I will add to my thoughts after the budget.

As readers will know I have done a lot of work on how to bring inflation down and grow the economy faster and put this to government in recent weeks.

Reform to deliver low inflation and faster growth has to start with a change of Bank of England policy. It needs to end its lurch to tight a money policy now inflation is falling. It must end its damaging sale of bonds. This would spare the Treasury large payments for the needless losses they are incurring and ease conditions a bit in the mortgage market.

Government policy must intensify to sort out labour market problems. They need to tighten the rules against low income migration further and do more to help people already legally  settled here into work. There will be substantial savings on public expenditure from this.

Tax cuts  need to be targeted on getting energy costs down to make the UK more competitive and ease the squeeze on the cost of living.  There need to be cuts in tax for small business and self employed, and some increases in the Income Tax thresholds as too many people are paying higher rate tax.

The absurd policy control based on the 5 year out forecast of the OBR needs replacing with a control based on a target of 2% inflation and 2% growth.

John Redwood (Wokingham) (Con):

I am a strong supporter of the recent initiatives of the Secretary of State and the Prime Minister to make food growing far more important. What are the targets for getting much more self-sufficient in food, and will it not need further reorientation of the money away from the environmental land management scheme and wilding, and towards proper food promotion schemes?

Fay Jones:

My right hon. Friend pre-empts me. I will certainly come to talk about that point in just a few moments, but let me first talk about further reforms that the Government are introducing, particularly in the field of farming mental health.

We will make up to £500,000 available to charities to deliver projects that support mental health in the farming sector, building on the support already on offer through our farming resilience fund, which has benefited more than 19,000 farmers to date. Mental health in agriculture is a key concern for the Department, so much so that my right hon. Friend the Farming Minister regrets that he is unable to be with us at present, as he is hosting a roundtable on mental health in agriculture. I know that shadow Ministers will agree that that is a commendable thing to be doing. Altogether, the work to change our approach will build a better and more supportive system around farmers, so that they can get on and do what only they do best.

Before I talk about our final strand of work, I want to congratulate my hon. Friend the Member for Bosworth (Dr Evans). Today his campaign for online retailers to carry a specific “buy British” button has achieved another success, as Ocado has become the latest retailer to adopt the tool, joining Morrisons, Aldi and Sainsbury’s. I congratulate him on his campaign.

Food security is a vital part of our national security. The primary role of farmers is to produce the nation’s food, and they deserve our gratitude for that—a point echoed to me on many occasions by the Chair of the Environment, Food and Rural Affairs Committee, my right hon. Friend the Member for Scarborough and Whitby (Sir Robert Goodwill), who is away on a Select Committee visit and unable to join today’s debate. Recent years have brought home the truth of that, particularly in an age of climate change, instability and increasingly volatile global food production.

Uncertain times require us to double down on the certainty of our food system. In the Government’s food strategy, we set a clear commitment to maintaining domestic food production at the current level at least, which is around 60% of what we consume. The importance of food security is why we brought in the three-times-a-year food security report through the Agriculture Act 2020. Going further, the Prime Minister announced a fortnight ago that, given the context of the last three years, we will significantly strengthen this work through a new annual food security index. Climate change is increasingly likely to impact on the sector, with more extreme weather events, so it is only right that we step up our monitoring of food security to ensure that we can act swiftly and decisively against any in-year shocks. We expect the work to be UK-wide and will work to achieve that, strengthening accountability across England, Wales, Scotland and Northern Ireland.

Despite covid lockdowns, despite the war in Ukraine, despite destructive Bank of England policy creating a big inflation then seeking to create a small recession, unemployment has gone lower over the last 14 years and many jobs have been created.

Remain said Brexit would mean big job losses. It meant the reverse. The UK ran out of workers and turned to inviting in even more people to take all the extra jobs. Today this presents a better opportunity. Instead of inviting in so many to do relatively low paid jobs we need to cut back severely on legal migration. The government has promised to cut 300,000 but more should be the aim. We need a full commitment to a better paid more engaged UK workforce, armed with more investment to support higher productivity. The higher wages need to be earned.

Physical jobs require fuller automation to take the delays and hard work out of the tasks. Clerical tasks need more AI based automation to tackle all the repetitious and tedious parts of the old jobs.

