Author: johnredwood

Leading governments are as expected coming up with tougher targets to reduce carbon dioxide output, and are accepting the discipline of setting shorter term intermediate targets on the way to net zero by 2050. This week the German Green party moved in to the lead in the polls for the September 2021 Federal election. They have  pledged to increase Germany’s target of a 55% cut in CO2 by 2030 to a 70% cut. To achieve this they say they want to phase out all new internal combustion engine vehicles  and stop all coal use by 2030. President Biden is talking of halving 2005 levels of CO2 output  by 2030 in a major reversal of President Trump’s cheap energy policy based on domestic oil, gas and coal.

The question to ask  is how will these targets be hit without major changes of consumer behaviour?  How will they encourage or incentivise people to change their gas boilers and scrap their diesel and petrol cars? Germany is still reliant on coal and imported Russian gas for industry and homes. Why put in another gas pipeline from Russia  if this all has to be displaced? The German motor industry is trying to develop and display electric cars to replace its current successful  model ranges, but so far there is  no sign of a mass surge in demand on the scale needed given issues over prices, battery life and charge times. Governments are now talking about green hydrogen alternatives to battery electric travel  and mains electric heating, but the products based on it are not yet available to purchase. More uncertainty about what technology will prevail puts [people off early adoption.

These carbon warrior governments need to work with the private sector to decide what is feasible. They need to understand this transformation can only go at the fast pace they now want if the cars, heating systems, diets and the other things they want to change appear as products people want to buy at prices they can afford. There has been no need for government to push the mobile phone revolution. Most people wanted one and most embraced the new capabilities of the phone. There was  no need for governments to subsidise or regulate to get people to use Google searches or buy on line from Amazon. Their service was readily taken up by people.

The EU talks about the twin revolutions, the green and the digital. The truth is the digital revolution is bottom up, led by willing consumers seeking film and music downloads, wanting social media  and welcoming on line shopping. The green revolution is still top down. Without the products that fly off the shelves because they are good and good value it is going to take a lot of law, tax, regulation and subsidy to force the changes the quangos and governments want. The more they do it  by law, the more people will come to resent it.

It has taken many years, much suffering and plenty of legal bills for the Postmasters to get justice over the Horizon scandal. MPs including myself told past Ministers there was no sudden outbreak of mass criminality by Postmasters, but there was a systems and accounting problem created by new computers. This has at last been admitted by the Post Office and the government.

Yesterday in the House the Minister made a statement about how the Post Office and government intend to proceed following the Court decision to quash past convictions for fraud, false accounting and theft by some of the Postmasters. They plan an Inquiry and a compensation scheme. There was widespread anger in the House about what has happened and how long it has taken the Post Office to accept its errors. I stressed to the Minister that they should as a matter of urgency grant compensation to all those falsely accused and many falsely convicted. The compensation should cover the Horizon losses themselves, but also the extensive legal fees to right the wrongs and the lost earnings and business revenue caused by these false actions. People have lost their livelihoods and seen their reputations savaged. The least the Post Office should do is offer generous compensation along with their belated apology.

I would like Scotland to stay in the UK and note that a majority of Scottish people in the latest polls wish to. I think all should accept the agreement in 2014 that the referendum was a legal once in a generation vote. As the Scottish election is dominated by arguments about independence, with the SNP wanting another early referendum on the subject to try to reverse the decision made just a few years ago to remain, it is necessary to look at some of the consequences of a theoretical pro independence vote.

Many SNP people and arguments imply they do not want an independent Scotland. Many seem to want devo max. The official party position is now to want so called independence but to assume they will be admitted to the EU. They do not have doubts about how feasible that would be, nor do they think through what a negotiation would be like to try to bring that about. Presumably the EU would want Scotland to be a net contributor to the EU budget, a very different relationship to one they have with the UK budgets that have favoured Scotland. They would also presumably expect Scotland to prepare to enter the single currency. That at least would sort out the strange refusal of the SNP to say which currency they would use were they win a referendum, though there would still be the question of what currency they would adopt between leaving the UK and being admitted as full members of the Euro.

