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

Anyone submitting a comment to this site is giving their permission for it to be published here along with the name and identifiers they have submitted.

The moderator reserves the sole right to decide whether to publish or not.

What do we need from a new Ambassador to the USA?

The outgoing Ambassador was right to resign. His position was undermined by the leaker, who needs to be identified. He could no longer perform his role, as the President took his criticisms personally. The next Ambassador must be capable of good analysis in private communications, expressed in moderate and professional language, and be a great advocate of the United Kingdom. He or she will need to rebuild trust and regular exchanges with the Administration after this most unfortunate rupture. We need someone who likes the USA and respects the democratic decision of US voters.

The new appointee should be expected to regain access to senior officials and the President and to reassure them that the UK respects the Administration in office and wishes to work with them, whilst of course reserving the right of a trusted friend and ally to give unpopular advice in private and to disagree in public about policy where our interests as countries diverge. The first report back home should explain the successes and aims of the White House as they set them out, and to remind us that we can learn from their economic progress. The US is growing considerably faster than the UK or the EU. It is enjoying considerable success in creating many new jobs and getting real wages up. The President’s tax cuts have made people better off, promoted more investment in the USA and helped establish more and better paid employment. The President, unlike his predecessors has kept them and us out of difficult Middle Eastern wars. More background to US achievement would be helpful and provide essential political context to the long run up to the next Presidential election, which Mr Trump is in a good position currently to win.

Of course the Ambassador should also inform London of the Democrat critique of the Presidency to provide balance. Instead of siding with the Opposition the analysis should evaluate chances or probabilities of the Democrats finding a candidate for the Presidency who might be able to win, and in the meantime assessing what the Democrats in the House of Representatives can achieve on issues where the Congress has a say.

The diplomatic memo should not be cheer leading for the President’s critics, giving a false sense of their chances of gaining control. Nor should it be propaganda for Mr Trump, whose policies should be reported and scrutinised professionally. The new UK representative needs to be proud of the UK and our decision to leave the EU, and alert to the many opportunities Brexit offers for the US relationship, not just in our minds but in the mind of the President.

Why do so few people buy electric cars?

The government’s enthusiasm for electric cars is well known. The whole EU has embarked on a huge top down reform of the motor industry, seeking to transform it from a range of vehicles based on modern low emission diesels and petrol vehicles to one based on new electric cars. So far in most countries including the UK customers have not been impressed by the electric cars on offer, so their market share languishes around 3-4% of the total market, with under 1% of the total stock electric. Meanwhile threats of more bans and taxes to come have put many people off buying a new conventional car at all.

There seem to be several worries that people have about electric vehicles. The first is range. Present electric cars have varied ranges from say 70 miles to perhaps 200. A modern diesel or petrol car has a reliable range of more than 400 miles or up to four times as much as the electric substitute. People are particularly worried about range on an electric car given the issues over the time it takes to charge them and access to charging points.

A petrol or diesel car does not induce range anxiety because there are so many filling stations available. You pass them on most journeys. It takes less than five minutes to fill and pay and regain full range again. In contrast it may take hours to recharge a battery car, with fast partial charges taking maybe 30 minutes once you have access to a fast charge point. If you want to do a 400 mile journey in an electric car it will take considerably longer than in a petrol or diesel which can get there on a single tank of fuel, given the need to stop off more than once to recharge the battery.

People also worry about battery life. There are manufacturers that will guarantee a battery for 60,000 miles or even for 100,000 miles, but doubts linger about the possibility that a large and expensive battery will require replacing well before the engine and vehicle are in need of replacement or major overhaul. A battery deteriorates, making it more difficult to recharge and undermining its power delivery and therefore range of the vehicle before the owner gives in and buys a new one or before the manufacturer agrees the battery needs replacement.

Some worry about the green impact of these machines. How will the state require people to dispose of or recycle the metals used in the manufacture of the battery? How much energy is used in the manufacture of the vehicle and its battery?

