John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems

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Too many people

I have long been an advocate of growth. I have always been clear the growth I want is in income per head, not in the number of people. I have advocated the higher wage higher productivity economy. I have opposed illegal migration. I have opposed mass legal migration into low paid jobs. This suppresses labour saving investment, keeps wages down and impedes training and levelling up.

I have also been a long term and sometimes a lone voice pointing out if we keep on inviting more people into the country we need to put in a lot more energy capacity, reservoirs, roads, schools, hospitals and homes to provide for them. I have explained that cheap labour from abroad is dear labour for the taxpayers as it entails many more subsidised homes and public services.

The numbers for the last year are far too high. If we invite in 500,000 extra a year we need to build a city the size of Liverpool every year and provide all the supplies and facilities it needs. Where is our new city for last year’s people? No wonder our hotels are being taken over for dwellings and so many fields are coming under the concrete mixer.

The government wants to cut CO 2 output. Then start with fewer migrants. It wants to solve the housing shortage. Then  have fewer migrants. It wants to deal with the electricity shortage. Then have fewer people. What does it not understand about the current over the top migrant policy?

 

 

 

Lets grow more food

 

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps her Department is taking to encourage more domestic food growth to help reduce the level of importation of food and the consequent impact on the environment. (83505)

Tabled on: 09 November 2022

Answer:
Mark Spencer:

The UK has a highly resilient food supply chain. We produce 61% of all the food we need, 74% of food which we can grow or rear in the UK for all or part of the year, and these figures have changed little over the last 20 years.

The Government Food Strategy, which was published in June of this year, sets out what we will do to create a more prosperous agri-food sector that delivers healthier, more sustainable and affordable food. The Food Strategy includes a commitment to broadly maintain the level of food that we produce domestically and boost production in sectors where there are the biggest opportunities. As part of this commitment, we are providing support to farmers to help improve productivity. This includes investing over ÂŁ270 million in innovation by 2029 to support agricultural productivity. In addition, the ÂŁ48m Farming Innovation Fund is supporting more than 43,000 farmers by providing grants which will also improve productivity.

Our high degree of food security is built on supply from diverse sources; strong domestic production as well as imports through stable trade routes. Recognising the global impact of food production, at COP26 the UK COP Presidency launched the Glasgow Leaders’ Declaration on Forests and Land Use. This declaration included the Policy Action Agenda for the Transition to Sustainable Agriculture which raised visibility of and mobilised action for transformation in agriculture, land use and food systems. Action in these areas is essential to ensuring sustainable food production for a growing population, whilst building resilience for farmers and a just transition to reduce emissions and reverse harmful impacts on biodiversity.

The answer was submitted on 21 Nov 2022 at 17:07.

 

Comment.   This is too little and lacks the energy and determinaiton needed to drive up our home market share to nearer the levels we enjoyed prior to joining the CAP in the 1970s. I will press harder to get the grant money spent on food production, not wilding.

 

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps she is taking to incentivise people to increase fruit and vegetable growing capacity by (a) using modern techniques to extend growing seasons and (b) regulating water and fertiliser use. (83506)

Tabled on: 09 November 2022

Answer:
Mark Spencer:

The Government recognises the important role of high-tech growing technologies in ensuring a reliable and sustainable supply of fresh produce for much of the year. Innovation, such as the development of new plant varieties and growing systems, have already allowed growers to extend the growing seasons of a variety of crops, for example strawberries.

Our plan to support the horticulture sector was outlined in the Government Food Strategy, launched on 13th June this year. The strategy will aim to increase domestic production through the adoption of a range of growing models, such as controlled environment horticulture systems. A controlled environment can offer environmental benefits, including efficient water use and a reduction in the use of agrochemicals.

In November last year, Defra launched round one of the Farming Investment Fund, committing over ÂŁ98 million worth of funding for farmers and growers to invest in farm equipment, as well as technology and infrastructure to improve productivity, growth and resilience. As part of the fund there are numerous strands which would benefit fruit and vegetable growers specifically, including a ÂŁ25 million ‘Improving Farm Productivity’ theme and a ÂŁ30 million ‘Adding Value’ theme. Both of which provide grant support for higher value, more complex project investments which deliver transformative improvements to farmer’s and grower’s businesses.

