Author: johnredwood

It is important that the Leave campaign stays focused on the big issues that matter. These are

1. We get our money back, bringing both the trade and current account deficits down by a fifth
2. We gain control of our borders.
3. We gain control of our own laws.
4. The UK regains places on the main world bodies it has lost to the EU, and becomes more influential in the world.
5. Our trade is not at risk, and we will be able to negotiate free trade deals where we wish.

The negative and unpleasant Stay in campaign wishes us instead to talk about

1. The Norwegian way – as if the UK had to pay loads of money to the rest of the EU once out for the right to buy all their exports!
2. Who leads the Leave campaign – to cover up for the poor media start of their campaign. We do not need a single leader, but a range of faces and voices.
3. Which senior figures sign up for the Stay in campaign – usually people who were wrong on the European Exchange Rate Mechanism and wrong on the Euro in the past.

We need to brush these nonsenses aside and concentrate on the big picture. The style of the Stay in campaign shows they have no belief in the structure and policies of the Euro driven EU, and wish to talk about anything apart from the centralising direction of their chosen international body. You rarely hear them saying anything positive about the Euro, about common borders, about political union, about business regulation and all other main features of the organisation they wish us to remain in.

The announcement of yet more job losses and closures in our steel industry is most worrying. The combined impact of low steel prices and high energy prices here in the UK is squeezing the owners, leaving them with big weekly bills to pay to keep works open. It is exactly what some of us feared as we campaigned against dear energy and warned that we faced industrial loss as a result. The collapse of world steel prices is accelerating the process.

The UK needs to buy substantial quantities of steel. We need them for railway lines and for vehicles, for buildings and for domestic appliances. The UK has a long tradition of making steel and of making high grade and specialist steels which command better prices. Traditionally an industrial country has a basic steel making capability as part of its investment.

So what can we do to stabilise the industry? How could we enjoy the march of the makers?

The first thing is to buy more of our own steel. The government orders many railway projects and other civil engineering structures. It buys vehicles and appliances. It needs to ensure a sufficiently high UK content in what it buys, including the steel. Other EU countries manage this for their own domestic industries, so all the time we remain in the EU we have to find similar ways to show sensible priority within the rules.

In exchanges in the Commons on Monday I pressed the government on the impact of EU procurement directives on buying UK steel. The Minister said they have been relaxed, but was unable to confirm that the UK state sector can simply require its purchasing officers to buy UK steel for all needs paid for out of tax revenue. There is still enough potential UK competition to allow sensible prices whilst specifying UK steel.

The second thing we need to do is to slash our energy bills. I have written and spoken regularly about how we can and should so this.

The third thing government needs to do is to look at its range of taxes and impositions on the industry to see if it can alleviate the burden of rates and other levies.

John Redwood (Wokingham) (Con): With oil at $28 a barrel, the North sea and its supporting investments face a very damaging threat. None of us can know whether in the near future OPEC might change its policy and suddenly reduce capacity to put the price up; and none of us can know exactly when enough capacity will be closed elsewhere in the world where there are exposed investments and very high costs to get supply back into line with demand and to get the oil price higher. All we can do at the moment is try to manage what we have. Today, we have a very low oil price by recent historical standards, and it has completely undermined the business model and the investment case for many parts of the industry.

I am delighted that the Secretary of State has pledged strongly that she sees the North sea as a fundamental part of Britain’s energy requirements in the future and a fundamental part of our whole industrial base, as indeed it is. The North sea has not just spawned substantial energy reserves and large tax revenues for us, but enabled the growth of a large number of highly skilled and technical jobs, with talented people working in a large number of companies.

The Scottish Nationalists are saying, “Let us review oil taxation again and have lower rates going forward”. At the moment, as there is no revenue coming into the Treasury from North sea taxes because the oil price is so low and the investments so damaged, I am quite relaxed about that advice, and I am sure that my right hon. Friend the Chancellor will be thinking very carefully about how he can support my right hon. Friend the Secretary of State for Energy and Climate Change going forward with more investment. I have to warn Members that even if he were exceedingly generous about future rates of North sea taxation, it is not going to be enough to make a difference against the background of oil costing $28 a barrel.

