My Interventions during the Second Reading of the Retained EU Law (Revocation and Reform) Bill

Rt Hon Sir John Redwood MP (Wokingham) (Con): I strongly support the Bill and congratulate the Minister on his presentation. I hope that the Government will urgently reform the energy directives and regulations that have made us cruelly import-dependent such that we now have to buy excessively expensive energy on the world market when we should drive for self-sufficiency.

Dean Russell, Parliamentary Under-Secretary for Business, Energy and Industrial Strategy: I thank my right hon. Friend for his intervention. It is ultimately about ensuring that we are doing the right thing by people across the country. The truth is that the Bill is a framework, and this is not the time to debate the minutiae and the details as there will be plenty of opportunities for that in Committee, the future stages and statutory instruments. We should welcome the Bill’s framework, which is about taking back control for the country.

Rt Hon Sir John Redwood MP (Wokingham) (Con): I thank my right hon. Friend for all the great work that has been done on the draft legislation. Does he not find it an odd paradox, or contradiction, that many Opposition Members come to this place apparently to form laws but do not believe we can ever make a law that is good, and we need to rely on EU law in so many areas where I think we can actually do better?

Rt Hon Jacob Rees-Mogg MP: I am grateful to my right hon. Friend, who is wise, as always. But it is even odder than that, because there is this very strange view that laws that came in without any scrutiny at all—regulations of the EU that became our law automatically—cannot be removed without primary legislation. That is just bizarre.

The laws with which we are dealing came in under section 2(2) of the European Communities Act. Either they came in with minimum scrutiny but could not be amended or changed, or they came in with no scrutiny at all. I know that my hon. Friend Sir William Cash disagrees with me on this, but we are not using this procedure to repeal Acts of Parliament. Even though these measures have the effect of introducing EU law, an Act of Parliament has had full scrutiny in the House, and to be repealed it deserves full scrutiny to be taken away. That is the correct constitutional procedure.

My Intervention in the Urgent Question on Great British Railways

Rt Hon Sir John Redwood MP (Wokingham) (Con): When will the Government and railway companies come forward with proposals for an improved pattern of services that attracts many more fare-paying passengers? We need to get the deficit down very quickly and the best way of doing so is by getting more people paying fares willingly.

Kevin Foster, Minister of State, Department for Transport: My right hon. Friend is absolutely right. Clearly, demand patterns have changed dramatically during the pandemic. For example, a lot fewer people are commuting into London at 7 am to 9 am and then leaving between 5 pm and 7 pm, or they are doing that three or four days a week rather than five, so there is a need to look at how we can adapt. We are giving slightly more flexibility to some operating companies, and looking at how we use our ticketing and, in particular, our ticket pricing. The rail sale was a great way of getting a lot of people on to trains that might otherwise have been relatively quiet, producing new revenue to the railways. In addition, as I said in response to the SNP spokesperson, Lumo is targeting traffic that goes by air to get it on tracks.


My Speech in the Treasury Estimates Motion

Rt Hon Sir John Redwood MP (Wokingham) (Con): I am glad the Minister agreed that the £60 billion for the energy scheme will of course adjust according to market prices, and let us hope that the current downward trend in some of the gas prices is continued. We need a mild winter and other bits of good fortune, otherwise we could be back facing even bigger bills. I am sure we are all appreciative of the fact that the new Chancellor wishes to review the scheme after March, because this is a very expensive scheme and there may be better ways of doing it to contain the expenditure.

I hope, for example, that consideration will be given, where price controls are still being offered to consumers, to limiting the amount of subsidised fuel any household can buy to a reasonable amount for a normal household, so that those who are in richer households and making much bigger demands on the fuel system would pay for the additional fuel they need—if they are lucky enough to have a heated swimming pool, or whatever it is—and would pay the full price on the extra fuel that such luxuries require. That is offered as a hopeful idea of how one can start to grapple with the very high costs of this scheme without in any way undermining the crucial guarantee to all those who are struggling with their bills already and want this kind of security.

I also have some concerns about the Bank of England estimate. It is quite true that, from Chancellor Darling onwards, quantitative easing decisions have always been jointly taken by Chancellors of the Exchequer and Governors of the Bank of England. One of the main reasons why they have always been joint decisions is that the Bank of England always understandably insisted on a complete capital guarantee against losses on the bonds, because it was envisaging buying so many bonds that they became very big for the Bank of England balance sheet, and it wanted to be reassured that the Treasury and taxpayers stood behind the system in case of losses.

