Category: Uncategorized

The Bank struggles to catch up

December 16, 2022 156 Comments

Most MPs and establishment officials tell us the  Bank of England is independent. They tell us The Bank’s main task is to keep inflation to their single target of 2%.

Inflation is well over 10%, more than five times target. It has been above 11%, and was 5.5% before Putin  invaded  Ukraine and set off an energy crisis. Inflation in China is 2.1%, in Japan 3.8% and Switzerland 3% though they too import a  lot of dear energy.

The Bank’s Governor has to report to the Chancellor and to the Treasury Select Committee.

Why is there no criticism of the Bank’s failure to control inflation ? Why did so few of us warn in advance of Bank Errors? Why do the Bank refuse to monitor, comment on and report money and credit growth? Why did the Bank print an extra £150 bn in 2021 thinking well into recovery  that would not be inflationary?

Why has it taken the Bank so long to get Bank rate to 3.5%? Why now we are entering a downturn does it think it needs further hikes? Why doesn’t it put rates up immediately to the rate they think they need to throttle inflation? I argued against  the extra bond buying in 2021, forecast higher inflation and urged higher base rate this year.

Now I want Treasury and Bank to work together on a growth policy to shorten and lessen the recession the Bank is now determined to create.

 

 

My Intervention to the Minister during the SNP Opposition Debate on Scotland’s Future

December 16, 2022 9 Comments

Rt Hon Sir John Redwood MP (Wokingham) (Con): The SNP was very critical of the electricity and energy regulation in the UK, and said that it wanted change in it. It did not seem to realise that all our current regulations are those of the European single electricity market, and that it is only because of Brexit that this Government are now consulting on changing those unsatisfactory regulations.

 

John Lamont MP, Parliamentary Under-Secretary of State for Scotland: That is a useful reminder that, while the SNP advocate breaking away from the rest of the UK and breaking away from Westminster and London, it wants even closer ties with Brussels and all the challenges and bureaucracy around that. I always welcome the opportunity that the SNP gives us to talk about the benefits that we all get from being part of the United Kingdom, and all the positives and strengths that come from working together across the whole country. The United Kingdom is the most successful political and economic union that the world has ever seen. In challenging times, we are stronger together. We are better prepared to deal with any crisis, particularly an issue on the scale of the energy crisis, or of the very thing that created the energy crisis—Vladimir Putin’s awful war in Ukraine.

In these volatile times, I continue to believe that the last thing people need is greater uncertainty. This is a time for unity behind a common purpose, not division that would split us apart. The challenges facing all of us across Scotland and the whole of the United Kingdom demand all of our attention.

On the substance of the motion, as the hon. Member for Edinburgh East well knows, the Scottish people do not see another referendum as a priority. There is no consensus across Scotland on another referendum and all the division and distraction that that would bring. We already know the process by which a constitutional question can be asked, because it happened back in 2014. We had a referendum and the people of Scotland decided our future by an overwhelming majority. That happened after there was consensus across political parties in the Scottish Parliament, in civic society and among people across Scotland. That is not where we are today.

If SNP Members want to focus their arguments solely on opinion polls, then what do they have to say about the polls, including recent ones, that show that people do not want another referendum on Nicola Sturgeon’s timetable? No matter how many polls there are that show a majority of Scots against another referendum, the SNP still wants us to go through the distraction of an all-consuming constitutional debate. It is all it cares about—another referendum at all costs.

My Intervention to the SNP Spokesman during the SNP Opposition Debate on Scotland’s Future

December 15, 2022 65 Comments

Rt Hon Sir John Redwood MP (Wokingham) (Con): As I understand it, the hon. Gentleman wants Scotland to pull out of the UK but join the European Union. How easy does he think that would be, given the EU’s stubborn attitude towards the Catalan claims and its support of Spain resisting even a referendum?

 

Tommy Shepherd MP, SNP Spokesman: The difference, of course, between the EU and the United Kingdom is that Scotland can leave one but not the other. I can imagine how the right hon. Gentleman might have felt if he and his Brexit colleagues, who wished for Britain to leave the EU, had been told, “Well, you simply can’t do that. You have no right to do that,” because that is the situation that is being presented to Scotland with regard to the UK.

In my view, which I think is accepted, Scottish independence requires two things. First, it requires the majority consent of the people who live in Scotland, and they need to express a wish for that to happen. Secondly, it concerns a negotiated settlement with this place and it will eventually require an Act of this Parliament. Those two things were fused together in the 2012 Edinburgh agreement, but because of the UK Government’s reticence, we will have to decouple them and take them separately.

