John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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The people voted No to changing the voting system

In 2011 the Coalition government at the request of the Lib Dems gave us a referendum on abandoning the first past the post voting system. Recognising the fact that many voters support the idea of single member constituencies where the MP has to provide a good service to retain support they offered the country the Alternative Vote system. This is a cheaper and easier version of the French two round system. It is designed to ensure every elected MP has the support of more than half the voters.

Under AV like the French system if a candidate attracts more than 50% first preference votes they are elected. If they dont then the second preferences of candidates attracting few votes are allocated until someone does achieve 50%. So if this system had applied this time there would probably have been more Conservative or Reform MPs on reallocations.

This was decisively rejected with 68% voting against. England was more strongly against but all four parts of the Union voted No.

Reform now campaign for PR. PR systems often break the link between an MP and a single constituency, or creates  two classes of MPs. Some  can be elected locally and others are chosen as top up MPs from a party list. The U.K. system of electing MEPs was a list system. It meant many MEPs were casual over regional constituency correspondence, often redirecting to U.K. MPs who needed to take constituents issues seriously. An MP/ candidate who is top of his or her party list knows they will get a seat so there is no pressure to listen or serve well.

Labour of course need to remember that their large majority is based on only a third of those voting wanting them in government. They should also worry that so few voted. A heavily distorted Parliament relative to public wishes is a concern but there is no obvious voting model that is better or would be supported in a referendum.

No government should change the voting system without a referendum

We should be reluctant to abolish single MP accountability to a local area.

EU countries with PR end up with coalition governments. Coalitions often  take a long time to create. They start by the parties in the coalition dumping many of their Manifesto promises to electors to find a common platform with other parties they disagree with.

How is that better?

The Netherlands decisively threw out their old government. It took seven months to form a new one out of four parties. . They had to chose a civil servant as PM as they couldn’t agree to support the leader of the largest party to be PM.

If the U.K. this time had wanted a Reform or Conservative government it could have voted for one in sufficient numbers to secure it.




Conservatives and Reform

Some contributors write in as if this is a Conservative site or to tell me to back Reform. Please read the recent statement over what this site is seeking to do.

I propose to welcome the new government’s main aims on growth, law and order and helping people get on in the world. This site will explore what changes and remedies are needed in pursuit of these aims. It will appraise the likely impact of  their policies and propose things that might work better.

Whilst it is true only 34% of people voting voted for Labour, if people had wanted a Reform government they could have voted for one. We need to work with the government we have, as they can pass any law and spend anything they want all the time they have such a large majority.


Labour sets out to get the U.K. to grow the fastest in the G7

Here’s the main aim of the Labour Manifesto. I fully support it. So did Liz Truss.It just shows how varied and wide an appeal it has.

Growth needs to be per capita growth. It needs to be productivity raising, wage increasing growth. We do not want GDP growth based on inviting in more and more people  to take low skilled jobs for low wages.That way lies further demands for more homes, more hospitals, more schools, more public spending.

Labour is less clear over how it will bring this about. They  want the private sector to build more homes. They suggest that simply setting top down house building targets in revised planning guidance will release extra plots for building and will resolve the matter. This is unlikely. The Conservatives used to set these targets but did not get building up to the 300,000 a year Labour wants, though they did increase the rate.,

Last year in England there were 1.1 million plots with housing permission available but the builders did not hit the 300,000 target. That had little to do with planning permissions and much to do with the Bank of England. The Bank deliberately sold bonds to drive mortgage rates up and kept short term rates high to reinforce the dear mortgages policy. They thought it necessary to drive rates up to stop people building and buying homes. That was a key part of their policy to correct the bad mistakes they had made with money and inflation in 2021-2.

Insufficient homes were built because they are dear, mortgages are scarce and interest rates too high to be easily affordable for many.  Labour needs to address the cost of homes, made higher by Stamp Duty and other taxes, and above all by the cost of credit.

Meanwhile more planning permissions take time to filter through as it takes years to get all Councils  to change their local plans in response to new guidance.

If the. priority is more affordable housing for rent or slae then it will need substantial uplifts in state spending on capital investment and subsidies.To avoid this being inflationary there needs to be expansion of the trained domestic building workforce  and more capacity in leading building  materials and components.

