John Redwood's Diary
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My Express article – What should the King tell Donald Trump?

King Charles will of course develop his own relationship with the President in private as Head of State. He will doubtless in public express sympathy and concern about the attempts on the President’s life, stress the long standing friendship and deep collaboration between the two countries and welcome the success of the USA as she celebrates 250 years of independence. The government’s support for his State visit is wise, as the UK must be well represented at the 250th celebration and the UK/US relationship needs some diplomatic stimulus after some bad disagreements between the Prime Minister and the President. The King can transcend  or avoid the politics.

In  practice the King will be given detailed briefing and draft speeches as he is there as the nation’s representative. In our democracy that means he must be loyal to the government’s line. This will pose substantial problems, as the PM has allowed large divides to grow between the US and the UK on a wide range of issues.

  1. Chagos   The President thinks it wrong to give them away to an ally of China and to  a country which has signed a Treaty banning nuclear involvement. The UK needs US agreement to amend the founding Treaty for the joint base on Diego Garcia, which the US is understandably unwilling to grant.
  2. Use of US bases on UK territory. The PM’s temporary banning of use of bases like Diego Garcia and Lakenhall did huge damage, as the US pays for these bases on UK soil for joint defence and protection and could easily pull out of them if they cannot use them as they wish.
  3. The Falklands. The President wrongly seeks to help Argentina.  He does not seem to understand the Falklands are UK territory with a self governing population that vote 99% to remain British.
  4. Energy policy The President thinks the UK undermines its national security and economy by refusing to use its own oil and gas and turning to imports.
  5. Defence   The UK has not set out how it will get to the new more stretching targets for defence spending by NATO members which have been reasonably requested by the US. The UK will need to explain the current incompetence where the world’s 6th largest defence budget which does provide 2 aircraft carriers, 6 destroyers and 7 frigates is unable to put a single ship into the Gulf to help, and struggled to get one to Cyprus where our base was under attack.
  6. Trade  The UK agreed one of the best trade deals with President Trump but then threw away the good will with its digital tax on US companies, its threatened cbam carbon tariff on US goods, and its extra regulations on US digital success stories.
  7. Iran  The UK has not given military  support to the need to stop Iran getting a nuclear weapon or to impede Iran financing and training terrorist groups in Yemen, Lebanon and Gaza.
  8. Ukraine  The US thinks the UK and EU have got in the way of  negotiating a peace and have helped prolong the war whilst not themselves providing enough support and military aid to Ukraine to win.

So what should the government tell the King to say? The King should help them get over the truth about Falkland islands democratic wishes and explain that the Falklands government is allowing exploitation of the oil and gas offshore where the President should approve. It would be good if the government chose this moment to announce it was abandoning the bad idea of giving Chagos away, so the King can reassure the President this important base will remain open for use. The King could start the repair job over normal use of US bases on UK territory before the US decides to pull out of some  in due course. It would be wise to keep off energy and environment policy as the two sides are so far apart. On defence the King needs good briefing on when and how the UK’s force of naval vessels and planes will be properly available to contribute to NATO and wider alliance tasks. The aircraft carriers are not ” toys”, but they need to be more in use and better supported by UK vessels and planes. The UK needs to consider when and how to offer concessions over its future cbam tariffs, its digital tax and other impediments to US trade to get back tariff free trade more generally.

The UK needs to explain on Iran what its so called coalition of the willing could and would do to help create as well as to police a peace. On both Ukraine and Iran the UK has to see that to make a reality of its wish to have negotiated peace  requires talking to and compromising with Iran and the Iran backed terrorists, and with Putin. Grandstanding in a critical way without spelling out how and why compromises will be made to bring success is far from helpful.

My main message to the government is do not send the King there empty handed. He needs some give in these UK positions  to help mend the relationship.