Our ambition now is to find some means to allow people in Scotland to express their view. It does not sit well for the UK Government to take a stance of actively trying to frustrate and deny that happening. This motion, if they were to vote for it today, fixes the problem, because it gives the Scottish Parliament the power to organise the first of those things—to determine the view of the people. We are asking for the Scottish Parliament to have the power not to legislate on the Union or on becoming an independent country, but merely to consult the people and to articulate on behalf of those who elected the Holyrood chamber. That is the opportunity that is offered by the motion’s proposed Bill, and I hope that hon. Members will take it.

The more that we tell people that they cannot have something, the more they want it. We have seen that in recent opinion polls with the surge in support for independence. Most significantly, in last week’s opinion poll, we saw a clear majority of people saying that there should be another referendum on this question before the end of the Scottish Parliament’s term in 2026—that is the first time that there has been a clear majority on the timing of the referendum.

All that is happening as a result of the UK’s obstinance, insistence and denial of the democratic mandate in Scotland is that the case for independence is being fuelled. If it comes to a situation where there is a conflict between the British constitution and the claim of right of the Scottish people, it is our responsibility, which we will not shirk, to make sure that the latter triumphs over the former.

 

What happens when there is no wind ?

December 15, 2022 145 Comments

This is an article the Telegraph asked me to write for their publication:

 

For more than a decade I have been asking Energy Ministers how do we keep the lights on  when the wind does not blow? There has been an  almost universal enthusiasm to finance  more windfarms. We were told we would get more than half our power from renewables. The stated capacity of UK wind turbines  is over 25  GW , which compares to demand on a cold day of a little over 45 GW.
This autumn and winter we have lived through periods of little wind, when the wind electricity output can be as low as 1% of our total needs despite having theoretical capacity for many times that. I have been repeating my question. If low wind  coincides with dark evenings and mornings when there is no solar power the grid has  turned to maximising output from gas generators . It has had to  call up the few older coal stations that managed to avoid the passion to demolish them.
I have usually been told that the UK will import any extra energy it needs if there is a cold snap with little wind. The Regulators and the industry rushed to put in more interconnectors to the continent so we have that flexibility they promised. I  remonstrated that we cannot rely on an energy short Europe if we run out of power. Most of the continent has no domestically available gas or oil, and was dependent on Russian imports which always contained a political risk. Unfortunately the violent conduct of Russia this year has led to an early ban on the imports that sustained Germany and Italy, leaving the EU trying to cut energy use to match the shortfall in supply. Relying on imports means paying very high prices.
There have always been problems with adding too much wind power to our system. Much of the wind power is best generated offshore in Scotland where there is availability  and on good days  more wind. This needs an enlarged high voltage network to  bring it south to where it can be consumed, with losses along the way. Too much interruptible renewable power on the system makes balancing the grid more difficult, with more need for back up generation that can be available almost instantly if the wind drops .  Relying on European imports does not work when the EU is also experiencing a cold period with little wind, especially if enough of the ageing French fleet of nuclear power stations continue to struggle to stay open.
Import dependence is also bad in other ways. It means exporting well paid jobs. It means paying large taxes on energy away to  a foreign Treasury instead of keeping them at home to pay some of the NHS bills. It gives the UK less control over energy when there are supply constraints that need managing. When electricity was first privatised there were three aims of policy. The first was to ensure security of supply, with the industry and regulators ensuring  a useful surplus over normal maximum demand from domestic stations. This was seen to be an important part of our national security. The second was affordable power, by developing a system which always used the cheapest power available. The third was environmental. In the first decade after privatisation the industry made huge advances, replacing coal stations where only around a third of the underlying energy emerged as electrical current  with gas fuelled combined cycle stations that improved energy efficiency by more than half, allowing cheaper prices and a much cleaner output. There was plenty of margin for cold days when something went wrong with a power station or two.
 
The government has wisely said it is going to make national security of supply a main aim again. To do so it needs to recognise that will require plenty of stand by power for when the wind does not blow. In due course we may find that investment in battery storage on a huge scale allows us to keep electricity from windy days to manage windless ones. We may find there is a commercial roll out for the widespread use of green hydrogen , generating more lasting power from wind electricity. Until that happens we need to rely on power stations that do work when the wind does not blow and the sun does not shine. 

My Interventions in the debate on the Remaining Stages for the Levelling Up and Regeneration Bill

December 14, 2022 24 Comments

Rt Hon Sir John Redwood MP (Wokingham) (Con): Can the Minister remind the House how the Government will stop developers gaming a local plan and getting permissions that are not within the local plan under some silly rule?

