Author: johnredwood

So Ofgem agree it will be another £108 on bills to increase the network capacity to handle all the extra wind farms and the gas back up. They try to sweeten the pill by saying without the extra investment it would be a £188 increase, presumably because we would be paying not use wind energy during good wind times because there was insufficient grid to shift it.

Mr Miliband keeps trotting out his double lies. He says energy bills will go down with more renewables, yet all the time in recent years with more renewables they have been going up. He tells us the problem is the price of gas, when gas is just one quarter of the cost of electricity per unit of energy and when guaranteed renewable power prices for new installations are well above the typical price of gas generated electricity today.

Claire Couthino the Shadow Energy Secretary has been right to call for stopping the latest bidding round for more renewables as they are proposing much higher guaranteed prices than current average energy costs, locking us into dear energy for many more years. They should only go ahead with renewables that will reduce energy prices because they are bid at lower prices.

We need to ask how  realistic are the grid plans? Can they really build all the envisaged grid by 2030 to meet their targets? Will they be able to build it for anything like the budget costs? How are they are going to overcome all the planning objections to many more pylons stringing their way across some of our best East Anglian and other landscapes?

The government is playing Russian roulette with our power supplies. The more unreliable renewables we have the more danger of power cuts when the wind and sun let us down. The more renewables the more the prices and costs go up if you add up the extra grid costs and the stand by gas power costs as well as the cost of installing and running the wind farms.

This is self inflicted misery. Realising we are fed up with rising power bills the budget is taking some of the current costs away to pay for the dearer renewables out of taxation. As most of us bill payers are also taxpayers this does not help us. It makes us angrier to have higher taxes as well as higher tax bills.

The budget was unpopular before it was delivered. Re running last year’s series of leaks and try ons of so many different damaging tax rises killed confidence and worried people. It gave an impression of a government that likes to harm anyone who works hard, saves, runs a business or dares to be successful.

On delivery the budget angered more. The freezing of thresholds broke the pledge  on Income  tax according to the Chancellor’s own words last year. The pensions changes broke the promise on National Insurance.

The media picked up the lies in the stories leaked to them ahead of the event. There was the misrepresentation of why they raised  taxes, blamed on the productivity down grade which had been cancelled out by the overshoot of actual tax revenues.

There was the extraordinary budget statement that she is cutting the debt, when the budget plans £628 bn of extra borrowing over the next five years. I pointed this out in a Telegraph podcast.

Now we learn there were misleading promises on energy bills, where the extra costs of more renewable energy will  be charged to bills but not mentioned in the speech. Claire Couthino  was right to call for cancellation of the next renewables round on grounds of cost.

The budget failed for one simple reason. It proposed far too large an increase in spending. That meant too much tax and too much borrowing. The Opposition is right to highlight the surge in benefit spending meaning workers pay  more to give to people who do not work. It is also true that the many losses of public bodies and the continuing dire productivity of some services I have been highlighting are too big a burden on taxpayers.

Too much talent and people with money are leaving as a result of a vicious tax policy.

The government has helped destroy the OBR. It appears the Chancellor used their mistake in letting the budget document out early to get rid of the OBR chief. There had been stories that the Chancellor disliked the OBR cutting its forecast for productivity growth, and thought it was given too little credit in the forecasts for its so called growth initiatives. The OBR was right about both these matters.

The OBR has also been badly undermined by the Chancellor’s ludicrous fiscal rules. She made the main control to be state debt falling as a percentage of GDP in the fifth forecast year. No one can reliably forecast 2030-31 today. Who wins the next election? What is their spending and tax plan? Who replaces President Trump and what happens to US fiscal and trade policy? What will interest rates be? Will inflation be under control? How many migrants will be coming in and how many people on benefits? None of this can be easily predicted for 5 years out.

Markets need reassuring. That is best done by a Chancellor who is serious about controlling spending, unlike the present one. Borrowing this year and next is too high. The Conservatives are right to propose £47 bn of spending reductions  now. We need fiscal rules to cut the deficit this Parliament, not waiting for possible cuts after the next election.