Having sufficient water is of vital importance for ensuring optimal yield, growth and quality of our crops. As part of the Farming Investment Fund, Defra launched the ÂŁ10 million Water Management grant scheme which provides grant funding support for the construction of on-farm reservoirs and the adoption of best practice irrigation application equipment to help ensure farmers have access to water when they need it most. This will build on-farm water resilience, so helping to ensure farmers will have access to the water they need to produce adequate fruit and vegetable yields.

We are also looking at a potential future offer for the Producer Organisation Fruit and Vegetables Aid Scheme. We are currently exploring the best way to support the sector once the Scheme ends in 2025.

The answer was submitted on 21 Nov 2022 at 17:03.

 

Comment  This is more helpful but the small sums suggest it lacks ambition over scale

 

 

 

Do not sell the bonds at a loss. My speech on the Autumn Statement

Fill the reservoirs now

I post beneath two Q and As on filling reservoirs now from high running rivers and the  need for investment in extra capacity. They are slowly moving to tackle the water shortage.

 

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps she is taking to increase reservoir and water storage capacity. (83504)

Tabled on: 09 November 2022

Answer:
Rebecca Pow:

The Government recognises the need to improve the resilience of our water supplies and is committed to a twin track approach to improving water resilience. This involves investing in new supply infrastructure and action to reduce water company leaks and improve water efficiency.

The National Framework for Water Resources, published in March 2020, sets out the strategic water needs for England to 2050 and beyond. The Framework sets out how we will reduce demand, halve leakage rates, develop new water supply infrastructure, move water to where itis needed, increase drought resilience of water supplies, and reduce the need for drought measures.

Water companies are using the ÂŁ469 million made available by Ofwat in the current Price Review period (2019-2024) to progress the infrastructure required. Before the end of this year, water companies will publish their statutory draft Water Resources Management Plans for consultation, that will set out how they will improve drought resilience and secure water supplies in the long term.

The Government also supports the agricultural sector with its Farming Transformation Fund grants for the construction of new reservoirs.

The answer was submitted on 17 Nov 2022 at 10:53.

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps she is taking to help refill reservoirs from river abstraction, in the context of increases in rainfall and river water flow. (83503)

Tabled on: 09 November 2022

Answer:
Rebecca Pow:

Water companies are taking action to improve public water supplies, especially refilling reservoirs. They are using drought permits to allow them to take water from rivers, including new sources, or to modify or suspend conditions in their existing abstraction licences. When the Environment Agency (EA) determine a drought permit application they will ensure there are mitigating conditions in place to protect the environment. The EA is encouraging water companies to submit drought permit applications early to help improve supplies over winter in preparation for next spring and summer. The EA has granted 18 drought permits for South West Water, Thames Water, Severn Trent Water and South East Water. Defra has also determined a drought order for Yorkshire Water. The EA is determining further permit applications for Southwest Water, Yorkshire Water and Thames Water.

We are also helping the agriculture sector refill their reservoirs over the winter. The EA is monitoring and forecasting flows to advise the farming sector when they can abstract in line with their licence conditions, which protect the environment and other water users. October rainfall was typically above average meaning that many farmers could start refilling their reservoirs and we are encouraging them to maximise all opportunities to do this, given November is forecast to be dry in many parts of the country.

The answer was submitted on 17 Nov 2022 at 11:06.

 

 

Stop wasting money

The Autumn Statement put up spending and taxes. It should be amended by cutting out needless and wasteful spending.

We do not need a government ad campaign to tell us turning down the thermostat would cut our energy use. People are not stupid.

What we do need is a government sector that turns the lights and heating off when it is not using its buildings. We need them to cut the number  of buildings they use now there is so much Home working.

We do not need them to increase overseas aid by signing up to new COP 27 funds and pledges.

We do need them to control our borders to stop illegal migrants. The hotel bills are large and wrong

They should pause the expensive smart meter programme.

They should cut the massive costs of HS2

They should stop the planned ÂŁ11 bn of losses on bond sales the Bank should not be making

They should get on with improved policies to get people off benefits and into work. No need for another review.

