The Prime Minister announced an important new policy today, following on the Chancellor’s outline of it last month. He wishes to cut energy bills by cutting some of the green levies placed on our energy bills by the last government. I am all in favour of this new approach.

            So what is there to remove or cut? The following is the list of extra charges on an average combined fuel (gas and electricity) bill, showing there are plenty of targets:

Eco  (Energy company obligation to pay for Green Deal)   £47 

Warm home discount  (levy to pay for discounts for vulnerable consumers) £11

Smart meters     £3

Renewable obligation   £30

Feed In Tariffs      (solar subsidy etc)  £7

EU ETS   (EU’s system for taxing CO2 emissions)     £8

Carbon floor price  (UK’s system for also taxing CO2 emissions)   £5

Total   £111     (9%)

There is also £60 of VAT  (5%)  courtesy of Sir John Major’s government and all subsequent governments

Energy and climate change policies add 14% to an average electricity bill, and 5% to a gas bill.  Last year the large energy firms received £900m in wind subsidies, paid for by consumers.

What could they cut? The domestic subsidy regimes for particular programmes could be removed. The EU ones would be more difficult to budge, though taking the issue to the EU for change would be worthwhile doing. The government will probably not want to remove the better purposes of domestic schemes to help poorer consumers and to promote better insulation. In these cases they might transfer some of the cost to general taxation.

The way to achieve cheaper power, as explained before on this site, is to reopen closed mothballed older power stations, keep open  the remaining lower cost older stations, and to generate more power from them at the expense of renewables. The subsidies for future additional renewable power should be reduced sharply or removed if you wish to cut future bills.

 

If the government does not change the mix of its current and future electricity generation, it will have  limited scope in the years ahead to lower the cost, given the trend to rely more and more on on dear forms of energy, and the need to continue subsidies promised to those who have provided these dearer forms of energy supply.  

 

Yesterday I  received the letter below from the Immigration Minister summarising the new Bill before Parliament to help control immigration. In view of the large number of comments on this site on this topic I thought I would share it with you:

“Today the Immigration Bill had its second reading in the Commons. This marks another important step in our work to clear up the mess we inherited from Labour, by building an immigration system which is fair to hard-working people and legal immigrants, while cracking down on those who are here illegally.

As things stand, it is too easy for people to live and work in the UK illegally and take advantage of our public services. The appeals system is like a never-ending game of snakes and ladders, with almost 70,000 appeals heard every year. The winners are foreign criminals and immigration lawyers – while the losers are the victims of these crimes and the public. It is too difficult to get rid of people with no right to be here.

This is not fair to the British public and it is not fair to legitimate immigrants who want to come and contribute to our society and economy. The Immigration Bill will stop immigrants using public services where they are not entitled to do so, reduce the pull factors which encourage people to come to the UK, and make it easier to remove people who should not be here.

Specifically, the Immigration Bill will make it:

i.          easier to identify illegal immigrants by extending powers:

• to collect and check fingerprints;
• to search for passports;
• to implement embarkation controls; and
• to examine the status and credibility of migrants seeking to marry or enter into a civil partnership.

 

ii.          easier to remove and deport illegal immigrants by:

• cutting the number of decisions that can be appealed from 17 to 4 – preserving appeals for those asserting fundamental rights;
• extending the number of non-suspensive appeals – where there is no risk of serious irreversible harm, we should deport foreign criminals first and hear their appeal later;
• ensuring the courts have regard to Parliament’s view of what the public interest requires when considering Article 8 of the European Court of Human Rights in immigration cases; and
• restricting the ability of immigration detainees to apply repeatedly for bail if they have previously been refused it.

 

iii.          more difficult for illegal immigrants to live in the UK by:

• requiring private landlords to check the immigration status of their tenants, to prevent those with no right to live in the UK from accessing private rented housing;
• making it easier for the Home Office to recover unpaid civil penalties;
• introducing a new requirement for temporary migrants who have only a time-limited immigration status to make a contribution to the National Health Service;
• prohibiting banks from opening current accounts for migrants identified as being in the UK unlawfully, by requiring banks to check against a database of known immigration offenders before opening accounts; and
• introducing new powers to check driving licence applicants’ immigration status before issuing a licence and revoking licences where immigrants are found to have overstayed in the UK.

The Home Office has produced a series of factsheets that cover the detail of each of the measures in the Immigration Bill. These can be accessed online at https://www.gov.uk/government/ collections/immigration-bill, along with other important information about the Bill.

The Immigration Bill builds on the immigration reforms we have implemented since 2010. These reforms are working: immigration is down by almost a fifth since its peak in 2010 and net migration is down by a third. We have reformed the Immigration Rules to cut out abuse where it was rife, while at the same time maintaining the UK’s position as an attractive place to live and work for the brightest and best migrants.

We will continue to welcome the brightest and best immigrants who want to contribute to our economy and society and play by the rules. But the law must be on the side of people who respect it, not those who break it.”

