Author: johnredwood

 

Successive parties in government in recent decades have wanted to see more growth and development in the west, the Midlands and the north, and less in London, the south and the east. They have tried similar policies to promote this – regional subsidies, strong state intervention, development agencies and Boards, restrictions on planning and development in many parts of London and the south east – and some different emphases with Enterprise Zones, Development Corporations and local government led plans vying for political attention. Nothing has worked overall. Under successive governments London in particular, and the areas around London as well, have outgrown the rest very consistently. Today London is 22% of the UK economy, and the rest of the South East and eastern region double this percentage to make the south eastern corner of our country more than 40% of the income and output. .

This poses any government with a dilemma. Should it reinforce success, stop fighting the market, and allow more and more people to live and work in the crowded south and  east? Should it spend more on infrastructure in London to support the fast growing population and output? Or does it have to restrain these fast growing areas, to try to direct more people and business elsewhere? In practice the Coalition government, like the Labour government before it, does a bit of both.

Current policy contains a strange ambiguity. Coalition Minsters are desperate to build more  homes in London and the south east. After all, they reason, demand is strong, house prices too high, so more should  be built. At the same time the official economic policy is to build and grow many new  industries outside London and the south east, which if successful would mean people buying up the empty and cheaper homes in the rest of the country and then needing more new homes there.

The tensions in the policy under market pressures are obvious. The government supports the idea of a pharmaceutical technology cluster around Cambridge, and supports Astra moving its facilities to Cambridge from the Manchester region, the very opposite to the preferred policy of building up higher value added industries in the north. The government is not trying to get Pfizer to reverse this decision in their bid approach,  but to endorse it. These types of decisions mean continuing house price and availability pressures on southern property, and surplus capacity in the  north.

Do you broadly favour removing restrictions in the way of more south and east development, or do you think there are government policies which could ensure that future growth was faster in all the other parts of the UK than in the London  centred south east? I invite your thoughts on how the economy can be rebalanced, and how the cheaper and often better housing of the  north can be used more .

 

Over the last two days we have examined the rift between sceptical scientists on global warming, and the scientific establishment. The sceptics point out that observed data is more complex than the simple theory that increasing human CO2 will always produce rising temperatures would suggest. Climate models have been wrong in the past, and need further complex computing to get them to cope with the many variables affecting average temperatures – factors like water vapour, cloud cover, wind speeds and direction, ocean currents, natural CO2 , other greenhouse gases, the warming of the deep ocean and the patterns of solar energy to name a few which they try to quantify.

The scientists on the establishment side tell us  they need bigger computers and more complex models. They agree they cannot predict average temperatures for next year or for the next decade. They go so far as to suggest it might be 50 years of low or  no warming before they question their underlying thesis of a defined relationship which is quantifiable between extra human produced CO2 and average world temperatures. They agree there is still a lot they do not understand fully or cannot accurately model, which is why their forecast of warming from manmade CO2 may be wrong for a  decade or more. Cloud cover and water vapour are two such variables. They see the role of water vapour as an accelerant of global warming  by asserting that it mainly  changes in response to CO2.

So what are we to make of it? I merely conclude two things. The first is the science is not settled. The fact that most of the funding and the people are on one side does not mean the sceptics and critics from within the climate academy are necessarily wrong on all counts. The bad way they are treated makes some of  the lay public suspicious. The second is that the scientists themselves in their honest and enquiring moments agree there is  more they need to understand before they can produce a model which does predict average temperatures decade by decade or year by year.

As a specialist in economics and politics I use other arguments and take into account other matters when considering what response we should make to possible changes to the climate. I have never ruled out the possibility that average temperatures may start to rise again soon, and of course accept  there is a greenhouse effect. Indeed some of that is crucial   to life on earth as we need to avoid extreme cold. Sufficient  carbon dioxide is also central to plant life which in turn supports all of us. Mankind needs to study and watch the weather and the longer term trends which they  call climate, and adapt our way of life and our physical surroundings as necessary.

I have been an advocate of the UK putting in more fresh water capacity for some time, to deal with the rising population and any dry periods we might face. I have also been working with the government. Environment Agency and others on projects to handle excess surface water during periods of heavy rain, which are made  more necessary by increased building to accommodate a rising population. I would like to see the government start work on a plan for a second Thames barrier, further downstream, to protect the people and large investment in  eastern London.

