Author: johnredwood

The UK needs more self employed people. It needs more self employed people who can go on to employ others and to set up small businesses. More self employment  brings more choice, more innovation., more local service . Out of a swelling host of self employed more larger businesses will emerge when someone’s idea and dedication to service takes off.

The covid lockdowns damaged a lot of small businesses and hit many self employed hard. An older  generation of self employed took a look at early retirement and some went for it, frustrated by the bans on their activities and the limitations placed on their customers by covid rules. Meanwhile changes to the rules of IR 35 in 2017 and 2021 made it more difficult for some to set up as self employed or to maintain that status even though they were genuinely on their own and searching for a range of customers and clients.

The government as it ponders how to encourage more people back into work at a time of more jobs than applicants should regard promotion of self employment as part of the answer. It should revisit tax rules to make sure they do not penalise those who are  independent and not enjoying employee benefits from a single “client” whilst in practise just working for one company. Some setting up in business may well start with just one client or customer, but are open for others and trying to win others. They do not enjoy employee rights with their first customer, but are desperate to diversity their customer base.

I would welcome an update from the government on their response to the public sector strikes.

At the beginning the line was there was no point in talks between Ministers and staff where they are covered by a Pay Review body. The government had met this year’s recommendations in full and would now concentrate on next year’s evidence to the Pay Review bodies, as should the Unions. In the case of the railways the Unions should negotiate with management, not with Ministers, whether in Network  Rail or the private companies.

Then Ministers shifted to saying they would talk about pay and conditions more generally, though not for the current year, and would attend some of the rail talks.

More recently there have been briefings suggesting backdated pay might be included in next year’s settlement, with speculation for health over a one off cost of living payment this year.

Ministers should start by recognising the different background and issues in the different activities. The railway is hopelessly short of fare paying passengers to meet its current high costs. Government needs to get the extraordinary high subsidy levels of the covid period down. The challenge should be to the industry to award higher pay based on improved working practises and on selling more tickets.

Health is different. There is a bursting order book  and many thousands of unfilled vacancies. There are problems retaining existing  staff including some higher paid doctors. There are also low paid staff who are squeezed by the sharp rises in food and energy prices.

The Health service needs its promised workforce plan to secure enough staff overall, to ensure appropriate grading and pay bands, and to meet reasonable employee expectations about living with high inflation. If the PM and Treasury are against additional money for NHS budgets then the cost of medical staff pay has to be met from other savings within the large health budget.

 

I do not get invited to Davos. Reading about what the guests say and do, I can hear all the same things in the Commons from Labour, The Lib Dems and SNP. There is nothing secret in the Davos remedies. Those who get reported at Davos tell us what most western governments and political parties are already saying. The  business people who go want to win and keep government business.

Their main preoccupation is climate change. They regard this as the biggest task facing mankind, as they think man made CO 2 is the only driver of climate change and will transport  us to too warm a world. They wish to transform what we eat, how we heat, how and if we travel, how business produces things by ending the use of fossil fuels. They still have not worked out what mixture  to go for in green hydrogen, or renewable electricity with batteries, or restricted use of heating and travel. They are regularly criticised for failing to lead by example as they fly around in private jets, ride in chauffeured cars and stay in air conditioned hotels.

They dress this up as good for green jobs, without answering questions about how much this huge transition will cost, how much capital in present energy and industry will need to be written off and how many jobs will be lost as factories, mines, oil and gas wells and traditional processes are closed.

They also favour open borders and free movement of people. They speak of diversity and tolerance, though they are often intolerant of different opinions to their own. They like every type of diversity save diversity of thought.

The disappointment about Davos is twofold. They do not invite people who will challenge the governing consensus. They fail to engage with the important difficult questions like Who and what caused the inflation? How can we boost real incomes?  Why did President Biden deliver Afghanistan to the Taliban? How do we stop Russia blowing up Ukrainian cities?

The world has too many globe trotting conferences to repeat the doctrines and policies which have failed. It needs some new thinking.

In the cold snap we are experiencing demand for electricity has risen as you would expect. There has been some wind, but we have needed to use coal fired power, all our gas availability and the wood burning biomass  stations. Typically the fossil fuel fired generators have been supplying well over half, with renewables back down to around a quarter.

