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

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Town Centres and Councils

Yesterday in a debate on the local government finance settlement for next year I raised some general issues about Councils and our Town Centres as well as local matters over the adequacy of grants and other  central government assistance.

When we come out of this extended lockdown we will be able to judge the permanent damage done more easily. Some shops and service providers will decide they cannot continue in business, given the long period of closure and partial working and the impact that has had on cash flows and borrowings. Some successful businesses will decide that they can carry on in future with more of their offer coming from digital commerce and less needing physical premises in each town and Village Street. There will be pressure to lower shop rents, and to move more rents onto a turnover related basis. Government will remain under pressure to keep business rates low where they have been reduced, and to cut them where they have not.

Councils are part of this debate because many have come to be important players in their local shopping areas. All principal Councils are important regulators and planners of shopping areas, deciding on what landowners can and cannot do with their properties, defining the streetscape and controlling the transport policies. Many are also now landlords of shop properties themselves, needing to consider the impact of recent changes on their rental and tenancy prospects. Many employ Town managers, help control shopping centres, run public sector facilities and determine the car parking and access strategies. They therefore need to both  decide how much of these various involvements they want, and what they are trying to do with their interests in these matters.

I urged them to wish for one thing Рa strong commercially led recovery, helping shops and businesses rebuild their trade and earn the means to pay the rents again as soon as possible. The High Street has a high job content in what it does, adds to the variety of life by creating a social focus, and a backdrop for cultural, sporting  and civic events. It represents much of what we have missed during lockdown. Forlorn High Streets stand largely empty, each closed shop a reminder of the economic damage to tenant and landlord alike of forced closures.

A good Council will make access and parking easier to rebuild trade. It will be flexible over planning permissions for changes of use and adaptation of buildings. Where it is an owner it will be realistic over future rents and uses itself. It seems likely there will need to be closures of a good many shops, as we have too many for likely future levels of physical shopping. That means we need imagination by developers and good will from Councils to convert or rebuild retail estate as homes, places for entertainment  or other workplaces as soon as possible.

Reform of the NHS

I was surprised to read of possible plans to undertake another reorganisation of the NHS. Apparently the government is thinking of reversing some of the changes introduced by the Lib/Con coalition government when Messrs Cameron and Clegg launched a joint document proposing giving GPs the power to procure services from hospitals and others through Clinical Commissioning Groups. There was some resistance to these changes which prompted a  review led by Oliver Letwin which concluded by  continuing the policy with some alterations to the detail. This system has been in place for a short decade now, and has just been tested by the pandemic. Reponses to the virus have greatly strengthened central decision making and resource allocation.

Ministers have become more involved in issues like protective clothing, capacity and medical priorities, listening to the advice of their national Scientific and Medical advisers on these matters and then making decisions based on that advice. As Health is a devolved matter the Chief advisers to Scotland, Wales and Northern Ireland have also had bigger roles, and there has been some effort to get agreement between the four parts of the UK. Usually there has been high level agreement about the overall priority of fighting the virus, sharing of approaches and data, but detailed differences in timing and magnitude of lock down responses. There have also been some differences in success with obtaining a range of supplies and in the pace of vaccinating. The roles of the NHS country Chief Executives and of national quangos and advisory committees have also been tested in public debate about their quality and wisdom.

The pandemic does provide an opportunity to review the system, though it would be wise for the crisis to be past before rushing to conclusions about what worked and what needs improving. During the phase of seeking to scale up the provision and future supply of protective equipment there was a danger of competing initiatives bidding against each other, and making it complex for local care homes and hospitals to know how best to secure the needs they had. There needs to be some review of how big are the benefits from central purchasing, how central purchases are  best distributed, and what are the continuing  benefits of local determination of need and procurement of supplies.