Lucy Frazer, Minister of State: This Bill and the proposals that we are bringing forward through the revised NPPF will do exactly that. At the moment, in 60% of areas, building is through speculative development, not where communities want it. We want to streamline the local plan process, get those plans in place, where communities want it, and then we can start and continue to build.

…

Rt Hon Sir John Redwood MP (Wokingham) (Con): Does the hon. Member not understand that the whole point about more local determination is that the local community ultimately has to say, “This is all we can manage and we cannot be overridden”?

Clive Betts MP (Lab): Yes, I understand that, and that should be taken into account, as it can be at the local plan stage. The problem is that, if every local community decides that it does not want house building, we end up with not enough houses being built nationally. That is the simple reality of life. What I am saying is, yes, have the argument at the local plan stage, but all too often now, local plans get bogged down not with where the houses should be built or with the quality of the housing and the infrastructure, but with arguments over housing numbers, with developers and councils employing lawyers and consultants to argue with each other. That is what happens. If we can get agreement between the council and the Government and that is then accepted as the target for the way forward, that is a suitable way to do it, rather than the current endless debate and argument about numbers and calculations.

I want to mention one other amendment, on environmental outcomes. One of the biggest arguments at local level is often on the environmental impact of development. There is great concern among local communities about the environmental impact and the fact that, when developers commission an environmental report, it is commissioned by the developer and paid for by the developer. Communities are often suspicious that the report produces what the developer wants to hear, rather than what the actual environmental impact is for those communities. My amendment 105 is simple: in future, the developer should pay, but the local authority should commission. In that way, we make it absolutely clear that environmental outcome reports on individual developments are completely independent, and that local communities can trust them. That seems to be a sensible suggestion. I hope that the Minister will accept it and move it forward.

 

 

Stopping the small boats

December 14, 2022 249 Comments

Yesterday the Prime Minister committed himself and the government to ending illegal migration across the Channel, announcing a series of administrative measures and proposing a stronger law in January.

Knowing the importance of this issue to many readers I reproduce below a summary of the government’s proposals in their words for your information and comments.
  • Over 40,000 people have illegally crossed the Channel in small boats this year, putting pressure on local public services. Many originate from safe countries and travel through safe countries. That is unfair on those who come here legally, unfair on those who have a genuine asylum claim – and unfair on the British people who play by the rules. 
  • The Prime Minister has prioritised this issue since he took office: he has delivered the largest ever small boats deal with France which increases UK-funded patrols by 40 per cent, re-established the Calais Group of Northern European nations to disrupt traffickers, and set a long-term ambition for a UK-EU wide agreement on migration.
  • But we need to go much further. Today, the Prime Minister and Home Secretary are setting out five new steps:
    • A new agreement with Albania so that the vast majority of Albanian claimants can be removed – with weekly flights until all Albanians in our backlog are sent home.
    • A new, permanent, unified Small Boats Operational Command in the channel with 700 new staff
    • Tougher immigration enforcement with 200 new staff and better data sharing with banks
    • Cheaper accommodation sites so we can move migrants out of expensive hotels
    • Clear the initial asylum backlog by 2023 by doubling the number of caseworkers and radically streamlining the process
  • However, we will go further still to solve this problem once and for all: early next year we will introduce new legislation to make it clear that if you enter the UK illegally you should not be able to remain – but should be swiftly detained and removed.
  • By taking these steps, we will be tough but fair, tackle illegal migration – and stop the boats.

 

 

Managing the Public Sector – My Article for Conservative Home

December 13, 2022 115 Comments

Labour lost office in 1979,when it lost control of the public sector. Its own trade Union friends and supporters created a winter of discontent, with rubbish piled in the streets and the dead going unburied. The party had unleashed a rapid inflation it could not control. Workers were fed up with pay controls and with the squeeze on living standards they were experiencing. In those days Ministers were to blame for the price rises and the pay policy.

The government  thinks today is different. They say an independent Central Bank and the outbreak of a European war have brought on the inflation. The public services are these days largely run by independent boards with professional management. It is their job to get on with the employees, settle the pay and raise the productivity to help pay for it.

There are two main problems for the government. The first is these independent bodies are handling things badly. The Board of NHS England has received huge increases in funding from Ministers only to deliver the biggest ever backlog and problems for many patients in getting access to a GP or hospital appointment. The  six senior managers there earning well over £200,000 each do not appear on the media to make the case for their pay and staffing proposals.  What is their plan to recruit and retain the staff they need? Where is the long awaited manpower plan?