 

I have one fundamental disagreement with those who designed EU energy policies. I think the UK needs cheaper energy. They want us to have dear energy, to make  us  use less of it.

I do not think it a good idea to drive industries  to foreign climes because our energy is much dearer than Chinese or American. It does not cut total CO2 output, merely changes where the CO2 comes from. It gives others the jobs we need.

I do not think  it a good idea to worry the elderly and frail about the size of the fuel bill to keep warm, or to squeeze families with ever higher energy prices.

In the last decade the dear energy advocates  were far more influential on energy policy  than people like me. They persuaded the Labour government here and the EU government in Busssels to build in dear energy as the only alternative. Out would go coal and oil based power stations. In  would come wind farms and solar panels. It meant a big increase  in costs and prices.

Now people see the extent of their victory many are unhappy about it. The Chancellor has stated clearly that he does want more affordable and reliable power for industry and homes, but finds the UK entangled in a dangerous web of EU rules and requirements which make this difficult to achieve.

The ijventors of our EU energy policy  should be rejoicing at the large price rises the energy companies are putting through. It represents the success of their drive for dearer energy, with more to come. Yesterday’s announcement of the nuclear deal shows just how much extra we will have to pay for low carbon fuel. The price was made higher by Labour’s failure to sign up such a deal some years ago when power was cheaper and the UK had more options. It was also probably  made higher by Labour’s decision to sell our nuclear industry.

At least action is beign taken to keep the lights on. All the time we are in the EU on current terms it has to be done within the framework of a dear energy policy.

 

        The September figures for Uk spending and tax revenues showed strong growth in tax revenue more than offsetting the 2.5% increase in cash current public spending (compared to last year). Income tax revenues have been well up so far this year, following the cut in  the higher rate, despite the increase in the tax threshold taking more people out of paying any income tax. Extra public borrowing  fell by £1bn this September compared to last.

 

The latest survey of Antarctic ice shows it has hit a new record extent (since measurements began in 1980).  Explanations as to why would be interesting from those who write in telling us they can forecast the weather and these important environmental matters.

 

       Today sees the government publish details of just how much extra UK taxpayers have to pay to support an NHS which gives free treatment to people who do not pay taxes in the UK. They think we could be spending as much as £2000 m a year.

           Those of you who write in and say ideas from this site and like minded MPs are ignored should note that this is a case where the government has listened. It also shows that the government is trying to find economies and ways of offsetting public sector costs which do not harm UK voters and taxpayers.

 

           It is good news that the government is taking some decisons to ensure more electricity generation capacity is built in the UK. The past decade saw the Labour government agree to various EU proposals, and add proposals of their own, which shut down plants. They did not take the  decisions to provide for their replacements, leaving us short of capacity from next winter.

         Emission controls and above all CO2 controls are leading to the closure of older coal, oil and gas plants. Age is leading to the closure of many of our existing nuclear plants. We do need decisions followed by investment in the replacements. The pipeline was empty  in 2010.

         I have no objection in principle to civil  nuclear power, and no objection in principle to foreign investment in our power production system. I do, however, want us to go for cheaper energy. I do want us to play to the strengths of the UK economy in our choices of new power stations, to maximise the economic benefits within the UK from the large investment programme we need.

          Some worry about our nuclear know how. The truth is Labour sold our nuclear industry to overseas interests sometime ago. The absence of new nuclear stations in the UK from the mid 1990s onwards meant the industry fell into disuse here at home. If you place no orders for almost twenty years you do lose a lot of expertise and modern design. This new deal could be a way for the UK to rebuild parts of its nuclear industry, and to benefit from French technology in an area where France has moved onwards whilst the UK has headed for the exit.

         Some worry about the price and the returns that The French and the Chinese will enjoy. Listening yesterday to the Secretary of State answering in the Commons, it sounds as if the draft contract does offer some benefits to UK consumers in the event of costs undershooting on the project. However, the guaranteed price at twice today’s wholesale market price, to come in in 2023 when they start generating power, is also indexed to general prices.  The overseas investors will enjoy some protections from political and other risks, and should be able to generate  a good return on the money they are putting up.

       I would like to see UK investors and companies coming forward to supply our future power needs. I also want to see more cheaper power in the future mix, which will come from gas fired stations. I will look at the way this could happen in a later posting.

 

 

        Are you today celebrating the fact that at last, after years of Labour and the EU closing electricity plant without effective replacements, a decision has been made that will help keep the lights on in the next decade? Or are you concerned that the drive to low carbon energy means  an expensive solution compared to current energy prices and the costs of keeping open older stations or driving hard for gas?

        I will give you my thoughts tomorrow when I have studied some of the detail of this new deal.

 

                 Today we commemorate one of  Britain’s  greatest days. Talking and thinking this week-end about Englishness has made me more conscious of the achievement on October 21st 1805, when the  navy met the combined fleets of Spain and France off the Spanish coast. It summed up the best of our principles and capacities.  It was an action fought to keep our own country free from foreign invasion, but also to help liberate the rest of Europe from a restless warlord who wished to enforce a false unity on the continent by force of arms.