To the extent that this supplementary estimate is to make good losses on bonds that the Bank of England is selling, I have these questions. First, why does the Bank of England think it must sell bonds at this juncture, when the United Kingdom bond market, the American bond market and lots of other bond markets around the world are particularly depressed by the need for a counter-inflation strategy based on high interest rates? We are crystalising a loss that, as I understand it, the Treasury then has to pay for, whereas if we have an unrealised loss, no payments are of course needed until eventual redemption, and very often the redemption value of the bond is considerably higher than today’s price in the market. I cannot quite understand why the Bank needs to sell these bonds now, and as this has always been a joint policy in which Chancellors have been very heavily involved and have heard Bank of England advice—Chancellors had to sign it off because the taxpayer is at risk, not the Bank of England itself—I hope this will be carefully re-examined.

To those who say that we do need to be selling bonds as well as putting up interest rates to curb inflation, I would say they should be careful not to overdo it. If the Bank really does feel it has to tighten even more, it can do so by a further rise in interest rates; it does not have to do so by selling bonds. Very directly, as we see tonight, the sale of these bonds can realise a loss and then can trigger a cash requirement on taxpayers and the Treasury at an extremely bad time for such a cash requirement. I think all of us have much better priorities than paying for bonds that are underwater, when we see the current state of the economy and the need to route more money to individuals and companies in the right ways, to see off a longer and deeper downturn and provide some balance in the public accounts. I ask the Minister and Chancellor to think again, and to talk again to the Governor of the Bank of England about their joint responsibility. They must ask whether this is really the right time to be crystalising losses, resulting in unspecified amounts of money that will have to be paid.

My Speech during the Energy Prices Bill debate

Rt Hon Sir John Redwood MP (Wokingham) (Con): I welcome the Government’s announcement today that this scheme should be time-limited to six months and that a different scheme should be developed against the possibility that energy prices remain very high for the months thereafter. I do not think that we can go on indefinitely at the rate of the cost of this particular scheme over the winter. If this continues, we need to target the support much more clearly on the many people and families in this country who could not afford the bills otherwise and leave those who have rather more money and are using rather more energy on luxuries to pay more of that for themselves. We have time to sort out a scheme that we can target better. I am sure that this Committee, and the dialogue that will continue, will make sure, through pressure from Back Benchers and Front Benchers, that we do not leave anybody out. It is very important that everybody has proper support one way or another so that they can afford their energy bills this winter and beyond.

I am also sure that the long-term solution is more domestic energy. We cannot carry on relying on unreliable imports, which can, at times, force our country to pay extreme prices on world markets to top up our gas or electricity because we do not have enough for ourselves. We are a fortunate country with many opportunities to produce fossil fuel and renewable energy. We have been a bit lax in recent years in not putting in enough investment, so I hope that the Secretary of State will look again at the incentives—as I am sure he will—and at the predictability of contracts and investment, so that Britain is a great place in which to invest for these purposes, and so we can exploit more of our energy and have more reliable supplies, even generating a surplus in some areas so that we can help Europe, which is very short of energy and does not have many of our natural advantages.

My concluding point is that we cannot go on for too long with a complex net of subsidies, price controls and interventions without damaging the marketplace more widely and sending the wrong signals, so I am glad that this measure will be short-term. We need a better system for the future so that there can be plenty of support for those on low incomes if energy prices remain high, but also much more investment to solve the underlying problem.


My Question to the Chancellor of the Exchequer during the Economy Statement

Rt Hon Sir John Redwood MP (Wokingham) (Con): What will the impact of these measures be on the growth rate, and will we still avoid recession?

Jeremy Hunt MP, Chancellor of the Exchequer: I will publish the economic forecasts from the OBR when I make my statement in a fortnight’s time. I think it is better for me to wait until I hear that. The proper answer to my right hon. Friend’s question is that what we are seeking is a long-term sustainable increase in the economic growth rate. That is a central policy of the Prime Minister, which has my wholehearted support.


My Contribution during the Committee Stage for the Health and Social Care Levy (Repeal) Bill

Rt Hon Sir John Redwood MP (Wokingham) (Con): I disagree with new clause 2 and new clause 1. I welcome very much the legislation. One of the objectionable features of the original proposal was hypothecation, because I do not think it is possible to identify a single tax that just happens to meet the costs of a particular service, let alone a tax that would then have revenue growth at the right pace to take care of the needs of that service. This one was particularly misleading. There was no way that the amount of tax to be levied got anywhere near paying the full costs of social care. It was misleading to make people feel that social care might be as cheap as this particular tax, although the tax itself was burdensome on all those who go to work.

