Speaking for England

Wokeish is not my mother tongue, but I feel I can usually speak and write it fluently because it is all the opposition parties in the Commons speak all the time. It is prevalent on the BBC and mainstream media, so news is dominated by its tropes and preoccupations.

It is stifling much debate and creating a divide with the informal conversations of some parts of the social media and of life when permitted in many clubs, bars and homes. It seems to be driving some people who do not follow politically correct thought into more extremes of language and frustration, which is bad for democratic debate. It means anyone however moderate and decent can fall foul of the unwritten rules of language and attitude that the left insist on. It leaves those of us who want proper debate about the preoccupations of the public struggling to allow it, given the severe censorship of the very topics on one side, and the roughness of language of some frustrated voters on the other side who threaten to abuse what should be the right of free speech.

There is a narrow preoccupation with certain themes, and a rigid view of certain challenges and opportunities. Brexit is all bad and always bad to the followers of politically correct fashion. They simply take every lie, half truth and threat from the EU side in the negotiations and retail it as truth.Many editors and interviewers bat for the EU in composition and questions of the interviews.

They alternate their anger over Brexit with their dominant wish that every sacrifice be made by the UK to purge the last drop of oil, the last molecule of gas and the last lump of coal from our lives and economy, as if the UK alone was responsible for their view of impending climate disaster and as if it will save the planet if the UK does abandon all carbon. There is no proportion in their understanding, and no room for anyone to ask critical questions or offer an alternative way forward. Gone is the usual worry about lost jobs or economic penalties as they chase a perfectly carbon free economy before the technologies to deliver it resonate with the public or are even available to buy.

Like most of us, they object strongly to slavery, yet their main anger is to slavery past by UK traders, with no mention of the people who traded slaves with them. They show scant parallel interest with the ugly slaveries of today that we might do something about. They rummage through UK history to highlight events and attitudes that we no longer support, ignoring the noble causes and the successes. They decline to mention the common adoption of the unacceptable by other countries and governments at the same time. England is always in the wrong, and never the victim in their world of devils and angels. There is a complete lack of pride in the UK’s role in bringing democracy to the world, in the successful campaigns fought against religious intolerance and slavery, and the battles for equality under the law and votes for all.

We need to take back control of our language and of the agenda. A strong democracy is one that can conduct a civilised but serious and passionate debate about what matters to large blocks of opinion. Attempts to prevent topics and ban any view you disagree with is usually an unwelcome move to alienate significant parts of the electorate and impoverish decision taking.

The EU, the US under Mr Biden and the UK all want people to dump their petrol and diesel cars and buy electric or go by train. They also want us to scrap our gas boilers for home heating and install heat pumps or all electric systems.

They also want us to do this in the next ten years. The enthusiasm for tougher targets to reduce “carbon footprints” means governments have to move on from forcing companies to change their energy use patterns to hit modest targets, to requiring everyone to change our habits to get closer to net zero.

In the UK there are an estimated 25 million gas heating systems in homes. It is going to be a vast task, and a very expensive operation to take all these out and replace them with something else this decade. Many people will object they do not have the money to make the change, or do not wish to have the disruption of replacement when their existing product is just fine. Some may decide to renew their gas boiler with another just before they are banned as they like that product and are wary of the new.

To make the switch happen government and business together have to come up with a great offer which makes people think the replacement is better than the old, and that the net cost of the change is worthwhile or subsidised. It would be better to leave the gas boiler as a legal product until there is a very popular range of other options which most people want to buy.

Governments are also keen to ban the diesel and petrol cars that have served us well over the last century. True greens do not want us to have individual transport other than a bicycle, but governments accept that many people need cars to get to work, to take children to school, to go to the shops and lead normal social lives. They urge us to buy the battery electric alternative.

So far this year in the UK diesel and petrol car sales are down 780,000 whilst battery cars are up by just 47,000. Some of that is of course CV 19 related, but some is the very trend government wants. It is deeply damaging to employment in our car factories and showrooms. Again it is good advice to say first help the industry find and promote popular non fossil fuel products. Only then think about banning the products people have liked up til now.

The Prime Minister this week wrote an article setting out his plans for a green revolution. His immediate target is to help create 250,000 new jobs to go with the 450,000 jobs currently said to be involved with decarbonisation. The plans entail £12bn of public investment designed to lever in an additional £48bn of private sector cash. That’s under 1% of the total jobs in the economy.

There are some good ideas in the list. He wishes the UK to plan an additional 30,000 hectares year with trees, some 100m additional trees. Last year the UK added 13,000 hectares of new wood to the total, with the largest share in Scotland.

