Author: johnredwood

Mr Hunt tells us we need more warships. He needs to concentrate on our relationship with Iran. UK forces helped the Gibraltar authorities seize an Iranian tanker on the grounds that it was taking oil to Syria against EU sanctions. In response Iran threatened to take a UK tanker. Iran or associated groups had already made unprovoked attacks on other tankers in the area. This week we saw a possible threat to a UK tanker in the Straits of Hormuz, repelled by HMS Montrose.

The first thing we need is the evidence from the Iranian tanker to demonstrate the legitimacy of the seizure, with appropriate treatment of the Captain and crew members who have been detained. Presumably a case will be brought against them. The second thing we need is confirmation of the arrangements for future UK tanker security near to Iran. The US is indicating their forces might be part of a general response to any Iranian threats. The UK normally has four minesweepers and an amphibious landing ship based at Bahrain, and clearly the frigate HMS Montrose is also available. All these ships have weaponry that could warn off smaller Iranian naval vessels of the types being deployed. If the UK works with other allies led by the USA, then there is the Abraham Lincoln carrier group in the area as well.

As the USA and the UK says, defending the rights of all to passage in international shipping lanes is important to world trade and to peaceful co existence between countries. Oil sanctions have helped drive up the price of oil internationally, but not excessively. The rapid expansion of US oil and gas output continues to offset the losses of OPEC production through sanctions against Iran and through governmental incompetence in Venezuela. We need to hear more from Mr Hunt of how the UK is going to seek resolution of this conflict in the context of the Iranian nuclear agreement and the division between the EU and the USA on this matter.

The US strategy is to force policy change on Iran by sanctions. Iran responds with military provocation. The UK should do what it needs to do to defend our shipping, seeking to avoid being drawn into any wider military conflict.

I am strongly in favour of keeping as many green areas of woodland, meadow and nature reserve as possible in our hard pressed area.
Wokingham Borough points out the following eleven areas as part of their green plans:

Keep Hatch woods, Binfield Road
Kentwood Meadows Warren House Road
Old Forest Road Meadows
Eldridge Park, Bell Foundry Lane
Keep Hatch Meadows Binfield Road
Buckhurst Meadows William Heelas Way
Langley Mead, Hyde End Road Shinfield
Mays Farm Meadows Hyde End Lane Shinfield
Five Acres Field Shinfield
Clare’s Green field Ryeish Lane
Hazebrook Meadows Arborfield

On Wednesday the Fed chairman Jerome Powell signalled that US interest rates are likely to fall at the next Fed meeting. Whilst he was able to report continuing good growth in jobs and wages, he pointed to trade uncertainties and a slowdown in the rest of the world as a reason the Fed might want to ease a bit more.

Meanwhile the Germans have just issued a government bond with no coupon, to the delight of their fans in the market who dutifully bought it. You might have thought the only reason you would want to own a government bond is to enjoy a secure income on it, yet here we have one which guarantees you no income whatsoever. Presumably the people who bought it expect a further fall in interest rates and more buyers willing to pay more for it in due course. They will need to sell it again before maturity. If you think buying a bond with a guarantee of no income return is foolish, then the only justification is to find someone more foolish to sell it on to at a profit before the reality of the no return bond is confirmed by repayment at par. There is speculation in markets that the arrival of Christine Lagarde as President of the European Central Bank will herald looser money and rates going negative.

Why have interest rates stayed so low for so long? How much longer will this apparent madness continue? The great banking crash on both sides of the Atlantic impaired the ability of commercial banks to generate cash and provide enough loans to propel good rates of economic growth. Intense global competition, large reserves of unemployed and underemployed labour and the advent of digital commerce all reinforced the trend to keep prices down. Many people responded to the ultra low rates by saving more. Japan shows this situation can persist for several decades, where a worse banking crash ushered in a long period of zero rates and no inflation. The position in the west should not last as long, given the less intense crash and the higher propensity to price rises in some places. Indeed, the USA did get its interest rates up to 2.25-2.5%, high levels for an advanced country in current conditions.

