John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood of 30 Rose Street, Wokingham RG40 1XU.

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My Intervention on the Post Office Horizon Ministerial Statement

John Redwood (Wokingham) (Con):

Will the Minister take UK Government Investments out of its role of controlling and supervising the Post Office? It has allowed these gross injustices to go on for too long, allowed the Post Office senior managers to rack up huge losses of £1,391 million to last March, with more to come this year, and given the executives bonuses for losing us that much money. It has left the Government with a great financial black hole. Would it not be better to change the Post Office management, to have it report directly to the Minister, and to make its No. 1 task giving justice to the sub-postmasters?

Kevin Hollinrake:

I thank my right hon. Friend for his question. He and I have had serious conversations about the future of the Post Office, which I am keen to continue to engage on. The current UKGI representative who sits on the Post Office board is Lorna Gratton, for whom I have a great deal of time and respect. Clearly it is important that the inquiry does its work to determine who did what in the past. As we look to the future, there are different opinions on how the Post Office should be governed. I am happy to keep those discussions ongoing with my right hon. Friend.

My Interventions in the Northern Ireland address – 2

Mr Baker:

If my right hon. Friend will agree, I would like to have a meeting with him, because I am very clear that the scope of law that can apply in Northern Ireland is that which is necessary to ensure the smooth flow of goods.

I have said before at this Dispatch Box that we were always going to have special arrangements for Northern Ireland. When I resigned from the then Government in 2018, the issue that I forced among our colleagues in the European Research Group was that of Northern Ireland. We wrote a paper that said that there would need to be alternative administrative and technical arrangements so that there could be an open border with the Republic of Ireland. We understood that there would be special arrangements. There was never going to be an open border with no arrangements to deal with it, and there was never going to be a hard border; it was always going to be necessary to do something unique and special in Northern Ireland.

As I have also said at this Dispatch Box, had this country gone forward with one united voice in accepting the referendum result, and had this country enjoyed the good quality of relations with Ireland and the EU that we enjoy today, we might have done better than leaving in place some EU law in Northern Ireland. I wish we had, but after all we have been through and the eight years it has taken to do it, I think that this settlement taken overall‚ÄĒthe Windsor framework plus the Command Paper, including the Humble Address we are debating today‚ÄĒrepresents the moment to bank what I regard as a win and move forward constructively in the best interests of all the people of the UK, but also the people of the Republic of Ireland.

John Redwood:

Let me reassure the Minister that the Secretary of State gave me a very clear assurance in this House that we can legislate for VAT for Northern Ireland ‚ÄĒso I am not quite sure why he was querying that.

My Interventions on the Norther Ireland address – VAT

John Redwood (Wokingham) (Con):

When I last asked him in the House, the Secretary of State assured us that this House can now legislate for VAT in Northern Ireland, which was a very welcome assurance. Can the Minister explain how far the EU can go in legislating for Northern Ireland if we in the Unionist community are not very happy with that?

Mr Baker:

I refer my right hon. Friend to the table on page 4 of the Command Paper, which answers his question somewhat more broadly. That table compares Northern Ireland to Ireland as an illustrative member state and Norway as a European economic area state, and goes through the ways in which the status of Northern Ireland, EU membership and EEA membership differ. Anyone looking at that table can see that Northern Ireland is in a completely different place.

When it comes to the specific issue of the extent to which Northern Ireland can be legislated for by the EU, I refer my right hon. Friend to the democratic consent mechanism for the overall arrangement‚ÄĒthe first vote on which will take place later in the year‚ÄĒand also to the Stormont brake, to which we could return but which we have covered in previous debates. I have known my right hon. Friend very well for a number of years; I have followed his thoughts on this issue since some years before I was a Member, and I am reluctant to give him a very specific answer on the issue of VAT. I know he will have followed the details, and the last thing I want to do is give him an incorrect answer.

A lack of energy

The government says it takes energy security seriously so it encourages more wind and solar. Opposition parties want a faster run down   of the gas and coal power stations that have been keeping the lights on, and query biomass at Drax. This would destabilise us more.

On Sunday demand was about one third below peak but we were dependent for than a quarter of our electricity on imports. This is alarming and shows the dangers to security and self sufficiency from premature fossil fuel plant closures and undue reliance on intermittent renewables.