Labour governments of the past have always left office with unemployment higher. Their boom/bust policies in the 1970s, and in the late 2000s threw too many people out of work. It is good unemployment remains low and job creation has been strong, but we need to do better with raising wages and productivity with the right training, machine support and investment. Public  sector productivity has fallen. There should be an immediate ban on external recruitment into the civil service and public administration.

I find it strange that for weeks we can all  read in the papers of a struggle between the Chancellor who wants to offer tax cuts, and the officials of the OBR and Treasury who do not want him to do that.

These arguments should take place in confidence. The Chancellor should make the judgement having heard all the arguments. Officials should co operate with the decisions made.

This better way of working has been  disrupted by creating a so called independent OBR and then doubling up by adopting a ludicrous control for policy based on their forecast of the debt and deficit in five years time. They themselves would agree that the only thing we can be sure about is their 5 year out forecast will be wrong. No one can give an accurate spot forecast for public borrowing that far distant. Their forecasts for the immediate year which could be more accurate have badly overstated borrowings in recent years.,

OBR forecasts are said to be independent but are formed in an iterative process with Treasury officials guiding them on government policy. If the forecast was genuinely independent there would be no need for the Chancellor to accept it or defend it. He might choose a different independent forecast from a reputable forecaster with a better track record. The insider’s forecast lures the Chancellor into acceptance or submission, however bad it might be.

This budget would be best based around how much government plans to spend next year and how much it might have to borrow in that year. That after all is meant to be the idea of an annual budget. Debt interest will tumble with lower inflation taking maybe £30 bn off peak levels of inflation linked cost. Public sector productivity should be prodded to remove some of the  £30 bn loss since 2019. Credit should be given for the planned cut of 300,000 in legal migration greatly reducing pressures on social housing and public service.

If the OBR insist on highlighting the 5 year debt figure then the Chancellor should cut back some of the unfunded spending increases pencilled in for that year.

On Friday 8 th March at 11 am I will give a public lecture on The Digital and Green Revolutions.  Tickets can be obtained ( free) from www.asc.ox.ac.uk/event/GDR24. All Souls College, High Street, Oxford.

Last year the taxpayer owned British Business Bank lost us £147 million. Its auditors said it can carry on trading because taxpayers will send it enough money to pay the bills.

609 staff were paid £60 million between them. Senior staff accrued more long term incentive bonus. Nice job if you can get one.

The taxpayer did get a long report on how they comply with a wide range of requirements. It revealed their investments in a bookshop, a beauty business, an electric forklift business and various other fashionable areas.

The taxpayer now has put £3bn at risk in this outfit.If we had used that money this year to cut the state borrowing we could have saved £120 m of interest instead of losing £147 m.

There is no evidence the state sector is any good at this type of investment banking. There should be no wish to saddle taxpayers with more losses. Sell the whole thing off as soon as possible.

The Rochdale by election was a most revealing event.

Labour did not campaign and announced no-one should vote for their candidate on the ballot paper as he was unsuitable. Most people expected Conservatives to poll poorly in line with other recent by elections. The current mood of the Conservative half of the electorate is to send a clear message to the PM to improve things, by abstaining or voting for a different candidate.

These then were the ideal conditions for Reform, or the Greens and the Lib Dems to mount a great campaign and show momentum. Labour the obvious party  to win here was not running.

The Greens with their extreme  approach to net zero demanding so many changes in lifestyle came in ninth with just 1.4% of the vote. The Lib Dems who also want to stop people using cars and speed green changes came in fifth with just 7% of the vote. There is no evidence here or in other elections that voters want more of the net zero policies.

This surely was ideal territory and background for Reform. There was speculation they could even emerge the winner. In the event they  limped in  in sixth place with 6.3%.

Instead the Conservatives were the only established party to get into double figures in third place. Rochdale voted decisively for two independent candidates who got 61% between them.

People want government to improve the economy, boost take home pay and control our borders. The sooner it is seen to do so the sooner voters around the country could get behind the government again. There is little appetite for Green/Lib Dem and Reform’s negative aim of destroying the Conservatives is not a big vote winner either as it does nothing to improve people’s lives.

I have always been a lover of the countryside. I admire the fields and woods of England. I have argued for less development of greenfields and for more kindness to animals.

I have campaigned for lower migration as I cannot see how and where we will build  three cities the size of Southampton each year to provide homes, shops and roads for 750,000 extra people. I look forward to this government tightening the rules further to cut the numbers more.

