Energy prices and regulation

The Prime Minister announced the headlines of a solution for the energy crisis. She proposes removing green levies and capping domestic energy costs per unit of energy, with a matching scheme for business. Presumably taxpayers pay compensation to the energy companies for selling us energy below their costs.

I favour doing more by way of tax cuts on energy, adding an end to VAT on fuel and cancellation of the carbon tax to cut energy costs. The problem with price controls is they might put people off investing in more supply, deterred by lower and unpredictable  returns from intervention. They also blunt the role of price in lowering demand when there is scarcity. It is necessary  to help people on low income with bills, or better to help them get jobs with decent incomes.

The EU was looking at plans of its own to tackle their cost of living crisis. They have been seeking a mixture of windfall taxes, price controls and rationing. It appears they have fallen out over controlling gas prices, with some fearing that would lead to an earlier loss of Russian gas and rationing. They expect Putin to find other markets for his gas. The EU seems to think the answer to dear and scarce Russian gas is even more investment in wind turbines and hydrogen.

It is difficult to understand why they believe this.Without storage wind turbine power is erratic and lets you down all too often. Hydrogen made using renewable electricity is not yet a commercial proposition and will need a vast new distribution network. The  truth is this decade many people are relying on the natural gas boiler for heating and the petrol or diesel car and van for transport. All the time that remains true Europe needs to secure supplies of gas and oil.

The U.K. can do something about this reality as it has reserves to exploit.

The Russian war in Ukraine

This week’s news that Ukrainian forces have liberated an area of eastern Ukraine taken by Russia comes as welcome news in the West. The decision to support Ukraine against a murderous  invasion has been backed by a supply of advanced Western weapons which have helped oppose the substantial Russian forces.

Ukrainian sources tell us Russian troops fled with low morale and in poor order, leaving vehicles and munitions behind. Russia claims it was a tactical consolidation that they ordered. All seem to agree Russia now controls less territory which looks like a Ukrainian advance. Ukraine is now reporting bad treatment of citizens under Russian rule.

This presumably means President Biden and the European allies will be encouraged by this and will continue to supply weapons, financial and other support to the Ukrainian state. The US has warned us to expect a long conflict. France and Germany want a negotiated peace. The Ukrainian success makes it unlikely  Ukraine will offer to surrender territory to Russia. It poses the question what will Russia now do?

Putin watchers do not expect him to sue for peace or to give up his violent attempt to take over substantial parts of the country. He is fighting a military war with Ukraine and a sanctions and commercial war with the USA and her allies. Putin is using the gas weapon to try to split the European allies. He wants to dilute or reduce western support for Ukraine. He is using nuclear pressure  against both Ukraine and the West through occupying a nuclear power station. He sometimes speculates about  the use of more extreme weapons which would put an end to the Putin lie that he was liberating Ukrainian people.

His use of the gas tap has so far troubled western economies with massively higher gas prices,  allowing him to collect substantial revenues whilst selling much less gas. This winter is going to be a difficult struggle both over trade including gas and for the forces seeking to win back lost territory.

I would be interested in your thoughts on what the West should now do. .

Queen Elizabeth I and Queen Elizabeth II

The two great Queens divided by 350 years and very different circumstances have shown women in the top job to best effect. Both came to the throne in eras when it was assumed men filled the leadership roles. Both inherited the job despite rules giving precedence to the male line. Both handled male dominated institutions with skill. The second Elizabeth was a role model for many more women leaders who in recent years have risen to the most powerful roles in our society, changing our public and business realms substantially so all but the most unreformed welcome good women leaders as well as men.

Their jobs were very different. Elizabeth I was head of government as well as Head of State,wielding ultimate power in her realm. Elizabeth II was the perfect constitutional monarch, embodying the power of the state but leaving it to governments elected by the people and answerable to Parliament to exercise the power.
Elizabeth I was at constant risk of assassination as her religious and political enemies circled. She had to reckon with the possible enmity of Spain, the super power of the day, drawing her into war. She needed to still the conflicts between Catholic and Protestant. She led her country to a remarkable victory against a huge Spanish invasion fleet and presided over a welcome internal peace which powered rising prosperity and a cultural flowering.

Elizabeth II survived the world war which threatened her family just like others from the bombing campaigns and inherited the throne at a young age owing to her father’s untimely death. She needed to keep the idea of monarchy fresh and lively for a new modernising era.With great skill she evolved the style and practice of the monarchy, adapting it to a television age. Her image like her predecessors was on every token of our money , on our postage stamps and in many a Council chamber and boardroom. It was also there in our living rooms on tv showing us her every move and gesture on visits and at state occasions. As the reign advanced so we saw more of her family life.She faced a level of public and media scrutiny that previous monarchs avoided, though they had often been lambasted by cartoonists and scribbling critics.

Wokingham proclaims the new King

I attended the Proclamation in Wokingham marketplace on Sunday.

The Mayor read the Proclamation from the Accession Council to a large crowd who had gathered in the sunshine.

I spent time talking to people after the event. We were all feeling the bitter sweet nature of the occasion. There was great and continuing sadness over the death of a much admired and respected Queen. There were good wishes and hopes for the new King.