I will comment on other parts of the Growth plan in later blogs.

Why the Conservatives lost

There were many reasons given by people who had voted Conservative in 2019  as to why they  switched their votes or  abstained.   I will attempt here to distll the main things that went wrong that lost the government support.

The long and strict covid lockdown

Many people disliked the lockdown and thought it wrong. Government failing to apply all of the rules to itself angered many more. Young people missed out badly on school and social activity. Some self employed and small businesses were badly damaged. Ideas proposed by some Conservative MPs to reduce the duration and exempt more people from the lockdown were rejected. The Opposition parties urged more severe and longer lockdowns, but government owns the policy as it implemented it.

The sharp rise in inflation

The government allowed the Bank of England to print excessive amounts of money in 2021, a recovery year. The first ÂŁ300 bn in lockdown year made sense to offset some of the economic damage lockdown did. The Bank made this mistake in line with the Fed and European Central Bank. The Chinese, Japanese and Swiss Central Banks did not announce more money printing and bond buying and kept their inflations around 2%.. The Opposition supported this Bank policy but were very critical of the resulting inflation. The government had to own the results of bad Central Banking. The Bank of England could not even forecast the inflation let alone control it as they should.

The rise in taxes

The high costs of support to people and public services during covid led to big increases in public spending. OBR/Treasury rules kicked in and forced tax rises. Labour supports the failure to raise Income Tax thresholds, one of  the main ways of raising tax. Conservative voters felt badly let down as they expected the government to offer lower taxes, not higher.  They became critical of excess spending which included the costs of lower productivity, Bank of England losses, waste and excess in NHS covid procurement, big cost overruns on HS 2 etc

The large  numbers of migrants

The 2019 Manifesto promised lower migration. Conservatives assumed there would be fewer new arrivals from the EU with the ending of free movement, as there were. They did not expect a very large increase in non EU migration instead. In January 2024 the government was persuaded to tighten the eligibility rules substantially to cut numbers significantly. The election came too soon for people to see the impact this is now having to control numbers, and too soon  to allow the government to toughen rules further if numbers are still too high.

Too many changes in government

Three different Prime Ministers and many changes of Ministers made it difficult for government to sustain a strategy or for Ministers to be in full command of their briefs and their departments. This added to public frustrations.

The values of my website.

This website is written by me. It is not a Conservative party website.  I hold no office in the Conservative party and have not been asked to advise or assist them.

My prime aim on this site is to provide good quality independent analysis of current economic and political issues. I will aim to set out the views of the main decision takers and influencers and seek to forecast what they may do or what results we might expect.
A secondary task will sometimes to make a case or help a campaign for policy change that could raise the prosperity, sustain the freedoms and improve the quality of life of people living in the U.K.

I will criticise government and leading institutions where they are doing harm or missing opportunity and support them where they are right. I will continue my campaigns for changes to the OBR  economic policy framework, to the methods of the Bank of England, to the bond sales, to features of the net zero strategy, to the numbers of visas granted, to tax policy and other matters.

Where I am not providing a neutral critique of policy and events but pursuing an agenda for change I will have my principles and experience in mind. Lower and fewer taxes usually bring better growth and more revenues. Free  enterprise solutions through competition and choice give the best answers for many of our needs. Government does need to intervene to help the ill and disadvantaged and should do so providing high quality service. Much more can be done to boost public sector productivity, quality and real wages.Freedom and democracy are always better than tyranny. National  self government accountable to electors is better than world and regional Treaty based instructions.

I will return regularly to the growing gap between US economic success and poor European performance. I think controlling migration numbers is central to easing pressures on services and to boosting real  wages and increasing worthwhile jobs for U.K. citizens. I will explore the UK’s relative success compared to the EU in embracing technology and expanding services exports, whilst showing how we missed out compared to the US over the main digital Revolution.

Contributors are welcome, especially if they bring insights or information to the topics covered. I will not be posting items that wish to make cheap political points or insist on disagreeing with everything I write however stupid the resulting response. If you want to complain about Conservatives communicate with a Conservative site.

U.K. trade booms

I keep reading nonsense that says our trade has fallen owing to Brexit.