 

My Telegraph article on GDP and growth UK/ US from Sunday

Why is US GDP per head more than double the EU’s? Why have the EU economies including the Uk grown only half as fast as the US all this century so far? The  EU and the UK’s pro EU establishment have been content for this disaster to unfold, watching US GDP per head reach $92,000 with the EU limping to $44,000. Why  do they rarely ask what European policy makers are doing wrong and why double up on all their policy mistakes?
The present UK government won with an attractive pledge to make the economy the fastest growing one in the G7 , which it just happened to be for the first half of 2024 after a long period of slow European derived growth.
Since getting into office it has gone about destroying jobs with high taxes and high energy costs. It bans new oil and gas investment and soon will stop the manufacture of all new petrol cars. It has furthered a productivity collapse in the public sector. It has launched a series of attacks on farmers, small businesses, landlords and others who try to make something happen and seek to serve the public. Predictably unemployment has surged, young people cannot get jobs, growth has stalled and the cost of living crisis rumbles on.
The growing gap between the US and the UK/EU owes a lot to the US policy of cheap energy and more domestic fossil fuel extraction compared to the EU policy of dear energy and closing down fossil fuels. The UK has seen an accelerating spate of closures of high energy using businesses under this government, with two refineries, petrochemical plants, ceramics factories, steel blast furnaces, a big fibreglass plant, vehicle manufacturing and others sacrificed in the name of net zero. The UK then imports these products adding to world CO2 rather than cutting it. US industrial gas is one quarter the price of Uk, so it is no wonder we cannot compete.
The UK is sitting on big reserves of onshore gas which could be extracted with suitable environmental protections. You can  drill and install well heads far away from homes and can reward local communities with royalties. The government even refuses to get out readily available gas in the North Sea where there are underused pipes and available platform production capacity to speed up delivery of new sources and cut the costs. Gas is a crucial feedstock for chemical production  as well as an energy source.
The growth gap grows as taxes rise in Europe and fall under President Trump. Only Ireland in the EU bucks the trend by having a much lower corporation tax rate, giving it GDP per head twice the EU level and filling its Treasury with so much more business tax as a result. Investors are drawn to low tax places. The rich list of world countries alongside the USA is mainly a list of low tax or energy rich small states like Singapore, Norway  and Bermuda.
Another key to US faster growth is technology. The US has produced the leading giants of the digital revolution, whilst the EU has specialised in regulating and taxing them more, jealous of US success. The US has a positive entrepreneurial culture, spinning more great businesses out of universities. The UK shares some of that but this government wants to tax and regulate them so much that the talent is now fleeing the country in large numbers. Common law systems are more fkexible and friendly to innovation. Codified EU law  can block new ideas.  Aligning more with  EU rules is putting us in a slow growth prison. .
Lower taxes, cheaper energy and fewer regulatory restrictions are a simple formula for growth which the UK establishment has no intention of allowing and spends much of its time denying. The Bank of England and the Treasury add to the misery by favouring boom and bust policies which disrupt investment. The Exchange Rate Mechanism EU boom bust of the late 1980s to 1992 did much damage. The lurch from Latin  American style money printing this decade to the Bank losing us a fortune selling bonds it paid too much for is very costly and destabilising .
The planned EU re set reinforces all of the old failings of EU/UK policy making. Higher carbon prices and tougher emission trading schemes will accelerate the decline of energy using industry. More regulating of digital and media industries will reinforce US domination. Large contributions to EU coffers mean higher taxes and more people and businesses with money leaving. More young people and migrants coming to the UK will lower average incomes and exacerbate shortages of homes, water, power and roadspace.
The EU re set will make the UK a colony of the EU again with no rights to change or object to their laws and taxes. The EU system makes Europe a colony of the US technology giants who control so many things about our lives and businesses. Not a great policy and not a good time to fall out with the US. There is no willingness by the  government to do any of things we need to do to reverse  the widening  growth gap  between us and America.

The UK/ US relationship

The UK has often fawned too much to keep something called “the special relationship”.  In practice what we have experienced with the US over the last century is a close relationship based on a mutually important trade with fair balance between imports and exports, a close military alliance formalised through NATO but also developed by close working on defence and intelligence matters on a global basis, and a common view of many of the world’s great political divides. The UK and the US are usually combined as champions of the democracies, and defenders of small states under threat from thuggish autocratic regimes. The US came late to both European wars as they morphed into world wars and was not as helpful as they could have been over the Falklands. The UK sat out Viet Nam, seeing the difficulties in achieving victory. The UK has assisted the US in its other major Middle Eastern wars.

