John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems

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Grow back green

The main governments and political parties of the world only want to talk about one thing, the planned great green transition to net zero. They of course have to talk as well about getting on top of the virus and restoring economic life damaged by the anti pandemic policies they have all adopted. They usually link the two, by assuring us that they plan to grow back greener. They expect vaccines to take care of the virus problem.

This is a huge essay in world government. They do all grasp that there is no point in a few countries doing this whilst others take advantage of cheaper fossil fuel energy and expand on the back of it. Last year the USA, the world’s largest economy, did not buy into the project. China the world’s largest industrial economy, claimed to support, but carried on expanding her coal and other fossil fuel based output, promising reductions later this decade from a higher level. With the world’s two largest economies not contributing to the cause it was more difficult for other countries to sell the idea to their public, as they could always ask what was the point if the world’s two biggest carbon emitters were not trying to change tack. This year China is talking of bringing forward her conversion to starting to lower carbon dioxide, though that will need pinning down with more precise targets and promises. The USA has converted to being a leading advocate of rapid transition to an electrified renewable world.

There will be no shortage of conferences to push countries to make more specific and expensive commitments. This month brings a US led summit on the topic. The G20 in July will have another. The UN’s big global conference is in November in Glasgow. Countries will doubtless advance the dates by which they will achieve substantial cuts in carbon dioxide output. This in turn will spawn multiple targets to increase wind and solar power, to close coal power stations, to end new diesel and petrol cars, to promote battery vehicles, to change people over from gas central heating and to find solutions to power planes and ships in new ways. It will be a world of expanding battery production, hydrogen development and the electrification of home heating.

When asked how there will be growth as we come out of lockdown they all tell us the same thing. The new jobs will come in renewable energy, battery cars and the rest. They do not go on to say that there will also be big job losses in fossil fuels, traditional transport systems and home heating. A lot of the greening will be an expensive switch, retraining the gas fitter to be an electrician and moving a coal miner to be a wind farm maintenance person. As it seems likely governments will prove better at stopping people buying the outgoing technology than they will be at getting enough people to buy the replacements, there could be a painful transition.

The priority must be to generate a full and strong recovery from the pandemic measures. I am all in favour of investment in cleaner air and water, in energy conservation and fuel efficiency. The green revolution still needs to find the iconic products which people want to buy willingly to speed its pace. In default of those there is a danger governments will slow recovery by their success in putting people off traditional products in a range of sectors targeted by the green plans. Net zero will not restore our economies.There needs to be a wide range of policies to promote enterprise and jobs and these need to encompass recovery in a wide range of traditional activities as well as producing new battery cars and windfarms. .

Where will people work as we exit lockdown?

As we make slow progress out of lockdown there will be more discussion amongst businesses, Trade Unions and employees over where and when office work will take place. Many people will still have little choice. If you are a shop worker or factory staff you need to be there in person when the facility is open when it is your shift. Many others now see opening up the vista of keeping on with some homeworking after a year of working mainly or wholly from their living room. Many companies have found they can continue to meet their customer needs and fulfil their work requirements on line with many working from remote locations.

For the employee there is the advantage of not having to get up early and rely on trains or buses to reach the office, nor having to sit in the traffic jam if you go by car. You save plenty of money on the season ticket or the fuel bill. Although there is more heating and wear and tear at home, there is a substantial time and cost saving by cutting out commuting. For all those employees who have to juggle minding and maintaining a home, and looking after children or elderly relatives with paid work, the conflicts are reduced and multi tasking just got easier.

For others often living on their own life became a lot lonelier with home working. Seeing work colleagues on a zoom meeting call is not the same as having lunch or after work drinks with them and being able to swap stories and arrange social events over the coffee maker. Those who live in smaller properties, or have well occupied homes with others needing the broadband capacity and some quiet space to make calls returning to the office gives them a better environment for what they need to do.

Employers seem divided or unsure about what they want. Some do think they need people back in the office to provide discipline and framework to people’s working hours. They value the advantages of in person collaboration, informal meetings and idea generation. Others think they can exert discipline through the well monitored systems of computers logged into the company network and can ensure the outputs flow from the home location. Maybe the individual is also less fussy about the time of some requirements because they are at home and can break off for domestic needs during what turns out to be a longer working day. Maybe the bosses often with larger houses like homeworking themselves and see the need to allow some of the same for others. There is little study yet of what has happened to productivity or how the wins and losses net out. Clearly many business meetings requiring travel and stays away were expensive and time consuming. It may be as good as well as much cheaper to do those on line.

Many say they want a hybrid week. That probably means Mondays and Fridays at home . Is that a good compromise for employers? Would that maximise output as well as employee satisfaction? What would it do to our city office centres who have travel and hospitality capacity for millions five days a week?

