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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The Christmas break

As the Prime Minister says,, the virus will not know it’s Christmas. He tells us to be jolly careful.

Nonetheless the government proposes a five day period when we are free to make more of our own decisions about social contacts in our homes with family. Some families will decide they do not wish to run any risk of infecting elderly or vulnerable people, and will not use the new freedoms to have a crowded house and table over the festive season. Others will decide that the risk is low for them of catching the disease at all or for getting a bad version of it, and will go ahead and use the freedoms the state permits.

Some elderly people will want the warmth and friendship of a family occasion and will assess their own risks accordingly.

This has itself created a further debate. A few have contacted me to say the relaxation is too generous, as they fear some will make bad judgements. More contact me to say if we can be trusted to make these decisions for five days, why cannot this be extended or why can’t there be a more general relaxation of rules? People after all do not wish to pass on a bad disease to loved ones and can make their own decisions about risk.

Where the government can help and reassure is to see what can be done about train travel. Now the railway is fully under state control for the time being the state has a duty of care to passengers. What actions have been taken or are being taken to ensure safer airflows in carriages? What evidence is there about spread rates for the virus at different levels of seat occupancy?

The railway is examining fare structures to avoid an incentive for more people to want to travel on an off peak train. Over a holiday period and in an era of homeworking off peak is a less clear idea anyway. They also need to renew the guidance about safe use of the railway and tell us what they think the risks are to inform people making those difficult judgements about family reunions over the five days of Christmas allotted.

The credibility of the science

I admire the work done by medics and scientists who study disease in getting to a much better understanding of this virus quickly, and in finding some treatments and some potential vaccines that can help tame it. These offer the establishment’s way out from lockdowns. I am urging the government to do more on treatments, as we are still due test results for various medicines which might help fight the disease.

I have been less impressed by the epidemiologists and modellers working for the government, who have produced high and worrying numbers which even they have had to amend or shade. They have had problems compiling and publishing reliable figures to plot the disease, had trouble designing reliable tests to see how much of the disease is around, and have chopped and changed definitions even for something as important as deaths. In the early months they delighted in publishing comparisons with other countries that seemed to exaggerate the UK figures in a negative direction as numbers were not calculated on the same basis for each country. There was also a time when there seemed to be facilitation to maximise the number of death certificates saying died “with CV 19” rather than died of CV 19. There have been big arguments amongst scientists over the speed and method of spread and the likely future course of transmission of the disease, with very different forecasts.

It is most important that the public have trust in the official scientists and advisers. This is more likely if they treat the public as adults, explain what they do not know as well as what they know, leave scope for individual risk assessment and judgement, and try not to change requirements or strong advice unless they find they were wrong and need to tell us that.

The advisers did change their stance on mask wearing, from telling us they did not do much or any good to saying we must wear them in enclosed public places. They shifted from emphasis on picking up the virus through your hands, with the need for hand washing and much sterilisation of surfaces, to emphasis on airborne virus picked up from sharing airspace with infected people. This is understandable as their knowledge improves or changes, but does lead more people to ask if the latest iteration of the advice is good advice. It is likely to be true you can catch the virus both ways and so need to be careful both ways.

Today these same scientific advisers have persuaded Ministers to back them again with recommendations for more severe lockdowns, maybe continuing all the way through to April next year. This is why their advice needs challenging, as the cost to livelihoods and businesses will be considerable if this is followed. What evidence do they have that the worst transmission now occurs through hospitality venues rather than through everyday social contact? There is much contact through schools and universities staying open, through family gatherings and through the many businesses that do need people to go to a place of work so our power stays on and our food is on the shelves. How much transmission is occurring through rule breaking with people holding unofficial parties, entertainments and events?

The government advisers have always seemed to want a vaccine and to want as many of us as possible out of circulation until a vaccine arrives. They need to help the government and the rest of us to live with this virus whilst various vaccines are rolled out in ways which minimise deaths and serious cases whilst allowing as much normal life as possible.

I am pressing again for the results of work the government has said it is doing on safer indoor environments through better air extraction systems, best practice on how to run shops, gyms, events in a socially distanced way, and recommended standards for protective clothing for different tasks. What is the latest thinking on the use of UV machines for removing the virus from places where people meet? I will look tomorrow at the big issue of NHS capacity.

