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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Bottlenecks and opportunities

World supply is damaged. China has introduced electricity rationing and is producing less as a result. Some Chinese ports have been partially closed for periods this summer thanks to continuing covid outbreaks. World shipping has been disrupted by shortages of empty containers, by a Suez Canal blockage and by pandemic restrictions. There is a general shortage of heavy goods vehicle drivers across Europe. China, the USA and the EU are turning to policies that rely more on home production and less on imports and global collaboration. There is a gas shortage worldwide, worsened by a period of little wind to  generate power that way and by Russian negotiations over the new pipeline to Germany . The regulator still has to grant a licence for the pipeline which is fully compliant with EU rules.  There are skill shortages on both sides of the Atlantic as economies recover from the anti pandemic closures.

The UK labour market despite the lockdowns has relatively low unemployment and a high level of vacancies. Some lower paid activities are in particularly short supply. There needs to be an adjustment, with people offered training and better pay and conditions to ensure we have enough HGV drivers, care workers, food processors, farm workers, chefs  and the rest. We also need to make sure there are enough people going through the longer training periods to be nurses, doctors, engineers and similar  so we do not have to rely on inviting them in from lower income countries that need their own people.

Whilst in the short term these stresses are worrying to people, they are also an opportunity to improve the lives of many. I have written and spoken before about truck drivers. There is  now greater agreement that they need better break and overnight facilities. They could also do with Highway departments that understand their needs to get to shops, hospitals and other customer places more easily. There does need to be better pay for those still on low pay and for those the industry needs to attract. It is primarily a task for employers to offer the better packages and to support people through training where necessary. Government needs to see through its promises to greatly expand training and testing capacity and should with Councils work on improving the conditions for drivers on the public highway and in parking and rest facilities.

Employers in a  number of areas need to do a similar exercise. In the care sector local government has a role to play as the buyer and user of many services. What combination of better training, more machine power and other support, and pay is needed to recruit the workforce needed?  On the farms what investment can there be in support equipment and labour saving machinery to get the crops in, the fruit picked and the vegetables packaged? There is still a long way to go with growing methods for fruit and vegetables to make them easier to pick and pack. Can the hotel and restaurant industry offer better career opportunities including training more chefs?

 

Labour’s lost loves

 

Welcome to the 1990s. Labour has dusted down the Mandelson playbook. It has staged a conference to show its not so new leader can purge the party of the left. We’ve had the policy toughness, denying the wish for a higher minimum wage. We’ve had the personal toughness, forcing out a Shadow Cabinet member for refusing to loyally celebrate lower pay. We’ve had the mood music toughness, with the handful of Starmer supporters sent out to portray the socialists in the party as a disloyal rump.  The result was a watered down change to the constitution, a defeat of the official  minimum wage policy  in the vote and plenty of tv debates revealing the big split at the heart of the party.

We will watch to see how they now fare in the polls. Commonsense tells you that stoking a civil war and trying to purge the Labour party of its socialist heart will not add votes. The polls probably rely more on how well or badly the government does anyway. No amount of striving got Labour into competitive shape between 1979 and 1992. The disaster of the Exchange Rate Mechanism pro EU policy by John Major shot them back into contention when the full magnitude of the recession it sparked became clear. No amount of modernisation and reform got the Conservatives back into competitive form, from 1997 to 2007. Labour’s even more disastrous banking crash and Great recession  then rocketed the Conservatives into first place in the polls.

For years Labour and Lib Dems have relied on their hostility to Brexit to provide opposition to the Conservatives. Now Brexit is largely done, with many voters wanting it properly finished by taking control of Northern Ireland trade and fish, continuing with hostility to the majority view does not look productive. The Remain bias of Opposition parties over the last few years has come across as backward looking, negative and anti democratic and ensured their big defeat in 2019. So today they need to look for something else. They seem to be moving towards two possible areas of difference with the Conservatives .