Condolences to the royal family

Many will have personal memories of the Duke of Edinburgh from meeting him or from his presence in our living rooms on tv or in the newspapers. The Queen has launched an electronic book of remembrance on www.royal.uk. I recommend this for all wishing to send condolences and to record their impressions of him and his service to the Queen and nation. The royal website also has more information about the Duke and his work.

The death of the Duke of Edinburgh

Our thoughts today are with the Queen and members of the royal family on the sad news of the death of her husband, the Duke of Edinburgh. He dedicated his life to serving the public and supporting the Queen as she carried out her duties. I send my condolences from the Wokingham constituency as the nation mourns his loss.

The international order

The UK decided to restore democratic powers by leaving the EU. We can now improve, amend or remove laws and spending programmes as we see fit. The government proposes, Parliament responds and public opinion is brought to bear on the process. If a government makes a mess of using its powers it will be replaced at the next election so the voters are in ultimate control.

Various contributors here believe that green policies and covid policies are somehow the work of hidden powerful advisers and forces. They are, on the contrary very public, and have been through substantial governmental processes. Whilst we have removed the overarching powers conferred by the EU Treaties and enforced by an active and powerful court, our country is still under a number of other important Treaties which governments of most political persuasions will observe and enforce. Anti pandemic policy has been heavily influenced by our membership of the World Health Organisation. The UK’s green enthusiasm has been locked in by the Climate Change Act enacted by the Labour government and accepted by the incoming Conservative one, and by UK agreement to the Paris and other international conference commitments made globally. I was one of just a handful of MPs who did not support the legislation.

The structure and culture of UK government is to abide by international rules and Agreements. There is no need to look for hidden influences urging these policies when they have been signed up to in a public way so the whole might of the UK official machine is bent on enforcing and complying with them. It is true the CV 19 policies are advisory. It is true the green policies require our consent and there is no strong enforcement mechanism like the European Court to make us do them, but government wishes to apply them anyway.

This means if UK citizens do wish to change these policies it is a bit more difficult. There could be arguments about “breaking international law”. When the UK ventured a different view of the Northern Ireland protocol as it needed to do some asserted this was breaking a Treaty and not allowed. I think they were wrong as a good argument can be made from the terms of the Protocol and Treaty themselves that there needs to be change to secure one of its prime objectives, the freedom of the UK single market.

In practice countries do renounce or amend Treaties by agreement, or sometimes reinterpret them . What matters is popular will and national law. Some say of course all Treaties must be obeyed, citing the 1713 Treaty of Utrecht which stated Gibraltar is a UK Crown dependency. I of course favour respecting that Treaty. The truth however is the status of Gibraltar rests with the will and views of the people who live there. It is because 99% voted to stay British that they will stay British and observe the Treaty. If they voted 99% to be Spanish of course there would be change whatever the Treaty says.

So my advice to those of you who disagree with the health or green policy, understand you need to change the policy of the government which in turn will need to amend its promises and proposals to the international community if you succeed.

Lobbying

It’s not much of a story that someone who was Prime Minister six years ago lobbied the Treasury on behalf of a business he is employed by, only to be turned down. To make it interesting the ex PM would have to break the rules over conduct out of office, and he would need to be successful in his lobbying. We are told neither of these conditions were met.

The facts are not going to get in the way of those who nonetheless want a debate about lobbying. Energetic lobbying is a part of a healthy democracy. Charities spend large sums on their lobbying for legislative change and access to spending programmes. Businesses organise themselves into trade Associations and nationwide lobbying bodies to get favourable changes of policy for their sectors. Trade Unions spend large sums on setting out their policy demands. The BBC and other media regularly give privileged slots on news and comment programmes for lobby groups to make their case prior to interrogating any Minister who dares to say No to the lobby proposal.Maybe the media is too kind to these lobbyists and ought to question their motives and views more thoroughly before running their demands.

Ministers of course need to understand what the business or other interest of a person is when they talk to them or have a meeting with them. This usually flows from the person having to make clear who they represent or work for to get the meeting in the first place. Ministers need to have shed all their own business interests, or to exempt themselves from any decision where there could be a conflict of interest. Much of the detailed commercial interface between government and business is handled by impartial officials who are trained to assess bids and proposals on their merits rather than favouring friends of the government. It appears that the wide ranging access Greensill had to UK government in the Cameron years was arranged by the Cabinet Secretary himself, the ultimate policeman of propriety and procedure in government. The interesting questions about the arrangements then in government relate to why the UK state needed to introduce supply chain finance, and why if the problem was late payment of public sector bills they did not just pay them more quickly. Tragically the Cabinet Secretary died young so we cannot find out from him what led him to give Greensill such access.

