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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Ofgem wants industry to cut back its electricity use next winter

So it’s official. Those of us who have been warning we do not have enough power for the future thanks to the EU’s mass closure programme of our power stations have now been vindicated  by Ofgem’s deeds. They say there could be a shortage next winter, so they will pay large industrial users of power not to use so much in the late afternoon and early evening when demand is often highest. They also say they will try to keep older oil plants available on stand-by.

      Why don’t they admit this is all the result of an EU policy that is backfiring badly? Why don’t they help make the case to the EU that we should not close old stations until we have  new ones to replace them with? We want a sustainable industrial recovery in the UK. It does not send the right message if industry is to be asked to use less power as there is a shortage.

The requirements for a new relationship with the EU

 

          For many readers of this blog the new relationship wanted with the EU is very simple – the same relationship as all other independent countries around the world have with the EU today. Many now just want us to leave.

           The Liberal Democrat and Labour parties, currently accounting for around half the votes in polls want no renegotiation. They think the current relationship is just fine. Most Labour and Lib Dem MPs failed to vote for the Referendum Bill put through the Commons by the Conservativve MP  Mr Wharton. Their leaderships refuse to offer either a new relationship or a referendum on our current arrangements.

           The Conservatives have set out a clear policy of negotiate and decide. Many fear they would not be able to get much improvement in our current terms. If that is the case then the country can simply vote to leave.  If by any chance a good deal was on offer, then the c0untry could vote to accept it. The most important thing is that whatever is done is endorsed by the British people in a special vote.

          The issue arises, what kind of renegotation would a Conservative government undertake? The leadership has recently made clear it would entail taking back control of our borders and benefit system. It would also entail removing  the impulse to ever closer union from the different Treaty the UK was prepared to sign. That is progress. Added to it, many  as a minimum would want the proposal of the European Scrutiny Committee that we should have a Parliamentary procedure to amend or disapply any European rule or law that does not meet with the approval of the UK Parliament. That way UK Parliamentary sovereignty can be re-established, and one Parliament could no longer bind a successor by consenting to an EU measure.

          In recent weeks 3 senior Judges have made clear their concerns about the way the European Court of Human Rights  are seeking to overrule Parliamentary supremacy in a number of important areas. This could be significant too, as we seek to find a way at last to give the British people a new relationship and a proper say in how they are governed. It is interesting that some  Judges think the ECHR is gping too far in asserting jurisdiction, and removing the old certainty where Parliament passed a law and our judges interpret it. This could lead on to similar worries about ECJ matters, especially as the European Court is seeking to make human rights matters for them as well.

 

Defending a free society

 

The recent US judgement that the extent of surveillance undertaken  by the US state is incompatible with American freedoms under the constitution is a welcome and important development.

As someone who was hopeful of something better from the Obama Presidency , he has been a big disappointment when it comes to civil liberties. He promised to close Guantanamo Bay, then failed to do so. He now supervises a very complex web of surveillance over the US people in the name of countering terrorism.

Guantanamo Bay was the very opposite of the system we fight to uphold – the right of every one to a fair trial, and the presumption of innocence until proven guilty. The surveillance of phone systems is said only to be about who you rang and when you rang them. It does seem very heavy handed to have to keep so many records about millions of innocent people.

Of course a relatively free society like the USA or the UK has to be realistic. There are enemies of a free society who do not play by our rules. We need to use our border controls, our police and courts to tackle them as need arises. We also need to be careful lest in the state’s enthusiasm to ward off evil, it goes too far in the direction of creating a Big Brother society where the state pre-empts our freedoms in the name of security.

Getting ready for the ERM and the Euro?

 

            I do not normally dwell on the past. Last week I was phoned about a couple of memos the press had seen as more documents were released under the 25 year rule. As they are of some long term and even topical  interest I will set out some background.

            In the middle 1980s I was both Head of the Policy Unit and Economic Adviser to the Prime Minister. One of the memos they have found is my note on the state of interest rate and currency management in 1984, when I first detected that the Treasury and Bank were moving away from domestic money supply targeting to trying to manage the value of the pound . I strongly supported the stated  policy of money targets.  The Treasury went on  to shadow the DM, a policy I thought would prove damaging. When the government did eventually join the ERM, far from preparing the UK for possible Euro entry, it caused a UK boom and bust which was entirely predictable.

