John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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Global government, elite restrictions

The Brexit vote was above all a vote to take back control from an unaccountable international body. People were fed up with rules and taxes that we had little influence over, that were then imposed against our wishes and enforced through a foreign political court.

Brexit voters want to see the promise that our votes would be respected and implemented seen through. We still have not taken back control of our fishing grounds, nor of Northern Ireland trade and   NI market rules and laws. This is unfinished business that the government needs to get on with.

Meanwhile some parts of the UK establishment, the senior civil service, the courts and the big quangos seem to  thrive on the idea that they can still get the UK signed up to international Agreements or Treaties to bind future governments and where necessary to thwart the wishes of  UK voters.

It is untrue to say the 2018 Global Compact for Migration signed by Mrs May is another such binding Treaty, as it expressly says it is not legally  binding and claims to respect the sovereignty of nations over  border matters. It is however part of a wide patchwork of international Agreements and more importantly  human rights law which is used by some to make it difficult for the Home Secretary to implement the public wish to see lower migration. The Home Secretary needs to come up with a strengthening of UK migration law to allow us to have sustainable and fair immigration.

Some are  similarly seeking to sign us up to as many international agreements under COP 28 as possible. These could  then  be used to limit UK freedom in making policy in everything from agriculture through transport to energy and industry, despite the fact that the world’s largest CO2 producers like China, Russia and India have not similarly committed. The UK needs to ensure that all the actions we take to cut carbon dioxide output cut the global output at the same time. International Agreements must be signed by  those who produce most CO2 as well as by us.  Ending up importing more from countries that do not control CO2 in the same way damages our economy whilst failing to tackle the CO2 totals.

An independent country needs to limit the amount of autonomy it signs away. Getting out of the EU is a huge step in the right direction, but we need to watch out for steps back again from a clever world establishment which does not trust the people nor the politicians who want to represent  their views. Some in the global  Establishment prefer to deal with politicians that they call grown ups, which means politicians who will ignore the public will or mislead the public over what is actually going on and who is in charge.

The most serious sacrifice of sovereignty was to the EU, with its binding legal structure and its own supreme court. Other international Agreements are subject to independent arbitration where there are disputes, and are best where there is a provision to allow a country to leave should circumstances alter.

Time to ease the cost of living squeeze

One of the official and Bank of England forecasts that might prove to be right is that people face a cost of living squeeze, predicted to be at its worst in April next year. People will face home heating cost rises, a  National Insurance tax hike and Council tax rises. General inflation is likely to reach its peak before subsiding around the same time. Supply shortages around the world including microprocessors, shipping containers and various manufactured goods add to the price pressures.

The government should take some action to ease the squeeze. On energy I have set out at some length how the U.K. could produce more of its own gas and electricity to start to reduce its dependence on dear and volatile imports and improve the contract costs of its longer term energy mix. On tax I still call for the NI increase to be scrapped. In a wide range of areas where supplies are short at home and abroad we need to be looking to put in more UK capacity to cut our import dependence. The higher spending Councils need to review their budgets to concentrate the spending on the essential services and to limit tax rises.

In some cases people will enjoy wages rises above inflation where there is a shortage of their skill. It is highly likely truck drivers, chefs, hotel staff and other constrained areas will see decent real wage growth. Many other people will be asked to accept wage rises that do not keep pace with the cost of living when tax and price rises are taken into account.

The UK market feels short of a wide range of services, There are good business opportunities for those willing and able to train to work in hospitality, leisure, care, building and a wide range of other areas. There is plenty of scope for people to set up their own businesses and to get orders from a public struggling to find the help they wish to buy in.

The UK government should do more to encourage self employment and the establishment of small business. Instead of taxing it too much and in too complex a way it needs to be easier to set up and get started, as we need the extra capacity. Many of the price rise are owing to shortages, so we do need more supply to solve the problems. The official machine is too ready to rely on imports.

The Bank of England

I think the Bank was right not to raise interest rates this week pending more knowledge of the Labour market and wage rises now the furlough scheme has ended. I am against raising rates all the time the Bank is creating more money to buy bonds to keep rates down. It would be a contradictory policy.