They should accelerate the NHS manpower plan which should recruit more medical staff to replace Agency temps, and cut overheads

 

Dodgy figures in the Autumn Statement

The Treasury keeps changing the figures it shows and withholds. I feel when reading Budget and Financial Statement books now I am being pushed into a view or judgement they want Ministers to make and readers to accept.

Let’s take the case of debt interest. They have decided to alarm everyone about the scale of debt interest. So they add to what all would agree is debt interest, the regular cash payments to lenders, the extra repayment amount on indexed debt which is not paid until the  loan is rolled over for another one on repayment.  With this year’s runaway inflation it more than doubles the apparent debt interest paid. So we are told on their definition debt interest has reached £120 bn or 11% of revenue this year.

That gives them the problem that as inflation falls away so will debt interest. So they will not tell us by how much in pounds. We can see it comes down on a graph from over 11% of revenue to 6%, so by 2024-5 on their odd numbers there is a big saving. Why not show us the cash interest figures for every year which are high anyway and offer a balance sheet line to show the increased cash cost of repayment of linkers alongside the  real win of repaying the majority of the debt which is not inflation linked  in pounds devalued by inflation.

There is then the assertion around half the  adjustments to get the deficit down will come from spending reductions and half from tax rises. To make it difficult to check  this they do not this time show the path for total tax revenues. The 50/50 is based around previous budgets and forecasts which had built in substantial increases in spending.

What this revision reveals is total spending will go up £133bn by 2024-5 compared to last year and by £224 bn by 2027-8. No sign of cuts overall. Income, mainly tax, can be derived by subtracting borrowing from spending. That goes up by £200bn between this year and 2027-8.

So to us mere mortals these budget plans are for a substantial cash rise in both spending and taxes. It will also on these numbers be a real increase in both, as they forecast inflation tumbling and going negative in 2025.

 

A Minister in office is not always in power

The events of recent weeks have shown that it is possible to be a Minister in office unable to see through changes of policy or enforcement of laws in ways the public and Ministers wish.

At the Home Office successive Ministers have made clear their wish to end people trafficking across the Channel. There has been a change of the law, yet still lawyers and legal processes conspire to delay final decisions on cases. People can claim to have been trafficked yet we do not seem able to return them to their home from whence they were trafficked. People claim they are asylum seekers yet they have come immediately from the safe country of France, and often came from another safe country before France. Two Home Secretaries have now been briefed against and complained about by civil servants. The Ministers have doubtless become frustrated at the lack of help to design a law which works or to enforce a law which was said to work. The idea is meant to be Ministers set out the aims of policy and provide the resources, whilst officials get on with implementing it in the best way.

At the Treasury Ministers are told they need to follow Bank and OBR orthodoxy. There has been a  notable lack of self criticism or curiosity as to how the UK has an 11% inflation rate when Ministers have endorsed a constant target of 2% inflation and left the Bank free to set interest rates, interfere in bond markets and oversee the overall banking  system to bring this about.  Nor has there been much public exploration of why successive OBR forecasts have been tens of billions out in recent years, and how this can lead Ministers to accept wrong judgements based on bad data. Treasury Ministers need to be more sceptical of the advice they are getting as so far it has landed us with an unwelcome inflation and may soon land us in an unwanted recession.

The OBR run the Autumn Statement

I said the OBR deficit forecast this spring for this year  was likely to prove an underestimate. Yesterday the OBR put it up by 75%.

I said all summer we would go into recession unless they changed policy. The OBR did not forecast that in the spring. Now they are forecasting a recession all next year.

Last year I argued to end Quantitative easing by the Bank and Treasury to avoid inflation taking off. They went for another ÂŁ150 bn of money printing and we now have a nasty inflation.

I now argue for some offset to the monetary tightening the Bank is doing and want them to stop selling bonds at a loss into  the market. I fear they will carry on and make the recession worse.

I see the government are offering some offset to the recession policies with a boost to public spending this year and next. The money given to people and companies to help with energy bills and offset inflation will as the OBR says reduce the depth of the slowdown.

It would have been better to include some tax cuts to do this, VAT cuts help cut the inflation rate. Cuts in tax on business and incomes help confidence and may even grow the revenues faster.

