John Redwood's Diary
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China’s warning

China has decided to suspend her not very demanding emissions targets as the country needs to keep the lights on. In a major reversal just before COP 26 the world’s largest producer of CO2 has had to urge full out production and purchase of coal to generate power. Any idea that the creator of 27% of the world’s manmade CO2 was about to reverse the growth in her carbon output has been forced out by the reality that she needs coal to keep the factories turning and the homes heated and functioning. In Germany the CDU is trying to keep coal alive until 2038, with the CDU government in the Rhineland approving new large strip mining activities, owing to the unreliability of wind power on the German system.

Governments keen to decarbonise need to recognise that their prime duty is to keep the lights on and the factories working. It is not a good look  to end up with emergency power cuts and the need to dash for coal to avoid disaster. Our very sophisticated societies, hospitals, schools  and homes rely completely on electricity to power them or to operate the controls, lighting  and communications. It is even more important now to have enough capacity for all conditions and eventualities.

I repeat my request of government that they make putting in more electricity capacity an urgent priority, choosing methods of generation that balance the current mix and provide resilience. I also want to see us produce more domestic gas and biomass materials to cut the costs and fuel use currently taken by importing LNG and wood pellet and to add to our options for power generation.

Levelling up is about people more than about public spending

I reproduce below a piece I published recently on Conservative Home:

 

I’m all in favour of levelling up. Our country needs all the talent it can get. I want more people who have bought their own home, found a good job, built their own business, developed a passion for dance or sport or entertainment.

I want a society where snobbishness is a thing of the past and where the plumber is as valued as the accountant and a food delivery driver as much as a health worker. We need a reliable water supply and food in the shop every day. These are important tasks.

The recent battle to recruit a new army of truck drivers should be seen as a prime case where we need to level up. We have seen years of decline in the numbers of people wanting to be long distance and heavy lorry drivers. A lack of concern by some employers over facilities for breaks and overnight stops, coupled with relatively low pay and long periods away from home, has made it difficult to recruit younger people and women.

During lockdown the online retailers needed a massive expansion of van deliveries for their offers. They were able to attract drivers to smaller vehicles with more flexible hours and better pay. The closures and shortages across Europe reduced the numbers of migrants willing to work for less with poor conditions.

The UK needs to attract back the qualified HGV licence holders and early retired, those who have swapped jobs in pursuit of better pay, and train a new cohort of truck drivers. Large employers and government need to remedy the defects of the conditions with more lorry parks, with better facilities for breaks and overnight stops.

Pay needs to go up, as it did when tube drivers used their negotiating muscle to require the public sector to pay much higher rates for a job than an HGV driver gets. There should be a new respect for these drivers now people see how dependent their own lifestyle is on the timely delivery of everything from food to petrol.

Levelling up is about people as well as about place. Indeed, if enough people in a given town make a success of their business or company careers their extra spending power will bring the extra investment, new services and better shops people would like to see.

Conservatives should not try to define levelling up in Labour terms. They place all the emphasis on levels of public spending. Levelling up to them is more about place than people. Buy the town a new heavily subsidised tram system, put in more public sector community centres and provide new school and surgery buildings and the place will be levelled up. If only it were that cheap and easy. They stress the amounts of money rather than what we get for it.

Of course it is right that improving the quality of the public estate and helping with communications and connectivity can help. Any MP knows they have to argue the case for the new school or the improved road for their patch.

That is not the same as thinking if we just double the public sector spend lives will be transformed. To have a self sustaining wealthier community requires government helping the many. They need to reap better rewards from work and to get access to the qualifications and opportunities it takes to own your own home, have some money in the bank for a rainy day and to have a working life that commands respect.

It all begins in the schools. Inspired teachers can help every pupil find that spark, that thing they love and wish to excel at, that drive to be positive about life and its numerous chances. It requires discipline, as you only get good when you practise a lot.

Aims need to be stretching but achievable, built up as a child progresses. It moves on to the choice of apprenticeship or degree. Some break from academic education because they are already sure of their ambition to be sports people or entrepreneurs or performers whose path in life after leaving school requires their full attention to the chosen course.

Government can of course help. It needs to redouble its efforts to make it easier for people to set up their own business, and to go on to recruit their first employees. It needs to make it easier and more affordable to buy your own home. The attack on the self employed through IR35 was unhelpful, The new tax on jobs is a bad idea. Getting a mortgage is not easy. Government contracts could be made available to more smaller companies to give them a chance of getting one through break down of quantities required through multiple suppliers.

