John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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More money for foreigners

This government just loves giving money away to foreign governments and companies. It is money we cannot afford, money they borrow which adds to taxpayers bills.

This time, as I warned, it is the offer of money to Jingye, the company that owns the blast furnaces ar Scunthorpe. Labour failed to nationalise them but passed legislation taking control of them to stave off closure. The furnaces were losing a fortune partly due to the UK ‘s sky high energy prices .

This meant taxpayers are paying the bills for the operating losses and stocks without making clear it took the assets unencumbered by debts for nothing. The blast furnaces were not worth anything given costs of closure or losses from running them.

The government promised to keep them open. How much will this cost taxpayers? They implied the blast furnaces would be replaced by a steel recycling works? When? How many jobs go when that happens? Will the government break its promises to the steel workers by sacking lots of them before the election? Or will it put taxes up again to pay the huge bills, leading others losing their jobs as the higher taxes take their toll?

Potholes and bad roads

I recently used the M6 Toll road again. Free flowing, good services area, no potholes. What a contrast with some of the nationalised motorways. In the last one a half years a government that hates motorists has starved them of maintenance so we now have the potholes we are used to on lesser Council roads on our most used and biggest highways. Hitting a pothole at 70 mph can do more damage than on a slower road. Motorists have to keep lane disciple to avoid other vehicles so they usually cannot swerve to avoid.

All my life our roads have been inadequate. Always too little capacity and under some governments and Councils badly maintained. In recent years the highways authorities have done their best to reduce capacity for cars and to make it mire difficult to drive anywhere.

We beed to put in more capacity to cope with the huge increase of population and to accommodate all the long haul trucks for imports necessitated by the government’s huge industrial plant and factory closure programme.

The obvious way to do it is to allow new toll roads or toll lanes adding to existing roads. The driver paying the toll for less congestion and a better road wins, but so does every other road user as the public roads paid out of taxes also become less congested.

The large number of prolonged road closures reflects dreadful public sector management. Toll roads stay open as much as possible as their owners and builders beed the revenue to lay the bills.

The lack of political leadership lets down our forces

I am not usually in favour of us fighting wars in the Middle East. I do think the only way to deter Iran who see us as an enemy and regularly attack us one way or another is to provide strong defence and to help destroy their aggressive forces. It is almost unbelievable that there has been no naval ship going to the Eastern Mediterranean. Our two fairly new aircraft carriers are both in UK ports. None of the 6 destroyers were available to send to protect our air base in Cyprus either before hostilities or when fighting broke out. One destroyer is crewed and ready but Ministers decided it was more important to send it to an Arctic exercise than to divert it to the real thing. Don’t they know there is a war on?

Surely they should have sent more air and some naval power to the Med weeks ago when it was obvious there were tensions that could boil over?
Shouldn’t they require better planning of deeper maintenance to avoid the service loss of too many ships at the same time?

The government’s punk lawyer approach makes life impossible. Sloppy law has left them in limbo on the disastrous planned give away of Diego Garcia. Threatening old soldiers with yet another review of long ago IRA troubles is unfair and puts people off joining the army.

Meanwhile the government promises extra money to repair holes in our defences, but this is too little too late , sometime never money.Will no Minister rebuild our defences? Will no Minister lead our forces in a proud way, ensuring they are available for action when needed? Starmer’s failure to act against Iran is shaming our country.

Gibraltar deal, another government give away

The long draft EU UK Treaty reveals once again a UK government that thinks negotiations with the EU are about taking dictation of theit terms. So often there does nit seem to be anyone speaking up for the UK.

Facts4eu have set out sone of the detail and implications of this latest give away. I have asked the Minister in the Lords to set out high high the financial cost if this deal will be for Gibraltar. How much will the handling charges be? What excise tariffs will be imposed by joining the Customs Union? What will be the compliance costs of all the EU regulations to be imposed? How much money will be given to the adjacent area of Spain in levelling up funds?.Which other taxes will be raised? What impact will thus gave on the Gibraltar business model where lower taxes and sensible regulation have helped create prosperity. The Minister had no reply on the total costs. When I buy something I expect to know the price before I say Yes, it is good value.

The government claims there will be no loss of sovereignty.How come? If Gibraltar has to accept EU laws whenever they add or change them, and put taxes and charges at their demand, surely that is a material loss of sovereignty?

The only good thing about the Treaty is the get out clause. Future governments of the UK and Gibraltar may need a unilateral exit without penalties. The Opposition in Gibraltar is understandably concerned about the role of Spanish officials in controlling entry into Gibraltar in future. The UK government should be concerned about EU and Spanish leverage over the airport. Our crucial military base needs free access for military personnel and materiel, where the small print of the Agreement needs careful testing.

OBR, the good, the bad and the ugly

Was there anything sensible in the OBR forecast? They were probably right to push their growth forecast down to nearer the consensus at 1.1% for this year, and to increase their unemployment forecast to 5.3%. Most were assuming this from private sector forecasts anyway.

They forecast that inflation will be at the target level of 2% in 2027, 2028, 2029 and 2030. That would be highly unusual. One of its foundations is their forecast that oil prices over those years will stay within a narrow range of around $62-68. That is also unlikely.

