Author: johnredwood

Carbon dioxide, jobs and the UK

March 20, 2015 110 Comments

Some green policies   really do destroy jobs, plunge people into fuel poverty and make our lives difficult. A recent report says that the UK should make its carbon dioxide targets even more taxing, to allow for all the CO2 emitted in places like China when making items to export to us.

So let’s get this straight. The UK has lost a lot of industrial capacity, in no small measure because Green energy policies have driven up our price of energy and helped make us uncompetitive with lower energy cost countries. This at least allowed us to hit CO2 targets a bit more easily, as we no longer use all that energy to make things. Under international rules each country accounts for the CO2 it generates. If a country decides to gain industrial market share, it has to do more to cut CO2 emissions elsewhere in its society if it is going to be part of the international agreements on these matters. If a country decides on deindustrialisation as one way to hit CO2 targets, that works under current accounting rules.

Some of us have gone hoarse warning that pushing up UK and EU energy prices will simply shift CO2 generating activities from us to parts of the world who do not share this concern. Now that has come to pass, it is amazing that we are being told it is our fault and we need to penalise ourselves further. If we do so, then we will lose even more industry, and doubtless be told that we need to tighten further to allow for more imports.

When interviewed on the radio, a proponent of this  approach said he wanted people to change their behaviours. He gave two examples. People should not expect to own their own car, but should use public transport or hire and share cars when needed. He also thought that  we should run household appliances like fridges for many more years than we currently do, with more repairs. He seemed to think this would save a lot of energy, reducing the amount expended on making new machines. It would also mean running older less fuel efficient equipment for longer, whilst  destroying the jobs of appliance and car makers. More reliance on public transport can raise the amount of CO2 and other emissions , depending on bus and train utilisation  rates, age of the trains and buses, and on the way they are driven.

We also hear the good news that there are no US tornadoes in March, a most unusual outcome. The climate change forecasters who have told us to expect more extreme weather, have now amended this forecast to less frequent extreme weather but more extreme extreme weather. Maybe that covers the good news this March. It just goes to show how difficult forecasting is.

Personally I want the UK to have a stronger industrial base, not a smaller one, and want people to afford enough energy to have decent lives. The idea that we need more wind energy, which in turn means we will need more back up energy for when the wind is not  blowing does  not sound to me to be very green  let alone cost efficient.

Mr Redwood’s Budget Speech, 18 March 2015

March 19, 2015 1 Comment

Mr John Redwood (Wokingham) (Con):

I rise to correct some of the myths emanating from the Opposition, who do not seem to read the figures. I hope they will catch up with the Budget detail from the Red Book now that it is more commonly available. We are talking about a set of plans for a five-year period that demonstrate that the Government think that, given the growth in the economy, they can afford to spend £60 billion a year more by the final year of the forecast period than is currently being spent.

The biggest change announced in this Budget is a very substantial increase in the planned amount of spending for the end of the period, 2019-20, at which time the Chancellor proposes a £38.1 billion increase in total managed expenditure—well up on the figures in the autumn statement. This is good news. It shows that the Chancellor is reflecting the confidence in the economy, the reduced cost of interest charges as the cost of borrowing comes under better control and the lower rate of inflation, which will have a beneficial impact on the cost of providing public services.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The right hon. Gentleman is giving an impression of a growing state, when what is happening in real terms is clear from page 112 of the Red Book—that, as a percentage of GDP, this Chancellor and his party are cutting the state by 13%, which will affect the poorest in society most. That is the legacy of a Tory Government.

Mr Redwood: I am giving the cash numbers, which are clearly set out on page 111. If the hon. Gentleman is patient, I will come on to deal with the argument about real terms and the percentage of the economy.

Let us start with cash. The £60 billion increase in the annual spend at the end of the period is a big increase, and if we can keep inflation of costs down, it could provide a real increase. We had these arguments at the beginning of the last Parliament. When I quoted the cash figures, people said it would amount to a real decline, yet we have had a real increase, with the last two years seeing real increases in total general public spending, as I indicated in a recent intervention and as this Red Book makes very clear. If the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) reads it he will see the real increases in general Government current spending over the last couple of years. Those have been affordable and the lower rate of inflation is helping.

If we look at public spending as a percentage of GDP, we see that, yes, it will fall, but that is extremely good news, because it means people will be able to keep more of the money they earn from their productive activities and as the economy is growing we can have better public services.

One of the cruellest myths being put around by the Opposition at the moment is that if we took public spending to 35% of GDP, we would be cutting it to 1930s levels. That is complete nonsense: for most of the 1930s, public spending as a percentage of GDP was well below 35% in any case, but I recently looked at the numbers and found that, in real terms, public spending this year is nine times the level of real public spending in the early 1930s—nine times in real terms.