What we are now battling for is not the revenues we used to get from North sea oil taxes. What we are now battling for is the very substantial income tax revenues that we have been getting, as the United Kingdom and as Scotland, from the very highly paid jobs in the Aberdeen area and the other supporting areas for the North sea. If we are not careful, $28 a barrel oil will lose a large number of those jobs—some have already gone—and flatten the incomes of many others. It will mean a very big hole in the Scottish income tax revenues on top of the damage done to the United Kingdom/Scottish revenues from the oil itself. That is why I hope that the Treasury and my right hon. Friend the Secretary of State will work with the industry to come up with any kind of scheme to give us a chance of reinvesting. We need to use the best extraction techniques and the best modern technologies. Of course we need the industry to work on its cost base, but that will require something very major.

My right hon. Friend the Secretary of State is also right that security of supply must be her single most important consideration. She is trying to balance security with costs and green issues, but I think she is right to regard security as fundamental. If there are tensions, the Government must surely put security of supply before all other considerations.

I notice that we are beginning to rely rather more in our policy on interconnectors. Let me provide a word of warning: they may provide a short-term solution, but to interconnect our supply to the continent of Europe— a continent very short of its own indigenous energy resources—does not necessarily make us more secure. Bearing in mind the importance of Russian gas throughout our continent, particularly the further east we go, I do not wish my country to be geared in the long term to an energy-short continent dependent on Russian good will. I think our security of supply must rest on indigenous UK energy resources—renewable and carbon-based in the right balance, but above all coming from generation sources that provide continuous and flexible supply.

I fully support the Bill in its wind provisions. I am a long-standing critic of wind, which I think is far too expensive. The main reason for it being far too expensive—let us be clear on the Conservative Benches, if not elsewhere in the House—is that we cannot rely on wind, requiring the building of two lots of power generation in order to be secure. There is the wind, which works sometimes, but 100% cover is necessary in many cases via other types of generation in case the wind does not blow. Given that the wind has a habit of not blowing when it is really cold and when industry might need quite a lot of energy, it is important to have that further back-up.

That brings me to the second most important proposition that my right hon. Friend has to handle, which is cost. We all witnessed an extremely sad announcement earlier today—one of a series of sad announcements about our steel industry. The Minister chided me when she said that if I believed in markets why would I want British investment projects to be buying British steel? Let me reassure Ministers that I always buy a British-made car because I live in this country. My salary here is paid from the taxes paid by people who go to work in my country, so I think it only courteous to buy some of its more expensive products when I have the money to be able to afford a car. Similarly, I like to holiday in England because it adds to the jollity of nations and provides circulation of the salary I am paid here.

I have always been someone who believes that if we live in a society or a political community, we should accept mutual obligations. I thus strongly believe that when we are voting on huge sums of money to go into very large investment programmes that have a large steel component, we should go to the next stage and say, “By the way, we want competitive British steel to be at the core”. We should be able to lay that down as a requirement. There would still be competition between the different British producers to keep them honest, but we should surely want to use our public money in that way.

Our problem on cost is that because we have so much wind in the system and we have to provide alternatives and back-up on top, the cost of our energy has become very high, which is undermining the industrial policy that my right hon. Friend the Chancellor set out in the previous Parliament seeking the march of the makers. We will get the march of the makers on the scale we want only if we offer cheap energy. Our energy needs to be cheaper than Germany’s, not dearer. It needs to be competitive with that in China and the United States of America, whereas it is far from competitive at the moment.

Modern industry is very energy intensive. It is not just the so-called energy-intensive industries that might attract some subsidy; the general process industry is energy intensive as well because it is highly automated and the grunt is now provided by electricity-driven machinery, not by human hands and arms. We need to understand that one of the core elements of any successful industrial policy must be cheap energy, so I wish my right hon. Friend every success in trying to bring together those three different components of her policy to put more emphasis on cheaper energy. To do that, we need to end these large onshore wind subsidies. To do that, we need a new generation of electricity plant that has cost as one of its main considerations. That may well be gas plant, but it will have to operate for considerable lengths of time in order to get the proper economies of scale.

The danger of the system we have inherited is that it makes sure that we pay as much as possible for energy at any given time. If very dear energy is available as wind energy, we have to run with that, which makes the cheaper energy dearer, because the base-load cannot be run any more, so the costs of switching on and off become rather large.

Three cheers for the Bill; I fully support it. Three cheers for the Secretary of State, but for goodness’ sake let us not rely on foreign supply and let us not rely on wind. Let us have some decent reliable base-load electricity at a price industry can afford.