The Bank of England created excess money and held interest rates too low for too long, ending with an inflation rate five times its target and five times the level in China, a country also facing high energy prices from the war. The  railways effectively nationalised by the need to subsidise empty trains over covid has gone on losing vast sums and now expects a pay rise on the taxpayers. Where are the productivity raising plans and the more popular timetables?

The second problem is the public expects Ministers to sort these things out. After all they appoint the key players that run these bodies. They can take them back under Ministerial control if they are not working. Weak poll ratings are saying to Ministers “Get a grip”. Deliver better service for an affordable tax bill. The NHS has received record levels of funding in the last three years and has presided over wasteful PPE contracts, underused contracts to access private hospitals and the cost of setting up and shutting down the Nightingales.

The problem is magnified by the poor performance of lots of branches of central government directly under Ministerial control. There  has been a collapse of productivity in processing asylum applications. There  are delays in getting probate approvals and in passport renewals. The civil service is good at delaying implementation of Ministerial decisions they do not like . They often offer advice to keep the UK fully aligned with the EU and to give in to the forces of the global soft left.

So what should the government do? There is no simple legislative solution. Wrestling changes of law through to force public sector employees to give up rights to strike may harden disputes. The delay in doing so makes it impossible for this to work for this December’s struggles. There was plenty of spare Parliamentary time if Ministers had wanted a new strike law this month. What the government needs to do is to mentor and encourage their chief executives to find ways of raising productivity and negotiating something for something settlements. If they cannot they need to replace chief executives who cannot manage their services.

The revelation of just how few asylum cases Home Office officials process compared to past levels shows how in some cases we are talking about a productivity collapse. What are the figures for probate cases, for issuing passports and the rest where there are backlogs? Do we need incentive pay? More staff? The senior managers should be organising the answers. Ministers clearly want a better service with backlogs cleared and should authorise and switch resources to do so.

Improvement should  be easiest on the railways. There is no case for giving train drivers paid well over average pay a large rise without action to improve working practices. Given the collapse of five day a week commuting and rise of on line home working the railway no longer has the same capacity to harm the economy as it once did. The railway management need to get across to their staff that the way to sustain and improve  higher wages comes from running more popular services. Serve people better and you have more money to share with staff.

Productivity has stagnated all this century in the UK public sector, despite huge sums spent on digital processing and despite the decline of in person service. More and more highly paid managers paid well in excess of the Prime  Minister have added to costs without adding to performance. Whenever a service fails or lets us down Ministers are blamed and left answering the unanswerable questions about what went wrong. There is no substitute for Ministers calling  in these expensive  CEO s and insisting on better plans to recruit and motivate the right staff and start clearing backlogs.

Keeping the lights on when the wind does not blow

December 12, 2022 250 Comments

I have been warning of the dangers of relying on renewables for our electricity before there is sufficient battery storage, pump storage and green hydrogen production to make energy available when there is no wind or sun to power the grid.

 

Over the last year the government did listen. It has kept three coal power stations and given them contracts for when we need that back up power. They  have opened Rough to give us a bit more gas storage for cold windless days. They have accepted that gas is an important transition fuel this decade, often providing more than half our electricity as well as heating most homes and energy intensive  industrial processes.

Yesterday renewables contributed a small single figure percentage of our electricity as demand rose to combat dark and low temperatures. We needed the fossil fuel back up. The government needs to encourage further back up investment in pump storage and make sure we have sufficient gas burning generators all the time we need them to keep sufficient power in the grid.

 

The system operator and regulator also need to review the capacity of the grid and street cable system. We cannot keep adding new electrical  demands to home and work without installing extra cables. Switching cars and heating represents big increases in electricity needed which is way beyond present cable capacity.

The difficulties of balancing a system with more and more interruptible power allied to the lack of capacity to handle more Scottish wind energy should lead to some new thinking. Energy policy  used to worry about security of supply first, then price and green issues. There needs to be a stronger plan for security. Imports are not a reliable answer as we have seen with the EU gas problems and the shut down of many French nuclear plants.

 

Strikes and public sector management

December 11, 2022 208 Comments

There is discussion of a new law to limit the right to strike in key public services, just as armed  service personnel agree not to strike when they join up. If the government thinks such a law would be helpful they should have used some of the underused Parliamentary time this November and December to put one in. They  did not,  meaning such a law cannot now have an impact for current rounds of Christmas and New Year strikes.