Some think governments will turn to taxing the electric car once more are bought, as they will miss the large revenue streams that come from VED and fuel tax on conventional vehicles. People are naturally distrustful of governments offering low tax and subsidy just to get people started.

It is true the electric car will stop all exhaust particulate emissions, which is good news. Increasingly however particulates come from tyre wear and brake pad use, not from exhaust emission given the big work done to clean up the back of a diesel. Electric cars will still generate tyre and brake particles.

How long will it be before there are electric cars that a majority of the car buying public want to buy? What will they look like and how will their specification be different from today? How much will people be willing to pay for one, as some current models are dear?

An undiplomatic Ambassador

The UK Ambassador to Washington made wrong judgements in his leaked memo. He showed he favours the Democrat criticisms of Mr Trump to the President. He should deliver balanced analysis with temperate language. What is “inept” about a Presidency that has delivered its main promises to electors? Why use the phrase “knife fights” to describe normal arguments over tactics and policy within a government?

By all means report the Democrat critique of the President, but do not make it the official view in the memo. That shows lack of judgement and fails to reflect the political realities in Washington. Of course the memo should have been kept private, but it reveals an attitude of mind which will impede the Ambassador in his dealings with the President and his immediate circle.

Trade deals are being arranged for our exit, and drugs companies still will be supplying us from the EU

I recently asked Parliamentary Questions regarding the trade deals that will be novated to the UK once we leave the EU. I also enquired about whether any companies based in the EU have indicated a wish to cancel contracts to supply the NHS with medicines in the event of us leaving on WTO terms. I am pleased to see that trade agreements have been signed with 32 countries.

It is also unsurprising to see that no companies within the EU have indicated they no longer wish to supply medicines to the UK in such an event.

Department for International Trade provided the following answer to your written parliamentary question (270691):

Question:
To ask the Secretary of State for International Trade, what estimate he has made of the number of EU free trade agreements which will have novated to the UK when the UK leaves the EU. (270691)

Tabled on: 28 June 2019

Answer:
George Hollingbery:

In the event of the UK leaving the EU with a negotiated agreement, the UK and EU have currently agreed that existing international agreements would apply as they do today for the duration of the implementation period.

Nevertheless, we have been working with our trading partners to have bilateral agreements ready in place for when we need them, whether that is after an Implementation Period or for a potential No Deal.

We are making progress and have signed or agreed in principle agreements with 32 countries. Total trade in 2018 between the UK and these countries accounted for 63% of the UK’s trade with all the countries with which the UK is seeking continuity in the event of a potential No Deal.1 That has moved from 28% since March. A regularly updated list of agreements signed is available on GOV.UK. https://www.gov.uk/guidance/signed-uk-trade-agreements-transitioned-from-the-eu

1 The figures quoted above are based on total goods and services trade (imports and exports) with the UK, according to the most recent data (ONS, 2018).[1] They cover 65 countries that are party to 35 agreements. These are the countries covered by existing EU agreements in force in 2018. As above, this excludes Turkey, Andorra, San Marino which are part of customs unions with the EU and Japan, as the Economic Partnership Agreement only came into force on 1st February 2019

The answer was submitted on 04 Jul 2019 at 10:30.

The Department of Health and Social Care has provided the following answer to your written parliamentary question (270230):

Question:
To ask the Secretary of State for Health and Social Care, whether any companies based in the EU have indicated a wish to cancel contracts to supply the NHS with drugs in the event of the UK leaving the EU without a deal. (270230)

Tabled on: 27 June 2019

Answer:
Stephen Hammond:

The Department has been in contact with NHS England’s Commercial Medicines Unit (CMU), who puts in place competitively tendered arrangements (Framework Agreements) through which National Health Service hospital trusts can purchase certain medicines.

Neither the Department nor CMU are aware of any contract cancellations related to a ‘no deal’ European Union exit.

The answer was submitted on 05 Jul 2019 at 10:00.

