Author: johnredwood

The closures of perfectly good coal burning power stations are coming thick and fast thanks to EU rules requiring their premature closure. The older nuclear stations are also approaching their shut down dates. The UK has lost its normal margin of reserve capacity, and is now close to the point where on a cold day in winter with no wind we will have to import sufficient  power to meet demand. The ability to import is becoming part of the calculation of how we keep the lights on. This is in accordance with the EU’s wish to create a unified energy market across the EU, so all EU countries come to depend on each other and look to Brussels to control their energy policies as a result.

The UK government is well aware of the dangers to security of supply. Some of us have been arguing about this for years, knowing that it takes years to plan, design and build new generation capacity. Last week the government did decide to authorise a new large nuclear power station at Hinkley Point. The investment will be made by a lead French investor and a supporting Chinese investor. UK taxpayers and electricity consumers will not have to put up any money for the planning and construction phases, but the government is going to guarantee a high electricity price once the station is working. This is the price of pursuing a low carbon economy, as the price of gas capacity would be lower.

The nuclear station on its own will not be enough to take care of all the closures and any increase in demand we might need in the years ahead. The UK has to plan for its rising population, and for the EU passion to switch a lot of transport, both rail and road, to electricity from primary fuels. I would like to see the government announce new gas power stations. They should represent the cheapest and easiest way of increasing generating capacity, and may well in future be fuelled by gas found in the UK.

Unfortunately, owing to the decision to rely much more on wind energy for baseload power, any gas or other similar power will be dearer. As the wind farms take precedence when the wind is blowing, the grid cannot guarantee demand to new gas power stations. They are needed for cold days, days of high demand, and days with no wind. This makes their power dearer as well, as the consumers have to pay for excess capacity anytime the wind is blowing.

Once you interfere as comprehensively as the EU has done in energy provision you create difficulties in keeping the lights on, and you make energy considerably dearer. Now the best we can do is a quick fix of more gas generation at a price. Meanwhile industry has been warned that if we do have high demand days with no wind, they will be asked not to use power at peak times.

The Commons considered and passed changes to tax credits On September 15th by 35 votes  as part of the Budget. Last week the Labour opposition highlighted them again, and the Commons voted down their motion critical of the changes that had already been made. Tomorrow I am told we have to consider them again on an Opposition amendment to the Welfare bill.

I strongly support the policy of cutting tax for people, and at the same time reducing the tax credits. It makes little sense to me to take money off people that they have earned, and then to give it back in a tax credit. That is two handling charges and two elaborate bureaucracies to take the money away and give it back. I also accept the policy of seeking to boost wages. This really requires rising productivity so the pay rises are affordable, as is now beginning to happen.

I want people to be better off as a result of all the changes. I want them to earn more, and keep more of what they earn. The government has twice shown it has the votes to put through this policy, which makes sense to a lot of voters. There remain two issues of implementation. By how much should the tax credits be cut back? What is the timing of tax credit changes and how does this relate to higher pay and lower taxes?

I have not myself done the sums. I have urged the government to pursue the policy in a way which means it is always w0rthwhile working, and in a way which maximises the number of people who are better off. The  government should share with us more of its numbers on the pace of these changes.

It was good to hear the Prime Minister confirm that if we vote to leave the EU that is exactly what we will do. I know some of you worry that you could vote to leave, win the vote, and then be cheated out of leaving. I have always said leave means leave, and that is now official.  The  sooner the better, when you look at the current very high cost of remaining a member, and look at the shambolic immigration, energy and currency policies the EU core is pursuing.

The most recent UK figures on debt and deficit come as part of the UK’s reporting to the EU on these important matters. We are reminded in the official communication that

“The Protocol (to the Maastricht Treaty) on the excessive deficit procedure defines two criteria and reference values with which member states should comply. These are a deficit (net borrowing)to GDP ratio of 3% and a debt to GDP ratio of 60% ”

The latest EU reports show that 14 member states still exceed the 3% control on budget deficits, and 16 remain with debt over 60% of their GDP. Some are way beyond the targets. Italy and Portugal have debts at more than 130% of GDP. Spain and the UK remain well above a 3% deficit target amongst the larger EU countries.

The total Euro area has a debt to GDP ratio of 92%, and the EU 28 a ratio of 86.8%. The Euro area as a whole has now got its deficit down below 3%. The UK in the year to March 2015 ran a deficit of 5.1%.

I read that the left of centre parties who won the Portuguese election have not been allowed to take office because they have dared to challenge the Euro disciplines. The Euro once again overrides democracy.

One of the main arguments in the Euro area is when and how will the Maastricht criteria be enforced? All the talk of a Euro Treasury follows hard on the introduction of the so called EU semester, an attempt to intensify the reporting and the pressure to conform with the required controls on debt and deficit. It is difficult to run a single currency without imposing a strong discipline on total government borrowings in the single currency area. Surplus countries dislike borrowing countries attempting to free ride at lower interest rates based on their prudence. Borrowing countries resent the tight controls on their borrowing the surplus countries wish to establish. So far the Maastricht criteria have not been observed by a majority of states. They are nonetheless an important constraint on worse performance, and they are now once again in the centre of the argument about establishing a Euro Treasury.