My view is Ministers need to engage more with the Chief Executives and senior officials who are meant to manage these  matters. Ministers direct, managers manage. Ministers set policies. CEOs and senior officials implement them. Ministers have made clear they want to stop the flow of illegal migrants across the Channel. They have stated they want the health backlogs down. They want  faster turnaround of  asylum claims, of passport renewals, of probate filings and many more other admin processes connected to licences, taxes and benefits.

They have in many cases authorised large increases in spending and given approval to a major expansion of state employment since 2019. Now they must ask where is all the money going? Why isnt there more service from the extra people and cash?  When will their aims be met?

It looks as if the independent body and quango model lets us down badly. It also is clear Ministers are having to involve themselves  much more in running departments if they want  to get things done. I will write more about the role of public sector well paid CEOs and why we do not  get better results. All too often Ministers agree an aim only to discover a quango is doing the opposite and makes it difficult for a Minister to get through a desired change of policy.

My Speech at the Parliamentary Debate on the Future of BBC Local Radio

December 10, 2022 122 Comments

Rt Hon Sir John Redwood MP (Wokingham) (Con): I entirely agree with that passionate defence of localism by Rachael Maskell. Local must mean local and we do not want people in the BBC in London imposing on us their views on how our local radio should be conducted and how big our locality should be. I see behind the centralised planning at the BBC a distorted version of what our constitution should look like within the United Kingdom, and a wish to impose that—against the clear majority wishes of people, whenever they have been asked about these subjects in referendums and elections.

It is not just that the BBC wishes to create phony regional groupings instead of truly local radio, but that it has a very distorted view of devolution. The BBC seems to be an enthusiast for devolution to Northern Ireland, Scotland and Wales, but it does not even know England exists. It always wants lopsided devolution. One of the four important constituent parts of the United Kingdom is scarcely ever mentioned; it is never suggested it should have any powers or right to self-government and there is no engagement with English issues on BBC radio in the way that there is a clear engagement with Scottish, Welsh or Northern Ireland issues. That causes enormous resentment.

In my own case, local radio is organised at the county level, at Radio Berkshire. That makes sense, because it is an area that we can recognise and there is some loyalty to our royal and ancient county. Many people now do not know that it had its borders artificially compressed in a local government reorganisation some 50 years ago, under a Conservative Government that I think made some mistakes. The county retains an enormous amount of goodwill and residual loyalty, and people are very happy for our local radio to be organised at that scale. If people had real choice, however, I think Wokingham would rather have a different radio from Reading, and I think we would probably rather have a different radio from Windsor, because we have a different set of issues. But we accept that there have to be some compromises because talented people need to be appointed and paid wages, and that cannot be done to a sensible budget at very local levels.

I urge the BBC to look in the mirror and understand why, in many respects, it is getting so out of touch with its audiences. It has a very narrow range of views and issues that it will allow people to discuss, and it has a particularly warped perspective on how we feel about our areas and what our loyalties belong to. I am allowed to express views from time to time on BBC Radio Berkshire. It does not put me through the ordeal of a pre-interview to find out whether my views are acceptable and fit its caricature of a Conservative in the way that nearly always happens if national radio is thinking of interviewing me. Then, I always have the double interview, and I quite often fail the first interview test because my views are clearly too interesting or unacceptable, or do not fit the caricature that the radio wishes to put into its particular drama. So people are spared my voice on radio and I have more free time, which is perhaps a wonderful outcome from those events.

I do not find that my local radio quite plots the drama as strongly as national BBC radio and television. I am very grateful for that because I think that good, independent broadcasting of the kind that the BBC says it believes in should allow people of decent views—not extremists who want to break the law, or racists—to conduct civilised conversations and debates through the medium of the BBC. But all too often, that is truncated or impossible because of the way in which the editors operate and their pre-conceived set of views, about which they wish to create some kind of drama.

Colleagues have made extremely good points, which I will emphasise, about the treatment of staff and the way these kinds of proposals are planned. If the BBC wishes to run truly local services, it must listen to us—the local people and the local people’s representatives—and treat its staff well, and be aware that they have given good service in the past and should be taken on a journey of change that makes sense for them as well as for the BBC. This all looks rather top-down, abrupt and unpleasant. Successful organisations understand that their own journeys, evolving as institutions, are best conducted if, at the same time, they allow good journeys for the staff who give them loyal service. That does not seem to be happening in this case.

I will spare you a bit of time, Madam Deputy Speaker—I have made the main points that I wished to make. The BBC needs to be more open to a wider range of views. If it wants to be local, it has to ask us what local means.