The Lib Dems tell us Trump tariffs will damage the world economy and harm  our trade. They then tell us to join the EU Customs Union to put a whole load of tariffs on trade coming from outside the EU. They say this would supercharge our growth. This stupid contradiction skewers their argument and reminds us how absurd the idea is that joining the Customs Union would make us richer.

We did try all this over a period of 48 years.During the first 20 years in the EEC our average annual growth rate slowed compared to the 20 years prior to entry. For the  two decades after 1992 when we were in the “ completed” single market as well as the Custom Union, our annual growth rate slowed even further. There is no sign in any of the numbers of any boost to growth or living standards from joining.Indeed, in the run up to 1992 the EU policy of belonging to their Exchange Rate Mechanism gave us first  a rapid inflation to be followed by a deep recession.

The UK is benefitting from Brexit  by the removal of all tariffs on imports of things we cannot make or grow for ourselves, and from materials and components needed to add value through our manufacture. Why re  impose all these tariffs driving up prices for UK consumers and making manufacturing even more uncompetitive.?

This  government has completed the negotiations on the India Free Trade Agreement  and inherited the Trans Pacific Partnership Agreement. We would have to tear these  up if we joined the EU Custom Union. Why antagonise so many countries in the fastest growing part of the world?

The UK has negotiated a less penal tariff settlement with the USA than the EU. Why throw that away?

The Lib Dems rely on the National Bureau of Economic Research study which says the UK has lost 6-8% of potential GDP. If they had read it they would see the last thing to do to speed our growth rate would be to join the EU. The loss of potential comes from comparing us to the US and other faster growing economies. The study leaves out slower growing Germany, France and other EU countries as they  are embarrassingly  worse than sluggish  UK. We needed to leave the EU to try to narrow the gap with the US growth rate. EU taxes and regulations have put  the EU into a dreadful slow lane compared to the US.

Imposing a whole load of tariffs and paying the EU a shed load of money did not  boost our growth when  in the EU. It would be an unaffordable folly to try to do it  again.

1. Public sector monopoly provided free at point of use by public sector   e.g. Roadspace
2. Public sector provision free at the point of use with some competition between public sector providers – hospitals, schools
3. Public sector monopolies provided free at point of use by private sector contractors  e.g. domestic rubbish collection
4. Private sector monopolies provided free at the point of use  e.g. free local newspapers, certain types of internet service, ITV
5. Monopoly activities provided by the public sector but paid for by users – e.g. Planning and Building Regulation services, passport issue
6. Competitive services provided by the  private sector but paid for by the state e.g. care homes for people without capital
7. Competitive services provided by the state but paid for by users – municipal or state trading – e.g. public leisure facilities
8. Competitive services paid for by users and provided by private sector – this is most public service in a free enterprise economy – everything from food to most  professional services

I set out these eight  hybrids to organise the provision of services in Third Way Which Way when the Blair government was seeking a third way between competitive private sector activities and monopoly state activities. They are relevant again. The government, short of cash, needs to explore more private finance  for state services where people already  pay user charges for the service, as with rail, Council leisure services, forestry, media, energy. Where performance is bad it needs to look at ways competition can provide a stimulus to higher quality and better value for money.

It used to be a strong requirement that no-one in the know leaked anything about the budget. When I was Margaret Thatcher’s adviser I read  draft budget papers in controlled conditions in No 10 to protect me and the budget from any leaks. I usually gave my advice to the PM one to one in person.  Like the few others who did see the budget papers we never spoke to the press about any of these   matters.

This latest budget farago shows why secrecy  is a good way to deal with highly market sensitive matters covered by a budget. It is an offence to disclose inside information that can move share prices. When papers picked up the idea that the budget might introduce a higher gambling tax, gambling shares reacted. When someone proposed a  bank tax, bank shares fell. When the later leak or comment confirmed no bank tax they rose.