I see there is also discussion of rolling into the agenda possible changes to the financing and access to care homes. This is a perennial topic which we can debate again another day in the context of intergenerational fairness and fairness between elderly people with different ailments and needs. Any change to the approach which states that if an elderly person needs care home accommodation and hotel service they should pay for it out of capital until they hit a minimum when they can qualify for state payment of the fees could be an expensive new commitment for taxpayers, though popular with those who might then inherit the housing wealth of the elderly person. I think the urgent priority is to see government thoughts on how the central and the local management of the NHS has worked during the pandemic, and what can be done to improve it for the future.

My contribution to the Statement on UK Shellfish Exports, 8 February 2020

John Redwood (Wokingham) (Con): Will the Secretary of State work with fish and general food retailers to promote and sell more of our great fish and other food products to domestic consumers? Will that in mind, will he urgently make grants available to expand cleansing facilities for shellfish, because we will need them for the domestic market?

The Secretary of State for Environment, Food and Rural Affairs
(George Eustice): I very much agree with my right hon. Friend. It is important that we build domestic demand. Indeed, many fish processors say that demand in the European Union is flat anyway because of the coronavirus and the lockdown, while UK retail demand remains quite buoyant for some species, although sadly not for all‚ÄĒin particular, the shellfish sector is quite reliant on export trade.

He is right that we should do more to promote fish, and we are working on a project with Seafish that the Government will co-fund to help build demand in exactly the way he outlines.

More home food production

Yesterday there was an Urgent Question on the EU ban on exports of bi valve molluscs from the UK to the EU.  The Defra Secretary told us he had prior assurance  from the EU confirming the legality of this trade post Brexit, but the EU have now changed their mind. The UK has been supplying continental restaurants and food shops with some shellfish. The English fishermen supply them straight from the sea, with continental processors  cleansing  them for sale with their own depuration facilities. He promised to seek urgent reversal of the decision, understanding  the damage it is doing to small fishing businesses. It affects oysters, muscles and clams, not  the larger  trade in lobsters and crabs. Demand on the continent is down anyway given the widespread closure of restaurants.

I urged him to make help available to the UK industry so we can process the shellfish here. Then they could be exported as food products. It would also mean we could sell them through our own fishmongers and food stores. The EU is being unreasonable over various food trade issues. It is high time the UK government took tougher action to enforce our UK internal market and ensure the smooth passage of food into and out of Northern Ireland, and time to be firm over fish. I did get a more encouraging reply to a recent written question on growing more of our own food.

 

The Department for Environment, Food and Rural Affairs has provided the following answer to your written parliamentary question (144914):

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps he is taking to promote and support more protected growing of vegetables and salad crops to extend the UK growing season. (144914)

Tabled on: 28 January 2021

This question was grouped with the following question(s) for answer:

  1. To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of the potential to extend the UK fruit growing season; and what support his Department provides to growers to extend their season. (144915)
    Tabled on: 28 January 2021

Answer:
Victoria Prentis:

We have the ideal climate and landscape to enable us to produce a wide range of fruit, vegetables and salad crops throughout the year. Innovation such as the development of new plant varieties and growing systems has already allowed growers to extend the domestic growing season for products such as strawberries.

We will continue to encourage and support our growers to produce more high-quality home-grown fruits and vegetables, ensuring a reliable and sustainable supply of top quality and healthy home-grown fresh fruit and vegetables throughout the year, all produced to high environmental standards.

Growers of protected and salad crops are currently able to apply for financial support to help them improve their productivity via the Fruit and Vegetable Aid Scheme, and looking ahead the Agriculture Act will provide powers to offer financial support to anyone starting, or improving the productivity, of an agricultural or horticultural activity.

Later this year, growers will have the opportunity to apply for support to invest in equipment, technology and infrastructure via the new Farming Investment Fund. This will help them to boost their productivity whilst also reducing impact on the environment.

The answer was submitted on 08 Feb 2021 at 14:57.

Tax rises would hinder recovery

There was some strange briefing in  the Sunday papers, purporting to come from unnamed people in the Treasury. The argument went that the budget deficit has ballooned to £400 bn so the budget would need tax rises to cut it. Various ideas of new taxes and tax rate increases were discussed, usually to raise relatively small amounts compared to £400bn. The individual proposals typically would cut the deficit  by 1-5% only on the figures given.