I have called for an end to more money creation.The Bank has created quite enough. Savings are high, so many people could afford to spend more if they wish. Bank liquidity and capital is strong, so banks could lend more if people wanted to borrow more. There is no need to create more money. If people and companies did decide to spend much more of their cash and borrow more to increase their spending inflation would pick up more. No need to stoke the money fires further.

 

The task of money management is not easy. There is a slowdown underway which will be intensified by the squeeze on real incomes next spring from delayed energy price rises and the tax increase. There is also a steep and predictable rise in inflation which the Bank did not see coming earlier this year but is now forecasting .

I would stop the money increases and watch the Labour market. Only if there is clear evidence of wage settlements generally taking off to embed the temporary price rises will we need higher rates. So far the wage rises are a feature just of a limited number of activities in shortage.

The government is squeezing incomes too much in the year ahead.It should cancel the National Insurance rise planned for April.

Plastic in the oceans

During a question and answer session at a local school environmental issues dominated the exchanges about public policy as usual.

The two most important environmental questions they raised were plastic in the  oceans and the need for more trees. I agreed with them about the importance of these matters.

Plastic in the oceans raise difficult questions both about responsibility and about who can remedy the problem.

I argued that the main blame must rest on all those people who threw the plastic away in an irresponsible manner in the first  place. In the U.K. we combat this with laws against litter by adults, and with strong social pressures on parents and teachers to tell children not to litter. Some Other  countries need to educate people against littering. The U.K. also spends taxpayer money on clearing up the litter where people do offend. Verges, streets and public places are regularly swept clean and the debris taken care of. More taxpayers money is spent on refuse collection, recycling and safe disposal so our plastic waste should not end up in rivers or the sea, even where it has been discarded wrongly.

In some other countries there is less pressure on people to avoid littering and a less good back up system to intercept litter before it finds it way via a river into the oceans. There are also bad boat crews who litter the oceans directly. This is especially difficult to police.

I explained that the U.K. and other rich countries use overseas aid to promote programmes for better refuse handling and for cleansing waterways. We cannot require other countries to do this. We have to persuade and encourage.

 

I set out how the U.K. government is promoting more woodlands, with local and National examples of tree planting. I also pointed out that if we continue to need more homes for more people there will be some counter examples where woods are removed to build on the land.

 

Housing need and numbers

The tensions between those who need a home of their own backed by the  house builders and developers and those who worry about the pressures on local schools, surgeries, hospitals and green spaces have become acute in the last two decades. The yearly arrival of more than 250,000 additional people needing homes compared with the 50,000 a year in the 1980s  has required a big increase in building. There is also the demand from people already settled here as grown up children seek a home of their own and divorced people who need a home each. This is partly offset by elderly people vacating homes if they need to go into a care home or die, and by some single people choosing  to share a home with a partner.

Today there is a new tension over the decision on CV 19 health policy grounds to house illegal migrants in hotels rather than other housing, with many writing to MPs criticising the costs and the diversion of hotels from more traditional uses.

The position could be improved if the authorities had more success in preventing illegal migration . Most of us condemn people trafficking. Ministers  want the profiteers arrested and taken out of circulation. Their businesses should be stopped. When will more success be announced?

It is also right to choke off most businesses being able to import cheap cut price Labour all the time there is a domestic option. In some cases shortages will need better pay and conditions and training programmes to meet our own demand.

I will be asking more questions about the development of the governments approach to skills, domestic recruitment of Labour and illegal migrants.

Filling the gap in our energy needs

I have recently asked some questions about the amount of energy we import and about the capacity we have available to generate electricity.

The government  said their capacity auctions have “secured the majority of GB’s needs to meet the forecast peak demand out to 2024/5 at a low cost”. It is true it says the majority. Does that mean the minority can be covered but at less satisfactory prices, or does it mean there is still a theoretical gap? If the latter they need to auction some more requirements.

