The UK car industry campaigned strongly against Brexit, claiming they could face a 10% tariff which could be damaging. Brexiteers said the aim would be a tariff free agreement, as was secured. It was always likely as the EU exports so many cars to the UK and did not fancy a 10% tariff that would add £200-£300 to the price of a typical new vehicle.

The Remainers in charge of the official government then persuaded Ministers to impose a £15,000 tax on each new  petrol and diesel car over a small limit, a burden 50 to 75 times higher than a 10% tariff. The industry did not complain about this body  blow.

The industry signed up to the idea that they should move swiftly to shut down all their diesel and petrol car production and go over to battery vehicles. The idea they might use  hybrids as a transition was soon knocked out by purists demanding all electric cars. Hybrids were anyway heavier, more complicated and dearer, needing two power systems.

These companies were big, profitable and successful. Why didn’t they do some customer research to find out just how opposed to battery vehicles a majority of car buyers were? Why didn’t highly paid managers have any understanding of the majority of their customers? Why didnt they see the obvious business risks? Why sign up to ending successful runs making popular cars early to switch to the unknown and largely unliked?  Former Jaguar owners who used to replace their car with a new one regularly told the maker they did not want  to buy a battery one.The company  revelled in the idea of dropping people like these from their customer lists. They are still trying to find the new generation of battery Jag buyers.

The pathetic inability of industry bosses to tell the UK and EU governments they could not sell enough battery cars and they would suffer badly from a forced attempt at transition is now laying waste a once great industry. German car companies announce plant closures and redundancies. Honda has quit the UK and EU altogether. BMW is backtracking on keeping some electric Mini work at Cowley to replace the end of the petrol Mini lines. Vauxhall is slimming down. Ford no longer makes cars in the UK.

Meanwhile government Ministers tell us how much they treasure the  industry whilst doubling down on the end of petrol cars which is the cause of the collapse. I wrote two short books setting out how net zero rules were out of line  with consumer wishes. You cannot have a green revolution if customers wont buy green products, or if they see that these products often aren’t saving us CO 2 anyway.

 

Yesterday as predicted here came news of a further collapse of our car output in January. UK vehicle manufacture for the home market was down 30%. The government wants to stop all manufacture of petrol and diesel vehicles so they must be thrilled that one of their policies is working.

They keep lecturing us to buy battery cars. Most of us do not want to, and many cannot afford to anyway.

They have agreed the closure of the remaining blast furnaces and the UK’s exit from new steel making.

They have banned us producing from any new oil and gas field in the UK forcing us to import more.

They have imposed sky high energy prices to drive out remaining high energy using industries like ceramics, paper, glass, aluminium.

Their policies led  to the  closure of the critical large oil refinery at Grangemouth.

They put out spin of new jobs in green industries. These are outweighed by the industrial collapse. Most of the new jobs rely on imports, especially from China where most of the solar panels, wind turbines and battery cars are made. It looks as if they want to get more battery cars in the Uk by encouraging China to dump cheap battery cars here rather than struggle with 100% US tariff and the EU 40% tariff. The electric cars and heating  systems rely on electricity generated by burning gas in a power station.

 

The budget set up disaster for this government. It put Ministers in conflict with so many groups and interests

Farmers with family farms see their farms being taxed away from them with NI and Inheritance tax. They are on permanent protest.

Pensioners on modest incomes were mugged by the removal of their fuel grant just in time for a cold winter.

Small businesses face a large tax hike if they employ people. There has been a plunge in job vacancies already. The businesses will cut back more in April when the jobs tax hits.

VAT on school fees has led less well off parents to take their children out of fee paying schools, pressurising the state sector. Some private schools have closed.

The change of tax rules for investing in AIM listed shares has further damaged the London markets trying to provide money for business expansion.

The failure to  link well above inflation pay awards for some public sector workers to improved productivity means too much state borrowing

Allowing large increases in water bills, energy prices, and Council tax is pushing up inflation and hitting family budgets

The budget has stopped growth, increased inflation, increased borrowing and made the public sector less efficient and less affordable.