Chips with everything

Under the new tier 2, much of the country will only be able to buy a drink in a pub or cafe if at the same time they order a meal. This policy of chips with everything is causing concerns about how many pubs and other hospitality venues will close down for good as a result. Tiers 2 and 3 with its more severe closures represent additional erosion of the High Street and more heartache for owners and employees of catering based business. A Parliament which has often campaigned to save pubs and Town Centres is edging towards more policies that destroy both.

There is a wider concern that I have set out before. Can we have a better vision than the idea that we suffer one bad lockdown only to have a brief respite before another. This time indeed many places face a tougher continuing lockdown with a different name and different criteria immediately after a national lockdown.

The government is having trouble persuading its MPs to back this latest redrawing of the map and rejigging of detailed controls over our lives. Many Conservative MPs are demanding more information on how the decisions are made over which Tier a place is in, over which controls and rules might have some beneficial impact upon the progress of the virus, over how much collateral damage will be done to other health care issues, how much economic damage will be done, and how a place gets out of the higher tiers.

This may turn out to be first angry responses, to be assuaged by better information later. It may be a more serious challenge to the whole base of the policy. I have heard MPs ask many detailed and searching questions, with no signs so far of compelling answers.

It turns out there is considerable judgement involved in putting a place into Tier 2 or 3, despite the generally expressed wish for it be more data driven. Whilst we are told there are five sets of figures they look at to do with case numbers, rates of change and NHS capacity, they admit they also look at Travel to Work areas and make assumptions about future developments.

There is great concern that many places have just lived through the national lockdown, only to find themselves allocated to a higher tier than before. Doesn’t that mean the national lockdown failed for them? There is little explanation of the true compliance rate with the rules , or of how the scientific modellers expect compliance to develop given the longevity of these measures and the sense of lack of progress their latest proposals have generated. It appears Ministers recommended a long Christmas break with permitted travel in response to polling, which was then used by the advisers to demand more lockdown for longer as offset for the Christmas relaxation.

Many pose the issue as one of seeking a balance between measures which control the virus and measures which allow jobs and activity to flourish. We need to move on to find solutions to both the pandemic and the need for economic recovery based on best policies for each issue, without having so many policies which favour one at cost to the other. I will be pursuing again the options that can help protect us whilst keeping open more hospitality, entertainment and travel, and asking more about the capacity of the NHS and the forecasts of the government advisers.

A new UK fishing industry

Remembering past experiences of EU negotiations some fear another sell out of our fish. Unrelenting Remain supporters tell us as the fishing industry is so small, we should make concessions to secure other unspecified advantages in a general agreement. If the industry is as unimportant as they say it is to us, why would the EU be so keen to win concessions on it?

Isn’t the truth that it is small today for the UK only because most of our fish are taken by continental boats and often taken away for processing far from our shores?

Fish is one of many important wins from Brexit for the UK. It is also totemic, because most agree our membership of the EEC, now the EU, came with the sacrifice of our once large and healthy fishing industry. We have gone from good surplus and plenty of stock in our seas, to overfishing from abroad and an astonishing net deficit in fish.

The government needs to take action to make the most of this opportunity. They must of course hold firm in negotiations and refuse to make any sacrifice of our fish. A Free Trade Agreement makes sense for the EU, so there is no need to sweeten the deal with a gift of fish.

The government should also get on with the following policies

  1. Announce freeports, including our best fishing harbours, with favourable tax and regulatory conditions to found and grow a high quality food processing industry on the back of more landed fish.
  2. Offer a fund to finance or guarantee finance on the purchase of new vessels from a UK yard or second hand vessels from a non UK owner, to undertake a rapid expansion of the UK fishing fleet.
  3. Offer more training and training support packages to people wishing to undertake work in the industry.
  4. Add Enterprise Zones to our Freeports, encouraging food manufacturers to make up great fish recipes, provide frozen product and help identify new markets for our food at home and abroad.

I am sending this to the government for consideration.

Three cheers for overseas aid

I am glad the UK spends money on ships and equipment that go to assist countries facing flood and tempest. I am in admiration of our medics and armed forces when they sometimes go to help treat and contain dangerous infectious diseases abroad. I am pleased the UK as one of the leading and richest countries of the world helps alleviate and tackle poverty in the developing nations.

The UK should set out what it can do and what it is good at, and should be generous where need arises and where we have the means to help. I want to see reform of our budgets and our activities in these areas so we achieve more with better value for taxpayers.