There are still strong elements of hypothecation in new clause 2, which I would equally object to. Again, we should not mislead people into believing there is a simple, relatively low tax that takes care of a huge problem—social care. Indeed, when the Government compounded the difficulty by saying that in the first instance the tax would be mainly used for the health service, and by some magic that would drop away and it would go to social care, it all became incredible to me. That is why I did not like the idea in the first place. It is very good news that we are sorting it out.

The challenge of new clauses 1 and 2 is a perfectly fair one, and I think the answer is straightforward. Social care does need more money to go into it, and it will need progressively more. If we fund our social care better and expand it, it will release some of the pressures on the NHS. There are some people who could vacate a bed quite safely and get better social care if that were available, so this is worthwhile expenditure from that point of view as well. Above all, it is worthwhile expenditure because people deserve better care and better treatment and that should be funded out of general taxation.

The Government are right now to abolish the hypothecated specialist tax, to give up the idea that there is a single, relatively low tax that solves all the problems, and to accept that social care and NHS provision together is a major claim on the general taxation of the country. If the general taxation of the country does not reach total spending—it does not seem to at the moment—it is also a claim on borrowing.

On that last point, we should remember that for the previous two years the Office for Budget Responsibility grossly underestimated the revenues that came into our economy, and we borrowed considerably less than it was forecasting. It may not be so wildly wrong this year, when it looks perhaps as if its borrowing forecast is a bit on the low side, but we must remember that the way to pay for these services is to grow the revenue. That was what we were doing last year and the year before, and that is what we must do next year, to take care of the need to spend more on the NHS and social care.

My interventions to the Prime Minister and the Business Secretary during the debate on UK Energy Costs

Rt Hon Sir John Redwood MP (Wokingham) (Con): Does the Prime Minister agree that we are too short of energy but have plenty of taxes, and that if we had an over-supply of taxes, as the Labour party wants, we would have less supply of the things we were taxing?

Elizabeth Truss, The Prime Minister: My right hon. Friend makes an extremely good point. The reality is that we cannot tax our way to growth. The policy that I am setting out today is all about helping people with their energy costs, as I promised, and making sure that we have the long-term energy supplies that we need for our country.

Rt Hon Sir John Redwood MP (Wokingham) (Con): Would the Business Secretary like to remind the House that the Republic of Ireland deliberately chose much lower corporation tax rates than the rest of the advanced world and collects a far bigger proportion of its economy in taxes on business than we do?

Jacob Rees-Mogg, Secretary of State for Business, Energy and Industrial Strategy: My right hon. Friend will be glad to note that the Chancellor of the Exchequer, from a sedentary position, is agreeing with him. My right hon. Friend is a higher authority on this than I am, but we know that the cut in corporation tax led to an increase in receipts. Higher taxation is not the answer.

Looking at the long term, we must fix our broken energy system. We must have energy independence and become a net exporter of energy by 2040. We cannot be held captive by volatile global markets or malevolent states. We must tackle the root causes of the problems in our energy market by boosting domestic supply. We will invest in renewable energy with vim and vigour, accelerating the deployment of wind, solar and—particularly exciting, I think—hydrogen technologies. To reassure my right hon. Friend the Member for Pendle (Andrew Stephenson), we will invest in nuclear technologies, which also provide us with cheap and clean electricity.

I note that my hon. Friend the Member for Ynys MĂ´n (Virginia Crosbie) said that her constituency is known as energy island. That is exactly what we need in this country. My hon. Friend the Member for Gloucester (Richard Graham) noted that not just Ynys MĂ´n but the whole of the United Kingdom is energy island. We must use all the resources available to us, including tidal energy, as my right hon. Friend the Member for Maidenhead (Mrs May) said. This is a great opportunity.

My intervention in the Northern Ireland Protocol Committee (Day 3) debate

Rt Hon Sir John Redwood MP (Wokingham) (Con): Has the hon. Gentleman or his party ever once lobbied the EU in public or in private to shift its position to accommodate the very reasonable grievances and to deal with its illegalities under the protocol?

Stephen Doughty, Shadow Minister, Foreign and Commonwealth and International Development: I do not agree with the last part of what the right hon. Gentleman said, but actually I sat around the table with EU ambassadors and, indeed, the EU ambassador to the UK to discuss these very issues just weeks ago, so I have sat down in private, and we have said so publicly on a number of occasions. The right hon. Gentleman should be reassured on that point.