Some want to believe that a few billionaires have particularly favourable access to governments and end up making the policies that rule us. The answer to that is Ministers have free choice about who they listen to and which arguments they find attractive. We need to concentrate on what Ministers say and do, as they have the power. Usually the policies which most annoy the critics are international policies embedded in treaties or set out by membership bodies like the UN. In the case of the EU they are of course strongly binding on member states through their own court and legal system. These are more difficult for governments to amend or ignore as that may entail renouncing the relevant treaty.

Ministers have daily to defend their choices to Parliament, the public and media and if they are taking bad advice they feel the results. Chasing the possible influencers can divert us from the real task of debating and changing what government itself decides to do, or debating any damaging rules and guidance of the international bodies we belong to. Chasing individual outside advisers is only relevant if there is corruption. As Margaret Thatcher wisely said, Ministers decide and advisers advise. That is usually true. Any adviser who overreaches or ceases to please can be dismissed. Oppositions are there in part to call out influence or lobbying which crosses the line from the acceptable.

New diesel and petrol car sales continue to slump

The UK car sales figures for the first two months of 2021 show a large fall of 87,000 vehicles. The industry is ascribing this to CV 19 and the closure of car showrooms. Doubtless there was a CV 19 effect. There was also an on line market people could use, and we did see a rise in the sales of all types of hybrid and electric vehicles over these two months despite closed showrooms and no demonstration drives. You would think it would be the new types of vehicles which would most need display in physical showrooms and demos to persuade people to buy them. The fall in sales of diesel and petrol cars was 96,000, offset a little by the 9,000 extra sales of hybrids and electric cars. The fact that it was cars we knew well that suffered the sales fall implies there is more to this than the anti pandemic measures.

The industry should worry that more of the fall is about the big structural change required by government to move people away from diesel and petrol vehicles. The combination of high new car taxes and the strong pressures not to buy new petrol and diesel cars is damaging volumes considerably. The UK invested billions to be a great centre for diesel engines and diesel cars and now faces a very sharp and severe contraction in this market. Why doesn’t the industry acknowledge this problem and talk about it more? Should this transition be slowed or eased in some way? Do new car taxes have to stay so high?

One of the issues being debated is the question of how much extra carbon dioxide is generated by a society going for a shorter working life for cars and more frequent replacement by new vehicles, even where the operating performance of the new vehicle is more fuel efficient. High new car taxes allied to anti diesel and anti petrol car policies may perversely persuade more people to prolong the lives of their traditional vehicles and hold back from buying new. If battery electric vehicles are bought more by the rich and urban dwellers who use them for short journeys or as second cars they will not deliver the environmental benefits their advocates seek.

Why is it that so many people claiming to be friends of the car industry spent several years telling us to worry about the impact on sales of a possible 10% EU tariff which did not materialise, but they are now silent about a far bigger collapse in sales than they forecast as a result of various governments’ policies to end the sales of new diesel and petrol cars in a few years time?

My response to Michael Gove’s consultation

Dear Michael,

I see you are asking Telegraph readers for their views on vaccine passports.

Your article seemed to be contradictory. It said we cannot rely on the vaccines to give us 100% protection so we need CV 19 passports. You then say we should rely on vaccines in a different way by only allowing vaccinated people to do certain things and give them a passport. How does this add to the protection, as in either case with or without the certificate we rely on the vaccination?

There is the residual issue of the small minority of adults who will not have the vaccine. Many of these will need to be given exemptions for health reasons or pregnancy, defeating the object you see in the control. If the idea has anything to recommend it it is simply to remove a few people that have no officially accepted reason for not being vaccinated from attending various events who might get the disease. They will presumably be offered the alternative of a test which may or may not be accurate. Given we are talking about a very high vaccine take up rate it seems likely there will anyway be little risk of picking up CV 19 as we will have something approaching herd immunity. In the dreadful event of a mutation that defeats the vaccine the system you recommend of course ceases to work and everyone is back at risk.

As you recognise there are technical issues about the use of apps and the necessary paper or card alternatives, and problems with the reliability of data back up. Some non believers without vaccination will operate to cheat the systems. Do we want to become a society where we will need to carry papers to do simple tasks and enjoy entertainments and sports? It is against all my instincts, born into a history based on the journey to freedom and liberty for all.

Yours

John

The EU’s protectionism boosts the rush to onshore UK activities

An article in the Sunday Telegraph argued this week-end that the most important achievement of Ursula von der Leyen in her first year as Head of the EU Commission has been to force the creation of a UK vaccine industry. In its usual pro EU way the officials of the UK government had been happy to organise vaccine supply and purchasing on a cross EU Basis. The increasingly threatening noises of the EU about vaccine distribution allied to Ministers grasping the need to control production and deliveries here at home in default of free trade with the EU changed this approach. It led to deals where a business agreed to make and pack in the UK to get the launch aid and the orders they needed to make a viable business. That has to become a more generally accepted model in the many other areas where the EU is out to take our business.