          The memo was just one of many communications sent to the PM to keep her up to date with these big issues, as we fought to grow the economy after the high deficits and inflationary tendencies of the late 1970s. During my time at Number 10 the PM did resist any official policy of shadowing the DM or joining the ERM. She did not want to believe at first that Treasury was managing the pound without that being the express policy, and then became worried when the evidence pointed in that direction.  I with others continued to brief her against the ERM right up the time when her colleagues effectively forced her to allow entry. In the later period Nicholas Ridley was the principal opponent of the ERM from within the Cabinet, who constantly made the case.

            The second memo was a piece about how we were  handling the Stock Exchange. The possibility of an OFT enquiry into the practises of the Exchange furthered the development of thinking in the markets which in due course resulted in Big Bang. I expected Stock Exchange reform to lead to a big expansion of the London markets, with many new entrants and much more capital and talent at work. I also expected it to mean the financial services and banking industries would break out of the narrow confines of the Square Mile, and help with the task of developing and improving the derelict  lands to the East around the old docks. So it proved.

           It is curious that out of all the memos and briefings I wrote with my Policy Unit team these two should be the ones that excite interest or have survived to see the light of day so far. The Policy Unit used to brief the PM on most domestic policy issues which crossed her desk. These briefs were welcomed by the PM who found they combined clear summaries of the different positions being taken around Whitehall with suggested ways of reaching a conclusion or an alternative strategy which might be superior. Most of the memos came back with underlining and notes to show they had been useful. Occasionally, as with the one I wrote  that proposed a major privatisation programme for the new Parliament in 1983 it did not get returned because she wanted to keep hold of it. After leaving office she donated it with other papers to the archives at Churchill College Cambridge.

Contributions to this website

     A few lively contributors have got back to sending me numerous contributions each day, and to writing very long essays from time to time. I am finding it difficult to moderate all of this, and would urge some restraint. Let us have the best of what you want to say. Otherwise I will just have to remove the longer  ones or the multiples from the same source.

The Nigel Mills amendment to the Immigration Bill

 

           The amendment tabled by Mr Nigel Mills MP is growing in popularity in Parliament. It aims to extend the current transitional controls on Bulgarian and Romanian immigration for another five years.

             Some dismiss it as impossible, claiming it would be illegal under EU law. It is true Mr Mills has not tabled it to include an amendment to the 1972 European Communities Act 1972, which would make it legal in the UK. That is something the government could do as it improves and completes the  Bill if it wanted to. Mr Mills has highlighted an important issue, where he  has a lot of public support. It will be interesting to see how many MPs end up supporting it.

             Many support this measure because of the impact too rapid a migration could have on public services, benefits and the jobs market in the UK. I think we should also ask ourselves about the impact it can all have on the countries losing people to the migration.

            Many of the people who have taken advantage of EU freedom of movement laws from other lower income countries  are the amongst the ablest and most highly motivated. Many of them have degrees, learn English as their second language and work very hard when they get here. These are exactly the kind of people the poorer states of the EU need to keep to offer the enterprise and leadership they need so their national living standards can catch up with the richer countries of the Union.

           Mr Cameron and Mrs May have now asked the EU to look  at how appropriate free movement of people  is when benefit levels for those in and out of work are so much higher in the rich countries than in the poorer countries. It would be a pity if the need to equalise across the EU before income levels have averaged out more simply led to an exodus of talent from the countries that most need to build and grow their talent at home.

The bind of independence

 

          As an MP I have not welcomed the strong strand of  thinking on government and politics in the last two decades  that more and more things need to be put beyond the reach of Parliament. Independence has been much in fashion. Monetary policy has to be under the control of experts at the Bank of England. Competition policy has to be under professional control. Environmental policy has to be given to an independent  Agency. Financial regulation should no longer be under Ministerial surveillance. Much of this has also helped conceal a huge transfer of power to the EU at the same time, which also means unelected officials with greater sway.  MPs pay and conditions must be settled by independent IPSA.

          The arguments are deployed that in all these cases- and many others- that we need the experts to be in charge. Politicians, we are told  are not up to the task of deciding these matters because they are so technical, or they should not  be allowed to because politics could get in the way of honest or sensible judgement. A lot of my Parliamentary colleagues subscribe to that view.  If you believe both those arguments then you should campaign for the abolition of Parliament. Juntas of professionally qualified people would surely be better at all important things.  MPs are unlikely to have the skills and training – other than by chance – that running any great service or making any set of  judgements needs.