My interventions in the North Ireland Protocol Committee (Day 2) debate

Rt Hon Sir John Redwood MP (Wokingham) (Con): Will the Financial Secretary confirm that the Treasury will never use the argument that we must not press ahead with the very necessary VAT cut on energy in the cost of living crisis because we cannot apply it in Northern Ireland? It could damage GB as well as NI if that argument were used. Will she promise that the Government will energetically pursue complete sovereignty over VAT?

Lucy Frazer, Financial Secretary to the Treasury: After this legislation has passed, we will be able to introduce VAT legislation across the UK in the interests of both GB and Northern Ireland. I can assure my right hon. Friend that the Treasury consistently looks at tax policies, including VAT, and the benefits and disbenefits of bringing in changes.

I turn now to amendments 37 and 41 in the name of Mr Lammy. I should note that this issue was addressed in a previous debate, so, in the interests of time, I shall aim to be brief. The amendments would restrict the use of the Bill’s powers to only make provision that is “necessary” rather than to make provision that the Minister considers is “appropriate”.

As my right hon. and learned Friend the Minister for the Cabinet Office and I have said previously, “necessary” is a very strict legal test. The amendments would therefore remove the policy discretion for the exercise of these powers, potentially limiting Ministers’ choice of the right solutions to the problems caused by the protocol. Changing the test to an objective one will provide additional uncertainty to businesses and consumers and it would severely limit the ability to facilitate consistent VAT, excise and other relevant tax policies between Northern Ireland and Great Britain, as well as a domestic subsidy control regime that applies to the whole of the UK.

I want to comment on how that was expressed by the hon. Member for Hove, who suggested that Ministers could make changes on a whim. That is simply not the case and is a misrepresentation of the position that is clearly set out in the legislation. Clause 12(3) clearly states:

“A Minister of the Crown may, by regulations, make any provision which the Minister considers appropriate in connection with any provision”.

Therefore, he or she would need to consider those matters very carefully, as Ministers from across the House would do. The amendments might also prohibit the Government from responding in a flexible way to issues facing Northern Ireland. That, in turn, will have a negative impact on Northern Irish businesses and individuals, so I ask the hon. Gentleman to withdraw his amendment.

Many hon. Members discussed the negotiations, and I hope that I have answered those points in my response to the intervention from Stephen Farry, The hon. Member for Hove talked about the single electricity market. The right thing to do is not to impact the single electricity market. As the Foreign Secretary has said, we want to cement the provisions in the protocol that are working, including the single electricity market. That is why this Bill does not seek to exclude article 9 or annex 4, which maintain the single electricity market. The Government are committed to preserving it and the benefits that it provides to UK citizens in Northern Ireland.

For those reasons, taken together, these clauses will ensure that the Government can set UK-wide policies on subsidy control and VAT, ensuring that those in Northern Ireland can benefit from the same level of support as those in the rest of the United Kingdom.

My contribution in the Northern Ireland Protocol Committee (Day 2) debate

Rt Hon Sir John Redwood MP (Wokingham) (Con): I welcome the notion of measures that restore our control over VAT and subsidies in Northern Ireland. It is entirely within the spirit and the text of the protocol, which says that both parties will respect the internal market of the United Kingdom. How can we have a proper functioning internal market if we have to have rates of VAT in Northern Ireland that are different from the rest of our internal market? And how can we claim that our country’s sovereignty is respected by this part of the agreement, as the EU originally said it would be, if we are not sovereign to change VAT in an important part of the United Kingdom? It is right that we legislate on this issue, because we took back control and we wish to restore the sovereignty of this Parliament. How can we say that we have a sovereign Parliament properly restored if our Chancellor of the Exchequer cannot change VAT in part of the UK? It is right and it is legal that we legislate within the terms of the protocol and the agreement, and it is essential that we do so. Those who favour a negotiated solution with the EU should recognise that a huge amount of time and talent has been put into negotiating with the EU in recent years on these matters, and it has been unwilling to be reasonable or to respect the spirit and even the letter of the protocol itself. It is time to legislate.

I say to those who favour a negotiated solution and still have this idea that the EU will, in due course, negotiate properly over one that it is far more likely to negotiate in a more sympathetic and realistic spirit if it knows that we have the firm backstop of clear legislation, which means we will do the right thing by Northern Ireland and the whole UK if the EU cannot be bothered to meet us and understand what it means for the communities in Northern Ireland.

The EU should also take on board the good advice from the Democratic Unionist party and other members of the Unionist community in Northern Ireland. The whole fabric of the Good Friday agreement rests upon the consent of both communities. The EU says it fully signs up to that and sees it as of prior importance to the protocol, so the EU has to understand that there is no cross-community consent for the current position. The sooner we legislate to sort that out, the better.