I have long been arguing that the UK needs to use its extensive public purchasing intelligently to promote competitive production and supply here at home on a wider front. It’s what the French and Germans have been doing for years. You do not see their Ministers and business leaders travelling around in top end cars made in the UK, or pressing for pipes and interconnectors to buy in UK energy. The economic nationalism of the leading continental countries have long been assisted by EU rules they help design and enact. In sector after sector where the UK had a good position prior to joining the EEC in 1972 we have seen loss of market share and increasing dependence on EU imports as result of their protectionist and nationalist strategies. They have been delivered through a willing EU that has its own reasons to make the UK more dependent on continental goods. We ended up importing energy whilst we are an energy rich country that always used to supply its own needs for coal, electricity and more recently oil. We were largely self sufficient in temperate foods, only to see heavily promoted and subsidised supplies from the Netherlands and elsewhere on the continent displace a significant amount of home production. The EU sent grants to get the UK to grub up orchards at home to rely on imported fruit. Falling short of the provocative idea of integrating defence, the EU moved to encourage and require plenty of joint procurement and the provision of weapons with complex multi country supply chains, limiting our scope to defend ourselves and removing important jobs from home so the wider EU could benefit from the UK’s larger defence budget.

The USA under its new President who adopts a lot of socialist proposals is keen to build Fortress America. The US is not exporting vaccines all the time they need them at home, and is busily building its own expanded vaccine industry on the back of public sector orders. The supply chain initiative I have commented on here is designed to onshore much more industry to the USA after they too have drifted to reliance on huge imports. Biden will use trade policy, tariffs, competition policy, public procurement and public subsidy to recreate more industry and technology in the USA.

Government directed business is not usually a good idea. Nationalised industries usually fall behind in innovation and competitiveness and come to rely more and more on state power to enforce their will and perpetuate an out of date business model. They end up sacking workers and raising prices to pay for inefficiencies. Biden has to avoid taking the USA down the path of too much government intervention at a time when that is the preferred route of the Chinese and of the EU.

The UK now needs to use its potential freedoms out of the EU to find that magic spot which allows the state to buy, source and assist in a positive way whilst ensuring most is done by competitive private sector businesses striving for those contracts and grants by innovating, changing and controlling costs well. The state will of course continue to provide the Free NHS and free schooling.

With advanced country governments spending around half their national incomes you cannot ignore the impact of the state on economic activity. Only if you make intelligent use of that spending power without seeking to control everything can you hope to grow faster. You also need to be aware of just how rigged markets now are in so many important places in the world. The EU above all places regulation and EU champions well above free trade or competitive forces. The winners in terms of greater prosperity and faster growth will be those who allow a larger private sector to survive and thrive, without being naive about the nature of some international methods to gain unfair advantage.

How the government needs to improve its green revolution

The top down drive to change the way we get around, heat our homes and chose our diets is said to generate lots of green jobs as well as helping the governments that drive it to meet carbon dioxide targets. As they plan this governments need to take into account all the jobs in fossil fuel based businesses that will go. The UK government also needs to understand that whilst windfarms, battery production, electric cars, new heating systems and different foods will all generate jobs, they do not necessarily generate them in any particular country. As this is a top down state led set of policies, it will take state action to call up the technologies, raw materials and production facilities that does produce the green products they favour. The UK needs to see that China, the USA and some others are far advanced with putting in this production. We need to speed the UK’s response. Given the lack of strong popular demand so far for many of the final products it will take some state seedcorn cash or tax breaks and contracts to procure the output needed.

Let us start with the raw materials. There are schemes to extract lithium from rocks in Cornwall. We will need plenty of lithium for a large electric vehicle industry based on batteries. There are plans to put in rare earth processing in the North East. That too needs developing at pace, as these electric technologies all need rare earths, which are currently dangerously concentrated in Chinese hands. It will need large quantities of green hydrogen. That requires more renewable electricity and plants to manufacture and store it.

Then look at capacity. If the UK wants a decent sized car industry to survive it will need factories capable of making say 1.5 million batteries a year. Nothing like that is yet on the drawing boards. It will need to at least double current electricity output to cater for domestic power demand. To reduce meat in diets it will require a large expansion of market gardening to produce a wider range and volume of vegetables and meat substitutes.

Net zero is a hugely demanding target. The government needs more positive action now to bring forth the massive investment and technological developments it requires if they are serious about it. It would be a bad idea to continue on the net zero course thinking we can rely on imports for all the new green products it will take. Above all it needs listening to what people and markets are saying. Government and business have not yet designed and produced popular low carbon products that enough people want and can afford. Until they do so the danger is it will prove easier to force the decline of what we currently have than to produce a success for the new areas governments want. So far the UK has seen a much bigger decline in diesel car and engine output than it has seen a rise in electric car and engine output. Government needs to consider this warning sign.