 

This week I attended an interesting meeting on climate science in the Commons. Two distinguished Professors came to present to  MPs on behalf of the Royal Society and the US Academy of Sciences. They set out the arguments  for the global warming movement. A few MPs who were interested subjected their thesis to detailed cross examination.

Their publication  starts with the statement

“It is now more certain than ever, based on many lines of evidence, that humans are changing Earth’s climate. The atmosphere and oceans have warmed, accompanied by sea level rise, a strong decline in Arctic sea ice, and other climate related changes”

This is a thoroughly unscientific statement. MPs elicited the reply eventually after sustained cross examination that in recent years Antarctic sea ice has been growing in extent. Why do the scientists refer to just the Arctic in their headline or conclusion? Where is the sea level rising, and is that occurring owing to land based ice melting as predicted? It clearly has nothing to do with sea ice melting. In their booklet towards the end they do  seek to explain the increase in Antarctic sea ice and accept that sea levels rise for reasons other than melting ice as well. Why do they think that rising temperatures melts ice and snow in the Arctic, but claim that rising temperatures creates more ice and snow in the Antarctic, where the extra warmth allows more water retention in the atmosphere leading to heavier snowfalls?

The document improves after its first paragraph, and does include a number of honest statements about their doubts or limits to their knowledge. However, the whole 24 page booklet is written from the proposition that there is global warming, it will get worse and it is caused by man made Co2. It seeks to dismiss some of the many arguments brought by sceptics against the theory, which makes it  read like a propaganda document.

I thought I would share with you some of the better more humble statements made in it, as a contrast to the loud mouthed certainties of the crude global warmists (not our two Professors I hasten to add):

“The magnitude and timing of these changes (to temperatures) will depend on many factors and slowdowns and accelerations in warming lasting more than a decade will continue to occur”

They assert that there has been global warming from 1850 to 2010, yet supply a graph which shows global cooling from 1850 to 1920, warming from 1910 to around 1940, cooling from 1940 to around the late 1970s followed by global warming to 2000, and a plateau since.

They argue that “Natural causes include variations in the Sun’s output and in Earth’s orbit around the sun, volcanic eruptions, and internal fluctuations in the climate system (such as El Nino and La Nina)” and these can also cause changes to temperatures, but argue they do not account for the last 10o years. One of the features of the work is a shifting in dates for different arguments.

“The largest global scale climate variations in Earth’s recent geological past are the ice age cycles” caused by changes to the Earth’s orbit.  There has been a 4 to 5 degree warming for this reason since the last ice age ended. They also accept that 50 million years ago there was two and half times   more natural CO2 in the atmosphere, and they infer that global temperatures were 10 degrees higher than now. The pamphlet does not seek to explain these large natural variations in CO2.

They accept that you cannot predict rising temperatures from rising human CO2 output, saying that in any given decade “many natural factors are modulating this long term warming” including volcanic activity, and changes in ocean currents. They seek to explain the “slowdown” in warming in the last decade. When asked how long we could experience a slowdown or fall before they thought their models wrong, the scientists settled on 50 years as a safe figure. It is safe in the sense that most of the people in the debate will be dead or retied by the time we get there, and allows a lot of latitude with natural causes offsetting man made global warming in the meantime.

They confirm that recent temperatures are below those reached “5000 to 10000 years ago in the warmest part of our current interglacial period”. That is a doubly interesting statement, as it leaves open the likelihood of a new ice age in due course from natural causes, and reminds us that there have been past periods of substantial warming without man made CO2.

“A warmer atmosphere generally contains more water vapour. Water vapour is a potent greenhouse gas. … Another important but uncertain feedback concerns changes in clouds… the latest assessment of the science indicates that the overall net global  effect of cloud changes is likely to be to amplify warming”. There is also uncertainty about the extent and speed of the heat transferring to the deep ocean.

“Several major issues make it impossible to give precise estimates of how global or regional temperature trends will evolve decade by decade into the future”. “With current understanding of the complexities of how climate feedbacks operate, there is a range of possible outcomes, even for a particular scenario of CO2 emissions. ” “Natural variability can modulate the effects of an underlying trend in temperature”.