Reducing growth in population is essential to bring housing supply and demand into better balance. It is crucial to bringing UK CO 2 output down. If you want net zero emissions net zero migration would be a good start. It is central to keeping more balance between town and countryside. It is crucial to improving our local food production as we need to keep the farms we have.

I favour planting more trees. Time was when we grew our own timber. Now we  import vast quantities from places where softwoods grow more slowly and use large amounts of energy to be brought here. Our new mixed woodlands should be for timber as well as enhancements for our countryside.

I favour more reservoirs. A few extra lakes can enhance the landscape and offer recreation . We are short of water if we get longer hot dry spells. We have not expanded water stores as the population  has grown.

I favour much more investment in modern agriculture. Fruit and vegetables can be grown in bigger quantities with modern protection against the weather and good control of water and fertiliser.

Some people writing in want me to challenge the idea behind net zero policies. They believe the climate is not warming, or they believe it is but this is not brought about by manmade CO 2. They query the climate models, pointing out past times when the models have not forecast correctly. They ask why the models are based on one main variable, manmade CO 2, and do not seem to encompass solar intensity, cloud cover and water vapour, earth seismic activity , natural CO 2,and other possible influences sufficiently. They wish to dispute with the scientific establishment who claim the science is settled and that only a major reduction of man made CO 2 can change things for the better.

I have  no intention of doing this. I accept CO 2 is a greenhouse gas and accept the climate changes. Those who want to challenge the establishment scientists need to find other sites and other authors. I intend instead to concentrate on the areas I know best. My challenge to established governments’ thinking is to the idea that the current range of policy proposals to drop world CO 2 will deliver their exacting targets any time soon. They very clearly will not, and in some  cases the proposed remedies land the world with more CO 2 than without them. I challenge the practicality and desirability of  international government policies on this matter.

The main things I will continue to question are

1. The accounting system which says if the UK cuts its CO 2 production by importing energy and energy intensive products instead of extracting and making its own, this is helpful. It clearly increases world CO 2 by at least the amount of the extra transport. If you import LNG instead of producing your own piped gas it is a big increase in CO 2.
2. The fact that whatever the UK does to its small amount of world CO 2 the targets will  be met or missed by the actions of China, India, the US and the other large CO 2 emitters. China and India plan to increase emissions this decade, and India well into the next decade making it very unlikely world targets will be hit by 2030. Those most worried about this need to turn their protests to China and India.
3. Electric cars are very CO 2 intensive for their manufacture and for the extraction of the raw materials and the production of their batteries. They need to be driven many miles before there are CO 2 savings compared to keeping your old ICE vehicle. If you recharge an EV drawing power from fossil fuel power generators as many do there is clearly no gain.
4. Heat pumps are  very expensive. They require a lot of disruptive and CO 2 intensive work to remodel and insulate a home before installation. They may not give a good result. They too do not help if the country has too little renewable power available to fire them.
5. The world is embarking on a wide range of different technologies – carbon capture, hydrogen, electrical drive, battery storage, pump storage, synthetic fuels other than hydrogen. There will only be a swifter transition when a few of these are scaled up and become cheaper, leading to wider adoption. The big array puts many people off early adoption, waiting to see what will attract the most subsidy to start and what will become more economic as it is grows.
6. The green issues need to be balanced with security of supply , affordability and practicality of product. Many green products for transport and home are a work in progress which is why they are not selling in huge  numbers. More work is needed to produce great value products that people want.

In summary for this revolution to take off most people need to change the way they travel, heat their homes, their diet and the products they buy. This will only happen when there are better green products on offer that people  want to buy.

John Redwood (Wokingham) (Con):

Will the Minister take UK Government Investments out of its role of controlling and supervising the Post Office? It has allowed these gross injustices to go on for too long, allowed the Post Office senior managers to rack up huge losses of £1,391 million to last March, with more to come this year, and given the executives bonuses for losing us that much money. It has left the Government with a great financial black hole. Would it not be better to change the Post Office management, to have it report directly to the Minister, and to make its No. 1 task giving justice to the sub-postmasters?

Kevin Hollinrake:

I thank my right hon. Friend for his question. He and I have had serious conversations about the future of the Post Office, which I am keen to continue to engage on. The current UKGI representative who sits on the Post Office board is Lorna Gratton, for whom I have a great deal of time and respect. Clearly it is important that the inquiry does its work to determine who did what in the past. As we look to the future, there are different opinions on how the Post Office should be governed. I am happy to keep those discussions ongoing with my right hon. Friend.