 

If government insists on more renewables it first needs to get someone to put in massive investment in some combination of

More grid capacity

Large battery stores

Conversion of power to hydrogen and its derivatives

More pump storage

Government claims renewables are cheaper than gas generation. They do not usually allow for the extra grid and storage costs, or for back up power. If this were true then some of the cost gain has to be spent on storage and transmission.

If it is as some  expect  that fully costed renewables are dearer government needs to tell us the extra costs and explain who pays.

Given the delays in rolling out hydrogen and large battery with extra grid it is probably necessary to add more combined cycle gas capacity for the transition. This is what Germany is now thinking of doing.

It is quite  wrong to be so dependent in imports. It loses  us jobs, costs us tax revenues, puts  big strains on our balance of payments. The EU is energy short, so it is very dangerous to rely on imports from them.

The ideas that we can muddle through with insufficient power on low wind days rests on two dangerous assumptions. It assumes everyone will accept a smart meter and accept the use of differential pricing to shift power demand away from peaks when renewables are low. it assumes many more people will own an electric vehicle and will be prepared to plug it into their home and run down the battery to heat and fuel the home when renewable power is scarce. Many people are resisting having a smart meter as they do not like this idea. Most people are not ready to buy an electric car or cannot afford one, and few are volunteers to have one to act as an adjunct of the national power supply.

 

 

UK trade with EU

The Remain politicians always claimed leaving the EU would damage our trade in goods with the EU. I and others pointed out that as our trade was so heavily skewed to imports and as we are both members of WTO trade would not suffer.

Remain insisted on locking us into a so called Free Trade Agreement, but still moaned that trade would be down as it would not match membership. This seemed bizarre.

So what has happened?

Since the vote in 2016, and since final exit  early in 2020, our trade has increased with the EU. There is nothing on the chart to show a Brexit hit.

Exports were £37 bn in Q 3 2016 at the time of the vote. They were £38.8bn in Q1 2020 as we left. They have now risen by a fifth to £46.2 bn.

Imports were already at a high £60.8bn in Q3 2016.They were at £59.3 bn in Q1 2020 but soared to £77.8 bn in Q 3 2023. This is a rise of 30%.

The bad news is we are still running a big trade deficit in goods with them as we did all the time we were in the EU. It shows the need  for better policies to promote home grown food and fish, more domestic energy  and more UK manufactures.

To leavers it was not about trade. It was about making our own decisions and spending our own money. The biggest wins so far are saving our large financial contributions, not having to agree to help repay Euro 800 bn of new EU borrowing, and avoiding another 7000 laws.

Reflections on the Cambridge debate

There were meant to be four lead speakers on each side. Those proposing belief in the United States of Europe did have four senior people. Two were former UK MEPs, one was the founder and co-President of a pan European party, and one was a fellow in European Politics at LSE.

The Opposition had myself and a Professor  who was sceptical about the feasibility and desirability of the USE. Two able students joined us. I was the only one of the four who thought Brexit a good idea though I had no plans to raise that. The others all wanted to raise Brexit, so that was 7 against 1.

Whilst it was an improvement on the referendum debates that the pro EU side did not deny a United States of Europe is a possible and desirable outcome, I was struck by their lack of detail. There was no blueprint for how the remaining tasks to build ¬†the bigger ¬†budget and larger tax base might ¬†work, how big the army need be, how and ¬†when the EU/USE would take responsibility for its own defence and how and when it would create peace in Europe. There was no exploration of how and when the EU growth plan would work and whether it was impeded at all by member state differences. ¬†There was plenty of hatred for Putin’s ¬†Russia and of a Trump led USA but no diplomatic path for better relations with these powers. The advocates clearly want a USE in Cold war with Russia and with the USA if they do not approve of its President.

Much of the tone of the debate was very narrow in attitude, repeating well known general platitudes about unity, democracy, solidarity with no understanding of how far the current structure is from delivering this.

There was no attempt to respond to the facts and figures I gave them on the huge gap between the US and the EU over growth, per capita  GPD and for the growth of great companies. When I highlighted  the importance of the great US digital corporations it led to hostility to capitalism though all these people do depend on Microsoft, Apple, Meta, Alphabet ,Amazon Web and Nividia to lead their own lives and to get their degrees.  Their approach like the EU is to rely on US companies whilst  condemning them.

Will the new intelligentsia wake up to reality? Europe has a lot of catching up to do. The world does not owe it a living. There is a huge gap between the high ideals they assert and  the reality of what the EU is doing.