Where place and people come together is in planning decisions. Places the Government wants to level up need more homes for people with good jobs and businesses of their own. Many have more freedom over where to live now we are moving into a hybrid world of working. More people with good qualifications and earnings help boost a community and provide more demand for others to meet.

A relatively affluent community like Wokingham is not affluent through more public spending. We are at the bottom of the tables for public spending per head in the main services. We are well placed in the relative prosperity and good place to live tables because they keep on sending so much investment in expensive homes for people to live in who have levelled themselves up through qualifications and good jobs.

Conservative Conference

For those interested I am speaking at the following meetings on Monday 4 th October

 

13.00   Bruges Group   on the  future of Conservatism with 3 other speakers

 

Science and Industry Museum

Liverpool Road

Manchester M3 4FP

 

18.30   Politeia

Making the most of Brexit

with Jacob Rees Mogg, David Jones and Barnabas Reynolds

Novotel Manchester Centre

21 Dickinson Street M1 4LX

 

Bottlenecks and opportunities

World supply is damaged. China has introduced electricity rationing and is producing less as a result. Some Chinese ports have been partially closed for periods this summer thanks to continuing covid outbreaks. World shipping has been disrupted by shortages of empty containers, by a Suez Canal blockage and by pandemic restrictions. There is a general shortage of heavy goods vehicle drivers across Europe. China, the USA and the EU are turning to policies that rely more on home production and less on imports and global collaboration. There is a gas shortage worldwide, worsened by a period of little wind to  generate power that way and by Russian negotiations over the new pipeline to Germany . The regulator still has to grant a licence for the pipeline which is fully compliant with EU rules.  There are skill shortages on both sides of the Atlantic as economies recover from the anti pandemic closures.

The UK labour market despite the lockdowns has relatively low unemployment and a high level of vacancies. Some lower paid activities are in particularly short supply. There needs to be an adjustment, with people offered training and better pay and conditions to ensure we have enough HGV drivers, care workers, food processors, farm workers, chefs  and the rest. We also need to make sure there are enough people going through the longer training periods to be nurses, doctors, engineers and similar  so we do not have to rely on inviting them in from lower income countries that need their own people.

Whilst in the short term these stresses are worrying to people, they are also an opportunity to improve the lives of many. I have written and spoken before about truck drivers. There is  now greater agreement that they need better break and overnight facilities. They could also do with Highway departments that understand their needs to get to shops, hospitals and other customer places more easily. There does need to be better pay for those still on low pay and for those the industry needs to attract. It is primarily a task for employers to offer the better packages and to support people through training where necessary. Government needs to see through its promises to greatly expand training and testing capacity and should with Councils work on improving the conditions for drivers on the public highway and in parking and rest facilities.

Employers in a  number of areas need to do a similar exercise. In the care sector local government has a role to play as the buyer and user of many services. What combination of better training, more machine power and other support, and pay is needed to recruit the workforce needed?  On the farms what investment can there be in support equipment and labour saving machinery to get the crops in, the fruit picked and the vegetables packaged? There is still a long way to go with growing methods for fruit and vegetables to make them easier to pick and pack. Can the hotel and restaurant industry offer better career opportunities including training more chefs?

 

Labour’s lost loves

 

Welcome to the 1990s. Labour has dusted down the Mandelson playbook. It has staged a conference to show its not so new leader can purge the party of the left. We’ve had the policy toughness, denying the wish for a higher minimum wage. We’ve had the personal toughness, forcing out a Shadow Cabinet member for refusing to loyally celebrate lower pay. We’ve had the mood music toughness, with the handful of Starmer supporters sent out to portray the socialists in the party as a disloyal rump.  The result was a watered down change to the constitution, a defeat of the official  minimum wage policy  in the vote and plenty of tv debates revealing the big split at the heart of the party.

We will watch to see how they now fare in the polls. Commonsense tells you that stoking a civil war and trying to purge the Labour party of its socialist heart will not add votes. The polls probably rely more on how well or badly the government does anyway. No amount of striving got Labour into competitive shape between 1979 and 1992. The disaster of the Exchange Rate Mechanism pro EU policy by John Major shot them back into contention when the full magnitude of the recession it sparked became clear. No amount of modernisation and reform got the Conservatives back into competitive form, from 1997 to 2007. Labour’s even more disastrous banking crash and Great recession  then rocketed the Conservatives into first place in the polls.