“There is considerable uncertainty about how hurricanes are changing because of the large natural variability and the incomplete observational record”

In summary, a pamphlet written to promote global warming theory based on man made CO2 is a mixture of polemic and some sensible and sceptical observations about the limits of current knowledge. As they accept water vapour is an important greenhouse gas, and clouds have a big impact on weather, the uncertainties about these two big variables clearly make shorter term average temperature forecasting very difficult, even for periods as long as a decade. From the graphs supplied deviations from their warming trend can last for several decades. The trend itself depends on how you draw a trend line on a very variable graph.

I found all this caution and scepticism encouraging. It implies there needs to be a lot more study before scientists can claim the science is settled, and before they have climate models which can forecast average temperatures over ten or twenty year periods.

 

Reply Those who asked about who the Profs were – they were leading Royal Society figures supporting this official publication of the Royal Society and National Academy of Sciences entitled “Climate Change  Evidence and Causes”. These are therefore all official statements of the RS.

 

 

 

 

 

This week global warming theory came back into my life. I write in praise of Professor Bengtsson, whose recent remarks as a respected climate scientist have led to more doubts about what is happening in the scientific community. He has stated

“We do not know when to expect a warming of 2 degrees Celsius…. These high values of climate sensitivity (to CO2) , however, are not supported by observations. In other words global warming has not been a serious problem so far if we rely on observations”

I support him not because he comes from my local university of Reading, though Reading is a very well regarded leading university worldwide for its work on climate and weather. I support him because he is speaking out for scientific method to be applied as sanely and sceptically to climate science as to other parts of science.

As I have explained here before, the science of  climate change is not “settled” as its leading propagandists like to tell us. No science is ever settled. Science proceeds by theory and models, followed by testing against data with continuous attempts to challenge, improve or overturn these models. Just look  at the way human understanding of the sun and planets has evolved. Galileo challenged the settled science of the heavens of his day despite the protests of the academic establishment, Newton improved on it massively, but the twentieth century went far further in altering and adding to the Newtonian consensus.

Professor Bengtsson joined the Advisory Board of the Global Warming Policy Foundation. You would have thought most climate scientists would welcome the addition of a respect member of their profession to the Board of a body which likes to challenge and question the academic consensus. He could have made sure the work of the Foundation took proper note of the academic work its is reviewing and challenging. Instead he had to write a letter of resignation shortly after joining the Board complaining  of the McCarthyite pressures exerted on him by the academic world for daring to join such a body at all!

This is not science as it should be conducted. If the scientists are truly confident of their models they should be able to deal with any intellectual challenge from a Policy Foundation without resorting to threats or tantrums. One of the  main reasons so many people do not believe the scientists is they keep putting back the date when their model predictions of rising temperatures will come true. Tomorrow I will look at their 50 year weather forecast, and ask why they cannot also do a 10 year one that works.

 

 

I have long expected Scotland to vote to stay in the UK. I was interested to see a more positive approach this week by the better  together campaign, something I welcome. I also understand why the UK government has not made contingency plans for the possible loss of the referendum. To do so would be misconstrued as evidence of worries that the vote would be lost and would be a boost to Mr Salmond.

This does not prevent others from speculating about what should happen in the unlikely event of a Scottish Yes vote to independence. I have suggested before that in such a circumstance the UK Parliament should pass an Act rapidly extending the tenure of existing MPs for Scotland until the chosen date of separation, and at the same time preventing them from voting on English or rest of the UK issues. The present Scottish MPs should play no part at Westminster in the negotiations the rest of the UK has to conduct with Mr Salmond over the terms of the split.

A more interesting question is how Westminster should respond to a No vote in Scotland. There has been some discussion of additional powers for the devolved Parliament if they vote to stay in. It seems to me it should be a priority on hearing of their wish to keep the union together, to tackle the outstanding  issue of England’s government. We have unfair asymmetric devolution. I want the new English Parliament to be at Westminster, on days when the Union Parliament is not meeting. Every English MP elected to Westminster should be both a Union MP and an English MP. We should get on with establishing a proper government for England in the devolved areas.