10 big wins from just leaving the EU on 31 October

We can

Spend all the money we save on our priorities

Cut tariffs on imports especially where we cannot grow or make them for ourselves

Remove VAT from items as we wish – as with green items like insulation and boiler controls  and feminine hygiene products

Rebuild our fishing grounds and land more of our own fish for home consumption

Work with our farmers to cut food miles and enjoy more home grown produce

Regain our seat and vote in international bodies

Sign Free trade  deals that suit us with other countries – all the time we were member s they never managed an FTA with the USA and many Commonwealth countries

Decide our own laws

Cut the costs of government by getting rid of a whole unnecessary EU level

Avoid all the financial and foreign policy  risks of the Euro and common EU foreign policy

 

Those who relaunch Project Fear aim to damage our country

Only if the EU believes we are leaving on October 31 without  signing the Withdrawal Agreement do we have a reasonable chance of leaving tariff free.

The new PM needs to tell the EU we are leaving, but we would be happy to negotiate a Free Trade Agreement after departure allowing the EU continued access to us tariff free and for us to them. All they need to do is agree talks.

The peddlers of false Project Fear forecasts clearly want to stop us getting such an agreement.

 

Boris calls for 20,000 more police

More police form part of the proposal for a reflationary budget. They are a direct answer to the requests of Chief Constables and Police Commissioners. I have reported here under  local issues this viewpoint.

I welcome a balanced package of tax cuts and public service improvements given the state of the economy and history of public service  funding since the banking crash and great recession of the last Labour government.

It is important that the new Home Secretary and Police Commissioners use the extra personnel wisely to tackle areas of crime where more people could make a difference. The public want fast response policing where officers can arrive promptly at a crime scene or location of possible crimes and disorder, and take prompt action to prevent or to pursue offenders. Intelligence led policing is likely to be the most effective, with any traditional beat policing being an exercise in engagement with the local community to learn about the problems and to pick up leads about possible offenders.

Drug rings and County lines need targetting more. Anti social behaviour and internet fraud are also big issues. I would welcome comments on how extra  officers could best be deployed.

New direction in the EU?

The possible new leaders of the EU have not received great reviews from the press and public commenting so far. The EU Heads of government took a long time to make up their minds who to recommend to the Parliament. Their decision dumped the spitzenkandidat system they were meant to be following. Instead of recommending Manfred Weber, the leader of the EPP grouping in the Parliament to be EU Commission President, they recommended Von Leyen, the Defence Minister of Germany, who was not in the frame for such a post prior to the election.

The lack of direct democratic accountability of the Commission President is a worry for some supporters of the EU. That is why they invented the spitzenkandidat system. Under this approach the leaders of the main party groupings contesting the European elections appear on public platforms and debate the future of the EU so the public can see what they would do if they won the European election and if their candidate became Commission President . Whilst it is not as good as making the post directly elected, it could provide more accountability than the behind closed door recommendation made after the election.

Von der Leyen is an unknown politicians when it comes to the EU agenda. We are told she is an EU enthusiast who will presumably wish to support more steps to European integration. She is also a German conservative, who may not want to commit  more German tax revenue to grants and transfers around the Euro currency union. She may find herself in disagreement with Christine Lagarde, the French former Republican, who is proposed to be the next President  of the European Central Bank. Lagarde is also likely to be keen on more European integration, and may advocate a bigger EU budget with Germany making a bigger contribution to that budget.

Charles Michel, the former Belgian PM, becomes President of the Council. Known for seeking to reconcile opposites and to weld a coalition out of very different forces, he will need dark arts to construct alliances and coalitions for policies that can command majority support in the Council of Ministers and the Parliament.

The Conservative leadership election

I will be voting for Boris when my ballot paper arrives. He has given a clearer pledge to get us out of the EU by 31 October than Jeremy Hunt. This is vital for the future of our democracy and for the recovery of the Conservative party.

He has pledged tax cuts for individuals earners  and home buyers and more spending on local schools and the police. In contrast Jeremy has promised a further expensive large cut in Corporation tax for large companies, where we are more competitive . It is our  tax rates for individuals and taxes on enterprise and property ownership that are holding us back and harming the revenues.