Of course in the run up to any budget many people not seeing the budget papers or helping with the decisions make public comments on likely tax changes and other matters. Share prices may gyrate around these speculations, depending on who said them. This however needs investigation because  many people who deal in shares woke up morning after morning to what looked like authentic steers or briefings from inside the advisory and ministerial tent handling the budget data and decisions. When several leading papers and the media all have the same story about likely tax changes there needs to be an enquiry to see if the rumours came from those in the know. It would be unusual  if all backed the same  hunch of someone on the outside at the same time.

Part of the process was on the record. The Chancellor herself gave a strong steer in her emergency statement from Downing Street about the need for higher taxes, with the implication being she was looking at Income tax.

I do hope the Chancellor reviews the disaster brought about by misleading statements over debts and deficits and over the need for tax rises. Far from pinning the blame for tax rises on past governments she has succeeded in highlighting how the extra tax was needed to meet her extra spending plans, particularly on the ballooning welfare bill.

The government is having a go at removing juries from most trials, demolishing a fundamental right of all freeborn English people to a trial judged by representatives of the public. It sits easily with their wish to put us under international, EU and code law, to marginalise the flexibility and commonsense of common law, and to put a class of technocratic governors and spies over us.

Tony Blair tried the jury trick but was resisted by the Lords. The UK is not short of jurors. Trials are not delayed owing to a shortage of jury members, but to rationed court time and a shortage of judges and criminal law barristers. Court hours are short and case waiting times unacceptably long. The government needs to use more buildings as courts and hire more lawyers to conduct cases.

A better reform to free court time would be to decriminalise not paying the BBC licence fee. Make that a debt  like any normal contract for services.  Reduce the number of thought control offences by allowing more free speech whilst taking seriously incitement to violence and terrorist plans.

This government seems to despise our history and wants to submit our democratic and legal freedoms to control by international lawyers and judges in their own  woke  mode.

Since 2010 Scotland has grown consistently more slowly than the UK as a whole. This is thanks to its distinctive policies. It spends more per head on the public sector than England. It borrows more per head ( via the UK) as it spends more than  the UK as a whole  per head. It believes in green growth and has subsidised and given permissions for substantial renewable energy. It taxes more and believes growth comes from more public sector spending.

At the same time as promoting public sector led and green growth it has actively supported closing down oil and gas, Scotland’s most productive  highly paid industry. Despite spending more than England, school standards  are lower and NHS waiting lists are still long.

The Uk government now wishes to follow similar high tax, high spend public sector led growth. Both the SNP and Labour governments supervise poor public sector projects, with Scotland losing control of orders for new ferries and the UK under four different governments experiencing massive cost overrun of HS2.

The problem with taking higher taxes off the private sector to pay  for less productive public sector activity is it is bound to damage growth. In Scotland deliberately running down the oil and gas industry damages both Scottish and UK productivity and reduces tax revenue.

The UK government is going the Scottish way in the mistaken belief they might win more votes in Scotland if they became more like the SNP. Instead it will help drag the UK growth down closer to Scottish levels.

The Chancellor looked both ways on battery cars. Under pressure no doubt from Mr Miliband she put

The budget was meant to be a boost to growth. Instead it was another big transfer of money from a struggling and burdened private sector to pay for a bloated and inefficient state.£30 bn for Mauritius and Chagos. £20 bn a year for Bank of England losses. A welcome for many thousands of illegal migrants with their big hotel bills. Endorsement for putting many more people onto benefits. Giving many more a sick note for life with no requirement to look for work. Recruiting more public sector administrators to lower productivity more.

Instead of tackling over spending the Chancellor added to it by ending the two child cap and ploughing on with steel and rail nationalisation and with renewable investment. This all needs serious taxpayer cash.

The long list of extra taxes and the predicted hike in Income tax to penalise  success, hard work and enterprise is more of the same. It will do more harm to a sluggish economy. Industry will continue to  be demolished by net zero and high energy prices, and retail and hospitality  hit by high taxes. Pity the young who will find it increasingly difficult to get a  first job, and later to buy a first home.