In the last referendum many SNP supporters argued they should stay in the pound. It seemed doubly bizarre to want an independent Scotland to have a foreign Central Bank. There would be no reason for the rest of the UK and the Bank of England to go on taking Scotland’s economic needs into account when setting rates and banking policy. Scotland would not be represented on the Board or around the Monetary Policy Committee table. They also believed last time that large and rising oil revenues would bail them out. Today the oil price is much lower and the new Scotland is committed to net zero, so they have to plan the demise of their oil industry.

The issue of debts and deficits would loom large. Of course if leaving the UK Scotland should take her fair share of the collective debt. Her budget deficit would be far too high for the Maastricht EU rules. That is an issue they would need to sort out as part of their membership talks with the EU. Meanwhile they would need to satisfy international debt markets about their plans.

I am not one to go in for Project Fear type projections of what might happen to Scottish economic output, jobs and trade were she to leave the UK. I have seen too many of those exercises be too pessimistic without helping the cause of those trying to keep a Union together. It is however important that the rest of the UK makes clear that were Scotland to hold and win a legal referendum to leave the UK we would respect it, and would proceed to negotiate exit. The UK would need to make fair proposals to share the debt, to allow independent migration and citizenship policies, to provide a means of following different trade and foreign policies, and settling issues over defence amongst other matters. Scotland would need to put up an EU external border with England is she got her way and became an EU member. Would Scotland seek to join NATO and be a committed ally of the UK? How quickly would the UK military bases in Scotland be removed? The rest of the UK should not seek to obstruct a departure following a legal referendum, but nor should it allow exit on Scotland’s preferred terms. 300 years of Union has created much common working and interwoven institutions so there would be much to unravel.

I am all in favour of defending our landscapes, keeping our water and air clean and being kind to animals. Conservatives believe in conserving what is best in the natural world and working with the grain of Human nature and the environment.

I am in favour of reducing the pressures of development on our green fields and woods by having a more sustainable level of migration than we were allowed by the EU free movement rules. People who do come to live here should be welcomed and have access to decent housing and services. There are limits to how much extra can be supplied.

There are some who wish to re wild large areas. I do not think we have the same obligation to wolves or wild boar or wild cats as yet unborn as we do to allow space and food for all the birds and animals who currently share our land. When we seek places for wild flowers and shrubs we should balance that with the need to grow more of our own food. A field of corn or a pasture of sheep can look beautiful and is as much a part of the natural world as some newly created wild space.

We need to avoid policies which destroy livelihoods and land important to people’s lives. The drowning of the Somerset levels was destroying homes and farmland in some strange experiment. The same was not tried in the Fens where they still dredged the ditches and manned the pumps to preserve England’s most productive growing land. Why was the Somerset levels selected for different treatment? We also need to defend land subject to attack from the sea where it has been settled and matters to people’s lives and livelihoods. In selective places we should consider as the Dutch do reclaiming land we could use for farms or dwellings.

I will continue to press DEFRA for their policies to promote food production. They seem keener on wilding when we need a proper balance.

The OBR who got their last year deficit forecast wrong by £91bn estimate that 2023-2025 will see economic growth settle down to 1.7%,1.6% and 1.7% a year. They assume migration continues with the population expanding by 0.3% a year, a bit down on pre pandemic and pre Brexit levels, to give per capita growth of around just 1.4% a year for the 3 years. These figures are disappointingly low.

It could be that they are simply more forecasting errors. After all they underestimated GDP last year and are usually on the pessimistic side. Or it could be that they expect the Treasury to carry on following austerity, EU alignment and state debt driven policies for the next five years which would deliver similar low levels of growth to our years in the single market under the Maastricht economic rules which drove the Osborne/Hammond debt and deficit austerity policies.

The government should challenge these assumptions and work out a growth strategy to improve these forecasts. We need to put behind us the years of dependence when the UK willingly signed up to rules and systems which exported more and more of our industrial output to continental factories, made us more and more dependent on EU imported food, power and much else besides and left important parts of our economy smaller as a result.

