John Redwood's Diary
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EU law repeals and deregulation

The government has sent out its latest update of progress in repealing, amending and incorporating EU law into UK law. It gives us the apparent good news that 2000 laws have now been repealed or reformed in total. This leaves another 4500 to deal with.

The latest list of laws repealed or amended continues with the official approach of doing many  repeals to items that are already time expired or did not apply to us in the first place. The first 3 on the list that I checked out from the latest report were:

Commission decision of 29 June 2005 (2005/477/EC) This was a temporary permission for plants Vitis L to be allowed into the Community from Croatia between January and March 2006. This was requested by Italy.
Commission decision of 9 March 2001 (2001/199/EC) This was a temporary permission for New Zealand potatoes to enter the EC from 1 March to 31 August 2001.
Commission decision of 29 January 2004 (2004/110/EC) was measures to handle the risk of BSE at a time when the UK had BSE in the cattle herd. This no longer applies with the end of BSE.

It is difficult to assess  progress when   lumping in  so many items that never applied, applied temporarily or apply only in circumstances no longer applying to the UK.

Many of the other items recorded in the list show how industrious the civil service has been to transfer many EU requirements into new SI s or Acts of Parliament, sometimes reinforcing their regulatory impact. The Aviation(Consumers) Amendment Regulations 2023 may well be important “restatements of EU case law related to compensation and assistance for passengers” but they are not repeals or deregulations. They keep us close to EU ways of doing this.

The Energy Savings Opportunity Scheme Amendment Regulations 2023 “amended the EU 2014 regulations …to report additional information concerning ESOS assessments/energy performance data and provide an action plan with annual progress updates”. In other words this one strengthens and extends the requirements of the EU regulation.

There is plenty more scope to do some good by repealing the unnecessary and simplifying the important. I have set out many examples in previous blogs of what can be done.

A better energy policy

If we left energy policy to the Opposition we would be closing down our oil and gas fields more quickly, refusing to get more out of the ground, and urging the construction of more windfarms. This requires a big increase in the grid which will take years to plan, agree and build. Meanwhile we would be even more dependent on imports. We would be in more danger of rationing or interruptions to supply. Prices would rise to provide sufficient incentive  to put in the extra  wind and solar capacity.

These parties have energy policies based on the imperative of getting to net zero. They never seem to worry about security of supply or affordability. These two aims should be more central to energy policy.

The government has now accepted that  getting more of our own oil and gas out makes sense. It did with some persuasion keep open a couple of coal stations for longer which has been helpful in the last two years.

We still do not have good ways of storing renewable power when it is available for times when there is no wind and sun. It may be possible to do this with battery stores and or making green hydrogen. Until that happens we need more back up power. As government and Opposition press  on with wanting  more things to run on electricity  we need more reliable power, it would be good to put extra gas fired stations in to meet need.

There is no point in urging more people to switch cars and heating  systems to electricity if there is insufficient renewable power on a reliable basis and insufficient grid space to carry the power from a distant offshore wind farm to a customer. There needs to be greater clarity about costs and charges and more consideration of affordability. The UK is suffering from too little domestic output at too high a price.

Plenty of headroom for tax cuts

I was critical of OBR accounting for  inflation linked linked government debt. They said the  extra repayment costs on index linked bonds  from higher inflation  were like monthly cash payments though the government does not send the bondholders cash each time prices go up. .  Now I can enjoy the reverse process where the accounting system to correct the figures going forward will record big drops in the costs of government interest payments as inflation falls away. In the year to November 2023 the OBR charged the government accounts  £50bn with inflation top ups to bonds that do not become liable until the bonds are due for repayment. This year beginning with December 2023 with inflation down from 10% to 4% the debt interest figure will tumble. It went below zero in December for the inflation adjustments.

It looks as if on their accounting system government interest charges and spending will benefit from a fall of more than  £30bn in the year ahead, assuming inflation now falls from 4% to 2% as forecast by the Bank of England. Tax revenues are predictably disappointing a bit compared to OBR forecasts as the higher rates and frozen thresholds bite. The Treasury/OBR model still attributes too much revenue growth with tax rises and fails to credit tax rate cuts with more revenue yet this often happens with the main capital and income taxes.