The truth is the huge deficit is not sustainable, and needs to be brought down by getting the economy back to work. it will be recovery that makes huge cuts to the deficit, not tax rate rises. The deficit will tumble as soon as the controls are removed from social distancing so  hospitality, travel, leisure and entertainment can flourish again. Let us hope vaccination and the decline of the virus allows the government to let this   happen soon.  There is a double benefit for the deficit. Spending will fall sharply as furlough ends, special help to small businesses and the self employed ends and the extra money for health reduces with the job of vaccination done. At the same time tax revenues rises rapidly from low levels, as people spend money again, as businesses pay their rents again, as incomes of individuals and companies pick up from recovery.

It is most important that tax and benefit policy does everything possible to restore the lost 10%of national output and income the anti pandemic policies have taken away. Tax rises will deter investment, deter spending, reduce taxable profits  and generally get in the way of recovery. They sap confidence and can even result in lower revenues if they hit transactions and activity. The country can afford the one off hit of a bad year with a massive deficit which everyone understands was a one off related to health policy. It is now important  for confidence that there is a good prospect of early and sustained recovery to bring the deficit down  by the reverse of how it rose. It went up because activity suffered such a bad hit,  not because the tax rates were too low.

Keeping the lights on

The government’s ambitious plans to move to net zero require the widespread adoption of electric cars, electric heating and¬† much else that will need more power to be generated. It will also of course require most if not all of this electricity to be generated from renewables. The current starting position includes around one fifth of our power coming from nuclear power stations. Most of these are scheduled to close for old age this decade. We also often import around 5% of our power from the continent at some cost to ourselves and the balance of payments. We need to regard this as an unreliable source given the problems with continental capacity and their present reliance on Russian gas and some coal. A substantial but variable portion of our present electricity comes from ¬†gas fired stations, depending on how strongly the wind is blowing and how many sunshine hours there are for the renewables.

Germany is becoming more dependent on renewables and has had some outage problems on cold calm days with little sunshine. California has power cuts from her dependence on renewables, despite having a usually favourable  climate for wind and sun. As the UK plans its way to net zero it needs to promote getting sufficient electricity capacity higher up the list of priorities.

The UK used to seek guaranteed supply and relatively low cost from its electricity policy. Privatisation in the 1980s drove down costs by replacing old and inefficient coal stations with much more fuel efficient modern gas combined cycle stations. The merit order meant the cheapest power was delivered on base load, only to be topped up by the more marginal dearer power. Environmental requirements were added as a third aim of policy. Privatisation did reduce CO2 output substantially by closing so many coal stations from market forces. Prices of power fell.

As policy has come to be dominated more and more by greenhouse gas considerations, the price of power has gone up and the margin of spare capacity has fallen. Indeed, capacity has become a difficult thing to estimate or measure. The more renewable power on the system the more variable the capacity is, varying from minute to minute depending on weather conditions. The system managers have a more difficult task than before. They are turning to interruptible contracts, to get industry to switch off if the wind stops blowing. They are calling for battery parks to offer stand by capacity, seeking people with stand by diesel generators for difficult times and wanting to flex tariffs to encourage off peak use. All of these methods can help, but they cannot be a substitute for having enough capacity with a decent margin to allow for variability of supply from renewables.

There are some approved renewables or green methods of generating power that are always available or available to a predictable pattern. Biomass or wood burning is as good as coal or gas as reliable power, there when you need it. Certain designs of water power are there on  stand by or available for regular times depending on tides, pump systems, and reservoir controls. Reviving water wheels from the past alongside windmills would have given more reliability. The UK has only one main pump storage system. It could do with some more to give the flexibility the system managers will need.

The scale of the task is immense. If the government is serious about ending new diesel and petrol cars from 2030, and serious about the widespread adoption of electric heating, the demand will be greatly magnified from today. Yet today we are close to power cuts every time we have a cold day with little wind or sun. I will ask our latest  Business Secretary to do something about our future capacity, as I have asked his predecessors.