The Prime Minister thought this relationship was crucial and put a lot of effort in the early days into playing down the unpleasant things leading Labour figures has said about  Mr Trump before he was re elected. The outgoing Ambassador did a great job to smooth the UK and then the US transition of governments. No sooner was this done, and an early win was pocketed by getting the UK a better deal on US tariffs than the EU. The  PM decided to put Mandelson in as Ambassador. This was as some of us warned a bad idea. He placed a man known to be close to Epstein into the Oval Office when the last thing the President wanted was such associations  at his meetings. The PM stupidly plunged on with trying to give away the crucial joint US/UK naval base at Diego Garcia, threatening to break the US/UK Treaty about the base and annoying US defence opinion to give the freehold to an ally of China.

More recently the dreadful handling of the sacking of Mandelson has annoyed US opinion. The refusal of permission to the US to use their own bases on our territories was a big mistake. We did not have to say we would join them in bombing action, but it was wrong to temporarily deny them use of their own facilities and then for the PM to change his mind late in the day.  The decision to withdraw our last minesweeper from the Gulf just before the outbreak of hostilities was a bad one, as the UK had been important in offering mine clearing services in the region. It was also pathetic that the UK had just decommissioned its one frigate in Bahrain and could not find a single naval ship to go the Gulf, and only one that was late and in need of repair to assist Cyprus.

No wonder President Trump is now angry with the UK, giving the King a very difficult job when he goes on a state visit. The PM  has to respond to or ignore  bad comments from the President which make things more difficult. He  at times decides to play to the left wing gallery at home who would welcome a more decisive break with Trump’s America. The truth is we need a better relationship in trade, defence and investment which has been made more difficult by bad decisions of the PM and now by the very public criticisms of the PM  by the  President. The government has to counter  the Falklands threat from Washington  and Argentina. The government should show it has the air and naval power and resolve to defend the islands.

 

My Conservative Home article on Net zero damage

 

The pace of closure of UK manufacturing is alarming.

I asked a question of the government who told me in 2025 alone there were 12,510 closures of industrial companies. They were unable to tell me how many closures there were affecting more than 200 employees.

The ONS Inter departmental business register shows a 4.5 per cent decline in manufacturing companies between 2023 and 2025, and a 12 per cent decline in transport and storage companies. These are not the same figures, and can conceal some mergers as well as closures. They do however illustrate the same worrying decline. The UK is making less in many areas.

There have been some very large closures, with two refineries, a fibreglass plant, ceramics factories  and some large chemical plants shutting down. These general figures reveal the wider trend. The UK is no longer competitive for many types of manufacturing for companies of all sizes.

Why doesn’t the government do more than express short term concern and promise help for people who need to retrain and try to find a new job? Why isn’t it angry or worried about the de industrialisation of the UK? Why is a party that is called Labour and has a great past tradition of standing up for workers in industrial settings so unwilling to engage and to find a solution to the mass retreat from making materials and finished products in the UK?

The main reason is Ministers are in the grip of the demon ideology of net zero extremism. They believe in the self-harming policy responses that  Minister Miliband embodies. They  say UK factories have to be shut to stop them creating CO2 as they burn gas or use fossil fuel feedstocks. Instead we must import these goods, leaving our home produced CO2 figures down. It means boosting world CO2 figures, usually by more than the UK saving. How can they defend this madness?

This crazy philosophy leads to the UK having the dearest energy prices in the advanced world, with government quietly rejoicing that will accelerate our ending of fossil fuel use at home. Government goes out of its way to make fossil fuels dearer, with a carbon tax, emissions trading, super taxes on oil and gas profits, VAT, fuel duty and range of charges to milk and punish the user of gas and oil and their derivatives.