The issue of who pays the tax is central to discussions on a new formula for Scotland’s finances within the Union. As Scotland takes over responsibility for income tax and others, so there needs to be a new grant formula to reflect the revenues she retains for herself.

Scotland’s share of overall revenues in 2014-15 was 7.8% (splitting oil revenues on a population basis). Within this Scotland collected a smaller share of capital and enterprise taxes like IHT, Stamp Duty and CGT, at around 5% of the total, but a higher proportion than her average of spending taxes like VAT, Spirits duty and tobacco tax. Scotland supplied 7.3% of the Income tax receipts, a little below her receipts average.

The SNP have argued in the past that most of the oil revenues should be attributed to Scotland as much of the oil is landed in Scotland. This is currently an irrelevance as the oil revenues have all disappeared thanks to the collapse of the oil price.

The Scottish government pointed out that in 2011-12 when more oil was being produced from the North Sea at much higher prices oil revenues ran as high as 16% of total attributed revenues, at a similar sum to Income tax or VAT. Unfortunately the natural decline of the North Sea reservoirs, alongside cancelled investment in exploration and new production at current oil prices, means those revenue sums are not going to be seen again anytime soon.

Worse still for the Scottish economy, we are now witnessing too many job cuts and pay cuts in the once lucrative North oil and oil service sectors. The Aberdeen area in particular is an area with many highly paid jobs generating substantial Income tax revenues for the UK state. Just at the point where this revenue passes to the Scottish government , it is in sharp decline.

I am asking questions to find out how the Scottish and UK government propose to handle this natural fluctuation or decline in Scottish income tax receipts. It is very relevant to how the Union’s finances will look in the new devolved model.

Many are struggling over whether an independent UK would be stronger and more influential, or isolated and sidelined. Indeed, it is probably one of the pieces of disinformation that characterises the cynical and negative Stay in campaign.

It is important once again to dismiss their myths. The UK’s power will not be diminished one jot by exit. We will still have the same economic strength, the same income, the same armed forces the day after as the day before. We will, it is true, have more of our own money to spend, so that is a gain.

We will not be less secure. Our defences will still rest on our own armed forces, our own vigilance, and our partnership with NATO. The UK will still be a leading member of NATO out of the EU. We will still have the same intelligence sharing arrangements with our allies, and be the continuing beneficiaries of the NATO guarantees to our security.

Far from having less influence over trade and commerce, the UK will regain her rightful place at the top trade and regulation tables of the world. Instead of being represented – or misrepresented – by an EU official, the UK will again have her own seats on these global bodies. That will give us more influence.

Some claim the UK would be unable to negotiate trade deals with the USA, India and China, as we would be too small. This is absurd. The world’s fifth largest economy would of course be able to negotiate deals with other large economies on our own, as many smaller countries have done. The irony is as members of the EU for 43 years we have no trade deals with any of those there so far!

Far from cutting ourselves off from the rets of the world, leaving the EU means the UK can reconnect with the rest of the world in our own right. I also think we will be taken more seriously by Germany and France from outside, as they will no longer be able to sideline and outvote us as they can all the time we remain in but not properly committed to the European project.

I support the Union of the UK. I am happy for Scotland, Northern Ireland and Wales to stay with England as long as they wish. However, as a democrat I support a Union of willing people and accept that some parts of the old UK may not wish to remain part of the future Union. The Irish Free State, now the Republic of Ireland, made that decision early in the twentieth century. I also expect the Union to be constructed on fair principles, which becomes more difficult with the current fashion for lop sided devolution.

The first thing to understand about our Union is that is both very flexible, and that the full union lasted for just 121 years out of the last 1000. Only from 1800 to 1921 did all of Ireland, Scotland, Wales and England rest legally in the same country with the same Parliament. During the last 1000 years the most common configuration has been a united England and Wales without Scotland and Ireland. The second most common state has been an independent England.

Several attempts were made to unite the three crowns and the four countries over the centuries, often involving unpleasant wars or civil insurrections. The most brutal was probably that under Cromwell, who united the four countries under the power of the New Model Army and imposed a general Commonwealth. Today I am glad we have no wish to exercise a Union by force.