I would add to this ambition the rider that we should at the same time plant trees that can be harvested and replaced with others, so we remove the large amount of timber import we currently bring in. We should above all wish to eliminate the import of wood pellet for Drax power station and replace it with domestic output that needs much less fuel to transport.

We need to know how this investment is going to be raised. Are there going to be more tax incentives for people to put their money into timber? Will the UK public sector start buying domestic timber for its needs?

He wishes to extend the Green Homes Grant scheme. It needs simplifying to get it to take off. Offering people cash help to get their homes better insulated, with double glazing and good draught exclusion is a good idea.

He wishes to fund research and development into hydrogen powered systems for homes and vehicles, and wants to pump prime UK made batteries. It is worrying how the UK and the EU have let China establish a lead in these areas, and gain a dominant position in some of the rare earths and materials needed to make modern batteries, which places us at a current disadvantage.

The headline from the PM’s intervention was a negative. The UK wishes to ban new diesel and petrol vehicles from 2030. The best way to cut the number of diesel and petrol cars is to produce new products which are better and better value than the cars we currently rely on. If the industry has done that by 2030 then moving on from diesels and petrol cars will be easy. If they have not, maybe the then government – which might just have some different Ministers around the table – will not want to end good products that people need.

There is need for more work on how all the electricity will be generated and how the cable network will be strengthened to take all the extra power. The UK is short of power and needs more reliable power as back up to wind farms. I will talk more about the policy of banning diesel and petrol cars and gas boilers tomorrow.

Yesterday I joined the debate on the government’s bill to give Ministers powers to block foreign acquisitions of companies, technology and other property that could be damaging to to our national security.

The Bill attracted cross party support. Much of the debate was about the detail. Two main questions arose. How can the system be set up to act smoothly and quickly for all the many foreign acquisitions that do not entail any threat to national security, as there is the danger that many buyers will feel the need to get clearance before proceeding. How do we define national security?

I pointed out that the UK has a high level of acquisition of our companies and assets because we run a large balance of trade deficit with the EU and now run a deficit on investment income thanks to all the past sales of assets to pay the import bills. I urged Ministers to develop policies that encourage more UK investors to invest in our future, and to invest in import substitution.

Many people define the national security phrase narrowly, to encompass specialist technologies for defence and Intelligence. I raised the issue of strategic weaknesses. In the two world wars of the last century – which we do not wish to repeat- one of the UK’s worst strategic weaknesses was the need to import food, fuel and other essentials through dangerous shipping lanes subject to sustained submarine and bomber attack.

Today we are very dependent on imported food and to a lesser extent on imported electricity. Shouldn’t our strategic audit encompass doing something to correct these weaknesses just in case? The continent is too dependent on Russian gas.

The UK used to set two main goals for energy policy. The first was to ensure competitive supply to keep prices down. The second was to ensure the UK could cover all her own electricity needs from home generation, with a sufficient margin of capacity to handle cold dark days and failures in part of the generating system. Some diversification of sources of power was always built in.

These policies were important to combat fuel poverty and to assist industry. If you want to have a strong industrial presence in everything from steel to ceramics and from chemicals to aluminium you need plenty of cheap energy. It is also a good idea to have electricity self sufficiency for strategic reasons. The low price was produced by a merit order system, where the cheapest power was produced all the time and dearer power was only added when demand rose to high levels.

In the 1980s major changes were made to allow more competition. These changes drove electricity prices down, whilst still ensuring something like a 20% capacity margin to allow for problems and demand peaks. The industry transformed itself from substantial reliance on coal to gas, and in so doing greatly increased its fuel efficiency, lowered its carbon output , cut polluting emissions and reduced prices.

In recent decades government has placed much more weight on two additional policies. The first is to decarbonise, forcing changes to close down fossil fuel stations. The second has been to accept the framework of an integrated European energy system, with more dependence on interconnectors deliberately put in. It is no surprise that the EU which pushed this is now using it as a threat against our exit. These two policies have led to higher prices.

As we leave the EU we need to change policy. We should discard the integrated EU policy, and reset UK independence of supply. We should seek to use competition again to drive down prices, and to ensure that where renewables are being added to the mix they are good value, taking into account their full cost. Wind energy, for example, is intermittent so allowance needs to be made for back up facilities. Water based renewable systems should have an advantage from being always available and that needs to be reflected accurately in comparative costings.

It will be more difficult for the UK to enjoy an industrial revival without cheaper power or without plenty of capacity and no interruptions to supply .

The UK is currently running a large state deficit, with the government spending maybe £350 bn more than its tax income this year. Last year we also ran a £100bn balance of payments deficit. Whilst this fell sharply during the global lockdown and big hit to world trade, it is picking up again as world trade recovers.