The policy makes no contribution to cutting world CO2, but it does do untold harm to the UK economy and workforce. The government loses the tax revenue on production workers, and has to pay benefits and compensation to those losing their jobs as the closures take place. It loses profits tax on the closing businesses, and loses a range of tax revenues as higher unemployment leaves communities with less spending power to use on shopping and services.

The government’s economic policy is marred badly by the relentless upwards march in unemployment. It adds to the economic damage, forcing the Chancellor to impose yet more taxes to pay for the lost revenue and the higher benefit costs from closures. This creates a vicious spiral. New and higher taxes lead to more energetic and hardworking people, and more people with money to invest, going abroad to escape the tax raids.  They lead to more businesses strapped for cash, paying less profits tax or in turn closing down.

The government adds to the agony by imposing bans on fossil fuel related activity. Companies cannot drill to find more oil and gas, hitting the domestic oil supply industry. Soon companies will not be able to make and sell diesel and petrol cars here, leading to the closure of all factories and production lines doing that. Ministers may be cheering the end of car plants, plastic factories, refineries and petro chemical works, but the rest of us  rue the day and sympathise with all those losing their jobs.

All of this is avoidable. If the government lifted the bans on oil, gas and petrol car making there would be more jobs and investment here and fewer imports. World CO2 would go down a little, not up. If the government scrapped carbon taxes and emissions trading a lot of closures would be averted. If the government cut the excessive rates of domestic tax on producing oil and gas, we would have more of them and more investment, reducing imports. Why pay the tax to foreign governments for the imports when you could get that revenue here at home if you charged sensible rates of tax?

Whenever I recommend more use of home gas and less of imports critics falsely allege I am in the pay of the big oil companies.

Let me reassure you. I am not and have never been in receipt of payments from oil companies. If I had I would have declared it. They say this as they have no good argument to counter my case. They simply ignore the harm they are doing to existing firms and jobs, and refuse to engage with their mad carbon accounting system which forces us to close and import instead. Then they fly off to their next conference to condemn the oil industry that supplied their jet fuel.

The best the net zero extremists argue is we are creating lots of green jobs. I agree they are in China, who make most of the solar panels, larger batteries and wind turbines, and in parts of the world with the materials to mine and smelt into the special materials needed for battery production. Clearly in the Uk we are destroying a lot more jobs than we create, as we see in surging unemployment.

The government’s passion to import from China and the EU visible in so many of their policies underlies much of their unpopularity. They ruthlessly intervene to stop or harm  the UK manufacturers. The public grasps that you cannot go on increasing your imports, as you run out of money to pay for them. If you do not make enough here and employ enough people here you have a poorer and more miserable community. We need sensible tax policies that increase revenues through growth, and import substitution policies to help home production.

 

Rachel Reeves talks up a bad story

Unemployment fell last month. Good news says the Chancellor. Yet the figures show there were fewer people in employment than a month ago, down 6000, or a year ago down 74000. Vacancies were down too. What has happened is more people have decided not to look for a job and more have been put on benefits for life. Bad news.

Growth improved last month. It still left it crawling along like the EU at under  half the US rate at 0.8% for the last  year. Why does the UK establishment always settle for European third best? No surprises there, as most of the measures Reeves and Starmer have introduced have slowed growth and damaged business. There’s  been the jobs tax, the oil and gas bans, the high energy prices, the business rates, the farms tax, the subsidies to stop growing food, the sky high Council taxes, the give aways to foreign governments, the crippling influence of the EU.

The complacency oozes out from the government. No published plans to deal with looming shortages of jet fuel, other oil products, and chemicals. No plan to sort out HS 2 or the Post Office, nationalised industries. No plan to save the steel industry, now on high subsidy life support from taxpayers. No plan to boost housebuilding in line with their ambitious targets. No plan to speed up grid construction to keep the lights on.

The dithering also goes on. I was told the other day by the Lords rail Minister that 20 months on the government still does not have a new budget or new timetable to deliver Birmingham to London HS2. It took a Conservative Lords amendment to force the pace on controlling smart phones in schools, as the government was lost in consultations and options. 20 months  on and the defence plan still awaits the money to pay for it.  We await a social care new policy whilst local government is put through an expensive and unpopular reorganisation.