The long road to net zero

 

We will soon hear of the Earth Summit in April to be set up by the USA. It will be followed by the Petersberg Group on climate change in May and the G7 in June, leading inexorably to the big global UN conference, COP 26 in Scotland in November. The aim of each of these meetings is to establish firm pledges from countries on how quickly they will bring down the carbon dioxide and wider greenhouse gas output of their countries. The world establishment now wants shorter term targets and tough realistic pledges on the long road to net zero by the middle of the century.

Some of my readers welcome this, and others are sceptical about various aspects of the climate change movement. I am writing this accepting the twin facts that governments believe there is a serious manmade climate problem created by greenhouse gas production, and intend to do many things to control and reduce the output of these gases. There are  no mainstream political parties  with a reasonable number of MPs taking a different view in Europe and the UK, and it is likely the Republicans after Trump will move closer to the Democrat position. International bodies and civil services are enthusiasts for this theory, and welcome the radical policies it ushers in. We are in for many more bans, rules, controls, and taxes to wean us off fossil fuel based goods and services, and for more subsidies and state sponsored investments to build the new green economy. Costs and charges of various products and supplies will be pushed up to discourage use. As the UK Climate Change Committee proposes, they want change in how we travel, in how we heat and cool our homes and workplaces, how we generate our electricity, how many products are produced in factories and in what we eat. They wish to see a reduction in meat and diary products.

I would be interested to hear your reactions to this, and to know how you will change your conduct if at all in the light of the likely changes to come.

Cutting wood miles? Let’s make use of the government’s enthusiasm for more trees.

I asked some questions to pursue the issue of increased UK timber production. I was aware of the government plans to promote the planting of many more trees as part of its climate change policies. The net zero carbon target now drives much of government policy. The interest in this within government is intensified by the long run up to the World Climate Change conference, COP 26 which the UK will host at Glasgow in November.

Whilst in general terms the answers show continuing commitment to more tree planting, they are short on detail. The pace of change is also slow. There is a big opportunity to expand woodland areas rapidly, and to¬† encourage timber growth in sustainable woodlands. The owners can then harvest the timber and replace the trees on a defined growing cycle. The UK’s warmer climate allows faster growth than Scandinavia and Canada where much of our timber currently comes from. The UK has substantial need of imported timber at the moment for construction, furniture and other purposes. We even import the wood to burn in¬† the Drax power station.¬† I will continue to press for faster action.

 

To ask the Secretary of State for Environment, Food and Rural Affairs, what plans he has to encourage the use of UK-produced timber to reduce wood miles. (142750)

Tabled on: 25 January 2021

Answer:
Rebecca Pow:

This spring we will publish a new England Tree Strategy, setting out plans to increase tree planting in line with our manifesto commitments, and to increase the management of existing woodlands. These actions will provide more domestic timber now and, in the future, reducing our reliance on imports. To drive sustainable investment into UK woodlands we also want to see the expansion and use of the Grown in Britain Certification mark throughout the supply chain, reducing the carbon footprint of the construction industry.

The answer was submitted on 02 Feb 2021 at 17:45.

 

To ask the Secretary of State for Environment, Food and Rural Affairs, if he will work with Drax power station and UK forestry to source UK biomass to replace imports. (142751)

Tabled on: 25 January 2021

Answer:
Rebecca Pow:

Our woodlands provide habitats, capture carbon and provide sustainable sources of fibre and fuel. We are seeking to increase planting across the UK in this parliament, and to bring more woodlands into management. This will increase the domestic supply of wood for a range of markets.

We are also developing a Biomass Strategy for publication in 2022 and will issue a call for evidence shortly. As part of the strategy we will review the amount of sustainable biomass available in the UK, and how this could be best utilised across the economy to achieve net zero.

The answer was submitted on 02 Feb 2021 at 17:30.