Allowing a huge deficit for just this year by the state is affordable, as interest rates are near zero and at the same time the Bank of England is buying up £250 bn of the state debt for taxpayers. The US, the Euro area and Japan are all doing the same. It’s still not a good idea to waste any of the money so borrowed, nor to think this is a long term answer to our economic challenges.

More serious is the balance of payments deficit. This now stems from two main causes. The first is the persistent large trade deficit with the EU. Our surplus with the rest of the world does not manage to get anywhere near offsetting all of this.

The second is the now persistent deficit on investment income account. Because for the last few decades we have imported so much more than we exported to the continent, we have had to sell companies, properties and shares to foreign buyers to raise the foreign exchange we need to pay for all the European imports. As a result we have changed from a country with a large surplus on our overseas investments prior to joining the EEC/EU into a country with a large deficit in investments, owing overseas investors much larger sums in interest payments and dividends than they owe us.

In future blogs I am going to return to the question of how once out of the single market and customs union we can reduce our trade deficit with the EU and stem the need to keep making our investment position worse by having to sell our assets. It is not a good economic model to be dependent on the goodwill of foreigners to buy your food or electricity, relying on foreign supply and on foreign finance to do so. The balance of payments has to balance, so if we import too much we have to sell off the country’s assets to pay the bills.

As the Prime Minister looks for new advisers he needs a select cast who will help him develop and communicate his strategic vision of our country and our future as we leave the single market and customs union and learn to live with the virus.

He needs help to build more bridges with Ministers and backbench MPs and to shape the resources and powers of government for a distinctive and positive approach to the future. There is plenty of talent and experience on the backbenches which needs enthusing and mobilising in many ways.

There are three immediate priorities, which have to be tackled together and are critically interlinked. The first is the secure a clean exit from the EU, with or without the preferred free trade deal, with no more slippage. Indeed, there will not be a free trade deal of an acceptable kind unless the clear resolution of the UK to just leave is believed by the EU.

The second is to put in place a full range of approaches to the virus as we await further breakthroughs from medical science, so we can live more normal lives and get the economy back to work whilst protecting the vulnerable and limiting the spread of the disease. I have often commented here on the initiatives we need to extend or develop to winnow down the impact of this virus.

The third is to do everything we can to promote and sustain recovery. We need more and better paid jobs, more and more profitable small businesses, more home grown food and home produced goods.

The Prime Minister needs to appoint those advisers who he thinks best meet his needs. He also needs to continue to take advice from leading members of the Cabinet who should also enjoy his trust .

The third quarter figures for UK growth were a record – up 15.5%. So far so good.

That was not nearly enough. It was the direct result of the large collapse the previous quarter under lockdown, and the efforts of the Treasury to get the housing market moving with a Stamp Duty cut and the restaurant trade working with generous special incentives.

If we look at the IMF forecasts for 2020 growth around the world we see a much better outlook for the USA, at minus 3.5% for the whole year, compared to the main European countries clustered either side of 10% down for the year. Their forecasts are not going to be that wide of the mark, looking at the latest third quarter figures. They see Spain down 12.8%, Italy 10.6%, France and the UK both down 9.8% and Germany down 6%. All but Germany have been very badly damaged by the virus and by the economic measures taken to counter it.

So why has the USA done so much better? After all its own virus death rate is similar to the UK’s and considerably higher than Germany’s. Large parts of the USA escaped full lock down, which helped. More importantly the Fed put in a much bigger boost than the Bank of England or the ECB which helped a lot. The US has many more of the large and successful tec corporations which boomed on the back of us all moving to an on line world for so many things. Old shops in Europe closed temporarily or permanently whilst people went shopping with Amazon.

The UK government needs to learn from the US experience. President Trump’s tax cuts helped. The deregulations helped. The technology clusters helped. Above all a very responsive Central Bank that promised to do whatever it needed to save the US economy and the world turned things round from their decisive interventions at the end of March.

The decision of the two Vote Leave advisers to move on must not get in the way of an early end to the talks with the EU and a clear decision to leave without a bad Agreement. Only if the EU has removed its demands for our fish, to control our laws and to impose their Court as part of an Arbitration system is it worth continuing talks about a Free Trade Agreement.

I have always urged the UK to prepare for No Deal, as it was always possible the EU would fail to deliver the Free Trade Agreement that is in their interest. They promised one in the Political Declaration then failed to propose one.

No Deal has always been better than a bad deal. It seems the EU only wishes to offer a bad deal, so let’s get on with leaving the single market. Weak UK negotiating under the previous government where Parliament was determined to help the EU not us made getting a good deal less likely. We now need to enforce the sovereignty clause in the Withdrawal Act.