It is high time the Treasury set itself the task of making a good improvement over the UK’s performance of the last 28 years in tge single market. We now have the freedoms to do better if only we will use them.
Tomorrow on Conservative Home I will set out a possible new framework for UK economic policy in response to the government statement that it is looking to change the rules governing economic management.

I sympathise with the official forecasters at a time of big change in the economy, with a large fall in output and incomes stemming from the measures to curb the pandemic. Getting forecasts right when the economy is falling further and faster when the measures go in and recovering faster and more when they are removed than in previous cycles makes it difficult to get the numbers right. I have had less sympathy with the undue gloom the OPBR put into their November 2020 and March 2021 forecasts, and said at both timeS I thought they were exaggerating the deficit. So it has proved.

In November they forecast a deficit of £394 bn for 2020-21.In March this year forecasting the year to end March which had almost ended, they said the deficit would be £354bn, a £40bn fall in four months. Yesterday they announced the provisional outturn at £303bn, £51 bn down on a few weeks ago and £91bn down on November. They point out they were thinking in March of £27bn of losses on loans which have not yet materialised and would not be a new demand for cash or borrowing anyway. Even taking this out it still leaves the forecasts way too gloomy. They underestimated the amount of tax revenue collected, and overestimated state spending.

I am raising this again because it will have knock on effects on future years. The £51bn revision downwards to the estimated deficit between this March and April is twice as much as the government now thinks it needs to add to tax revenue in 2024-5 to control the deficit. Could it be that those future years forecasts are also wrong? Might they be too pessimistic, so how necessary is the extra tax? I have other issues with the future tax policy over how you do secure more revenue and what the role of growth is in meeting the state’s requirements. Even in their own terms, however, the OBR should examine the possibility that they have been too pessimistic for future years, and consider the need for some caution in drawing early policy conclusions for future years from forecast numbers which have recently proved so unreliable. Did they urge a needless or undesirable tax rise?

I was pleased to learn that at last the Post Office accepts its accounting software was faulty and led to wrongful accusations and cases against Post Office managers. Various MPs took up these matters without success, as in this 2014 debate to highlight the problem:

Post Office Mediation Scheme, 17 December 2014

Mr John Redwood (Wokingham) (Con): I am grateful to my right hon. Friend for leading on this issue and for bravely taking the case of many people in the postal sector to the management. From his discussions with the senior management of the Post Office, is there any sign that it now recognises that it made mistakes? Is there any willingness on its part to recognise that at least some of those people are completely innocent and deserve an apology and compensation for the way that their lives and businesses have been wrecked?

Mr Arbuthnot: That is a very difficult question to answer, because the Post Office pleads secrecy. It will not tell us what is happening in the mediation scheme. We asked in July how the mediation scheme was going, but it refused to tell Members of Parliament because it was all confidential.

I have to reveal today that there are around 250 privileged lobbyists nestling at Westminster who do not get enough scrutiny.
These talented individuals have managed to organise themselves passes to the Palace of Westminster.
They use their passes to loiter and linger around the corridors to get the opportunity of direct private exchanges with Ministers, to propose their plans and causes without officials present.
They even get access to some meetings where Ministers brief them and take their questions in closed sessions.
They often work with private sector companies, trade unions and charities to help them make their case and make it look better based and respectable.
They themselves receive public money, and seek to raise other money to back their campaigns.
Their latest campaign is particularly clever. It is a campaign to stop other lobbyists from access, presumably to enhance their own special access and to cut down lobby competition.

I refer of course to the 250 Opposition MPs who are on the taxpayer payroll and can lobby for much of their active day. If Ministers stopped listening to lobbying I suspect they would have some sharp words to say. Parliament is a system partly for organised lobbying for causes MPs and their constituents back. There is no reason why others cannot see or write to Ministers. There is nothing wrong with charities, Trade Unions and businesses lobbying for policies that help them. That will be obvious and declared when they make their case.

Of course Ministers need to treat all representations properly, and avoid any conflict or avoid acting where they are themselves party to a lobbyists cause or profit.