For years Labour and Lib Dems have relied on their hostility to Brexit to provide opposition to the Conservatives. Now Brexit is largely done, with many voters wanting it properly finished by taking control of Northern Ireland trade and fish, continuing with hostility to the majority view does not look productive. The Remain bias of Opposition parties over the last few years has come across as backward looking, negative and anti democratic and ensured their big defeat in 2019. So today they need to look for something else. They seem to be moving towards two possible areas of difference with the Conservatives .

The first is they wish to out green the Conservatives, and to focus green policy on a more determined rush to net zero. This will help them with younger voters and with a certain kind of well qualified urban elector, but it will leave them well short of a majority. They will find that as the election draws nearer so they will be pressed on what a faster approach to net zero means. If it means dearer heating and transport, the need to spend a lot of money on ripping out the gas boiler, an  enforced earlier  switch to electric cars, the need to pay high carbon taxes and the rest they will find many voters will not support that in the privacy of the ballot box. Voters will say they support the idea of net zero for fear of retaliation, but they will not vote for policies that deliberately limit their freedoms or make them worse off.

The second is the wish to be generous and kind to the rest of the world and to see the crusade against poverty in global terms. They will stand up for the restoration of free movement with the continent, for higher levels of overseas aid, for generous definitions of asylum seeking and the idea of running here a World Health Service free for all. Again that will cement various groups of socialist voter, but will not shift the dial to retake the Red Wall seats they lost in 2019.

Sir Keir Starmer’s essay did not reveal any great talent for finding the big political idea that people want, nor any ability to encapsulate in great phrases and pithy arguments what Labour is about. The negative of just  taking socialism out of the Labour party does not spread enough joy and hope to the many but  comes with the price of division.

The EU, Mr Biden and Northern Ireland

The EU continues its negative approach to international relations. It has picked a fight with the USA over their agreement  to link with Australia and the UK in a submarine and Asia defence deal, indulging in French tantrum diplomacy. Apparently  daily it seeks to undermine the UK in Washington using its large embassy staff to brief the Administration and politicians with a very misleading and biased account of the Northern Ireland Protocol. They probably urge  the President not to offer a Free Trade Deal to the UK as they seem worried by the prospect of one. As I have often argued we can get to a FTA with the USA by both the UK and the USA joining the TPP, or by the UK joining the US/Mexico/Canada Free Trade Agreement which might even be possible under this President. Meanwhile we have a great trade with the USA without any FTA as there was no EU/USA Trade Agreement to roll over when we left. The WTO works fine.

The EU misrepresentation of the Northern Ireland Protocol and Good Friday Agreement is more concerning and does need correcting. The UK Embassy in Washington and our new Foreign Secretary need to redouble UK  efforts to get across the UK and Northern Ireland majority view of the issue to the USA. The Northern Ireland Protocol is not essential to the Good Friday Agreement which is  not about trade matters. The Good Friday  Agreement is fully  supported by the UK and Republic of Ireland governments. It sets out constitutional provisions of importance and is based around a mutual respect for and by the Republican  and Unionist communities.

The Protocol as interpreted by the EU is  harming relations within Northern Ireland and between NI and the Republic because it does not respect the wishes of the majority community. As interpreted by the EU it  is denying NI  the advantages of membership of the UK single market which was meant to be guaranteed. There is clear evidence of diversion of trade from NI/GB to NI/EU though this is ruled out by the Protocol. The document states “Having regard to Northern Ireland’s integral place in the UK’s internal market, the Union and the UK shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the UK”. The Union has being doing the opposite.

The UK will need to take action to restore the integrity of the UK internal market in NI. NI should not be impeded in  getting GB products and supplies whilst of course UK companies selling into NI can ensure there is no seepage of goods destined for NI into the Republic. Trusted trader schemes, electronic manifests and spot inspections by UK officials away from borders can police the trade. A trusted UK supermarket company or large retailer should be able to stock their NI branches as they do their GB branches without EU interference. NI/UK  and the Republic  of Ireland have a good history of co-operating to stop smuggling over the NI/Republic border during our time in the EU, as the EU/NI border was a VAT, excise and currency border throughout. We did not need border posts as these matters were sorted out electronically away from the border.

The UK diplomats should explain to their US contacts that the EU is wrongly interfering in our internal trade. It would be  like Canada saying it needed to police and inspect US goods moving from other US states to Alaska in case they ended up in Canada instead.  I don’t think US politicians would countenance that.

They should also read out the crucial Article 16 of the Protocol which states “If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the UK may unilaterally take appropriate safeguard measures”. There is clear diversion of trade going on so we need to act.