This cold snap has reminded us it is not just on windless days we have a problem. Because renewable power often is well below theoretical capacity, and because we are generally short of power when demand is high, we  need all the fossil fuel power we can get.

Those who plan a rapid transition to net zero need to recognise that this is the starting position. Were the public to adopt electric heating and electric vehicles in the way the net zero plans require we would need a huge increase in generating capacity to meet all the extra demand. At the moment the bulk of our transport energy requirements are met from diesel, aviation spirit  and petrol and the bulk of our home heating and industrial process is provided by gas.

Before we can expect wholesale public conversion to electric vehicles and heating we need reassurance that the large increase in renewable power generation and the accompanying big increase in the grid capacity and street cable  networks has been put in to meet  all the extra demand that will create.

Tax rises usually do damage. They deter investment, destroy jobs, prevent people spending money, cut business turnover, push rich people out of the country. They are favoured by those who want greater equality from greater misery. Get rid of all the rich foreigners and we will have more equal society, but we will also lose their investment money to create jobs and say good bye to  their spending power diverted to competing countries.

The  November Financial Statement put up taxes substantially. It also raised the amount we have to borrow massively by 75% compared to the March OBR forecast. This was the direct result not just of the energy cost increases but also the result of the slower growth they had to factor in. High taxes, low growth, excessive borrowing come from each other. Labour proved that by their more extreme  excesses on tax in the 1970s when we had huge deficits and a so called brain drain as talent poured out of the country.  The government  need to grasp that the best way to get the deficit down is to grow faster. To grow faster we need lower tax rates, not higher. We need enough tax incentive for rich people and companies to come here, invest here, spend here. We need to allow more home talent to be self employed, to set up small businesses, to grow larger businesses. Why is one of the UK’s greatest entrepreneurs Sir James Dyson having to decry government policy towards jobs and investment?

I will be producing some pieces on how we can can have affordable tax cuts in the March budget. They need to be affordable costed growth promoting tax cuts that help increase the number of successful entrepreneurs, attract foreign capital and stimulate investment in the extra capacities we need. If the government is serious about getting inflation down it needs to promote and facilitate more domestic energy supply, more home grown food, ,more fish landed in the UK, more trees growth for timber here , more steel and ceramics output and the rest that we need to curb imports and increase supply.

Yesterday the retained EU law Bill completed its Commons stages. The Opposition put up a barrage of absurd criticisms and false scares instead of debating the real issues. The government endlessly  made clear it had no plans to revoke employment rights and environmental protections. It argued that the UK had often pioneered these laws  before joining the EEC/EU, and had often gone beyond the minimum standards required by Brussels.

The main advance provided by the legislation is to take all retained EU law which was transferred en bloc on leaving as a separate category of UK law and to make it pure UK law through this measure. Once this is done the law falls to be interpreted by UK courts without reference to ECJ past judgements, and is in a form which allows amendment, improvement or repeal as Ministers and Parliament see fit. Ministers will not be able to do any of this without further Parliamentary processes. In practice any substantial change to a body of law  is likely to need primary legislation in the UK Parliament.

The worry about the Bill should not  be the wrong forecast that it will lead to wholesale cancellation of retained EU laws, but that it may not result in a thorough enough review of all this legislation followed by sensible amendment and repeal. We need a better debate on which of the many laws we opposed unsuccessfully at the time of their introduction should be revisited.

I wish to see early use of our powers to cancel VAT on energy, and to permanently remove it from green products. I wish to see greater use of our new powers in agriculture to promote more UK food production. I wish to see the Ports Directive repealed, the droit du suite removed to assist our art market, an improved Data Protection regime, strengthened controls against ultra large foreign trawlers in our fishing grounds, pro science rules to foster UK work in medical and pharmaceutical research, the suspension of emissions trading which is penalising our energy intensive industries at a time of high energy prices  and strengthened policing of our borders amongst others.

I look forward to the government’s list and would be interested in your thoughts on improving the inherited law base.

There is considerable discussion and much misinformed commentary on a possible EU/UK deal on this outstanding disagreement.