The first is they wish to out green the Conservatives, and to focus green policy on a more determined rush to net zero. This will help them with younger voters and with a certain kind of well qualified urban elector, but it will leave them well short of a majority. They will find that as the election draws nearer so they will be pressed on what a faster approach to net zero means. If it means dearer heating and transport, the need to spend a lot of money on ripping out the gas boiler, an  enforced earlier  switch to electric cars, the need to pay high carbon taxes and the rest they will find many voters will not support that in the privacy of the ballot box. Voters will say they support the idea of net zero for fear of retaliation, but they will not vote for policies that deliberately limit their freedoms or make them worse off.

The second is the wish to be generous and kind to the rest of the world and to see the crusade against poverty in global terms. They will stand up for the restoration of free movement with the continent, for higher levels of overseas aid, for generous definitions of asylum seeking and the idea of running here a World Health Service free for all. Again that will cement various groups of socialist voter, but will not shift the dial to retake the Red Wall seats they lost in 2019.

Sir Keir Starmer’s essay did not reveal any great talent for finding the big political idea that people want, nor any ability to encapsulate in great phrases and pithy arguments what Labour is about. The negative of just  taking socialism out of the Labour party does not spread enough joy and hope to the many but  comes with the price of division.

The EU, Mr Biden and Northern Ireland

The EU continues its negative approach to international relations. It has picked a fight with the USA over their agreement  to link with Australia and the UK in a submarine and Asia defence deal, indulging in French tantrum diplomacy. Apparently  daily it seeks to undermine the UK in Washington using its large embassy staff to brief the Administration and politicians with a very misleading and biased account of the Northern Ireland Protocol. They probably urge  the President not to offer a Free Trade Deal to the UK as they seem worried by the prospect of one. As I have often argued we can get to a FTA with the USA by both the UK and the USA joining the TPP, or by the UK joining the US/Mexico/Canada Free Trade Agreement which might even be possible under this President. Meanwhile we have a great trade with the USA without any FTA as there was no EU/USA Trade Agreement to roll over when we left. The WTO works fine.

The EU misrepresentation of the Northern Ireland Protocol and Good Friday Agreement is more concerning and does need correcting. The UK Embassy in Washington and our new Foreign Secretary need to redouble UK  efforts to get across the UK and Northern Ireland majority view of the issue to the USA. The Northern Ireland Protocol is not essential to the Good Friday Agreement which is  not about trade matters. The Good Friday  Agreement is fully  supported by the UK and Republic of Ireland governments. It sets out constitutional provisions of importance and is based around a mutual respect for and by the Republican  and Unionist communities.

The Protocol as interpreted by the EU is  harming relations within Northern Ireland and between NI and the Republic because it does not respect the wishes of the majority community. As interpreted by the EU it  is denying NI  the advantages of membership of the UK single market which was meant to be guaranteed. There is clear evidence of diversion of trade from NI/GB to NI/EU though this is ruled out by the Protocol. The document states “Having regard to Northern Ireland’s integral place in the UK’s internal market, the Union and the UK shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the UK”. The Union has being doing the opposite.

The UK will need to take action to restore the integrity of the UK internal market in NI. NI should not be impeded in  getting GB products and supplies whilst of course UK companies selling into NI can ensure there is no seepage of goods destined for NI into the Republic. Trusted trader schemes, electronic manifests and spot inspections by UK officials away from borders can police the trade. A trusted UK supermarket company or large retailer should be able to stock their NI branches as they do their GB branches without EU interference. NI/UK  and the Republic  of Ireland have a good history of co-operating to stop smuggling over the NI/Republic border during our time in the EU, as the EU/NI border was a VAT, excise and currency border throughout. We did not need border posts as these matters were sorted out electronically away from the border.

The UK diplomats should explain to their US contacts that the EU is wrongly interfering in our internal trade. It would be  like Canada saying it needed to police and inspect US goods moving from other US states to Alaska in case they ended up in Canada instead.  I don’t think US politicians would countenance that.