The latest official figures tell a different story. U.K. exports grew by 50% between 2016 and 2023. That is well ahead of inflation. It was led by a 70% increase in services, the largest part of our export total. Exports of goods rose 31% in cash terms.

The U.K. has been reducing the share of its trade with the EU over many years, both from within and from outside the EU. The U.K. has embarked on a major net zero transition which leads to making far less where manufacture needs fossil fuel as energy and feedstock.This affects goods exports to anywhere in the world.

Since Brexit the U.K. has leapfrogged to second largest exporter of services after the US. We have also benefited from a surge in inward investment into greenfield projects. We were the third largest recipient of greenfield FDI over the last twenty years, and have risen to second in 2021 and 2022. In 2022 the U.K. attracted 3 times as much as Germany and 4.5 times as much as France.

In the Brand Finance index of soft power the U.K. has risen to second place since leaving the EU. That is not surprising as the U.K. has regained its place and vote at the WTO, joined the TPP, helped set up AUKUS and been an important leader of NATO after the US.

Check the Lib Dem “facts”

Lib Dem’s revel in false “ facts”. Everywhere I go I see large signs saying “Lib Dems winning here”. On past form and present polls in a majority of these cases it will be a lie as they will lose again. It is a bad form of lie, the self serving lie. They  think people will vote for them if they pretend lots of others will. Very often most people have no wish to vote for them, so learning they might win is not going to change it.

Their latest national leaflet tells me “Labour are in third place in large parts of the country”. Not in the polls the rest of us read.

It says they will “double nature” by 2050. What does that mean? How? Surely their actual plan is to convert more farms to solar and wind installation and put up many more pylons for grid, industrialising the landscape.

They say they “will bring down household energy bills by taxing the profits of gas companies to deliver the savings”. How? Surely charging more for gas to pay the tax puts our gas boiler bills up? There is  no policy to give us free heat pumps to stop us burning gas. No policy to avoid power stations burning gas when the wind does not blow.

They say they will “deliver real protection for people against rising mortgage and rent payments”. As a party that pursues more regulatory controls on landlords leading to less rented accommodation I do not see how that works. Mortgages are mainly determined by the Independent Bank of England, an institution they support. So how would they get rates down?

It is high time Lib Dem’s were  more thoroughly fact checked. They combine self serving endless messages about how they think people are going to vote with wish lists detached from reality.

I see green Ed took an internal flight the other day. He should practice what he preaches about modes of transport.He did not have to organise such a long distance tour criss crossing country in a way designed to maximise the use of fossil fuels.


Selective undercover reporting

Nigel Farage was right to condemn the statements of a Reform volunteer filmed by an undercover Channel 4 team. He was also right  to ask about who the man was and why he volunteered for that particular canvass.

The media is very selective about where it goes for under cover reporting and what facts it is keen to check. It is right to condemn racist and homophobic language. I do not recall undercover reports into anti Semitism in the Labour Party though that has been a worrying problem. There has not been much undercover reporting of extremist Middle Eastern terrorist groups operating in the U.K.

The BBC and mainstream commercial media have been keen to fact check Brexit and Trump supporters. They are far less keen to fact check net zero  campaigners or campaigners for more money for public administration and Councils. When Labour and Lib Dem’s say we can decarbonise more quickly what checks do they apply to these unlikely claims? When they say renewable power is cheaper why don’t they point out this usually excludes grid, back up and green tax costs? Why do they allow people to go unchallenged who tell us closing our oil and gas cuts CO 2 when importing LNG instead increases it?

Nor will the mainstream media allow a rational debate on the disastrous run of Bank of England, Treasury and OBR forecasts. Their wrong inflation forecasts gave us an unnecessary high inflation followed by a small recession. Their wrong deficit forecasts stifled a growth policy and fuelled austerity.

When Councils are pleading poverty why do the media never give the actual large total cash sums paid to each Council along with the substantial up lift each year?

The Reform phenomenon

Recent polls show Reform just a point or two behind the Conservatives, with one showing them 3% ahead. They are the clear winners of the election campaign if you believe the polls.