The Bank of England looks increasingly isolated and cut off from central banking trends elsewhere. The tight UK money squeeze has slowed the UK economic markedly, yet still the Bank presses on with it. If the Fed thinks the US needs more stimulus after a first quarter growing at 3.1%, surely the UK economy now scarcely growing at all needs a boost?

I participated in the debate on the Animal Cruelty (Sentencing) Bill yesterday.

Several constituents contacted me to support it. I intended to, as I have long thought we need to do more to protect animals in our care and to punish those who think cruel abuse of animals is acceptable. We were told some harrowing stories of what cruel people have done to dogs in their care, deliberately injuring them for the warped amusement of the owner.

The Bill reinforces the Animal Welfare Act of 2006 giving the courts the right to impose a prison sentence of up to one year for a summary conviction and up to five years for a conviction on indictment. The aim is to provide a stronger deterrent to those thinking of being cruel to animals, and a more appropriate punishment to those who do serious and sustained harm to an animal.

The outgoing Ambassador was right to resign. His position was undermined by the leaker, who needs to be identified. He could no longer perform his role, as the President took his criticisms personally. The next Ambassador must be capable of good analysis in private communications, expressed in moderate and professional language, and be a great advocate of the United Kingdom. He or she will need to rebuild trust and regular exchanges with the Administration after this most unfortunate rupture. We need someone who likes the USA and respects the democratic decision of US voters.

The new appointee should be expected to regain access to senior officials and the President and to reassure them that the UK respects the Administration in office and wishes to work with them, whilst of course reserving the right of a trusted friend and ally to give unpopular advice in private and to disagree in public about policy where our interests as countries diverge. The first report back home should explain the successes and aims of the White House as they set them out, and to remind us that we can learn from their economic progress. The US is growing considerably faster than the UK or the EU. It is enjoying considerable success in creating many new jobs and getting real wages up. The President’s tax cuts have made people better off, promoted more investment in the USA and helped establish more and better paid employment. The President, unlike his predecessors has kept them and us out of difficult Middle Eastern wars. More background to US achievement would be helpful and provide essential political context to the long run up to the next Presidential election, which Mr Trump is in a good position currently to win.

Of course the Ambassador should also inform London of the Democrat critique of the Presidency to provide balance. Instead of siding with the Opposition the analysis should evaluate chances or probabilities of the Democrats finding a candidate for the Presidency who might be able to win, and in the meantime assessing what the Democrats in the House of Representatives can achieve on issues where the Congress has a say.

The diplomatic memo should not be cheer leading for the President’s critics, giving a false sense of their chances of gaining control. Nor should it be propaganda for Mr Trump, whose policies should be reported and scrutinised professionally. The new UK representative needs to be proud of the UK and our decision to leave the EU, and alert to the many opportunities Brexit offers for the US relationship, not just in our minds but in the mind of the President.

The government’s enthusiasm for electric cars is well known. The whole EU has embarked on a huge top down reform of the motor industry, seeking to transform it from a range of vehicles based on modern low emission diesels and petrol vehicles to one based on new electric cars. So far in most countries including the UK customers have not been impressed by the electric cars on offer, so their market share languishes around 3-4% of the total market, with under 1% of the total stock electric. Meanwhile threats of more bans and taxes to come have put many people off buying a new conventional car at all.

There seem to be several worries that people have about electric vehicles. The first is range. Present electric cars have varied ranges from say 70 miles to perhaps 200. A modern diesel or petrol car has a reliable range of more than 400 miles or up to four times as much as the electric substitute. People are particularly worried about range on an electric car given the issues over the time it takes to charge them and access to charging points.

A petrol or diesel car does not induce range anxiety because there are so many filling stations available. You pass them on most journeys. It takes less than five minutes to fill and pay and regain full range again. In contrast it may take hours to recharge a battery car, with fast partial charges taking maybe 30 minutes once you have access to a fast charge point. If you want to do a 400 mile journey in an electric car it will take considerably longer than in a petrol or diesel which can get there on a single tank of fuel, given the need to stop off more than once to recharge the battery.

People also worry about battery life. There are manufacturers that will guarantee a battery for 60,000 miles or even for 100,000 miles, but doubts linger about the possibility that a large and expensive battery will require replacing well before the engine and vehicle are in need of replacement or major overhaul. A battery deteriorates, making it more difficult to recharge and undermining its power delivery and therefore range of the vehicle before the owner gives in and buys a new one or before the manufacturer agrees the battery needs replacement.