We need a growth strategy which must include tax cuts. We now know there will be more than £30 bn extra headroom as the interest payments plunge. The government should cut energy taxes as a priority. Getting inflation down more quickly would mean even  bigger falls in debt interest and curb inflationary increases in public spending across all the budgets. Cuts in taxes on small business and the self employed will boost output and competition. Income tax should also be brought down by taking more people out of the higher tax brackets they are being dragged into.

My Intervention on the Offshore Petroleum Licensing Bill

John Redwood (Wok, Con):

I want to see far less imported LNG. Can the Minister give us some good news on what we might be able to achieve in getting more gas out, and will he ensure that many blocks—not just one—are put up for a licence round to get rid of that LNG?

Graham Stuart (Minister for Energy Security and Net Zero):

The estimate from the North Sea Transition Authority is that a billion of barrels of oil equivalent, including gas, would be lost if we did not have new licences. That is lost tax revenue for this country, on top of the 200,000 jobs and lower emissions—[Interruption.] So far, I have not mentioned the tens of billions of pounds of tax. [Interruption.] It is not surprising, given how comprehensively easy it is to destroy the Labour party’s arguments, that the right hon. Member for Doncaster North keeps up his constant chuntering. He cannot win the argument while he is on his feet, so he sits there and tries interrupting those who can. If we do not have new licensing, which is Labour’s policy, we will see emissions go up in the short term; 200,000 jobs undermined; tens of billions in tax not brought into the public Exchequer; and—for those who care about dealing with the climate emergency—we will lose the very engineering skills and talent that we need to retain in this country in order to make the transition.

Offshore Petroleum Licensing Bill

The government yesterday secured passage of its Bill to encourage more oil and gas from the North Sea to its next Commons stage.

It was an important policy change when the government  announced it did wish more oil and gas to be produced from known fields, and wanted the quango in charge of the North Sea to license more blocs for exploration. It makes no sense to run down our oil and gas fields faster than we need do claiming that helps reduce CO 2 when the country then imports LNG instead. Such gas creates four times as much CO 2 as home gas down a pipe, given the large amounts of energy needed to compress it, transport and to switch it back into gas to go down pipe system from the seaport.

Some query whether it needs a new Act of Parliament to achieve this. Why not just instruct the North Sea Transition Authority and win a vote in the Commons if the Opposition objects? Some wonder why the requirement to hold an annual licence round is set out with a minimum of one bloc, when of course they will need to offer many blocs to an active industry. It would also help if the Treasury would review energy taxation which is higher in the UK than in many competitor countries. Far from helping our Treasury that policy drives both energy production and energy using industries away from the UK.

The UK needs to take energy security much more seriously and needs to do all it can to extract more home gas all the time people and businesses have gas boilers for their main source of heat. Using the road to net zero as an excuse to make us more import dependent on energy which entails more world CO 2 is a very bad policy favoured by the Labour, Lib Dem and SNP parties. That policy means all those well paid oil and gas jobs are in another country. it means the bulk of the taxes levied on producing oil and gas are paid to a foreign Treasury. It means the UK is made beholden to more overseas energy interests.

Time to rejuvenate the Business department

I read and hear in various places that Kemi Badenoch is out to woo the right. I know she has been very loyal to Rishi Sunak. Contrary to some briefings she sent no message of support to the sponsors and supporters of the amendments to the Rwanda Bill . The sponsors in their discussions with No 10 and the Home Office did not report back on any interventions from the Business department to help them amend the draft. She has kept out of the difficult issues preventing GB to Northern Ireland trade.

 

The  relevant groups on the so called right that would  like to help her in her important job as Business secretary include the Growth Group, the European Research Group, the NTB and the Net Zero realism group.  These Groups were very disappointed when she abandoned the Jacob Rees Mogg Retained EU Laws Bill, which was designed to remove and amend bad or needless inherited EU laws.

We have offered to work with her and the other Business Ministers on a programme of better and less regulation. We have been pressing the need for more and cheaper UK  produced energy. The EU carbon emissions and interconnectors framework for more imported power are particular concerns. It is leading to much industry closing down in the UK making us more dependent on imports. We await a response on how the UK can retain a basic new steel making capability. We are worried that current regulations  to force Electric vehicles will lead to too rapid a decline in car industry based in the UK and to more Chinese imports.

Jobs up and pay up since Brexit

See Facts4EU. Excellent graphs and analysis today showing strength of jobs since the referendum, contrary to gloomy official forecasts.

 

 

https://facts4eu.org/news/2024_jan_brexit_is_working