Now we see care homes and charities  saying they cannot find all the money to pay  the extra jobs taxes. Doesn’t the government care about any of this? Why wont it listen and mend its ways?

As I have pointed out there are easy ways to cut public spending by tens of billions without cutting services.

The last government was only slowly easing the self harm net zero policies the EU made us follow which the Climate Change Committee wanted to gold plate. They agreed to lift bans on new oil and gas drilling and new UK production. They delayed the ban of selling petrol and diesel cars but left in place damaging fines for selling too many. They relaxed the need to get rid of gas boilers and install heat pumps.

Mr Miliband arrived in office, reversed all of those measures and set about enforcing a more severe bout of self harm. He introduced “Clean” electricity only by 2030 requiring a further surge in imports and massive subsidies. He speeded up the closure of our petrol and diesel car plants and with the Business Secretary agreed the closure of our remaining blast furnaces. He probably welcomed the closure of the Grangemouth refinery.

Is he unaware of the massive damage his dear energy and rapid exit from gas is doing? Does he really believe relying on more windfarms and solar panels will secure our supply or lower the prices? Has he asked how much it costs to keep gas power stations on stand by for bad  weather? Has he seen how in cold snaps with little wind we pay sky high prices to import to keep the lights on?

Our electricity bills have 17% extra on for renewable subsidies and helping consumers who cannot afford the high prices. There  is VAT. There are windfall taxes on oil, gas and renewables. Oil and gas companies now have to pay 78%. The old Renewables Obligation certificates and the newer contracts for difference pour billions of pounds of subsidies into renewables.

The US grows faster and is a lot richer thanks to policies that deliver much cheaper energy. Their electricity price on average is half ours.

Dear Prime Minister

President Macron has been to Washington to set out the European position on Ukraine. There is little you can add to that. Europe is divided, with several key military states refusing to join any peacekeeping force. Germany and the UK have led the provision of money  and weapons this side of the Atlantic , with France, Italy and Spain far less generous. This remains a sore point with President Trump who thinks the European members of NATO should have been much more forthcoming. Trying to defend their inactions is not going to help.

President Trump wants some early wins. He wishes to strengthen NATO with bigger non US forces. You should tell him new legal advice has come to light showing that the ICJ cannot decide a case against the UK on the Chagos islands as our Treaty Agreement held Commonwealth matters outside their remit. Given this you will not be giving the islands away and the US base is secure. You will allocate the money Mauritius wanted for the lease to more defence spending on improved capacity.

The President wants to get tariffs on US exports down and is very critical of the EU imposing  tariffs on 73% of all the WTO categories of goods. It is true since Brexit the UK has taken this down to 53% but some high tariffs on food, cars and other items remain. You should offer to cancel all tariffs where the US will match us, giving both sides a big win.

The meeting should be mainly about trade. The UK will not be in the negotiations between Ukraine, US and Russia, which need to be kept tight to have more chance of success. Offering the President free trade, a secure naval base, higher UK defence spending and an early State visit could bring a good result. Lecturing him on Ukraine and giving away Chagos will mean bad transatlantic relations.

 

Yours

Rt Hon Sir John Redwood

 

 

 

 

 

 

 

Rather than arguing about 2.3% or 2.5% the MOD should decide what extra  capabilities we need to defend these islands and help our allies. My suggested list is

1. Improved Iron Dome style surveillance and interception capabilities for the whole UK against incoming  missiles and drones

2. Expanded drone and missile capabilities and stocks including hypersonics

3. An army of 100,000 deployable troops

4. Further destroyers, frigates and submarines to ensure we can deploy two carrier led   groups, with support vessels, all built in UK yards

5. Sufficient strike aircraft for home defence, overseas bases and carriers.

How to pay?

Redirect money from Bank of England excess losses, (£15 bn a year )recovered public sector productivity ( £30 bn a year) and delaying carbon capture and storage (£19 bn)

These savings also can provide for necessary lower taxes and a modest reduction in borrowing.