 

Visiting a local primary school and Memory Lane

On my recent visit to a local primary school I asked about progress with teaching reading and writing English. I had on my mind Nick Gibb, Schools Minister for most of the last decade until the reshuffle. He is a tireless campaigner for using synthetic phonics as the best method to teach reading, and has had some success with the profession in  getting this more widely adopted with some good outcomes. Standards of reading and writing have been rising.  The school confirmed they used the method and were pleased with the results.

When I was preparing for the visit I allowed myself a rare trip down Memory Lane to recall how I thought as a primary school child. I had enjoyed my mother reading to me before I was old enough  to go to a state primary. I had puzzled over the shapes of the words and felt frustrated that I could not read them for myself. I often asked for a favourite book and could remember enough to gently complain when my  mother skipped a sentence or two because she was so  bored with the same story. I still could not read the words I knew were missing.

Being introduced to the sound based alphabet was a revelation. Suddenly as I mastered abc as a set of sounds I held the magic key. I could venture a pronunciation of new words that I had not met before, and could read aloud the words I understood and were part of my personal dictionary of the mind. It was one of a few key gifts or statements during  my education that made a huge difference to how I learned and progressed.

It was as big a breakthrough as my first day at primary school, when I was delighted to find a world that was my size. After five years of living in a land of giants where every chair was  a mountain climb and every piece of furniture a huge and unmoveable obstacle, I was in a classroom with chairs and  tables that fitted me and my classmates and I could move if necessary. Primary schools are gateways to a bigger world. At their best they give children the power to understand so much more  and the confidence to go on their own personal journeys.

The need for more UK electricity generation

I was pleased to hear that the government is about to order or plan more nuclear power capacity. They need to. The UK currently generates around 15% of the power we need and around 17% of what we produce at home from  some old nuclear plants. Four of the seven  have to close by 2024 and two more  by 2030. The very least the government needs to do is to replace these. Only Hinckley C is currently going ahead and will be producing 3GW in a few years time. None of the smaller Rolls Royce plants nor the other large plants now being considered are likely to  be available prior to 2030, so we face a drop off in the next few years which should cause concern..

The UK relies on imports for 10% of the electricity we need. We buy imports most days including when demand is well below our domestic capacity. Given the growing tightness of energy supply on the continent, their ambitious decarbonisation plans which could leave them wind dependent and short of power and French threats we should wish to end our reliance on this source of power.

Wind power last year supplied  under 16% of our needs and solar under 4%. The aim is to push this higher and more capacity is being  added. However, as we have just witnessed, you can have a period of little wind and below average sun, leaving you very short of electricity. There needs to be  more back up or allowance for underperformance of these renewables.

Last year biomass added 6% of our needs and gas 36%. Recently three old coal stations have had to be brought back into use and have provided around 4% of our power.

The total demand last year averaged 33.8GW. Peak demand can reach 45GW on a busy cold day. The system has enough power currently for peaks assuming the renewables work well. However, with nuclear about to decline  and with domestic demands about to rise a lot were people to buy electric cars and electric heating systems we are going to need an additional 10.4GW of usable capacity. This would take care of the net  2GW loss of nuclear, the 3.4GW imports, and  5.0 GW to allow for a substantial rise in domestic demand for the planned electrical revolution.

The immediate task should be to keep all old power stations available on care and maintenance to be brought on if wind and solar let us down. The government should examine what are the  best and cheapest forms of renewables that are not wind or sun dependent, given the priority they accord to decarbonisation. They need  to see if expanding biomass makes sense. It may be that for a transition period the UK simply needs more combined cycle gas as the cheapest option.

Energy policy needs to keep enough capacity available to keep the lights on at all times, and needs to worry about the level of bills.

Buying petrol and diesel

As someone who has kept away from filling stations for the last week as I still have some diesel in  my tank it is worrying to see such long queues of people wanting to fill their tanks earlier than usual and some also wanting to fill extra cans for storage.

Ministers have assured us there is no shortage of fuel in the country, to be met with the reply that nonetheless there are filling station closures and queues. These have been brought on by a large surge in demand which should  abate when more people have full tanks and cans and as concern reduces.

Messages by some in the industry started the extra demand by drawing attention to what were  limited and local delivery problems. Let us hope the industry can recharge the forecourt tanks and resume supply for more usual levels of demand. Those of us who held back would like to be able to replenish emptier car tanks at our regular times.