The Protocol itself was an agreement to disagree, a temporary holding position pending the full Trade and Co-operation Agreement between the UK and EU. Then there was the failure to resolve the outstanding issues even at that later stage. It left unclear the interactions of EU and UK law and of the respective internal markets.

The Protocol does make clear the primacy of the Good Friday Agreement, which the opening of the Protocol says “must be protected in all its parts.” Yet the Protocol now is the main cause of dissent, preventing the resumption of devolved government and cross community working which lies at the heart of the Good Friday Agreement. The Protocol does not enjoy the consent of the Unionist community, yet the Good Friday Agreement requires the consent of both communities to important matters covered by the Protocol. Most people of good will want the Good Friday Agreement to continue to provide a secure future for NI, and are worried by the current impasse over attendance at the Stormont Assembly.

The Protocol states support for the “shared aim of avoiding controls at the ports and airports of NI to the extent possible in accordance with applicable legislation” . It is to have regard to “the importance of maintaining the integral place of NI in the UK’s internal market”. Article 1 “respects the essential state functions and territorial integrity of the UK”. NI is recognised as part of the customs territory of the UK. Article 6 is dedicated to the protection of the UK single market.

The truth is the EU negotiating mandate does not allow a solution, because it violates these crucial features of the Protocol and does not respect the legitimate concerns of the Unionist community. So far we read the UK may share more of our trade data with the EU concerning internal trade within the UK, with no reciprocation. We hear the UK is considering border control points at ports and airports in violation of the Protocol to avoid checks on internal UK trade into NI. None of this makes any sense, as it will annoy the Unionist community more.

Those wishing to help resolve this need to understand these simple points. Nothing can work in NI without the consent of both communities. The Protocol does not have Unionist consent. It is not just a matter of trade issues. The Unionist Community does not wish to be subjected to EU law with no rights to reject or amend it. The EU and UK should not seek to force a solution on NI that one community rejects.

The UK has been very generous in seeking to meet the legitimate concern of the EU, namely the protection of their single market. The UK could secure this for them by the method of UK legislating to say it would be an offence for anyone in NI to seek to export into the EU products that do not meet EU laws and regulations. There is no case to justify barriers to GB to NI trade, nor the imposition of EU laws on NI now the UK has left the EU. Of course the UK should supply all data concerning exports to the EU that the EU wishes to see. The checks and controls on exports to the EU need not be made at the border but can  be made at the farm, factory or warehouse from which the consignment is despatched.

Article 13.8 envisages the amendment or ending of this  Agreement. Article 16 allows either side to take unilateral remedial action in a wide range of problem circumstances, and seeks to outlaw trade diversion which imposing barriers on internal GB/NI trade can create.

John Redwood
(Wokingham) (Con):
Could the Secretary of State give us a little more indication of how he will consult on and agree minimum standards in the railway industry?

Grant Shapps:

I will set out in a bit more detail the way in which the legislation will work in a while, but, briefly speaking, secondary legislation by regulation will be used in each individual sector to come to the right balance. I will explain that in more detail, if my right hon. Friend is patient. I will give way in just a moment. I have already taken more interventions from Opposition Members than from Government Members. I think it is true to say that there comes a time when we cannot let such a situation continue. That is why we need minimum safety and service levels to keep livelihoods and lives safe. It is frankly irresponsible, and even surprising, for the Opposition to suggest otherwise.

 

 

Glad to report we have made some progress in keeping the lights on. Intervention has secured the capacity cited below to bring into use when there is insufficient wind and solar available. This amounts to around a third of necessary output on a cold busy day and to around half of other times:

 

The Department for Business, Energy and Industrial Strategy has provided the following answer to your written parliamentary question (117398):

Question:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what is the maximum electricity output from all coal and biomass generating plants in the UK that would be able to operate if needed. (117398)

Tabled on: 06 January 2023

Answer:
Graham Stuart:

As of the end of September 2022, the installed capacity of coal and bioenergy plants in the UK totalled 14.1 GW of electrical power. This comprised 5.9 GW for coal-fired plants (Digest of UK Energy Statistics, DUKES 2022, Table 5.11) and 8.1 GW for bioenergy plants (Energy Trends, December 2022, Table 6.1). The latter comprises 4.7 GW for solid (animal and plant) biomass and 3.4 GW for other bioenergy.