I went along with the Conservative leaderships’ support for hitting the 0.7% target of GDP, though I have misgivings about such targets. I do not think we should commit to spend a certain proportion of a fluctuating and usually growing number. We should decide on spending on a case by case basis and against our general budget background. We do not pledge to spend a fixed proportion of GDP on health or education or policing, but look at those budgets in the light of needs and costs. I trust the government will now repeal the 0.7% pledge in our law codes.

Labour will doubtless oppose such a change. They averaged under 0.4% of GDP on overseas aid in their period in government 1997-2010, despite pretending to support the international commitment to spend around twice as much as they managed. They never explained why during all those years they did not do what now they say we must do. Those who want to see more overseas aid spent might do better to lobby the EU and its member countries who spend together well below the 0.5% the UK is now indicating as a new temporary level.

Last year the UK again spent 0.7% or £15bn on overseas aid. £10bn of this was spent on projects and activities we chose along with the recipient country in so called bilateral aid. The balance of £5bn was spent by our giving the money to the EU and other multinational bodies to spend as they saw fit in so called multilateral aid. As we leave the EU it is a good time to bring our overseas aid spending back in house and decide on how we can best help those in need. We should also look at the full support we give, which goes wider than the items allowed under international conventions to be called Overseas Aid. Some of our Defence expenditure is aid, being used to help bring peace to strife torn countries and providing assets to tackle disasters.

I want us to identify the areas where we have most expertise and can do most to help. Maybe the UK should specialise in a few areas like the provision of clean water to each home, the provision of primary education to all girls as well as boys in poor countries and the roll out of programmes to tackle infectious diseases.

We should follow certain guidelines. The money should for preference be spent in the country we are trying to help, using as much local labour and skills as possible. Where we need advanced country inputs these should usually come from people and companies based in the UK. We should work on the principle that it is better to teach a hungry person to fish and farm for themselves rather than sending them food parcels. The aim is to get countries out of poverty, not into dependence. More trade is often of more help than more aid.

It will be great to see us achieve more by concentrating our efforts in areas where we have most to offer, harnessing public and private sectors together, and taking control with more programmes we run for the benefit of the poorer countries. .

My speech during the debate on Exiting the European Union, 24 November 2020

May I reassure the Opposition that I wanted to make a few comments in this debate, and I submitted a request to participate on my own initiative? I have not received any message from the Whips, either before or during these debates, that I should not make a few remarks. With the permission of the House, I will exercise that democratic right.

I understand that there is a parliamentary game going on and that the Opposition want to extend this debate because there are some other things that they do not want to discuss, but that is a matter for them. Oppositions are quite entitled to use what time is available for their own purposes.

Alan Brown (Kilmarnock and Loudoun) (SNP): May I ask the right hon. Gentleman whether the game is not on the Government’s side, given that they have withdrawn all their speakers, except for his good self?

John Redwood: On the contrary. As I have just explained, there has been no pressure to withdraw my application. Some of my right hon. and hon. Friends who thought that they were going to speak in the debate have reread the proposal and realised that, given the incisive eloquence we would hear from the Minister, there was absolutely no need for them to come to the Chamber and duplicate and triplicate that. I have been foolish enough to think that I can add something to the Government’s case, because I support the measure. The fact that my right hon. and hon. Friends seem to have better things to do shows that they are 100% behind the measure, and just want it to be passed as quickly as possible as they attend to their other duties as busy MPs.

So why do I support these regulations, and why are the Government doing this? The first reason is to take back control. That is what millions of people voted for, and many of us are very frustrated that it still has not happened. As the Minister stated clearly, this is about ensuring that, from 1 January, we in this House, on behalf of the British people, can decide for ourselves within international law what the rules shall be on tariffs, quantitative barriers, restrictions and inducements to trade—and how right that is.

I always find it so disappointing that the Opposition, who now say that they understand the spirit of Brexit and have embraced it, do not believe that they can come up with any single improvement on the great body of European law that has been forced on us over many years. I am more optimistic. Working with the talent on the Government Benches, I can see lots of ways of improving on European law. It can be better, not worse, and more rather than less in the right areas. Surely our trade policy should be geared to the interests and concerns of businesses that back this country by investing and creating jobs in it.