The Cambridge Union debates a United States of Europe

I offer below a speech similar to the one I  made on Thursday night at the Cambridge Union. I spoke spontaneously and was not given enough time to say what I wanted. This recreation captures some of what I said then and adds a bit.

 

This House should not  believe in a United States of Europe

It is good to see that some eight years after we had our great debate about whether to stay in the EU on its journey to ever closer union Cambridge wakes up to what the argument is all about

It would be quite a turn round for Remainers in the UK to believe in a United States of Europe.

They spent the last 50 years telling us the EU had no such plans.

It is just a single market they told us.

We will not lose more sovereignty they said .

Successive federalising Treaties were tidying up exercises. Nothing to see here

 

It is true I never believed them.

It was always clear to me the aim was a United States of Europe.

I could hear it in the speeches of many on the continent who were more honest about their direction.

I could read it in the Treaties themselves as they set out on their course of ever closer union.

 

We went from common market to single market

We went from European Economic Community to European Union

We went from the Treaty of Rome to the Treaty of European Union via Maastricht, Lisbon and Amsterdam.

The aim was always to create a United States of Europe

Many wanted to rival or outshine the United States of America

 

Today I can tell you there is still a gap between plan and reality.

I know both the USA and the EU fairly well.

I have travelled and worked in both.

I can assure you that for all its federalising and centralising

The EU is no United States of Europe in the way the USA is the United States of America.

 

 

Let us look at some of the differences

 

The USA has a powerful President elected by the voters of the whole nation

The EU has five Presidents jostling for authority. Not one of them is elected by a pan European electorate.

 

If any government in the world wants to  talk to the USA, they ring the President in the White House.

Who are they meant to ring if they want to talk to the European Union?

 

If the USA wishes to meet a foreign country at senior level the President meets the Head of the other state.

If the EU wants to meet they often send a couple of their Presidents who argue over who is senior

 

The USA backs its foreign policy with the world’s¬† most powerful army, navy and airforce.

The EU’s small forces cluster under the NATO umbrella and rely on US protection

 

The EU says it promotes peace

So what went wrong with its interventions in the Balkans?

How is it promoting peace in Ukraine?

 

The EU claims to be democratic

In Poland the new government is busy locking up Ministers from the government of 2007 despite a Presidential pardon

Germany has put the AFD Opposition under surveillance

The EU backed Spain in sending Catalan nationalist politicians to prison

The EU seems happy with stopping critics of its scheme from standing for election

The European Parliament has no organised Opposition saying the EU’s policies are wrong and offering an alternative

 

The EU says it promotes free trade

Yet it is slow to reach agreements with other countries

And quick to impose protections at home

 

The EU’s idea of a single market is

Laws telling everyone what they can make and how they can make them

No wonder innovation withers

All they needed was the simple rule that if you sold a product in your home country

Then you could also offer it for sale in any member state

 

The EU claims to foster a digital revolution

So how come all the world’s main technology companies are in  China and the  USA?

 

The EU claims to be good for growth

So how is it that the fifteen largest quoted companies in the world are all American ‚Äď yes 15

How come the USA has outgrown the EU so much in recent years?

 

US GDP has now hit $80,000  a head

That almost double the EU’s $41,000

Time to ask who has the better model for growth?

 

Where the USA gives us great digital innovations and services

The EU taxes and fines US companies for daring to supply what the public and business want

 

The USA creates an exciting 21st century of opportunity and investment

The EU is stuck in the last century worrying that innovation brings threats

 

The EU wants many to buy battery cars

Pity they will largely be imported as China corners production of batteries

 

The EU poses as kind to migrants and asylum seekers

Yet it and its member states have been in recent years busy building more border wall and fence than Donald Trump

 

The EU promotes trans European networks.