The answer was submitted on 16 Jan 2023 at 14:57.

There is a disjointed contradiction at the heart of UK politics. The major parties claim to believe in the supremacy of Parliament. In Commons exchanges Opposition parties hold the government to blame for everything that happens in the public sector, and for much in the private on grounds they could have regulated it. Ministers rarely deny collective responsibility. 

 

Yet the major parties this century have also created and empowered more and more so called independent bodies, arguing that panels and boards of independent  experts should be much better at deciding things and at spending tax money than politicians without specialist knowledge and with public opinion to please or appease. The independent bodies who often get things wrong, make mistakes and annoy people usually escape blame and shelter behind the Minister who was not allowed to interfere with the mistakes when  they were making them. 

 

One of the most prominent examples of this confusion is the Bank of England. Most MPs believe Gordon Brown made it independent. Most believe the Bank has one overriding aim, to keep inflation  down. This is embodied in one simple and memorable target to keep inflation at 2%. Recently inflation hit 11%, more than five times target and more than five times the Bank’s forecast a year or so earlier. Opposition politicians blame the government for the inflation. The government blames the Russian invasion of Ukraine, glossing over inflation already at 5.5% before the tanks rolled. No one seems to blame the Bank that owns the target, sets interest rates, and printed £895 bn of extra money which must have had some impact. 

 

Take the Environment Agency. It is charged with many tasks which include both keeping us free from flooding and ensuring we have enough water. Some years ago it allowed systems to keep the Somerset levels dry to silt up with fewer working pumps. The inevitable flooding took place. Ministers  had to intervene to get some order restored. The Agency was expressing a political preference for salt marsh over farms which did not reflect tradition or local residents needs.

 

The reassuring truth is we are still sufficiently a democracy so when an independent  body annoys enough people or makes a big enough mistake politicians do usually intervene. They impose new measures or new men and women on the agency or change the way the whole thing is done. The frustration is the need to often go through a long period when a quango is visibly failing pretending not to notice, or blaming someone else with Opposition and Ministers united in the view politicians  should not interfere. 

 

The reason our traditional constitutional theory gave power to Ministers was twofold. Often it needs a common sense decision taker to sift the professional advice, challenge the experts and decide what to follow. It also does need a specialist at what the public will accept and at what the public wants, which is what good politicians know. 

 

Today the NHS is at the centre of political rows. It is ironic it is so, as both main parties believe in the NHS, both support its values, both give more money to it, both want the waiting lists down. The rows are mainly about results. Sometime ago Parliament set up NHS England with its own CEO , Board and well paid senior executives. All agreed the politicians should stay out of running the  NHS. So who is to blame for the current high waiting lists for non urgent assessment and operations, poor labour relations, the shortage of beds  and long waits for urgent treatment? The Opposition will blame Ministers and Ministers blame the epidemic, the unusually high seasonal pressures and global trends. Few ask whether the executives could have spent money better, raised staff morale, used considerable powers over grading, promotions and increments to look after staff better. The quangos seem untouchable. 

 

 

If the UK wants to persist with its model of independent bodies it needs to make their CEOs, Chairmen and Governors more directly accountable. Their tenure and remuneration should vary depending on performance. Their responsibilities need to be more tightly defined. If Ministers have to run these things  that is probably best done by taking them back into direct departmental control.

 

Jerome Powell the Head of the Fed, America’s Central Bank, recently argued strongly for narrow limits being placed on how much independent power a body like the Fed should have. He sees the political imperative to keep main policies under democratic control through the Congress. He said the Fed should not be set aims to  promote the net zero journey or other social objectives, as these are contentious matters that need political judgement and leadership. The Fed should stick to its economic objectives which are cross party and relate to the direct tools and expertise the body has. He is very conscious that the Fed has to earn the right to have such powers by doing a good job and avoiding straying into more disputed policy areas.

 

This is all good advice. It is time for the UK to review how much power these bodies wield, and to assess how well they have performed. Ministers who fail to do this stand in danger of taking the blame for the errors they have not themselves committed.