Stephen Doughty (Cardiff South and Penarth) (Lab): I raised a serious point in an intervention on my hon. Friend the Member for Manchester Central (Lucy Powell) about the Falkland Islands. Does the right hon. Member agree that the UK family is a large one, including our overseas territories, and we ought to be backing the fishing fleet in the Falkland Islands that are trying to export squid and calamari to the EU? Will he join me on a cross-party basis in urging the UK Government to address the concerns of the Falkland Islands?

John Redwood: Of course I hope we can do things to help the Falkland Islands, as we have over many years. They are clearly part of our family, and blood and treasure have been shed to ensure that they are part of our family, so I above all think that we should do all we can.

From 1 January, we in this House can do the things that are in the power of an independent country. We cannot instruct the EU when we are out of it any more than we could when we were in it. There have been a glittering array of failed issues that we put to the EU on which it did not sympathise with us. We had a series of Governments who were so broken backed that they only ever accepted things that the EU wanted to do and did not try to do anything that we wanted to do, which is why it got so frustrating as a member of that body.

It is about taking back control, and I urge everyone here to be more optimistic about the powers of this House. What is the point of someone being a Member of Parliament if they do not believe that they can improve on anything in the inherited corpus of EU law? Why do the Opposition, on the whole, say, “Everything EU perfect, everything generated in this country rubbish”? It is not plausible, and it is against the spirit of the Brexit majority in this country. They want us to get a grip and do better. If we do not do better, they will change us. That is the joy of Brexit—they, at last, will get back control over us. If the law went wrong in the European Union, it did not matter who was in the Government. Even if they threw the Government out, nothing changed, because the EU would not change the law, whereas if we get the laws wrong, the public will know what to do—they can throw Ministers out.

Alex Cunningham (Stockton North): Will the right hon. Member give way?

John Redwood: I am not giving way, because I have a couple of points to make, and I am conscious that many Members wish to make speeches.

Lucy Powell (Manchester Central) (Lab): Where are they then?

John Redwood: There are clearly Members on the Opposition Benches wishing to catch Madam Deputy Speaker’s eye.

The second point I want to make is that this is about our balance of trade and our balance of payments. One of the tragedies of our membership of the European Union over nearly 50 years was how we transformed ourselves from an industrial country with a strong farming and fishing industry into one that had been badly damaged by the rules and tariffs that the EU imposed on us and our trade with the rest of the world. It was asymmetric and very cruel.

We lost a large chunk of our motor industry in the first decade of our membership—I think it halved—and we lost a lot of our steel industry. We moved from being a net exporter of fish to being a heavy net importer, with much of our fish taken by foreign vessels and foreign industry. We have lost a lot of our self-sufficiency in temperate food, because the common agricultural policy did not suit us. State aid, cheap energy and so forth on the continent helped places such as the Netherlands to outcompete us on salads and flowers, for example.

We have a big job to do to rebuild ourselves as an industrial, farming and fishing country that is capable of cutting the food miles, cutting the fish miles and delivering more to ourselves and to our own plates through import substitution.

I hope that from 1 January, if not before, Ministers will use these new powers to review all the restrictions and rules about trade and tariffs and create a British model that is better and fairer to Britain, so that “made in Britain” means something, and more is made in Britain and willingly bought by British people. It is very difficult for the Opposition to oppose that, although they will doubtless try to, because they always want to sell Britain short and to build the EU up to greater heights.

None the less, outside this Chamber there will be great relief to know that at least some people in Parliament wish to see a revival of British fishing, British farming and British industry and to understand that the rules of trade and the skewed subsidies and tariffs against the rest of the world have been extremely damaging to people who want to build businesses and farming activities in the UK and that it is time for a reversal.

I wholeheartedly support this measure. I want to take back control and I urge more MPs to get into the spirit of it, and, instead of cavilling and criticising every move that this country wishes to make to be independent, contribute to the debate about how we can be better.

Plenty of spending

So the government plans to spend £280bn more this year on their response to the pandemic. Some of this was much needed compensation for people who were not allowed to work or trade their businesses, and some of it was necessary extra spending on NHS capacity to handle the disease.

Now it is most important the government seeks value for the spending, and get the NHS up to full running on all the non CV 19 work.

State debt and money printing

Time was when I and many other economic commentators would have rightly warned that a country cannot take on too much debt as it has to pay the interest and pay it back one day. It needs to live within its means. I would also have confirmed that any attempt to simply print more money to spend in the public sector or to use to buy up the debt would lead to high inflation, and would come to create a deep recession as hyper inflation undermines normal activity.