All the time we were in the EU no trans European train turned up at Wokingham station

Whilst HS 2 was ground down by cost overruns and extreme delays

 

The EU’s energy policy has left it short of energy and facing high bills

Germany’s bad decision to close all her nuclear stations did not help

The worse decision to build pipelines to make themselves dependent on Russian gas followed

 

The EU has a great idea to put in more solar and wind energy

Such a pity China will supply much of the kit

Meanwhile the EU has not worked out how to store renewable power when plentiful

Or how to use electricity in planes and trucks

The USA under Biden as well as Trump carries on drilling for more oil and gas

So they can send gas to Europe to keep the lights on

 

The EU’s farming policy became so hostile to producing food

That a Dutch government fell because of it

 

The EU fishing policy is great at allowing supertrawlers to hoover up far too much fish

Damaging fishing grounds and sea bed

 

The Euro is the jewel in the federal crown

The chosen means to complete the Union

It has been a currency in search of a country to love it

Now the EU  is making progress with the common budget, common taxes and common borrowing a USE needs

 

The Germans agreed to the Euro on grounds that it would take a tough anti inflation stance

They wanted no return to currency printing and debasement that so damaged Germany 100 years ago

In recent years the ECB did turn to money printing and ended up with high inflation

 

Germany agreed to monetary union on the basis that all states would need to keep their debts and deficits down.

Those rules are now suspended and most countries are way over the borrowing limits

 

One of the main constraints on fast progress to complete the United States of Europe is the huge costs it will impose

The EU itself is trying to overcome the cash shortage by its own huge borrowing spree

It aims to add a short trillion euros to EU debts

Which will fall to be guaranteed by the member states

 

The EU is a long way off commanding the mighty resources of the USA

The Euro is still no match for the dollar

 

As the EU worries about its defence and security, worries about its long and exposed borders, worries about its cash need, worries about where to find extra tax revenue from highly taxed people the US storms ahead with the digital revolution

 

I warn you

Do not be a small business in the EU ‚Äď they will regulate and tax you too much

Do not be an entrepreneur in the EU ‚Äď they will make innovation difficult and impose high taxes

Do not be a believer in freedom in the EU as they have a law for everything

Do not believe the emerging United States of Europe will outshine the USA

 

History tells us the attempts at European unions fail

The Holy Roman Empire broke up

The Scandinavian union broke up

The USSR broke up

To say nothing of the forced unions some European countries sought to impose on others that caused so much harm and loss of life

 

So EU

You do want to be the USE

But you are nothing like the USA

Why would anyone believe in this lopsided underfunded over regulated legal structure?

That is no new successful country

It is the comfortable well paid  redoubt of an elite that is fast losing it with many voters.

 

 

 

 

 

 

 

Yours sincerely

 

The issues over the vote on Gaza

At the heart of the row in the Commons over the Gaza vote was a bitter feud between the SNP and Labour.

For many years the Standing Orders have been followed which state that on an Opposition Day the Opposition party that is given that day can table  a motion for debate and require a vote on it. This was done to prevent the government tabling an amendment, voting through the amendment and thereby preventing a vote on the Opposition party motion. It is an exception  to normal procedure on an amendment where we vote on it first then vote on the motion as amended or unamended depending on the outcome of the amendment vote.

Labour gets many more Opposition days than the SNP as allocation depends on number of MPs in the party. They chose not to use recent days to debate and vote a Labour motion on Gaza. The SNP motion went too far in criticising Israel  for the Labour leadership. They were worried about Labour MPs voting for the SNP motion, and concerned Front benchers would resign to do so.

Seeing the SNP Motion the government as it is entitled to do tabled its policy as an amendment to the SNP motion expecting Parliament to first vote on the SNP motion followed by a vote on the government amendment when the SNP motion was defeated. Labour also tabled an amendment.

The Speaker wanted all 3 positions to be heard but his decision to allow priority to voting the Labour amendment meant the SNP motion would not be voted if the Labour amendment passed. The government then said they would withdraw their amendment expecting the  Speaker  to restore Standing Orders by requiring  a prior vote on the SNP motion followed by a vote on the Labour amendment. Instead the Speaker determined to continue with priority for the Labour amendment. It also meant in the debate the Shadow Foreign Secretary took priority in responding to the SNP over the government.

Conservative backbenchers used up the remaining time so the Labour amendment had not been put to the vote by 7 pm when following the resolution of the House proceedings should have ended. Instead the chair put the Labour amendment after 7. There were howls  of protest against putting it and cries of No against the amendment. The chair declared the amendment passed  unanimously.

This was a bad day for Parliament. Meanwhile the Israeli Parliament voted against a two state solution for Gaza and Palestine. That was a vote that matters. It should  remind UK MPs that what matters  in Gaza is the views of Hamas and Israel.