Those who stood patiently to the side of the Town Hall had been unable to hear the address but took it in good spirit and were pleased to have witnessed the event. Many wanted to talk to me about the Queen and some had heard my tribute in the Commons where I tried to pass on my understanding of the love and professionalism the Queen displayed in her many visits and ceremonies. They wanted to know more about the sovereign we have lost.

There was general optimism about Charles III and an understanding of the important role a monarch can play at the head of our democratic system of government. In good times and bad the Queen could speak about the things that unite us.

Why Parliament stands adjourned and when it should return

Parliament rightly has adjourned to pay respects to our late Queen and to allow the use of the Palace of Westminster for the solemn proceedings before the funeral around the lying in state. On current plans the House of Commons will not meet again until October 17th.  We need to get back to Parliamentary work sooner than mid October given the shortened September session and given the urgent tasks that await the new government.

There is a need to produce a detailed scheme of help to businesses facing impossible fuel bills. We need to debate and legislate the full package of energy measures to increase supply and ease the cost of living and cost of doing business crises. We want to hear the Chancellor’s Financial Statement and cut the taxes as promised.

MPs will want to hear from the new Home Secretary how she will defeat the dangerous people trafficking across the Channel, and develop the points based migration system. We wish to learn more of the new Health Secretary’s plans to get waiting times down and cut waiting lists. How will a range of Ministers unite to produce a growth strategy?

It is right we show our respects to the late Queen and right Palace and government are united to organise the State funeral. We must then pick up the pace of changing things for the better.

I have put these points to Ministers

The King’s speech and Parliament

The King spoke well with a moving tribute to his late mother and his clear pledge to undertake his new tasks in the spirit of public service above politics which informed the Queen for seventy years. At the Privy Council he reaffirmed his wish to uphold our democratic traditions and to be guided by the Parliaments of his realms.

In the coming week the UK Parliament will  rest adjourned in mourning. The Palace of Westminster will  be turned into more of a  fortress than normal  in preparation for the funeral of the Queen and the arrival of numerous Presidents, Heads of State and government from around the world to London for this great and sad occasion. The Queen’s body will lie in state in Westminster Hall in preparation. The external business of government will stop, with politics suspended whilst  the relevant Ministers are involved in the preparations and events surrounding the death of the monarch.The nation mourns with its government until the funeral.

Meanwhile the country wrestles with the energy crisis and the cost of living pressures. It is fortunate that the government was able to make a reassuring statement before these sad events that relief is on its way from unaffordable fuel bills. Behind the closed office doors it is important that work goes on to complete the plans for the energy package and for the promised Financial Statement later this month to follow the period of mourning. Parliament should  return earlier from the planned Conference break to scrutinise and approve measures commensurate with the scale of the challenge to business and families posed by the prices of gas and electricity. Business is suffering now with no protection in place against the surges in energy prices.

Constitutional monarchy

The Queen’s success rested on her firm understanding of the principles of constitutional monarchy in a democratic state. She took seriously her leading role in the great occasions of each year and of her reign.

Every year saw her distribution on Maundy Thursday in spring, her Remembrance day acts so we do not forget all those who gave their lives in war, Trooping the  colour in summer and her unifying Christmas message. There was the annual  rhythm of the sporting events she liked to attend and time spent in Balmoral and Norfolk outside London.

The reign brought us royal weddings and state funerals, Jubilee celebrations and one off events from the Olympics to World Cup competitions where she  would play her part.She hosted Heads of State visiting from abroad and travelled to many countries as our leading Ambassador.

She opened Parliament and set out the government’s plans in the Queen’s speech from the throne. Written in neutral language it is heard in silence by all parties. MPs then return to the Commons to debate it, support or criticise it, putting living politics into the measured plain prose of the original.

Her success in avoiding political controversy was absolute. She did not find herself in papers based on leaks of partisan or one sided views she was alleged to have let slip in private because she did not allow herself such views. In conversation she was brilliant at being interested in whoever she spoke to without letting slip a viewpoint of her own that some would disagree with and think too political. She did ask the occasional question that made the news, as when she asked why the economic experts had not foreseen the coming economic crash in 2008. She spoke for most of the country when she asked that.

 

The Queen

The sad end of the Queen’s life will be felt by us all. She has been our Queen all through our lives, a source of stability and a well known presence at our great national events.

Over seventy years of peace and rising national prosperity the Queen brought many subtle changes to the monarchy. She judged the evolving moods and attitudes of the nation. She quietly modernised the way the monarchy works and how we can relate to it. As the titled head  of a class conscious  society in the 1950s, proximity to the court  underwrote that culture. 70 years later the monarchy is more accessible to a  diverse range of people with more relaxed attitudes to etiquette.

She lived for service to her nation, for her family and for the animals and sports that helped enrich her life. Our longest reigning monarch, she ranks alongside Victoria as a long serving Queen who helped create the spirit of an era. The U.K. modernising  and rebuilding after the world war was self consciously the nation of the new Elizabethans. Our Queen throughout her seventy years stayed safely above politics and contentious opinions, the only way to ensure a constitutional monarchy flourishes.

The nation has lost its foremost diplomat and representative. She led the growth and work of the Commonwealth. Everywhere she went and in every country where had a role she created good will and graced many formal and entertaining events. I send my condolences to the royal family who have lost a mother, grandmother and great grandmother.

 

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 Môn (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 Môn 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.