Meanwhile it is difficult to see why the UK has to report its debt and deficit to the EU at all, when successive governments clearly have no wish to hit the EU targets, and when there are rightly  no penalties for failure to do so. The most recent figures show the UK deficit gradually reducing, with tax revenues growing more quickly than the growth in public spending, as planned.

What is curious is that the left wing UK parties in the UK who thunder against “austerity” by which they mean cuts and controls on public spending and borrowing never fulminate against the more intense public sector austerity the EU requires under its Maastricht criteria. Why do they not spend some time and energy trying to change that?

After my speech in the Commons on justice for England BBC Scotland wanted me to give interviews. There was as always no call from BBC England.

I agreed to do a radio interview for BBC Scotland yesterday morning. The wish was to debate the SNP false allegations of second class MPs and possible damage to Scotland and the Union. Understandably there was no interest in whether these proposals help England enough or are fair to England.

In England Radio Berkshire asked to interview me. They too took the SNP agenda and sought to confine the interview to the issues of so called second class MPs and alleged damage to the Union. They did not ask a single question about how it might help Berkshire. They did not ask if it gave enough power to England. They did not ask how we might want to use the power. They did not grasp that the settlement of the money is going to be a crucial issue which is only partially dealt with by Thursday’s vote.

If the BBC wishes to pose as broadcaster for the whole Union of the UK it has got to learn the lines of the English as well as the Scottish. It needs to probe and ask questions from an English point of view as well as from a Scottish point of view. It needs to be voice for England and to offer us some English coverage. We need a BBC England.

Labour made the situation worse by their behaviour in the Commons on Thursday. Few Labour MPs came in for the debate. Their response was led by a Welsh MP, with Welsh MPs more prominent than English on their sparsely populated benches. Their threadbare arguments were similar to the SNP, complaining about second class MPs and an alleged inability of the Speaker to read whether a bill or spending item related to the UK or just to some part of it.

Labour failed to speak for England. Most of Labour’s English MPs were notable by their absence. They allowed a debate on England to become more a debate about Scotland. Again there was no BBC England to ask them why they don’t care about the injustice of devolution to England, or to prise out of them a policy on how England should in future be looked after on our fast changing constitution.

There was rightly an outrage when the EU announced last year that the UK along with other member states had to change the basis of calculation for its GDP in a way which meant we then had to pay more money as contribution to the EU budget. The government argued strongly against the gross payment, and many voters thought it unfair that the UK was required to make such a large payment for past years.

The latest government publication on spending, tax revenue and the deficit offers some clarification of what has now happened. In December 2014 the UK public finances recorded a gross payment of £2.9 billion extra money to the EU, though no cash was transferred at that point. The first cash payment of £0.4 billion was made in July 2015, and the second payment of £2.4bn was paid in September 2015.

Against this unwelcome payment are substantial offsets. The UK is promised a repayment as the EU returns to all member states additional contributions ” related to data revisions.”. The Office of Budget Responsibility estimates that the UK will get £1.2 billion back under this heading. So far £0.5bn has been received in February this year. In addition the UK will receive back an estimated £0.8bn as additional UK rebate under the method of calculating that.

So the latest official forecast is the UK will end up paying an additional £0.9bn, not the £2.9bn gross figure originally debited to the accounts. At the moment the UK is £1.9bn out of pocket, with the promise of further rebates and repayments.

All this reveals the complexity of EU affairs, and the fact that even a Eurosceptic government with no wish to pay any extra ends up having to pay something all the time it is a member of the EU.

It’s that time of year again when spending is reviewed. Every year I have been in Parliament spending has gone up, and every time all the debate has been about cuts. That’s the way the public sector likes to organise its debates. There are cuts in forecast increases, cuts in real rather than cash spending, cuts in baseline budgets that overstated the spending, and sometimes even real cuts in real activities. Whatever the cuts made total spending goes on upwards and upwards in cash terms, and usually in real terms as well.

This spending round is a bit more significant than normal. it is the start of a probable five year Parliament, and the start of a Conservative government. The government does wish to control the rate of increase in total spending. It has also ensured real increases in defence, pensions, schools, the NHS, overseas aid and the EU payments, so it needs to probe more incisively the other spending areas that do not have one of these special protections.

This week MPs have been lobbying the Chancellor and the Chief Secretary over what they would like to see in the new budgets. I am therefore inviting all of you to make your requests known.
Some of you will want to cut overseas aid and end our payments to the EU. Those options are not on the table as far as the government is concerned, though ending the EU payments is in the power of the British people when we get to the EU referendum.

MPs have been proposing a number of good ideas. The huge expenditure on climate change research, administration and policies could be usefully cut back. After all, as the proponents tell us the science is now completely settled, why do we still need people studying and researching it in government departments?
The large land banks of the state sector are far bigger than any likely operational needs. It is time to sell some of that land, and to get some of it into better use for homes or commercial premises.
The vicious circle between Housing benefit, higher social housing rents, and larger surpluses by housing associations could be altered to give tenants and taxpayers a better deal.

What are your ideas?