Conservative Home article on mutualising parts of the public sector

Everyone an owner. There’s a popular Conservative policy that reaches out across the divide. An owner can be a self employed person setting up and running their own business. They¬† can be a shareholder in a company they work for. It can be a left of centre idea in the form of a co-operative or mutual where workers and or customers own the concern. It can be home ownership, as attractive to many Labour voters as to Conservative.
         Time was when past Conservative governments made great strides in extending ownership. As a Minister  I helped the miners of Tower Colliery  take on the ownership of their mine against a reluctant Coal Board.  I freed parts of the Property Services Agency from within government so the managers could take it on and sell their skills more widely than the public sector. As an adviser I helped the lorry drivers of National Freight take over their old nationalised industry and transform it into a successful transport business.
          The work I did for Margaret Thatcher led to the option of self invested pension funds instead of having to join a multi member  big fund. It beefed up company share ownership schemes,  and launched popular issues of discounted and free shares in the big privatisations. Incentives and help to own your own home were improved. Schemes to allow self build and homesteading, taking on and improving a run down public sector property were extended. We made it easier to be self employed and to set up a business. We raised the VAT threshold so small businesses did not have to wrestle with that extra cost and complexity.
          Today we could find new  ways to extend ownership. The public sector has become bloated and it has a deep productivity problem. It would be a good idea to explore ways in which employees in nationalised businesses, in independent public bodies and in parts of the administration of state departments could have a stake in  what they do and more reward for improved performance.
          The Post Office shows just how much can go wrong when the people running it do not have a stake in it. They have presided over the dreadful treatment of the sub postmasters for many years. Less remarked is that they also have accumulated a massive £1390 million loss for taxpayers. They have wiped out all the money taxpayers put in and left an effectively  bankrupt business . It  can only trade because it has guaranteed subsidy and cash made available by the government to meet all the losses.
         HS 2 Ltd shows how overpaid senior executives there spent ever larger sums given freely by taxpayers with a much delayed  result and with a huge cost overrun. Again they had no incentive from success and no downside if they got it wrong. If people want private sector large company levels of pay and bonus they should be expected to deliver good results for taxpayers, or should lose their ,jobs and or not get a bonus if they fail.
         The railways are largely now nationalised. They have all the symptoms of nationalisation. Poor service, too many strikes, bad labour relations, huge losses to be paid by taxpayers are constant. There is no energetic business plan to win back lost passengers and provide new purpose for a system running high on overheads . Staff are often  not treated well and do not benefit from success in attracting more passengers and earning more revenue.  As the contracts to run train services end the state should reorganise. It should reconnect track with train services. It should offer shares in the new regional businesses to employees and to new providers of capital. It should allow other companies access to the tracks of the regional companies, with a competition regulator adjudicating if the regional company does not want to offer track capacity to others.
        Much of the work of the Agencies, Councils  and departments takes the form of contracts with providers. A Council sets a refuse or street cleaning or grounds maintenance policy and then sub contracts to a private provider. Quite often poor supervision of contract or poor policy choices lead to bad work or inefficiencies. More of the work done by the staff of the department, Council or Agency could be done by an external specialist concern, which could emerge from giving current staff teams contracts to do the work and the right to offer their services elsewhere. Once more is subject to competitive challenge so there will be more progress in raising productivity and quality and using innovations and new technology to improve service. The Minister or Council Committee should set the objectives and the budget.
        The government needs a more generous policy towards self employment. The self employed provide so much of the crucial flexible personal service people need. They are prepared to work at week ends and evenings, come to your home to work, allow you to get in touch by phone or email without all the aggressive protective noise from larger companies. We have lost far too many of them since 2020. The government should scrap its changes to IR 35 which make it more difficult for self employed to win company business. Councils need to offer them a better deal on van access and parking to help the rest of us. Government should assist Councils to be  business friendly in the interests of more and better services for their residents.
         The government should improve its schemes to help service personnel and other key worker groups to own their own homes. Housing on public sector land, and created from modernising and adapting other public property would help. Mortgage contributions could be part of the salary package, with private capital brought in from building societies and banks. Where the state wants to keep the property when the person wishes to leave public employ, then it should buy back the home at a market adjusted price so the person has money to help with the purchase of a property for their new lives.
¬† ¬† ¬† ¬† ¬†There are plenty of ways for government to help people own something. More of the public sector can be mutualised. More public property can be used to help create homes and businesses for people to own. This could give the state a new sense of purpose, raise quality and productivity, and help improve relations with the workforce. Let’s have a nation of owners, where the interests of workers, executives and owners are aligned because many more can directly participate in success.