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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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.

 

 

BBC – and Opposition party – think : public spending

The Director General of the BBC has asked all the BBC staff to try harder to ensure impartiality and fairness. The BBC has long favoured every kind of diversity save for diversity of opinion. It pursues its own agenda, often mistaking a one sided presentation or propaganda for the truth, as it sometimes  finds it difficult to even comprehend the other side of an issue.

Today I start an occasional series of articles which I will send to the DG about unconscious bias or deliberate distortion  of the arguments. The BBC in most of its comment programmes and new broadcasts accepts the proposition that if there is any problem with the quality or quantity of a public service it is owing to a lack of money. They also presume that a lot of  money for any given service is a good thing, and more money is a better thing. They fall foul of the lump of money fallacy as the best descriptor of a public service. They make the often disproved assumption that more money will secure the improvements people want.

I’m sure none of them go shopping like that. They would not enter the shop and offer to pay £50 for the groceries up front without seeing what was available and what the prices were. They would not assume they had had a more successful shop if they had ended up paying £60 instead of £50. When they got home they would not say isn’t it great, I have spent  £50 on groceries. They would return triumphant to parade the cauliflower and the apples, the eggs and the bread. Nor would a family member turn round and say you should have spent £60 though they might complain if there were  no chocolate biscuits.

The BBC should concentrate more on the outputs of the public service, and on the resources in terms of skills, people, supplies, properties or whatever might be needed to increase the quantity or raise the quality. They will need to challenge  opposition and government politicians who simply assert it must be bad because it is only costing £10bn or it must be good because it is costing as much as £10bn . They need to get into more of the detail of how well managed a service is, whether productivity is rising, whether the service needs to get more right first time and work harder at quality management both to improve the experience of users and control the costs to the taxpayer. Quite often professional lobbies lobby MPs for more cash for a service yet they are unable to tell you what the current budget actually is or how it is spent. The doctrine of new money haunts the debate, yet all next year’s money is in one sense new money.

How many more times will we be treated to the lazy story that the hospital treated patients badly because it was short of funds, or that School A with bad results was short of money to do a better job even though it got more per pupil than School B with a lower per pupil amount. Sometimes the true story is a lack of funding, but other times the story is bad management, absentee staff, poor training , bad buying , too much administration or whatever. The reason people do not come back from the  shop kicking themselves for only spending £50 when they could have spent £60 is they would probably have wasted the other £10. They  would have bought more food than they could eat before the use by date had passed, or bought the dearer items that were no better, missing out on  the special promotions and good prices.

So it is with public services. Most of us want good public services and are happy to pay a decent price through tax for them. Most of us want well remunerated public sector employees, but recognise there has to be a quality and productivity back up to good pay. Our experience of the service quality will not be swayed by whether it cost a lot or less. A good series of examinations of both good and bad examples of public service management would inform a better public debate. To many in  the opposition and the BBC it seems there should be no limit on how much money is directed into some public services, and any shortcoming will always be blamed on Ministers once again failing to vote enough cash.

Do not send motorway sit down protesters to prison

I have no wish to load the prisons with the protesters who block main roads. Some of them want to be sent there to heighten their newsworthiness. There are often too many to send them all. Why should we taxpayers have to pay more to keep them in prison to increase the coverage they get?

A friend this week suggested to me a punishment for deliberately blocking the highway as part of a protest which might  better fit the crime and might be more of a deterrent to many of them. Why not make the penalty the loss of your driving licence? The crime would be deliberately blocking the road as a protest. The police and courts could remove as many licences as there were protesters with licences.

The protesters should welcome this. As they want us all to create less carbon dioxide we would be enabling them to do just that themselves, by banning them from using personal transport in future. It would force them to do as they preach, going by bike or public transport. The ones who do make their own sacrifices already would not mind, whilst many of them who lecture the rest of us how to live but do not follow their own advice would face a disagreeable penalty that did inconvenience them .

What do you think about this?

The timing of tax cuts

The main point I was able to make yesterday in the short speech Parliament allowed was that we need the cuts in tax rates now to promote faster growth. The Chancellor rightly says he wants them in due course. They should not be a reward for managing to grow against the headwind of high taxes. They should be a necessary part of a growth strategy. They will speed  growth and make the rest easier to achieve.

The budget moved huge sums of money thanks to a major rethink over the official forecasts from just six months ago. The OBR has lifted its forecast of growth this year by a massive 2.5% or more than £50bn. It has raised its inflation forecast for next year from 1.8% to 4%. It has slashed its unemployment forecast from 5.6% to 4.9%. It has discovered £44 bn more revenue in the first six months of the year that it forecast in March. I argued that the March forecast was wildly pessimistic. Now the economy is slowing the forecasters have decided to up the projections for this year!

The OBR expects growth to slow to an average of just 1.5% a year in the three years  2024-26. Despite this it proposes a 3.8% per annum real growth in public expenditure. To make such large sums more affordable it is imperative to lift the growth rate. That will require the various measures I have written about to boost underlying capacity in many things from energy to food, from transport to engineered products.

The Treasury needs to review public spending to secure value for money.