They should also read out the crucial Article 16 of the Protocol which states “If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the UK may unilaterally take appropriate safeguard measures”. There is clear diversion of trade going on so we need to act.

 

Visiting a local primary school and Memory Lane

On my recent visit to a local primary school I asked about progress with teaching reading and writing English. I had on my mind Nick Gibb, Schools Minister for most of the last decade until the reshuffle. He is a tireless campaigner for using synthetic phonics as the best method to teach reading, and has had some success with the profession in  getting this more widely adopted with some good outcomes. Standards of reading and writing have been rising.  The school confirmed they used the method and were pleased with the results.

When I was preparing for the visit I allowed myself a rare trip down Memory Lane to recall how I thought as a primary school child. I had enjoyed my mother reading to me before I was old enough  to go to a state primary. I had puzzled over the shapes of the words and felt frustrated that I could not read them for myself. I often asked for a favourite book and could remember enough to gently complain when my  mother skipped a sentence or two because she was so  bored with the same story. I still could not read the words I knew were missing.

Being introduced to the sound based alphabet was a revelation. Suddenly as I mastered abc as a set of sounds I held the magic key. I could venture a pronunciation of new words that I had not met before, and could read aloud the words I understood and were part of my personal dictionary of the mind. It was one of a few key gifts or statements during  my education that made a huge difference to how I learned and progressed.

It was as big a breakthrough as my first day at primary school, when I was delighted to find a world that was my size. After five years of living in a land of giants where every chair was  a mountain climb and every piece of furniture a huge and unmoveable obstacle, I was in a classroom with chairs and  tables that fitted me and my classmates and I could move if necessary. Primary schools are gateways to a bigger world. At their best they give children the power to understand so much more  and the confidence to go on their own personal journeys.

The need for more UK electricity generation

I was pleased to hear that the government is about to order or plan more nuclear power capacity. They need to. The UK currently generates around 15% of the power we need and around 17% of what we produce at home from  some old nuclear plants. Four of the seven  have to close by 2024 and two more  by 2030. The very least the government needs to do is to replace these. Only Hinckley C is currently going ahead and will be producing 3GW in a few years time. None of the smaller Rolls Royce plants nor the other large plants now being considered are likely to  be available prior to 2030, so we face a drop off in the next few years which should cause concern..

The UK relies on imports for 10% of the electricity we need. We buy imports most days including when demand is well below our domestic capacity. Given the growing tightness of energy supply on the continent, their ambitious decarbonisation plans which could leave them wind dependent and short of power and French threats we should wish to end our reliance on this source of power.

Wind power last year supplied  under 16% of our needs and solar under 4%. The aim is to push this higher and more capacity is being  added. However, as we have just witnessed, you can have a period of little wind and below average sun, leaving you very short of electricity. There needs to be  more back up or allowance for underperformance of these renewables.

Last year biomass added 6% of our needs and gas 36%. Recently three old coal stations have had to be brought back into use and have provided around 4% of our power.

The total demand last year averaged 33.8GW. Peak demand can reach 45GW on a busy cold day. The system has enough power currently for peaks assuming the renewables work well. However, with nuclear about to decline  and with domestic demands about to rise a lot were people to buy electric cars and electric heating systems we are going to need an additional 10.4GW of usable capacity. This would take care of the net  2GW loss of nuclear, the 3.4GW imports, and  5.0 GW to allow for a substantial rise in domestic demand for the planned electrical revolution.

The immediate task should be to keep all old power stations available on care and maintenance to be brought on if wind and solar let us down. The government should examine what are the  best and cheapest forms of renewables that are not wind or sun dependent, given the priority they accord to decarbonisation. They need  to see if expanding biomass makes sense. It may be that for a transition period the UK simply needs more combined cycle gas as the cheapest option.

Energy policy needs to keep enough capacity available to keep the lights on at all times, and needs to worry about the level of bills.