Some worry about the green impact of these machines. How will the state require people to dispose of or recycle the metals used in the manufacture of the battery? How much energy is used in the manufacture of the vehicle and its battery?

Some think governments will turn to taxing the electric car once more are bought, as they will miss the large revenue streams that come from VED and fuel tax on conventional vehicles. People are naturally distrustful of governments offering low tax and subsidy just to get people started.

It is true the electric car will stop all exhaust particulate emissions, which is good news. Increasingly however particulates come from tyre wear and brake pad use, not from exhaust emission given the big work done to clean up the back of a diesel. Electric cars will still generate tyre and brake particles.

How long will it be before there are electric cars that a majority of the car buying public want to buy? What will they look like and how will their specification be different from today? How much will people be willing to pay for one, as some current models are dear?

The UK Ambassador to Washington made wrong judgements in his leaked memo. He showed he favours the Democrat criticisms of Mr Trump to the President. He should deliver balanced analysis with temperate language. What is “inept” about a Presidency that has delivered its main promises to electors? Why use the phrase “knife fights” to describe normal arguments over tactics and policy within a government?

By all means report the Democrat critique of the President, but do not make it the official view in the memo. That shows lack of judgement and fails to reflect the political realities in Washington. Of course the memo should have been kept private, but it reveals an attitude of mind which will impede the Ambassador in his dealings with the President and his immediate circle.

I recently asked Parliamentary Questions regarding the trade deals that will be novated to the UK once we leave the EU. I also enquired about whether any companies based in the EU have indicated a wish to cancel contracts to supply the NHS with medicines in the event of us leaving on WTO terms. I am pleased to see that trade agreements have been signed with 32 countries.

It is also unsurprising to see that no companies within the EU have indicated they no longer wish to supply medicines to the UK in such an event.

Department for International Trade provided the following answer to your written parliamentary question (270691):

Question:
To ask the Secretary of State for International Trade, what estimate he has made of the number of EU free trade agreements which will have novated to the UK when the UK leaves the EU. (270691)

Tabled on: 28 June 2019

Answer:
George Hollingbery:

In the event of the UK leaving the EU with a negotiated agreement, the UK and EU have currently agreed that existing international agreements would apply as they do today for the duration of the implementation period.

Nevertheless, we have been working with our trading partners to have bilateral agreements ready in place for when we need them, whether that is after an Implementation Period or for a potential No Deal.

We are making progress and have signed or agreed in principle agreements with 32 countries. Total trade in 2018 between the UK and these countries accounted for 63% of the UK’s trade with all the countries with which the UK is seeking continuity in the event of a potential No Deal.¹ That has moved from 28% since March. A regularly updated list of agreements signed is available on GOV.UK. https://www.gov.uk/guidance/signed-uk-trade-agreements-transitioned-from-the-eu

¹ The figures quoted above are based on total goods and services trade (imports and exports) with the UK, according to the most recent data (ONS, 2018).[1] They cover 65 countries that are party to 35 agreements. These are the countries covered by existing EU agreements in force in 2018. As above, this excludes Turkey, Andorra, San Marino which are part of customs unions with the EU and Japan, as the Economic Partnership Agreement only came into force on 1^st February 2019

The answer was submitted on 04 Jul 2019 at 10:30.

The Department of Health and Social Care has provided the following answer to your written parliamentary question (270230):

Question:
To ask the Secretary of State for Health and Social Care, whether any companies based in the EU have indicated a wish to cancel contracts to supply the NHS with drugs in the event of the UK leaving the EU without a deal. (270230)

Tabled on: 27 June 2019

Answer:
Stephen Hammond:

The Department has been in contact with NHS England’s Commercial Medicines Unit (CMU), who puts in place competitively tendered arrangements (Framework Agreements) through which National Health Service hospital trusts can purchase certain medicines.

Neither the Department nor CMU are aware of any contract cancellations related to a ‘no deal’ European Union exit.

The answer was submitted on 05 Jul 2019 at 10:00.