Mr Brooks Newmark (Braintree) (Con): It is statistically worth pointing out that the direction in which we are heading is towards 35.2% of GDP, but that when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was Chancellor he was spending about 35.8% or 35.9% of GDP. There is not a huge difference between where we are going and where he was.

Mr Redwood: To make the point, the Chancellor has said that he will spend a little bit more in the last year of the period so that we reach exactly the percentage of GDP that Labour thought appropriate in 2000. We cannot say that because we are spending the same percentage of GDP we have cut spending or that it is down in real terms. If we have a healthy, growing economy, public spending is well up in real terms, as is the general size of the economy. We should welcome that. What we want is growth in the economy, so that we can have affordable growth in the range and quality of public services. That is exactly what this illustrates. I hope that Labour Members will stop trying to con people into believing that if we ended up with 35% of GDP—1% lower than the Chancellor intends—we would somehow have 1930s levels of public services. It is so absurd that I cannot believe that they even dare to repeat such nonsense day by day.

What we want from this Budget, and what I think it helps to deliver, is more growth. It is great news that we now have such good employment figures, which show record highs. It is good news that unemployment is reducing and good news that youth unemployment in particular is reducing.

What has happened over these five years is quite remarkable if we consider two important background points. The first is the state of the banks inherited in 2010. This House has never really understood or grappled with the magnitude of what happened to the banking system under Labour, or the magnitude of the changes between 2008 and today, particularly with respect to RBS and HBOS. If we had asked most economic forecasters what would happen to the UK economy if we took about £1 trillion of assets off the balance sheets of two leading banks, they would probably have forecast that the economy would crash in a remarkable way. What is fantastic for our country is that after the initial crash over which Labour presided in 2008-09, we have managed to get the economy back to growth while mending the banks and going through the extraordinary shrinking on the banking balance sheets. [Interruption.]

I find it remarkable that Labour Members will not listen to what I am saying. They lived through this dreadful experience and their regulators allowed the banks to over-expand their balance sheets, when many of us were saying that it was going too far. [Interruption.] Indeed, we did. We constantly said that regulation was too lax. I remember writing in the report of the economic policy review undertaken by the Conservative Opposition that, while in some areas there was far too much regulation, the regulation of the things that really mattered—cash and capital—was far too lax, and needed to be tightened. However, the Labour Government and their regulators then made the worse mistake of over-tightening in a hurry, and precipitated a major crash. Labour needs to learn from that. Indeed, we all need to learn from it, because we do not want it to happen again. We need to understand why there was such a big crash in output and in people’s living standards and real incomes, and why it took time, between 2008 and 2013, for growth to resume. The reason was that the banking system was so badly damaged that, obviously, it took time to get it back into shape.

As the Chancellor said himself, there was another reason for our problems. In 2011 there was an extremely unpleasant euro crisis, which had an impact on Britain because we live by foreign trade as well as by our domestic activities. We had to shelter ourselves from the worst of that. We are now in the process of orientating our trade much more strongly towards Asia and the Americas, the growing parts of the world, and away from the European area, which is mired in recession and is still experiencing enormous difficulties. It decided to create a single currency without creating a single country to back it and love it, and is having to live with awful strains and stresses as a result.

As we meet today, this Budget is an important event. It is certainly a very important event politically in the United Kingdom. However, a far more important set of events is taking place on the continent, where hectic negotiations are taking place between Greece, Germany and the rest over whether Greece can stay in the euro. It is not easy to see a happy outcome in either direction from those very pained discussions, but are we not glad that we are not having to live with that awful experience in this country, thanks to some of us who urged very strongly that we should stay out of the euro?

The hon. Member for Bishop Auckland (Helen Goodman) thinks it is funny that Greece has a youth unemployment rate of 50%, but I do not. I think it is a disgrace. I also do not think it is funny that several countries on the continent have a general unemployment rate of 25%. That is quite unacceptable, and the Labour party would rightly condemn it every day of the week if it were happening here, but it is not happening here because we ran our own economic policy, and we have done a much better job that they did on the continent.

Mr MacNeil: Does the right hon. Gentleman accept that most of the problems of the European Central Bank are to do with a fixation on inflation—a fixation that he shares?

Mr Redwood: I have no fixation on inflation, but neither do I think that runaway inflation creates prosperity. It is necessary to manage inflation, and to manage growth, and to have an economy that can expand. I am very pleased that this Budget helps to create and preserve the expansion that is now under way in the United Kingdom. I think it is good news that it contains measures to promote more home ownership and saving, and I think it is good news that it contains measures that will help enterprise and business to promote more jobs, because what we want are more jobs and better-paid jobs.