 

What would be a good settlement in the Middle East?

 

Markets are very sanguine about the US/Israel/Iran/Hezbollah wars. They seem to assume that both the US and Iran need to come to a deal, that Israel will accept US pressure to do so, and Hezbollah/Houthi forces will come to heel. This is despite Iran an the US remaining a long way apart on the future of Iran’s nuclear programme and enhanced uranium, on the policing and charges for passage through the Straits, the extent of Iran’s drone and missile capacity, and the US bases and military action in the region.

Both sides stress their strengths and their ability to carry on with a resumed war. The US can bomb  more things in Iran, can blockade Iranian ports and could threaten to use specialist forces for raids or for seizing small areas of land. Iran can get re supplied with drones and missiles to threaten the US and her allies, and can use her mobile small forces to stop shipping in the Straits. Iran has proved her point that despite the US destroying much of Iran’s conventional force and killing her old leaders, the country can still continue and can remain a threat with her asymmetric warfare whilst the US has shown her capacity to dominate conventional warfare.

So will Pakistan be able to keep them talking to broker a peace? What is the acceptable answer for the US on re opening the Straits, reining in Iran’s terrorist allies and curtailing Iran’s nuclear ambitions? What does Iran intend to get over the relaxation of sanctions, the imposition of tolls on the Straits and guarantees of no further US military intervention?

A resumption of hostilities and or a failure to re open the Straits to western ships means big issues over shortages of oil, gas, and various important chemicals. That way lies more inflation , less activity and some rationing.

 

More questions for the PM and Sir Olly Robbins

I and the group of Conservative MPs who wanted a proper Brexit did not approve of Mrs May letting Sir Olly Robbins have so much influence  over Brexit, negotiating a hopelessly one sided deal that suited the EU. We did not however personally attack this senior official or demand his sacking from the civil service. We argued strongly with the PM and then sought to  remove her , holding  the PM responsible for the feeble deal.

So I now find myself needing to make the case against Starmer sacking Robbins. Today the Committee needs to clarify whether he has been properly sacked. All we know is the PM says he sacked him but we have not seen the dismissal letter. The Committee needs to ask

1. Was he sacked in a short phone call?

2, What were the stated grounds of dismissal? Was it simply the PM had lost confidence in him, or was it an allegation of misconduct for failing to report details of the vetting of Mandelson?

3. Was Sir Olly given the chance to present his case against the sacking? Does he now have the option of an enquiry into conduct and the right to present his case? Misconduct is presumably  the alleged grounds of dismissal as the post is not being discontinued to allow redundancy. The boss not liking you is not a legitimate ground for dismissal.

4. As the PM decided on a political appointment can we now  see the letter or memo instructing the FCDO to change US Ambassadors and to announce the appointment of Mandelson? The PM has the power to make a political appointment but when he does so he needs to issue an instruction to pre empt the normal official process and competition.

5, As it was a political process with the successful candidate chosen by the PM he became responsible for satisfying himself that the candidate had the right skills and experience and would not damage national security or reputation.  Why did the PM ‘s due diligence on Mandelson not uncover at least  some of the worries the formal vetting  process uncovered?

6. How could the  PM ignore or not know the Epstein, China, Russia, business links of Mandelson and the risks they posed?

7. If he is properly sacked how much compensation will be paid to him?

Time for the PM to own up and take the blame

It is not just the Mandelson disaster which has angered the country and makes the majority hungry for him to go.

It is his whole style and approach to government. He said something true when he said he prefers Davos to Westminster. This is the never home Keir, international law Kier, two tier justice Kier, tax the hard working Kier, clobber UK business Kier, put self defeating  net zero policies before our living standards, our jobs, our incomes Kier.

He burns too much jet fuel and spends too much taxpayer money travelling the world in a vain search for famous friends and photo opportunities. Instead of building UK defences he pretends we can rely on a non existent EU security. Instead of stopping UK de industrialisation brought on by ludicrously dear energy prices and taxes, he seeks to make it worse  by making us submit to higher EU carbon  taxes and tariffs. Instead of helping people into work he slaps on jobs taxes, business taxes and farm taxes.