If I needed any more reasons to choose Boris rather than Jeremy, the issue of fox hunting would supply it. Jeremy Hunt announced he would want a further Commons vote on fox hunting and implied he supported fox hunting. I have no wish to see this divisive issue re opened in Parliament. It is very unlikely Parliament would vote a different way to last time, but it would stir up strong emotions on both sides. Mr Hunt then appeared to back down rapidly under fire, saying he did not intend to introduce such a motion were he to become Prime  Minister and was merely reasserting the position from Mrs May’s failed Manifesto of 2017. This made his position worse.

I look forward to our early exit from the EU without signing the completely unacceptable Withdrawal Treaty. I want a  Brexit bonus  budget to spend the money we save. We should stop all contributions to the EU from 1 November onwards.

Can populists govern as populists?

We have two good examples of populists now in power. In the USA Mr Trump is seeking to remodel government  in line with his promises to the American people. In Italy a populist coalition between Lega and Cinque Stelle struggles to keep to its pledges to the Italian people.

Mr Trump’s early months in office were afflicted by a reluctance of departments of government to implement his wishes. Secretaries of State and other senior officials he had appointed allowed the media to run a story that “grown ups” were still in charge of the Administration. Someone briefed that people could safely discount the President’s tweets and views, as these were not what the government was doing. Mr Trump soon worked out that you have to be in power as well as in office if you wish to get things done. He embarked on removing a number of the senior people in the government who did not get on with his tasks, seeking a team of people who would reflect his wishes and would stick to the campaign promises he made.

The governing establishment seemed to think using tariffs to seek better deals around the world was not the done thing. Mr Trump pushed on with the strategy and found a Commerce Secretary, a Treasury Secretary and a Secretary of State who accepted the direction of travel. Some of the Pentagon and State department seem to favour more military action in the Middle East. Mr Trump has been very careful to use minimum power and only in response to a military provocation. As he himself says, he is not a warmonger and would prefer the USA to be at peace.

There are times when the President’s tactical changes to try to get advantage in negotiations with foreign interests make it difficult for the relevant government department to keep up. The departments have got better at keeping quiet when the President is on manoeuvres to gain improvements, as with the tariff threat to Mexico to get them to provide more policing of their borders. Mr Trump’s wish to have wide ranging tax cuts was more of a mainstream policy which government  and Congress co-operated in, with a successful outcome.

Mr Trump seems to show that a determined politician who wants to keep his word to the electors can make a reluctant governing machine do much of what he wishes. Conscious that a network of international treaties, the so called international rules based system, can impede the US ambitions for fairer trade or faster growth, the President has been prepared to bend or remove international obstacles to an America First jobs based strategy. Faced with an often hostile Congress he has made full use of Presidential executive power and special role in international affairs.

In contrast under the much more comprehensive and stifling EU rules the Italian populist coalition has found it difficult to keep its promises. The wide ranging tax cuts Lega favours and the substantial basic income guarantee Cinque wants have proved difficult against EU enforced budget rules. The leaders of the two parties were forced to be Deputy Prime Ministers, with a PM over them acceptable to the EU with the force to keep Italy in the EU and Euro system. The government’s wish to have a tougher  migration policy has come up against the EU rules and requirements. The government’s wish to rebuild the infrastructure and invest more in the economy is thwarted by debt and deficit controls.

The Syriza experiment in Greece  ended in failure for the radical left party, unable to break out of the financial controls imposed by the Euro area because they ultimately would not or could not walk away from the Euro and establish an independent Greek economic policy. Italy is experiencing a similar dilemma. To do the things its government would like to do would require exit from the Euro. The populists are not willing to do something that big and might not have popular support if they tried it. The break up of the Soviet Union showed that it was quite possible for countries to leave a currency bloc and have different economic policies that worked well in a matter of months after exit. Current members of the Euro do not seem to think that would be possible or desirable in their case, so they will fail to be populists in power despite being  in office. The power of an official machine to wear down all but the most energetic and determined of Minsters and Presidents is well known. So far no-one in the EU has succeeded in governing as  a populist with an agenda they can implement.