I was pleased to hear the Chancellor say that most jobs now are full time, and that many are highly skilled. That is what the country needs: more skills, more opportunity, and the chance for individuals to train, work and educate themselves well so that they can get better-paid jobs. That is what we all want in the House. It is sometimes suggested that the Conservatives do not want it, and I find that regrettable. We want it as much as anyone else. We want more jobs, better-paid jobs, and more skilled jobs. We know that we have to earn our money, and we want to create opportunities for people to earn theirs.

The Budget contains some sensible judgments on how much the country can afford in increased public spending. I think that £60 billion is a perfectly good judgment of the amount of extra public spending that will be possible by the end of the next Parliament. It also contains a judgment on how we can finally get rid of the deficit and start to cut the debt. I find it a bit odd that Labour has been telling us that too much was cut in this Parliament, and is now saying that the deficit is too high. I have news for Labour. You have to cut if you want to lower a deficit; it does not just magic away. The question is, how do you get that judgment right?

John Healey (Wentworth and Dearne) (Lab): It is possible to deal with a deficit simply by cutting, which is largely what the right hon. Gentleman’s party has done, but it is also possible to deal with it in a more balanced way by cutting where cutting is needed, raising revenue where it is right to do so, and ensuring that there is enough growth to bring in the revenue. That was the fundamental problem with the policies that existed at the beginning of the current Parliament.

Mr Redwood: The right hon. Gentleman has just described the policy of this Government. They put some taxes up, they went for growth—which is now coming through, and is helping to tackle the deficit problem—and they reduced the over-optimistic spending plans of the outgoing Government.
We have been told that it was wrong to cut capital spending. Well, I seem to recall that the only bit of spending that the Labour Government cut in detail before leaving office was the capital budget. They made massive cuts in capital. The Chancellor has restored some of those cuts, but because of the parlous state of the overall finances, he could not restore all of them.

The Budget presents a good package. There is good news on home ownership, good news on employment and good news on growth. A great many myths need to be put back into the dark room, because they are not going to con the British public.

Mr Redwood’s intervention during the Budget Debate, 18 March 2015

March 19, 2015 0 Comments

Mr Redwood (Wokingham) (Con): I would just like to point out that although we have cut the planned spending increases of the previous Government, public spending has actually been going up. As the Red Book confirms, Government spending went up by 1.5% in real terms in 2014, and by another 1% this year.

Mr Mark Hoban (Fareham) (Con): That demonstrates the challenges we face to get the pace right. One thing we should be absolutely clear about is the importance of sticking to the course.

Budget numbers

March 19, 2015 99 Comments

So the Chancellor shot a few of Labour’s foxes.

First to go was the idea that the Conservatives will take the UK back to 1930s levels of spending. This is Labour’s favourite lie, based on confusing spending as a percentage of the economy with real levels of spending, which are currently nine times the 1930s! As explaining all that is difficult, the Chancellor has raised planned spending for 2019-20 so the percentage of the economy will be 36%, the same level as Mr Brown and Mr Blair chose in 2000. No return to the 1930s guaranteed.

Second to go was the idea that a further raid on the pension funds of the better off, and an increase in taxes on banks would pay for Labour’s programme. The Chancellor has done both those things, and the money is absorbed into the budget figures to help pay for the tax cuts the government offered.

Third to go was the idea that living standards had fallen this Parliament. The Chancellor gave us numbers to show they have gone up modestly, and are now rising at a better rate. GDP per capita is 5% higher, and real household income per capita is also up over the Parliament.

Fourth to go was the idea that the new jobs are all part time, zero hours or low skilled. The Chancellor assured us 80% are full time, and most are skilled.

So what is the underlying strategy? Mr Osborne has set out five years spending and taxing plans, so all know what they will get from a Conservative government. Other parties in the election will have to work from those figures and explain how they will pay for extra spending or how much extra they will borrow.

His plans are to get the budget into balance by 2018-19. Debt as a percentage of GDP will be falling from next year, 2015-16. Public spending is forecast to go up by £60 bn in cash terms in 2019-20 compared to 2014-15, with the largest increase in the final year. In 2016-17 there is a planned small cut in cash public spending.

Savers will benefit from £1000 tax free savings income on standard rate tax, and from more flexible ISAs.

Budget boost for first time homebuyers

March 18, 2015 3 Comments

I have been pressing the case of first time homebuyers, who find our local house prices dear. The Conservatives promised a discount on  homes for first time buyers under a new scheme which will cut the costs for developers as long as they pass on the advantage to the buyers.

Now the  budget adds help with saving for a deposit. For every £200 of deposit saved the  government will top it up with £50, up to a total of £3000 on £12000 saved. That should take some of the waiting out of wanting and help people to save more quickly for the deposit.

Russia, Nato and Ukraine

March 18, 2015 60 Comments

There are some who seem to think we are back in a new cold war. They highlight aggressive actions by Russia. They respond with aggressive words, and with some sanctions. They see NATO as able to limit Russia’s aggression.