Labour policies effectively tell people not to strive to do better, not to work hard, do not try to grow a business, do not buy a better home or send your children to a private school. If you do the state will criticise you and send you a bigger tax bill. When so many things go wrong because of bad policies it is time for the Labour party to demand a change.

 

The coalition of the unwilling

Why did the PM need to fly to Paris to co host an on line meeting?  Another big bill for UK taxpayers. A  needless use of scarce jet fuel when he should be at home planning how to deal with shortages.

What is this coalition able and willing to do? We are told it is not involved in the Middle East war, despite the threats to our shipping and bases, and the attack on Cyprus. I thought the PM sent extra Airforce jets to Cyprus to help defend UK and allies interests in the region.

The PM says they are working to re open the Straits of Hormuz to shipping. Yet we are also told they are not in  talks with the countries and terrorist groups fighting the war and threatening shipping, so how does that work? We are also told the coalition will not be sending naval forces to the Gulf to seek to impose a peace and freedom of the seas.

We are given a contradiction. The UK and others will consider sending a naval force once there is a peace agreement negotiated by others under the chairmanship of Pakistan. Why would there be a need for a naval protection force once there is a settled ceasefire or peace?

This all looks like play acting whilst others fight and negotiate over the disputed waters. Far from making the PM a more respected international statesman and adding to his popularity at home, voters will ask why is he away from the UK when he needs to make decisions here? Instead of pretending he can magic the international problem away without engaging the combatants, he needs to do something useful like get more of our own oil and gas out of the ground.He needs to deal with the jet fuel shortage, not make it worse by using more himself.

The Prime Minister suffers another blow

The Prime Minister suffers another self self delusion. He thinks that he is a great international statesman, and wrongly assumes that will make him more popular and help his party in the May elections. Instead it looks as if his over involvement in foreign affairs and the matters of the Foreign Office will do more to bring him down than anything else.

I have recently written about how his alleged great strength as a lawyer determined to govern under the strictures of international law has turned to dust and unpopularity. He was slowly being destroyed by his  failings to understand the limited powers of the ICJ, his wrong view on Chagos, by  the way the ECHR stopped his Smash the gangs policy and the boomerang that was his holier than  thou approach to government in opposition followed by the sleazy realities of some of his now ex Ministers and government deeds.

This has all been surpassed by jetting around the world giving cash and overseas territories away and above all by his gross mishandling of the US relationship. I was one of the few that advised not to sack the talented professional Ambassador he inherited in Washington who did a great job for him in the early months. I thought Lord Mandelson was a risky appointment because he had been forced out twice before from senior government roles over conduct issues. The links with Epstein were well known and the last thing the President wanted was a UK Ambassador that revived memories of that man every time he entered the Oval Office for talks. It has proved to be even more spectacularly stupid than I imagined.

There was the need for Mandelson to back pedal on his past unfortunate comments about Trump. There was the sacking when they discovered he had been closer to Epstein for longer than they thought. There was the need to accuse Mandelson of lying to explain how it was he got through the appointment process. There was the need to fire Starmer’s Chief of Staff, blaming him for recommending the appointment. There was the need to respond to Parliament’s demand to see the papers surrounding the appointment and Mandelson’s work as Ambassador, still not properly complied with. Now there is the latest biggest disaster that it emerges Mandelson failed the original security vetting by the Cabinet Office.

The PM has sacked the top official at the Foreign Office and claims the Foreign Office overrode the security warnings without telling any Minister or any senior staff at No 10. This is difficult to believe as the Foreign Office Head made clear to Parliament the appointment of Mandelson was a personal political appointment made by the PM. The PM failed to tell the Commons of this new news on Wednesday when he could have done so. By Monday afternoon when the PM gets round to making a statement there will be days of adverse press and media speculation. The PM has once again left his MPs and party workers to explain the mess whilst he flies to Paris to pretend to have influence over a war he is trying to  sit out despite the bombs and threats against our shipping and our bases.