The OBR have upped the ante with their bloated figures for debt interest including non cash items. These should come tumbling down as inflation falls. The Chancellor has done just what the OBR wanted. Their ÂŁ50 bn black hole is bizarre. No one can say what the deficit will be in five years time. If we followed a more pro growth policy it would be lower than the 0BR say and could vanish altogether. If the Bank and OBR continue to dictate the black Hole will be bigger, driven there by a worse recession. ÂŁ50 bn is less than the large revisions to OBR deficit forecasts in each of the last three years.

Steering the economy by OBR five year forecasts is like relying on a medieval map to get to a modern city.

My Speech at the Opposition Day Motion on Britain’s Industrial Future

Rt Hon Sir John Redwood MP (Wokingham) (Con): I congratulate the Minister on a lively and informative speech. It was great to have a positive vision for the future from him. He rightly reminded us that many of the exciting new technologies and opportunities available to modern industry and business are being grasped by both the private sector and the Government working together. I congratulate him and his Department on that work. However, I urge him and the Department to greater efforts in the range of more traditional industries that are still very much industries of the future. We have a choice. If we make the right decisions on taxes, regulations, support frameworks and orders, we can produce more such things at home. If we make the wrong decisions, we will end up importing too many of them.

I start with energy. The Minister’s Department has a crucial role in organising our energy and the transition that it wants as well as ensuring that we have enough of the traditional energy forms when they are crucial to heating our homes and turning our factories. In this period of transition, we can do more to extract more of our own oil and gas. That is greener than importing it, because, in burning gas that comes down a pipe from the North sea, far less carbon dioxide is generated than if the gas were extracted somewhere else, transformed into liquid form and transported—at least half the CO2 is saved that would otherwise be generated. More importantly, that is a safer supply. Even more importantly, if we are still to have high taxes on it, we will collect those taxes. At the moment, the more we import, the more dead money goes out of our country to pay somebody else’s taxes, doubly burdening our industry with the extra cost of what are sometimes extreme market prices to secure the supply—when there is not a long-term contract—and extra transport costs that must be put into the equation for effective delivery.

I urge the new ministerial team to take up from where the old team were moving to and understand that there are quite a lot of good proven reserves out there now. Production licences could be granted in a timely way, and we could have more of our own import substitution and more secure supplies for the future. It is possible to work with the industry on existing fields so that maintenance schedules can be kept to a minimum and output can be maximised, particularly over a difficult winter. We all know that if anything goes wrong with the UK and European gas supply over the winter, it will be our industry that gets caught first; industry is very reliant on plentiful gas supplies for much of its important processes.

We must be careful about carbon accounting. I think a lot of us feel that it does not make a lot of sense to say that the heavy gas-using industries and other fossil fuel-using industries in the United Kingdom, such as cement, glass, ceramics, steel and so on, will be penalised because they are generating carbon dioxide in their process, only to substitute imports of those same products that will certainly produce more CO2, not only because of the long-distance transport, but quite often from the processes as well, as this country has often gone a bit further in more efficient processes than some import substitutes. So that, too, is an area that we need to look at very carefully.

On the car industry, I would like to expand a little on the intervention. Again, a difficult transition is under way and it can only go at the pace that the customers are willing to let it go. At the moment, as we have been hearing, a relatively small minority of the cars built in this country are full electric cars—something to do with price and range, and people getting used to the idea of the electric vehicle—and so during the transitional period we again have a choice: either we produce the diesel and petrol cars that people still want to buy, or somebody else does that and we end up importing them. Again, I do not think that that is a good course. I would not want to be ahead of some of the other leading car producers in the world in definitely ruling out producing vehicles that still sell well, when we have put a lot of investment collectively into developing more fuel-efficient vehicles, which have much less coming out of the tailgate.

My final brief point builds on one that the Minister eloquently made in certain contexts. We can do a lot more, as the Government are trying to do, with sensible purchasing of our own products. Of course, we do not want to buy products that are less good quality or too expensive. There has to be competition within the UK market to reassure the Government they are getting value, but just as we have always done with things like warships, so we can do for more essential products. We should give the home base the best chance and, if necessary, help people come in as major investors with their factories in order to do so.