They assume that housebuilding will boom from the current 220,000 a year to hit 300,000 a year by 2029-30. So by the last year of this Parliament housebuilding will at last have reached the annual run rate the government promised, but will of course have fallen well short of the 1.5m target over the 5 years. There is no obvious reason to forecast such a big rise.

They think base rate will start to rise again from next year. They also expect the average government borrowing rate to hit a crippling 5.2% in 2029/30, up from 4.4% this year. This is not a background for more home purchase. It will confirm it has always been dearer for Reeves to borrow than the previous government.

They do make some plausible forecasts. They say the tax burden which was 38.8% of GDP in the last Conservative year will hit a terrifying 42.5% in 2029/30. That’s a 12% real increase in tax bills.

They expect gas production in the UK to halve (2030/31 on 2024/5) as a result of the manic close down our industry policy. They expect welfare spending to surge by £75 bn or 24%.

They estimate Bank of England losses to be paid for by taxpayers at £89 bn between 2025/6 and 2029/30! Still they do nothing to reduce them.

More fiddles and implausible numbers

Down comes the growth forecast for 2026 to just 1.1%. Up goes the forecast for unemployment to 5.3% this year.

The Chancellor claimed credit for getting inflation down , yet it is up from the 2% she took over to 3% today. She said she had got interest rates down, yet longer term UK interest rates have been higher than the worst day under Truss all last years and so far this year.

The OBR want us to believe borrowing will come down by the end of the forecast. This is the result of a sudden new outbreak of tough spending control with resumed productivity growth. How likely is this?

I cannot believe she can sit there and do nothing. Youth unemployment has surged thanks to her Jobs tax, High Street taxes and employment law changes. Housebuilding is down with many unable to afford to buy a home of their own.

She presses on with bans on our leading exports of oil, gas and vehicles, factory closures from dear energy and surging unemployment.Her tax rises, new regulations and net zero self harm conspire to keep us poor.

A no cost way to promote growth

Rachel Reeves has been right to keep quiet and to try to squash discussion of the Spring economic statement this week. The long run ups to her 2 budgets encouraging gloom and speculation of big growth killing tax rises did harm.

It would however be wrong for the Chancellor to let the Spring Statement go by without trying to salvage a growth strategy from her anti growth packages of measures to date. Here are some easy changes that do not entail spending any more public money and in some cases will bring in more tax revenue

1. End the ban on new oil and gas exploration
2. Grant licences to develop existing proven oil and gas reserves
3. Redirect new grants from wilding the countryside and stopping food growing, to grants to promote more food production at home
4 Refuse to continue with big gift of our fish to EU trawlers given the absence of any wins in the EU re set negotiations
5. End the ban on new petrol and diesel cars from 2030 to avoid big factory closures
6. Delay implementation of job harming Employment Act
7. Require higher proportion of UK work in defence contracts
8. Amend Habitats Directive restrictions on new housebuilding

The tyranny and folly of international lawyers

I have set out the very questionable international law the UK government has prayed in aid for its monstrous give away of Chagos. The government failed to read the clear opt outs from International Court of Justice jurisdiction for defence and Commonwealth matters, and the opt out for defence from UN law of Sea.

Now we have the government inability to see that Iran is a constant and worrying threat to us, and particularly alarming that she might soon develop nuclear weapons. There is a good case in international law for US action.

What is angering so many of us is this further legal essay in two tier justice. Iran murders its own citizens, removes human rights from women, kills people in hospitals, attacks civilian targets abroad, funds and trains terrorist groups in several countries. So why does Starmer’s famous international law never stop them? What is the point of international law in these matters if Iran, Russia, China, North Korea and others break it when they choose?

International law is important to control people and goods moving across borders. Between sovereign states,affairs are controlled by International Treaty. If one of the parties breaks the Treaty there is no police force, army and prisons to enforce against the offending government.

The PM needs to ask the Attorney General to improve his legal advice and to fit it into international politics.The question to ask about the US action is not is it legal but will it work? It needs Iranian domestic regime change to make it a success.

Decapitation?

The latest tactics of the US is to target killings or arrest of murderous and tyrannical leaders of regimes that disrupt the peace or do serious harm.
Time was when some condemned the idea of targeting the commander or leader of an enemy regime, probably encouraged by their own commanders or leaders who did not favour retaliation. It has often been the case that successful killing of the enemy has led to peace. When Henry Tudor’s army killed Richard III that was the end of the War of the Roses. When Hitler killed himself recognising he was about to be captured that ended the 2 nd World War in Europe.
The ability of the US and its leading allies to kill leaders in hostile countries whilst protecting their own leaders does provide a relatively easy way of shortening wars and saving many lives. Should we welcome this development? Killing the Supreme leader of Iran who has authorised mass murder of his own people for daring to undertake peaceful protest requires a concentrated attack on him and his key helpers.
The EU leaders and the UK PM were an annoying irrelevance to relieving the brutality of the Iranian regime. They sheltered behind international law to ignore the voices of the suffering masses in Iran, and failed to see the need to find the quickest way to end the evil regime at minimum risk to the Iranian people. The assertion that the US acted illegally has not been backed up by proper legal argument. Is this international law view any better than the nonsense the government put forward to justify giving away Chagos?