They should remember how bad the Cold War was, and remember that in those days the West knew the limits to its power. NATO spent much more of its income on defence, had larger forces than today, but decided it could do nothing about Russian aggression in any part of Eastern Europe. We watched as Russia invaded and subjugated an unhappy Hungary, Poland and Czechoslovakia. The NATO defensive umbrella, backed by the formidable nuclear arsenal of the USA, ensured Russian expansion would stop at the East German border.

Today things are not as bad as in the Cold War days. The main countries that wished to leave Russian control have done so. There are many more free states and peoples in Eastern Europe. Russia herself has changed a bit, with more free enterprise. At times Russia wishes to be a more mature power in the world, but in other ways behaves badly towards neighbours. Russia understands the NATO pledge to support all its members, and has concentrated on gaining influence or control in non NATO members close to its borders.

The west rightly condemns aggression to take territory and control people who do not wish to be ruled under Russian influence. The West also rightly has not made the position of people in East Ukraine or Georgia worse by intervening in the local wars. The aim of Western policy should be by diplomacy and economic action to limit Russian expansion, without wanting to extend the EU and NATO in turn. I see no reason to extend a NATO guarantee wider than has already been granted, and no need to expand the EU ever eastwards.

All those who currently enjoy the NATO umbrella should also be expected to spend more of their money on maintaining good defences at home. The UK and US are the only two NATO countries to presently meet all the requirements on a NATO state. Those who want our protection should also spend 2% of national income on defence, and spend 20% of their defence budget on equipment.

Aircraft noise

March 17, 2015 0 Comments

As readers will know, I made strong representations about the trial of new routes for planes to and from Heathrow last autumn. There was more noise over Wokingham, and as a result of the pressure I and others applied they ceased the trials early on 12 November.

There still seemed to be more noise after the trials ended in some places. When I raised this with the airport they could only think that there were more easterly winds which can cause more noise for us. Following further complaints, I have now been told that NATS did make a further change to operations last year without consulting or telling us. It coincided with the trials of new routes, but has remained in place after the end of the trials.

What they have done is concentrated more flights within a 7 mile wide corridor instead of the 13 mile wide corridor they used to allow, increasing the number of flights over part of the Wokingham constituency including Wokingham town. Heathrow Airport have now apologised for not telling us about this change, but say they did not know this was happening, a statement confirmed by NATS.

The bad news is NATS have the power to make this change without consulting us, and are currently determined not to switch back to the previous pattern of flights. I will take this matter up directly with NATS, now that we know a change was made which has worsened the aircraft noise for some residents. NATs argue that overall fewer people are affected by aircraft noise, and argue their new routes are safer as well.

Copies of the Letters:

0152 – John Redwood MP, Wokingham – 2015-03-17

COMPTON before after maps

COMPTON FINAL QA

Rt Hon John Redwood – 170315

Noise management on the M4 and A 329 M

March 17, 2015 1 Comment

My latest discussion with the Highways Agency is to get them to extend the areas which will get some noise protection from the introduction of additional barriers along the M4. I have also asked the Council to reconsider the extent of barriers along the A329M.

On the recent maps I have been shown the additional barriers are limited to the M4 west of Winnersh, so I am asking for more protection.

Manifesto

March 17, 2015 136 Comments

As we await the final version of each party’s 2015 Manifesto, I thought it a good idea to re read the Conservative 2010 version.

That Manifesto placed most emphasis on the need for economic recovery. Most of the policy proposals for the economy were geared to helping generate many more jobs. Much of what was promised has been delivered, and much of that delivery has produced the desired results in terms of jobs.

The Manifesto promised keeping interest rates lower for longer, which has happened. It promised a reduction in youth unemployment which has occurred, and an improvement in UK competitiveness in world league tables, which has also been achieved. The pledge to cut Corporation tax has been met,the banks have been reformed and strengthened as proposed, the OBR was set up, and Ministers’ pay was cut. The new government did reduce the National Insurance bills it inherited, has ended the annuity rule for pensions and increased the focus on STEM subjects at school and university. The IHT promise has not been delivered, falling foul of coalition agreements. Council Tax was frozen for two years as promised and then kept down. We have discussed immigration before, where the target was not met.

On Europe the Manifesto said

“We believe Britain’s interests are best served by membership of an EU that is an association of its member states. We will never allow Britain to slide into a federal Europe. Labour’s ratification of the Lisbon treaty without the consent of the British people has been a betrayal of this country’s democratic traditions. In government we will put in place a number of measures to make sure this shameful episode cannot happen again”. The government did enact legislait5on requiring a referendum for a future transfer of power or if any government wished to join the Euro. Conservatives ruled out joining the Euro, then and now. As the Manifesto made clear there was no promise of a referendum on Treaties which had already been ratified, including Lisbon.