The polls show both Labour and Conservative weakening a little over the campaign, with Labour sometimes dipping below 40% and the Conservatives struggling around 20%. In 2017 in the election the Conservatives polled 42% and Labour 40%, a combined total of 82% with no majority of seats for either. Instead today their combined total is around 60% but Labour is forecast to have a huge majority of MP s. Why?

There is a frustration that the two parties are so alike. They both backed COVID lockdowns. They both backed printing large sums of money which proved inflationary. They both back OBR orthodoxy which makes a growth policy difficult. They have both presided over large increases in NHS waiting lists, Labour in Wales and Conservatives in England. They both backed the Windsor framework limiting the opportunities of Brexit. Neither proposed a good pruning of EU bureaucracy and regulations. Both allowed large scale migration.

Reform have tapped into these frustrations, but have not proposed answers that can right the wrongs. Their answer to the Bank of England disasters is to impose a £35 bn tax like charge on commercial banks . Why don’t they demand an end to the colossal Bank losses coming from needlessly selling long bonds at a loss? That would save a lot of money for tax cuts.

Their answer to the small boats is to turn them round or send them back. Border Force say that is impossible and refuse to do it. Lawyers are ready to show it is illegal.France refuses to let the people land.  Reform  want lower legal migration, but that is now at last government policy.They could identify the further categories they would ban or restrict.

Reform have taken up scrapping IR 35 and raising the VAT threshold for small business, ideas I spent the last Parliament promoting. I agree with those.

Reform want proportional representation. I disagree. Whilst our system can  mean the majority have to put up with a government that only got 43% of the vote the system has two big advantages over PR. We elect a named MP for a constituency which makes MPs much more attentive to local views and needs. A government has the votes to keep its promises so we can judge them at the next election. PR systems usually bring weak governments. The parties form a coalition by ditching the promises to voters that got them elected making accountability difficult or impossible. The result of the combined actions of Reform and the One Nation Conservative leadership if the polls are right will be to visit on us a Labour government that may have a lower vote share than Labour led by Jeremy Corbyn gained in 2017  but have a large majority of MPs giving it a lot of potential power if it can keep its party together.





In search of cheap power

So far the UK’s ambition to be the Saudi Arabia of wind has put in an impressive 29GW of capacity. On a good day when there is plenty of wind and total demand is only around 30 GW this might deliver half our power needs. On a day of low wind, and when winter demand is over 40GW it might be 1-2%. It is true the cost of supplying the capacity and therefore of the power has come down as turbines have been scaled up and their capacity cost has fallen. Since 2010 levy support and contracts for difference have cost us an extra ÂŁ80bn plus for renewable power (to 2023). Current electricity bills are around ÂŁ100 higher thanks to green levies.

Labour and Lib Dems say we can switch over to all no carbon electricity by 2030 and that this will be cheaper. Both these claims seem unlikely. Labour say to get to all carbon free they need to install an additional 87 GW of capacity, allowing plenty of margin over the demand of 30-45 GW depending on time of day and weather. As most of this will be wind, and as the sun does not shine during long dark evenings and early mornings in winter it will still require stand by gas generators and all those interconnectors to import. The truth is we have already become very import dependent, with imports at over one fifth of our needs even on sunny low demand summer days when the wind dies down. We have been closing fossil fuel stations down before having the renewable reliable capacity (with storage)  to replace them

There seems little likelihood that the UK can plan, permit and install anything like 87 GW of renewable capacity in the next six years. The last auction to supply capacity did not go well as the prices offered were unattractive. The lesson was the Regulator needs to allow considerably higher prices to get companies to come forward to offer new capacity. Investors are going to be wary of the opportunities given the history of windfall taxes, price controls and changes of policy. These are all likely to get worse if we have a change of government to Labour.

Labour and Lib Dem buy the idea of cheaper power because they assume gas prices will climb higher and stay there, so wind energy looks cheap in comparison. Instead in recent months gas prices have retraced most of the giddy climb they experienced when Europe determined to get rid of its dependence on imported Russian gas and the Ukraine war sent the price spiralling. Hitting a peak of ÂŁ6 a therm, it is now back to 80p.

The amount of capacity they envisage would also require a large expansion of the grid with pylons straddling many more landscapes.