              It was victory for the underdog. Napoleon’s forces on land, and on this occasion at sea, were greatly superior. It was victory for daring and innovative tactics. The encounter followed a hectic chase of the French fleet, as Nelson tried to track it down and stop it getting to the English Channel. It was proof, if proof were needed, that training, experience, and belief in their cause, could give the British the strength they needed to vanquish the bully.

                Victory at Trafalgar over the combined French and Spanish fleets in 1805 was decisive. It meant Napoleon could not complete his conquest of Europe. England by her exertions had once again ensured the ultimate freedom of many nations and peoples on the continent, as well as protecting her own. Shorn of control of the coasts, and unable to invade England to stop her independent support for the conquered countries on the continent, Napoleon fought on, only to face ultimate defeat. England, then as later, stood for liberty and the self determination of nations.

               The victory was   comprehensive.  17 Allied ships surrendered, and  the Achille blew up .  27 English ships of the line with 2154 guns had overwhelmed a Franco Spanish fleet of 33 capital ships, with 2638 guns. The Allies also mounted more guns on frigates and smaller vessels.  4408 French and Spanish were dead, with 449 English killed in action. It is almost unbelievable that such an inferior force, attacking in the  full face of Allied naval fire in a light wind that maximised the time at risk as the fleets edged closer, could achieve so much.

            So what was it about that encounter that made it possible? It is true England had a charismatic Admiral who instilled confidence in his captains and men just as he struck doubt and fear into the minds of his enemies. His strategy was bold, and gave the English the advantage once the lines had closed of being able briefly to rake the French and Spanish ships through their vulnerable sterns. His leadership created a true band of brothers amongst his captains, who had considerable freedom to choose their own method of fighting in the melee which followed the clash of the fleets. The heroism of Captain Harvey and his crew on the Temeraire was an example, even  on that day of  formidable bravery and daring.

               The English were able to manoeuvre most of their ships in the light winds from great seamanship, whilst the Allied fleet struggled to get the van of its fleet back into the action once their lines had been cut. The English shot more broadsides from superior loading and firing, and fired on the down roll into the decks of the opponents. The Allied fleet disabled English ships by firing on the uproll into the rigging, without killing so many personnel.

               It was the most remarkable day in the long and remarkable history of the  English and British navies. May we use wisely the freedoms they helped us secure.

 

 

      One of the latest ruses by those who want the state to do more, spend more and interfere more, is to encourage a battle of the generations.  Mr Milburn was at it this week.  The young can only do better if we spend more public money on them, so we need to take more money away from the old.

     I have never bought into the theory that the Baby bulgers are a lucky generation who have sucked up too much of the country’s wealth. The amount of a country’s wealth is not limited or static. Many of the baby boomers made their own luck. They worked hard to advance their own and the nation’s wealth. Their children should be able to go further and faster, as they after all will benefit from the huge sums spent on their health, welfare and schooling (far more than was spent on the baby boomers), and will come to inherit the wealth their parents have built up.

 

The baby bulgers with wealth are fairly generous to their children. They are already giving them money for deposits on homes, assisting their family budgets and giving money to grandchildren where they have a surplus. Those who don’t have a surplus are often working hard for no reward as child minders and family assistants to their children.

 

The true battle should be over policy to help to ensure that the next generation can be wealthier and more successful than the baby bulgers. We should not settle for nasty fights over distributing what has already been made or created. We should be more active in debating how to create conditions in which the next generations can be more successful. They too must add to the stock of the nation’s wealth, and earn the higher incomes they naturally seek.

 

That is why on this site I try to spend more time describing the policies that would liberate enterprise, attract more capital, create more jobs and drive forward higher productivity. Such policies will mean  higher average real living standards. Robbing richer Peter to pay poorer Paul will not create higher living standards and may simply alienate, demotivate or lose us Peter. Paul needs a job. Once he has a job he needs help to make a success of it, to move on to a better paid job.

Too many are fatalistic about low wages and no wages. They think people have to stay trapped by them all their lives. They think it unrealistic to suggest people can help themselves to a better life by working hard, undertaking training, venturing in a business of their own and many other ways. Fortunately, in  practice, many still do walk from poverty to success, and many more walk from modest beginnings to a more comfortable middle age. Of course state policies should help, and should take care of those who cannot, but the state needs to say more people can succeed.

 

If we spend all our time arguing over how to distribute what we have, we will put off the entrepreneurs, innovators and grafters who would otherwise stay here and create more wealth, employment and income here. That is the challenge. To do that requires lower tax rates and less government interference with those who are energetic and hard working, not more.

As for the elderly, it is true they have benefitted from recent Coalition improvements to state pensions, and from tripartisan policies of  free services and income top ups. They too would benefit more from an improved climate for savings and investment, so they can enjoy a better return on their pension investments, and have a better deal from annuities.