England has always been an independently minded country, with democratic and self governing leanings that have marked its history out from many on the continent and elsewhere in these islands. Though in name a monarchy throughout the last 1000 years, England has regarded the holder of the Crown as in some ways an elected monarch who has to continue to please the people and powers in the land to retain the orb and sceptre. 12 monarchs have been deposed, murdered or otherwise removed from office since 1066. In other words a monarch had around a one in three chance of premature loss of the crown.This trend continued well into the twentieth century with the deposition of Edward VIII. King John was not deposed but had to sign a charter limiting his power. Charles II had to sign up to substantial limitations on royal power to regain the throne for the House of Stuart. William and Mary accepted further limitations on royal power when they took the throne over from the dismissed James II. George III had to accept a Regency owing to his mental condition. During the Wars of the Roses there were frequent changes of monarch as the rival houses and factions fought to secure the crown.

This flexible approach to the rights and choice of Kings enabled a stronger Parliament to emerge. Even powerful monarchs like Henry VIII turned to Parliament to lend authority to his change of Queen and to the Reformation removal of the powers of the Roman Church and Pope. Most monarchs needed the support of Parliament to secure the money they wanted for their wars and government. Today we fight over these issues with words and Parliamentary motions. The issues raised by devolution are similar to those that lay behind the wars over the Union in the past.

Deposed or assassinated: (29% of the total)

William II, Matilda, Edward II, Richard II, Henry VI, Edward IV, Edward V, Richard III, (Jane Grey), Charles I, James II, Edward VIII

Accepted Regent in his place

George III

Accepted substantial limitations on power

John, Charles II, William and Mary,all later monarchs

It no longer surprises me that whenever I write of railways enthusiasts rush to defend every last feature of current or past railway operations. They go on to assume I do not know how railways currently work, and allege that railways can never be improved but have to be run according to current or past methods. It makes for a depressing debate.

In the real world business strives for constant improvement. Innovators review every feature of how cars or phones or computers work and seek improvements to steal a competitive march, to lower costs, embellish specifications, enhance performance and wow customers. Railways in the eyes of their UK enthusiasts are usually stuck in a twentieth century time warp, with many wanting to go back to nationalised British Rail and some still in love with steam traction. The railway industry need not be immune to the same insistence on change and improvement that we see in most competitive business sectors.

The industry is moving on more than some enthusiasts realise.The heads of the industry understand that they control fabulous straight routes right into the centre of our main cities, and appreciate they need to use these routes more to help us move the rising numbers of people wanting to travel. The industry accepts that improvements are possible. These include lighter trains that accelerate and brake more quickly; better signals that allow more trains to use track safely; better timetabling to reduce conflict between fast and slow trains; more passing points and platforms to allow more use of track by more trains; and removal of bottlenecks, as recently undertaken at Reading station.

Competition is the main driver of progress. We allow limited competition in train provision through the franchise auction process. More importantly we now allow some contestability of the franchise, which can create new routes and services as challengers to the incumbents. As the government reviews the present structure of the railways it needs to examine how reuniting track and trains in single companies might assist, and how such regional monopolies could be kept honest by allowing challenge from other companies to offer competing services.

The car I currently drive has so many more better features that the car I drove twenty years ago. It is much more fuel efficient, safer, with new on board navigation technology, better tyre life, longer service intervals and with an initial price no higher than I paid in the last century to buy an equivalent car. It shows what competition can do. I do not think it is perfect and I urge the industry to improve as they can on what they have sold me. Why not the same optimism from railway buffs? Why do they think their current railway could be perfected by making it a state monopoly again?

I have received some answers to Parliamentary Questions concerning floods and the Environment Agency’s work and response.

The Agency is responsible for 22,600 miles of main river. In the year 2014/15 they dredged just 120 miles of this estate, or 0.5% of the rivers.

They spent a combined total of £45 million on cleaning, weeding and dredging rivers and river banks, out of their total budget of over £1 billion. That is under 5% of the budget.

The Environment Agency is responsible for 347 fixed pumping stations, including the Foss one in York which was deemed to be overwhelmed and led to the decision to flood parts of the city. The Agency did not put in additional mobile pumps, on the grounds that they judged there was too much water to shift using such devices.

The Agency itself has 245 mobile pumps. Along with other emergency services there were 425 mobile pumps available in December 2015 to deal with floods. 42 of these pumps were sent to the north of England to assist with the additional rainfall and river flows there.

The picture which emerges is of an Agency reluctant to undertake conventional maintenance and cleansing of rivers. There are also questions to be asked about the availability and the use of pumps, and how they co-ordinate with other emergency and public protection services to fly pumps in at short notice to places under stress.