 

My speech during the debate on Exiting the European Union (Value Added Tax), 3 February 2021

 

As the Minister has told us, these are two important statutory instruments for the facilitation of trade generally and for the facilitation of trade within Northern Ireland and between GB and Northern Ireland, and to the extent that they make things easier and allow zero rating of important services and goods, I welcome them wholeheartedly. But, of course, as others have said in this debate, we meet today against the background of clear difficulties and problems in the implementation of the Northern Ireland protocol, where it appears that a number of important impediments to GB-Northern Ireland trade have been inserted, and it is crucial that the talks go well and we get rid of them as quickly as possible.

So when we look at the administration of VAT, which is an important part of the trade process, I would like an assurance from the Minister that these regulations, and all the other VAT and excise rules applying in Northern Ireland and throughout the United Kingdom, will be solely administered and enforced by United Kingdom authorities, because I have much more confidence in them.

Will he also assure me that the aim of these statutory instruments, and the wider VAT legislation that they add to and amend, is to ensure that the movement of goods from Great Britain to Northern Ireland, or the other way, will be as smooth and easy as the movement from London to Surrey or from Manchester to north Wales, because that is what I thought we had agreed and signed up to‚ÄĒthat Northern Ireland was a fully integrated part of the United Kingdom single market, under our single market and taxation rules? I would like the reassurance through these statutory instruments that we are intending for that to be true.

Will the Minister also confirm that there has for many years during our period in the European Union been an important VAT border between the United Kingdom and the Republic of Ireland, but that it has always worked very smoothly and was not enforced at the physical border, in accordance with the spirit of agreements and not wanting barriers at the land border?

It was an electronic border and adjustments were made by computer or by correspondence so that these things could be sorted out in a sensible and decent manner without having to have people queuing at borders to make complex calculations and submissions.

If that is the case, does the Minister agree that it is in that spirit that we need to find the answer to the current impositions and difficulties affecting our trade across those borders? It seems very odd that we cannot replicate that success of our past trading, where electronic manifests, trusted trader schemes and so forth, and proper electronic VAT registration worked very well. Surely the UK authorities, if we are the proper and sole enforcement authority in Northern Ireland, can work with trusted traders, VAT-registered hauliers and ferry companies and so forth, and we can accept their certification or word that the goods on their load are entirely GB-Northern Ireland or Northern Ireland-GB. We can then accept, therefore, that there are no other considerations and the loads can then move as smoothly as from London to Guildford or Manchester to north Wales. It would be very helpful to hear the Minister’s views on how that can be achieved and how quickly we can get to that point.

It is absolutely crucial to the people of Northern Ireland, as we have heard from their representatives, that they can trade smoothly with the rest of the United Kingdom. That was fundamental to the spirit of the agreements that the United Kingdom entered into with the European Union over the issue of trade with and between Great Britain, Northern Ireland and the Republic of Ireland. I hope the Minister will have good news for us and that these things can be sorted out quickly.

Trade frictions within the UK

Yesterday in Parliament I raised the issues of trade friction  between the GB and Northern Ireland again in the Commons. I will post my speech when it is available.

I was pleased that Michael Gove now accepts there are important issues to be sorted out and is¬† engaged in talks with the EU, the Northern Ireland Executive and the Republic of Ireland. Maybe he can get an agreement to sort these matters. If not he will need to legislate urgently¬† in the spirit of the EU’s acceptance that Northern Ireland is fully part of the UK’s single market and customs area to ensure the smooth flow of trade between GB and N0rthern Ireland. Our border officials need to know that goods destined to flow between different parts of the UK should pass as easily as between London¬† and Surrey when it comes to excise, VAT and goods checks.¬† The idea that there would be lots of people seeking to evade¬† goods checks into the Republic by routing things through Northern Ireland and claiming them to be UK domestic trade is wrong. Most of the trade we are talking about is large supermarkets supplying their stores in Northern Ireland, or deliveries by Trusted traders and large hauliers who wish to keep their privileged status and good record with the authorities.

I did not vote for the EU/Uk Agreement because I had worries both about N0rthern Ireland and fish which I highlighted in the debate. These remain real issues and need urgent attention to tackle them.