Buying petrol and diesel

As someone who has kept away from filling stations for the last week as I still have some diesel in  my tank it is worrying to see such long queues of people wanting to fill their tanks earlier than usual and some also wanting to fill extra cans for storage.

Ministers have assured us there is no shortage of fuel in the country, to be met with the reply that nonetheless there are filling station closures and queues. These have been brought on by a large surge in demand which should  abate when more people have full tanks and cans and as concern reduces.

Messages by some in the industry started the extra demand by drawing attention to what were  limited and local delivery problems. Let us hope the industry can recharge the forecourt tanks and resume supply for more usual levels of demand. Those of us who held back would like to be able to replenish emptier car tanks at our regular times.

Mrs Merkel was no friend of the UK and helped the EU lose our membership

It is true that Mrs Merkel will soon retire from the office of Chancellor after a signal achievement of winning and keeping such a high office for 16 years. No-one else in her era came anywhere near such an achievement. She not only exercised great authority in Germany but also in the EU, where she was the leader of choice amongst the member states that the EU turned to  to strike deals and find compromises to keep some momentum to the project. Being the Leader of the largest population, the largest national economy and the biggest financial contributor in the EU of course helped in carving out that niche.

Her diminishing numbers of fans and supporters in Germany will mourn her passing. They saw in her stability and calm, a woman who eschewed political gestures and strong arguments. She worked behind the scenes, sought compromises, changed policies when the wind changed and often sat on things for a long time before venturing into the argument. For most of her time Germany grew more prosperous, and unemployment stayed low following the SPD led contentious labour market and benefit reforms at the opening of the century.

Her legacy however should not  be air brushed because she was a survivor. She leaves her party gravely weakened, sitting on around half the vote in recent polls  compared with what she achieved in the Federal elections of 2013 (21% in a recent poll versus 41.5%)  and facing a difficult election. We will see soon how the party has performed in the actual election.

She has undermined the policies and principles of the conservative party she inherited. She led the party from support for nuclear power to a policy of closing it down. She changed policy from controlling migration to welcoming in hundreds of thousands of new  economic migrants. She claimed to represent German conservative principles in  the EU based around low levels of debt and no money printing only to allow or be unable to stop massive Quantitative easing programmes, the issue of EU debt and general large overshoots of the German inspired Maastricht debt and deficit criteria by many countries. She tried to reassure worried Germans that Germany’s wealth and tax revenues would not be used to subsidise high deficit countries elsewhere in the EU, only to permit the build up of over Euro 1 trillion of German deposits at zero interest at the ECB which was lent on at zero interest to the deficit countries. She leaves her successor with difficult issues over the transition to net zero, the requirement to close down the German petrol and diesel vehicle industry and the need to get out of coal whilst ending nuclear.

More importantly, her main legacy in the EU is to have greatly assisted in the unintended exit of the UK from the EU. She led Mr Cameron and Mrs May to think that she had power to settle the EU position, which may have been true, and that she might be the helping hand they needed. Instead she was a hawk denying Mr Cameron any negotiating wins to take home to persuade floating voters to stay with the EU. She offered Mrs May no help to shape a deal which more MPs could have accepted. Her enthusiasm to force the UK into a federal project which a majority of the public were never going to accept sealed the fate of two UK Prime Ministers and allowed Leave to win both the referendum and the 2019 General election.

Parliament, the people and Brexit: a rare retrospect

For years on this site I faced a barrage of criticism from some for staying with the Conservative party and not joining UKIP or later the Brexit party . I explained patiently that there could only be a Brexit if the Conservative party gave the people a referendum by using their majority in Parliament to do so. I always thought UKIP and the Brexit party would fail to win a single seat in a General election. I was wrong by just one seat in one election. I always told such lobbyists that we needed to do three very difficult things. The first was to make it Conservative policy to hold a referendum. The second was for the Conservatives to win a majority. The third was to win the referendum. We managed to do all three with all the left of centre opposition parties continuously and resolutely against and with some Eurosceptics decrying us.

