who the illegal travellers are than about what should happen to them. Most agree if someone is fleeing violence they deserve to find a safe haven. Most agree if a rich young economic migrant buys a place on a boat with a view to getting rights to live and work in the UK when the law does not allow they should be denied access.

I have never thought there is a single measure government can take the stop the boats. There are various actions that need to be intensified.

1. There needs to be more action against the businesses that provide the boats and run the boat services. These are all illegal unlicensed boat services breaking French/Dutch/Belgian/German and EU law over safety at sea. They doubtless fail to pay taxes, fail to file accounts and may be money laundering.They are endangering people’s lives. You would have thought the continental authorities would see the need to enforce these laws. If they will not the UK has to do so. The UK needs to get better supervision of French beaches launching these services from its French Agreement and for the money it sends the French government to do this. It must be obvious to anyone policing a beach in France that these overloaded boats about to depart are not licensed local trips.

2. There needs to be more success in prompt processing of applications for asylum. The aim should not be to allow or encourage a high rate of approval of asylum grants just to settle cases easily but an honest assessment. The UK judges far more illegal arrivals from normally safe countries to be genuine asylum cases than other European countries do. This acts as a pull factor for more to come.

3. Those who are genuine asylum seekers should apply under one of the many routes of legal entry . Their cases should be determined in reasonable time so people can settle and get a job as quickly as possible.

4. The  government needs to review what it offers illegal arrivals in the UK, comparing it with how they are treated in comparable countries like France. If we are more generous then we will attract more.

5. The government does need to sort out where it can send illegals to when their cases have been determined. This may well need strengthening the law in the way I have set out.

 

 

The apparent cost of UK debt interest has shot up in the last two years. Some of this is the result of the state continuing to borrow a lot more on top of a large established debt. Some of it is the extra cost of the new borrowing now interest rates have gone up. These issues need addressing by a mixture of more revenue from faster growth and less spending on various programmes as often outlined here.

There are however other large elements in the interest bubble that depend on the accounting conventions and the strange decisions made about bond purchases and sales by the Bank and Treasury. The index linked debt entails paying cash interest payments as with  normal government bonds and these are properly annual expenditure. There is then the need to repay the inflated value of the bonds on redemption, where there is no cash outflow until the date of repayment. In practice the government just borrows the inflated value back again without ever having to pay out of running revenues. This should be a contingent capital liability.

The large amount of gilts held by the Bank of England are no longer a debt of the state to the private sector but a debt to itself. Here the government indemnifies the Bank against losses, so the Treasury is currently incurring losses it has to make good every time the Bank sells one of these bonds at a large loss in the market. These costs could be cut if the Bank stopped selling the bonds, waiting instead for their repayment when the losses would be smaller.

The Treasury also pays the Bank for running losses. The Bank pays out more interest to commercial banks on the deposits they hold with it, than it gets in interest on all the bonds it holds. It deliberately bought these bonds at very high prices offering very low income, making this problem worse. The OBR reckons  every increase in the Bank’s bank rate increases government interest costs by £10.8bn.

The European Central Bank, faced with similar problems of large losses on bond capital values sells fewer of them than the Bank of England. Facing running losses, the ECB has recently announced that from September commercial banks will not receive any interest on the reserve deposits they have to place with the ECB, eliminating much of the loss on holding low income yielding bonds.

The UK government needs to  get Treasury and Bank here to review its current practice with a  view to getting material reductions in the apparent costs of debt interest. That would give the Treasury more flexibility to set out a growth strategy to start growing the revenues faster. This is one occasion when copying an EU idea could help.