When I asked if they would keep the remaining coal stations  available which had to be used recently when we had a windless period, I was told they do not plan to do so as they use the capacity auction system. I fully accept that capacity auctions can be the best way of procuring the cheapest next available power, and these are indifferent as to ways of generating. The point about asking is that they have just had to use the coal stations, so putting a ball and chain through them might not be a great idea. If there are cheaper and better ways of guaranteeing sufficient capacity then of course the coal stations could  be demolished but only after better sources of reliable power have been secured.

I went on to ask if they were thinking of converting the coal stations they have just had to use to biomass, as they have done with the bulk of the capacity at Drax. They ruled that out in their response.

When I asked about substituting more UK produced gas for some of the expensive gas we are importing, including long distance LNG, I was told that they offered but “conditional support for ongoing domestic gas production”. I still do not understand why they think imported gas is better in any circumstances. Long distance gas brought in on ships must be less green given the transport involved and probably dearer.

It appears that gaining a low domestic carbon dioxide score is the main driver of policy. Policy needs to ensure sufficient UK energy capacity at affordable prices as well. Importing timber pellets or gas is not a carbon win on any sensible accounting scheme.

Tackling health waiting lists

We are all in favour of getting NHS waiting lists down. Patients need timely appointments and prompt treatments. The government has announced a substantial unspecified portion of the £36bn extra in one announcement over three years to tackle waiting lists, money to  be shared and transferred eventually to social care.  It has announced another £8bn added to future budgets. I asked some questions about how this money is going to be spent.

When I asked how many extra medical staff will be recruited using the £ 8bn  I was told “We are working closely with NHS England and NHS Improvement to develop a plan for how that funding will  be used including workforce requirements and additional medical posts that may be  needed”.

When I asked where was the plan to reduce waiting lists I was told they aim to publish “an elective recovery delivery plan ” in November.  They have explained that they added £1bn to this year’s £1bn Elective Recovery fund and aim to spend the £8bn over the three years 2022/3 to 2024/5.  When I asked about the NI surcharge money  they said they are “working with NHS England and  NHS Improvement to develop a plan of how that funding will  be used”

When I asked how much the property costs would  be of setting up new NHS diagnostic centres they told me the small and precise figure of £55m. That implies a plan with proper costings for that venture. I look forward to seeing how many centres that buys. The bigger cost will of course be staffing them. When I asked about the  value for money of the Test and Trace programme I was told there will be a value for money report on that in the late autumn this year.

I was somewhat surprised by these answers. Given the strength and depth of NHS management I thought they would have put together a plan to bid for funds from the Treasury for the waiting list work. I would have expected the workforce requirements to  be the main feature and cost in the plan. I would have expected the Treasury to require detail over how waiting lists were to be  brought down  before placing a firm sum into the  budget. I would also have expected the Treasury to have pushed back on the huge Test and Trace budget to see if some of this year’s allocation could  be  transferred to waiting list work.  There are other elements in the large and fast growing health budget of the last two years that also need examining, as they should have been one off and set up costs  brought on by the pandemic. There is a general attempt in the Red Book to distinguish between one off and regular spending.

Presumably the costs of establishing then standing down the Nightingales was a one off . Presumably necessary work on better controls over airflows and air cleaning to curb infection spread has all been done by now, and those items should drop out of  budgets. Presumably fewer of the workforce are now having to self isolate or be off sick as the Covid case rate in hospital declines and as serious infections wane thanks to widespread vaccination.  All that should help improve the ability of the hospitals to tackle backlogs and to get staff back to more normal duties and routines. I will watch out for the plan to get the lists down, and will ask further questions to see how they are getting on. They were not able to tell me how many Chief Executives the various parts of the English NHS now employs. I would have thought someone would keep a record of that, as they all get paid.

 

COP 26 is undermined by China, Russia and other large CO2 producers.

It looks as if whatever agreements can be secured in the next few days over cars and cash, trees and coal, the world will definitely see more carbon dioxide produced at the end of this decade than this year. The G20 partners were unwilling to deliver the full $100 bn a year for the lower income countries, and some members were unwilling to curb their own emissions anytime soon.

In the agreements to be made about some of the areas where CO2 could be reduced the UK must not get itself into a position where it promises too much only to end up importing the goods, we need from countries that produce more CO2 making them and supplying them than we would for ourselves. Importing goods from China or energy from the EU does not cut the world’s total carbon footprint but does weaken our economy and reduces our job availability. We will still be burning gas this decade so we should burn more of our own to cut the carbon cost and cash cost of all those LNG tankers coming in from miles round the world.