I myself stood on a manifesto of wanting to persuade the Conservative party to adopt an EU  referendum in the 2010 election, and in support of the national Conservative party Manifesto pledge for a referendum in  the 2015 election.

The pressure to give people a vote and to let us make the case for exit began with the David Nuttall proposal for a referendum which Parliament voted down on 24th October 2011. 83 Conservatives supported that motion which was defeated by 483 votes to 111. The extent of rebellion against the Conservative three line whip shocked the government. The inner group advocating the referendum were grateful to David for fronting it. We wanted someone as the first name on the proposal the leadership could not decry as a “usual suspect”.

We gathered more support. By the time of the John Baron amendment to the Queen’s speech seeking a referendum bill in 2013 we had well over 100 supporters of a referendum and the government itself abstained. The opposition voted the proposal down by 277 to 130. As the PM came to see we were near to having a majority of the backbench party and were intent on a referendum he conceded, knowing his leadership could be challenged by us  if he did not grant one. It  became official Conservative policy to let the people choose. The offer of a referendum helped the Conservatives to win a majority in 2015. We did not threaten the PM and wanted to help him win the election. He saw for himself the logic of the building support for a referendum.

When Mrs May shifted her stance from wanting to get Brexit done to accepting advice from  a UK establishment that was determined to water down or thwart Brexit by negotiating us back in via another Treaty, many Conservatives rebelled. The first Meaningful vote on her bad deal was defeated by a massive 230 votes.

This week I was reminded of the significance of the third so called Meaningful Vote on Mrs May’s proposed Withdrawal Agreement. Against great pressure to back the government 28 Conservative MPs rebelled again against a three line whip. The resulting defeat led to Mrs May’s resignation, the election of Mr Johnson and the 2019 election needed to bring Parliament’s view on Brexit more in line with the public.

None of my Eurosceptic  critics  on this site have ever acknowledged that we did pull off those three difficult tasks, and did not see that we always needed votes in Parliament to do these things. It is always possible for those who do not share power or need to compromise to shout from the sidelines what is the best answer, but to get something done you need votes in Parliament. The tragedy was it needed a change of leadership and a change of Parliament to get Parliament to do what the public had voted for in the referendum. And Yes, there are still things to do to sort out  the NI issue and the fishing.

The problems with the single market

There are still those who regret our absence from the EU single market, and who wrongly confuse it with free trade.  The EU single market was instead a catch of regulations and controls which proved to be very damaging to large swathes of UK industry and business. Its Common Fishing Policy denuded our seas of fish and drove us from self sufficiency with good exports  into import dependence. The common energy policy was driving us into import dependence on interconnectors  for gas and electricity when as an independent country we could easily be self sufficient. In our first decade in the common market our car industry halved under the weight of tariff free competition from the continent, and our large nationalised steel industry with five huge integrated plants lost market share and came under pressure to start a big closure programme. Meanwhile the business services area where we were strong was not opened up to benefit us in return.

There are also those who seem to think our exit from the EU was mainly  to secure free trade deals with other countries, and who  now complain that there is no immediate prospect of an individually tailored US/UK Free Trade Agreement.  The EU never had one yet our trade with the US is strong, growing and in surplus . This shows that whilst Free Trade Agreements are  nice to have and can add something, the core of trade occurs under WTO rules anyway. We trade with the USA and with the EU as most favoured nations under WTO rules. It is more likely the UK will be an early joiner of the TPP, to be followed by US membership, thereby adding a freer trade proposal to our bilateral trade with America.

The main aim of leaving the EU was to restore our right to self government. I always stated that the gains would depend on how we use the freedoms, and never suggested the main point was to extend the range of free trade agreements, nice though that might be and likely though it was. The government has done a good job in negotiating trade deals so far, to the point where Mr Macron is incandescent with rage about our latest Australian agreement. The EU has got to learn now we are independent they cannot control us or reverse decisions we make with others that they do not like.