There are plenty of examples from history and current economies to show what goes wrong if a government tries to borrow and print its way out of economic troubles. Call it the Weimar model, from 1920s Germany, or the Zimbabwe model from that country in the first decade of this century. Or call it the Venezuela model, still living through the disastrous consequences of borrowing and spending too much in the public sector and trying to print its way out of the debts. A government that prided itself on generous handouts to the poor ended up leaving the poor hungry and roaming supermarkets with little food. Hyperinflation set in. That clears the shelves of goods, drives imports sky high in price as the currency plunges, and undermines investment and business. Venezuela, the country with the world’s largest oil reserves has been unable to pump much oil, as the oil wells go without maintenance and the transport fails.

But today I need to report that the Euro area, the USA and the UK have embarked this year on a major programme of expanding state debt, and their Central banks have printed a large amount of new money, politely called Quantitative easing. Indeed, to save the world economy the Fed created an extra $3trillion this spring. We should be grateful, as it was needed.

I will call this the Japanese model. For 30 years now since her huge credit crunch and asset price crash, Japan has followed a policy of greatly expanding its public debt, and buying in large quantities of it with money created by its Central Bank. State debt in Japan is now around a remarkable 250% of GDP. It stands at 1,328,000,000,000,000 yen. Despite this Japan suffers from practically no inflation, output is fairly stable, investment continues and the currency is behaving well against others.

So far the actions taken by the USA, UK and the Euro area during the pandemic have shown that we can at least temporarily follow the Japanese model. We should not ,however, assume we will be able to do this indefinitely or will need to do what Japan has done for some 30 years. We cannot assume our economies will remain immune to inflation, that our currencies will remain relatively stable against others, were we to persevere with too much debt and too much money printing.

It has been possible to do it so far because the anti CV19 measures were such a big hit to demand and incomes, that it needed an equally large offset from borrowing more and creating more money. There was no shortage of goods for the money to buy, apart from a few specials like PPE which duly shot up in price. The UK has decided it can afford to expand state debt above 100% of GDP, and has set out on a course of creating an additional £450 billion of new money, on top of the £445bn of QE money inherited from previous governments and the banking crisis. This should be fine, and gives the UK a crucial breathing space to make the unusual and large expenditures caused by the CV 19 response.In effect this newly created money will pay for the excessive one off costs of the pandemic policies. It would be best to assume that as we recover we need to bring the special measures to a well timed end. Too fast and we are back to recession. Too slow and we are on to inflation.

The UK state through the Bank of England will own well over 40% of the large state debt it is building up. The Treasury pays interest to the Bank and the Bank sends it back as a dividend to its government owner. This is why I am less concerned than many about the level of debt. This view is reinforced by the way so far the UK can borrow large sums at near zero interest, removing the normal pressures and constraints on borrowing more.

Confidence remains a precious flower. The government must seek value in all this extra spending, and have plans to get back to something more normal in good time. The Japan model works for Japan, but Japan usually has a balance of payments surplus, an ageing population with a savings habit and years of experience of no price rises. The US and UK with large trade deficits and a history of more inflation are only temporarily able to follow the Japanese model.

Postings to the site

When I moderate the postings I see the name and post as usual. I now see you cannot see all the names on the public version so will ask the webmaster to sort it out.

A better Christmas?

Plenty of people want a Christmas to cheer them up. Sales of trees and decorations are by all accounts good. People are brightening up their living rooms early this year, and planning a family get together. The government was at least wise to relax the rules a bit to allow more people to come together for Christmas meals and conviviality as they wish.

There has been much worry expressed by some government scientific advisers over what all this social contact might do for the spread of the virus, and a wish on their part to have periods of greater restriction before and after. They like the idea of each of us having some sort of limited freedom budget, and if we spend too much of it on meeting people over Christmas we need to rein in before and after.

We need to move on to a more trusting approach, where we all make more of our own decisions based on understanding the messages from the medics and scientists. We can calculate our own risks and the risk we might pose to others, as we do about all other such threats in the normal course of life.

It is not easy making choices for people, weighing the danger from opening non essential shops against the danger of opening hospitality venues. I am glad the discussions some of us have had with Ministers making the case for sports facilities to be open and against the curfew have led to some sensible modifications of the local lockdown schemes. What do you think of the latest proposals? I and my colleagues will study the detail of these new measures as it is published, and will want to see a way forward that minimises damage to business and ,jobs.