 

As one of the few opponents of Mr Brown’s purchase of most of the shares in RBS I would like to look five years on at the way RBS has progressed since the crisis.

I advocated the UK authorities giving limited support through loans and guarantees to the UK clearing bank parts of RBS that needed support to prevent a wider collapse. I had in mind the kind of controlled administration or living will approach which the authorities now say they will adopt if there is a future similar crisis. I thought it was quite wrong to put so much taxpayers money at risk, wrong for taxpayers to finance a bank which was undertaking large amounts of investment banking business and paying huge salaries and bonuses to its staff. I wanted RBS to be forced to sell off its insurance and overseas banking arms, and slim or sell its investment bank, as part of its response to the crisis.

Instead Labour took over the conglomerate, appointed a new Chief Executive, and told him to run it as an integrated group. Taxpayers enjoyed quarter after quarter of heavy losses. The Group was reduced in size drastically, as they closed down business activities and wrote off large quantities of loans that had gone wrong. No wonder the UK economy did not make much progress 2010-12, as its largest bank was cutting its balance  sheet by more than  £600 billion.

Now the  management seems to agree with much of the approach I have advocated, splitting up what was never a natural integrated business. They are in the process of selling Citizens, the US bank. They have sold the insurance interests. They have slimmed down the Investment bank and wish to concentrate on the main UK clearing bank business. The last quarter saw some profit at last for the ill served taxpayer shareholders. There is talk of a dividend later this year.

The Bank of England should never have left the wholesale markets so short of cash as they did during the crisis. It exposed weaknesses in this large bank too drastically, and increased the likelihood of major losses. Once the bank was brought down by the lack of funds in the market, the government should not have leapt in to buy the shares. It has been a long battle to get more to understand that in such a crisis the government and Bank should act as a lender of last resort and a guarantor of the crucial parts of the financial system, but should not take on a whole rambling conglomerate with a failed business model and put taxpayers money into shares.

 

This week listening to Labour I thought I had woken up again in the 1970s. Labour wants “solemn and binding” guarantees from Pfizer that it will never sack a British worker if it takes over Astra Zeneca, and will invest large sums in research facilities at Cambridge.

There is something absurd about politicians demanding assurances that a company’s promise will be held to whatever happens next. Anyone who has experience of government knows that events can force a rethink of the genuine promise honestly made. They also should know that an individual can make a promise, but changes to personnel in the government or company subsequently may change the policy in ways the person making the promise can no longer influence.

It is of course sensible to ask enough questions to make sure the promise is honestly made. We do not want a Pfizer promise like the Lib Dem one to rule out tuition fees for university students, only to see them newly  in power craft a policy and recommend it which did the opposite of what they promised.

It is difficult to go much beyond that. Sometimes people in power make promises which may have been honestly made, but later are forced to choose between two different promises, as it is not always possible to carry out both when circumstances change. Labour promised an ethical foreign policy, yet under the influence of allies and wanting to uphold the US special relationship ended up fighting a war in Iraq which was heavily criticised at the time on ethical grounds.  Labour also promised no Income Tax rises, yet ended their period in office with Income Tax and National Insurance tax rises owing to the collapse of the economy and Great recession on their watch. Sometimes parties promise things they know they cannot possibly carry out, like UKIP promising to take us out of the EU if we vote for them in the European elections. A few days before elections I do not have the luxury of pointing out any Conservative examples, without danger of misrepresentation, but I am sure my readers will be keen to supply some they think occurred.

Sometimes things deteriorate far more than expected. In the case of a company if trade turns down and revenue falls, they may well have to cut costs in ways they had not expected. Companies do not have the luxury of governments with their own currencies, of being able to print more money or borrow cheaply. If a company cannot pay all the bills it has to make cuts.

In the case of Pfizer, what happens if the CEO changes from the one making the promsie? What if the shareholders of the enlarged group if they succeed with a bid have a different view from that of the bidding management of Pfizer?

As I have pointed out before, both Pfizer and Astra Zeneca have been cutting their workforces. Astra is currently closing its research facilities in the north. We will never know for sure which route is the best for British jobs and research, because only one side will win and  have the chance to show us what they can do.