 

 

 

Here’s a way for Council candidates to improve their chances of election.

Offer lower Council tax. Why do so many candidates compete to spend more and put it up? Why do Councils usually put it up by the maximum allowed?

Offer to cut out all those annoying expenditures that make  our lives worse. End Council “investments” in property and utilities.

Cancel all those anti driver road schemes.

Sell Council trading activities, empty properties and surplus land.

Have a plan to slim down bureaucracy with staff freezes and slimmer organisations.

Cut out many of the woke projects.

Use competitive contractors to deliver more of the service

 

The German economy has failed to grow for two years. Its once dominant car industry is reporting falling sales and sharply declining  profits.They have spent huge sums on designing and launching  battery car models, only to find customers do not want them. That was entirely predictable.

Mercedes only sold 12% of its vehicles as all electric. They now say they will make more of the petrol and diesel cars people want to buy. No wonder profits are down. Misallocated capital to battery cars has hit returns.

The whole German economy is suffering from trying to get off dependence on Russian gas, from premature closure of all nuclear power and the search for buyers for the products of the net zero revolution.

The tragedy of these decisions is that they also fail in their own terms. Importing LNG instead of producing piped gas generates far more CO 2. Destroying petrol car factories prematurely and building battery car ones boosts CO 2. Plugging a battery car or heat pump into a grid using gas or coal fired electricity adds to CO 2. Why do Net Zero enthusiasts refuse to look at the total world impact of what they are doing? Why are China and the USA, the largest CO 2 producers, still increasing?

The net zero revolution can only work when they have low carbon products people want to buy, and far more renewable power than current generators and grid systems can deliver.If renewable power is so much cheaper then investors will want to install more.

It is odd that the western governing elites press hard for peace in Gaza rightly pointing to the deaths and destruction in the war, yet do not  press for peace in Ukraine where there are also terrible deaths and destruction of property.

President Trump wants peace in both places. He is accused of letting Russia get too many wins in Ukraine and of being too pro Israel in the Middle East. In both cases the question is where is the better answer which can get us to peace? Secretary Rubio is seeking to get a path in Gaza to peace that the leading Arab states support and will back.

In Ukraine the President says after 3 years of bruising and expensive war Ukraine has lost substantial land and has suffered bad damage to its property and economy. He does not see Ukraine being able to evict Russia by force and has no more intention than Biden of using US and NATO forces to do the job. Nor does he see Russia being able to defeat Ukraine and take the whole country.He therefore says to both sides that a settlement related to the current front lines is a better outcome than fighting on with more loss.

Many European governments disagree strongly. They have not put forward any alternative plan. They have been slow to provide modern and effective weapons to Ukraine.  They have continued to buy plenty of Russian LNG whilst US led sanctions were trying to undermine the Russian economy. They failed to hit the target for the delivery of shells. They say they want to be in the room with Trump and Putin, but if they are serious in thinking Ukraine should  join NATO and should not surrender any land Putin would not stay in the room.

They failed to coordinate a position when Macron convened an informal meeting. No formal EU meeting has agreed a line. They discussed how to police a peace settlement along the lines of the settlement Putin and Trump might  agree which they say they do not want. France, Sweden and non EU UK said they would send troops but Poland and Germany the largest military powers near Ukraine refused.

They want Ukraine to become a Nato member after the peace, but as the US is against  and is the dominant partner in NATO this cannot happen. Russia does not want another NATO state on its doorstep as it does  not  grasp that NATO is a defensive alliance that would not threaten it unless Russia was invading a NATO country.

If Europe is serious about helping Ukraine to fight on and improve its bargaining position then it has to set out how it can replace all the lost money and military might of the US which means doubling its current contribution. It would need to increase that doubled contribution as the combined generosity of US and Europe has been insufficient. I don’t see Europe being able or willing to do that.

 

11 am All Souls High Street Oxford  Friday 21 February

 

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