Attention needs to shift to China, producing 27% of the worlds CO2 and planning to go on increasing it this decade. It needs to turn to Germany, still using plenty of coal and arguing over whether to do so until 2038. It needs to ask Mr Biden how much of his green investment programme has survived his bruising encounters with his own Democrat Senators, who seem to have halved the total spending package the President thought necessary, which included the major change towards green investment. Is President Biden about to preside over the rapid run down of the US coal, oil and gas industries which grew strongly under his predecessor and alarmed green campaigners? Probably not. If he did the USA would have to import more.

Attention also needs to be given to helping the private sector launch an array of compelling products and services that consumers can afford. The green revolution needs to discover the Mini of the new vehicles, the iPad of the new heating systems and the smartphone of the new diets that will walk off the shelves because people like them more and can afford them.

The leading foreign visitors at COP 26 who fly in need to avoid looking cut off from the real world the rest of us live in. It is no good them lecturing each other, all using the same alarmist sound bites if they plan to stick with their cavalcades and private jets flitting from air conditioned hotel to meat rich banquets. It looks odd to be telling the worlds millions to sacrifice their current lifestyles and aspirations and to abandon their cars, holiday flights gas, boilers and diets when the COP elite think their demands do not apply to themselves or can be brushed aside by buying pardons.

Some policies which would cut human CO 2 output

The experts assembled for COP 26 claim that the world’s average temperature is rising and that the cause is the output of too much CO 2 and methane by mankind.

This being so, shouldn’t they require all anti Climate change conferences to be digital events? It is quite obvious that Glasgow is producing a surge in emissions from travel, banquets and air conditioned hotel use. A cavalcade of 85 vehicles to bring the US President does not offer a good look for all those telling the rest of us  to walk or cycle.

The debate should begin by looking at population growth. As a freedom loving democrat I do not recommend population control policies. However many countries do express views on population numbers and family policy. China, the world’s most populous country for many years did have a one child policy. Most countries do have family policies based around taxes, benefits, child care and education policies. Does COP 26 have something useful to say about how many people the world can sustain and what is a sensible balance between helping families without providing financial incentives for larger families?

 

For any given country policy should take account of the needs of wildlife and nature. Too many people can mean the removal of habitats from wildlife, and the loss of species.The best green policy the U.K. could adopt is to return net migration levels to those of the 1990s before Labour opened our borders. At current rates  we need to build a city the size of Plymouth every year to accommodate new arrivals. This generates a lot of extra  CO 2 for the construction. It erodes our countryside. It requires expansion of public services.

The governments assembled could all pledge to green their own activities, switching all public buildings to electrical power and removing diesel and petrol cars to show the rest of us how to do it. If they pioneered maybe they could get the costs down making it more attractive and feasible for others. Saving energy is a good idea and requires millions of sensible daily decisions. Before the pandemic I went to a big government meeting on green matters. The  sun was shining  strongly through the windows of a huge government room, where all the many bulbs in the chandeliers were alight. I was the only one who asked if we could turn them off.

Time to be firm

France is behaving foolishly. The Agreement has been honoured by the U.K. offering licences to French fishing vessels that fished in U.K. waters when we were in the EU.

France wants licences for vessels that did not have legal licences before. If they were fishing in our waters they were doing so illegally. The French arrest of one of our trawlers was unreasonable as it has a licence to fish in French waters. Apparently it was missing from a list giving the French an opportunity to be awkward, despite being told our vessel was legal.

Meanwhile the U.K. needs to bring to a head the way the unreasonable conduct of the  EU towards Northern Ireland is diverting trade from GB to the EU against the clear statement of the Protocol.

I did not support the final Agreement because I thought there would be trouble over the interim fishing agreement and  the Protocol. Both were said to be temporary. We need to bring forward terminating them both and implement a proper Brexit on these vexatious issues. We are quite entitled to given the illegal actions of France and the EU and the terms of those Agreements.