   I hold the opposite view. I think it is right that a group of non specialists, chosen by the people, should take the best advice the experts can provide, but should decide on commonsense grounds what to do and how to proceed. The MPs and Ministers can of course appoint the best talent to run public services, to hold tribunals and the rest, but the elected Parliament needs to responsible for how they get on, for the policy framework they work within, and for the most sensitive judgements. The advantage of elected officials is they can be thrown out if they get it wrong, and they can be held to account because they want to keep their jobs. There is no-one as accountable as a  Minister or MP , always facing the reality that their tenure can come to an abrupt end if they cease to please.

        The problem with collections of experts is they may act as monopolists. They may keep out dissenters and  radicals from their profession. They can behave like the scientific establishment telling Galileo he was wrong that the earth went round the sun. They said then that  the science was settled and all the other scientists agreed that the sun went round the earth.  They can behave like the Bank of England on the eve of the bankruptcy of Northern Rock or RBS, telling us that it was better these banks went down than the Bank eased liquidity in the market creating moral hazard. There the elected official, the non expert, Mr Darling had to override the bank in 2008 and get them to loosen policy by cutting rates along with other countries before  more damage was done.

 So what will happen now, or in 2015, when IPSA intends to use its independence to put through an unpopular MP pay rise?  The leaders of the three main parties rushed to establish an independent body to settle MPs pay in 2009. If you believe in independent experts then it should be left to them.If the leaders  now think they are responsible still, and have a better understanding of the public mood, then they need to bring to the Commons proposals to end IPSA’s independence.

          It is a good test case of how many people really believe important issues should  be settled by unelected people. The case of IPSA has great symbolic importance, but the case of a host of other super powerful quangos rests on the same arguments as those for not meddling with IPSA’s verdicts.  What will most MPs do? They will accept a pay rise if IPSA retains its independence and pays it in 2015. They will vote to end IPSA’s independence if their leaders decide that is necessary in the light of public disquiet. The debate seems to be now, th0ugh the decision will probably  not be taken until after the next election, so it properly rests with the next Parliament or with an independent IPSA.

The EU wants to turn our lights off

 

 Not content with forcing the closure of eight working power stations producing relatively cheap power, the EU now wants to wreck or hold up the contract to build a new nuclear station for the UK.

  The older plants the UK has been forced to close would have produced cheaper power for longer if EU rules had not forced them out of business. That is bad enough. But surely the EU should let the UK get on with finding replacements, before the lights go out?

The EU may have a good case that the level of implied subsidy in the agreed nuclear power price is high. But what do they expect to happen, if they rule out generating power from the cheaper fuels? How can we generate CO2 free power, without massive subsidies and ramped up prices? How does the treatment of nuclear differ from windfarms, which they allow despite providing very expensive electricity with huge producer subsidies?

We used to show people the absurdities of the common agricultural and fisheries policy to show them just how expensive and unhelpful EU policies could be. Dear food in our time, and dumping fish back in the sea as they were the wrong type of fish to catch, were the hallmarks of EU policy for years. Now they control so much more.

Our energy policy is no longer our UK policy, but an imported EU one. It is driving  industry out of the UK as power is so dear, and it now threaten s us with insufficient power to get us through the next few winters. Give us a break EU. Try to understand that if you make us close down cheap power, we will have to generate some dear power and subsidise it.

I would myself rather have a dash for gas, as the US has done. The irony of this is that the US has cut its CO2 by more than the EU and helped its industry at the same time by its pursuit of shale gas. The EU is negative about most ways of generating power, and is now placing the UK in an impossible position.  Role on renegotiation and an In/Out vote.

 

Good and bad innovations

 

I love the new. I have been an early adopter of better technology. I had one of the first mobile phones when they came out and I was running a major company where the mobile came in handy. I bought an early home computer. Some of the new technology on cars is great. The internet is a radical and liberalising force which is transforming the way we live.

What I do not like so much is a monopoly or regulator telling me I have to adopt technology which I would not bother to buy for myself. The great digital switch over forced me to throw away two tvs that were still working fine, and landed me with a bill for a new tv which for months gave a worse picture than the ones I had thrown out. Now I am told I have to scrap my cheap but effective radios which I run on FM, in  order to go over to dearer digital radios. I have listened to digital radios at other people’s homes and have not been persuaded that they offer something better that I want to pay for.

If it’s not broken don’t fix it. If there is an advantage for the BBC to switch then why don’t they give me a rebate on my tv licence to help me buy a replacement radio? It’s just another time consuming regulatory burden on us, to have to scrap good radios and go to the trouble of buying new ones we would not otherwise buy. Doubtless it will also swell the import bill, as most of the new radios are made abroad. It’s good news for China.

 

The BBBC is running a Digital Radio campaign on its website, and is pushing digital radios as Christmas presents for people.

Leave us alone.