Steve Baker: Wanted – a politically and economically viable path to low emissions

23 Feb

Steve Baker is MP for Wycombe, and served as a Minister in the former Department for Exiting the European Union.

No serious person doubts that CO2 is a greenhouse gas or that human emissions of it have contributed to our changing climate. Our legal target of Net Zero carbon emissions by 2050 is water under the bridge, nodded through without a division in parliament despite the scale of the implied changes to all our lives.

I admit I will miss petrol engines, especially in motorcycles, but I have no in-principle objection to Net Zero – other than that there has never been a democratic choice about a policy which means, as our Chief Scientist, Patrick Vallance, wrote in the Guardian, “transformation is required at every level of society”.

My objections are practical questions about how we get there – questions usually evaded by turning back to what we ought to do and why, or by doubling down on misinformation. That can’t go on because socially, economically and politically-unviable policies will not survive contact with the public.

Our current energy crisis is substantially a result of the emissions reduction policies of previous governments, particularly Tony Blair’s. Blair changed course away from the gas and nuclear path established by Conservative governments, which had reduced prices while cleaning up electricity generation and domestic heating. Blair’s renewables drive, which was maintained by all subsequent administrations, has left the UK critically exposed to the regional price of gas, because it is natural gas alone which ultimately guarantees security of supply for the UK electricity network.

It’s rational to have a climate policy, but our climate policies aren’t rational. Our acute crisis is a result of chronic, long-term strategic extremism in energy and climate policy. Policy which has been naïve about geopolitical realities, too inflexible, too dogmatic, too hasty and far too expensive.

Just as with our Covid response, the root of our problems is a failure to conduct robust cost–benefit analysis while focussing too narrowly on a particular problem.

Economists can value the harm done to human welfare by emitting a tonne of carbon dioxide – the Social Cost of Carbon. Estimates vary, but most think it is somewhere between £10 and £40. So if reducing emissions by a tonne costs over £40, we are probably doing more harm to human welfare than the climate change we are trying to prevent.

That is, above £40 per tonne the cure is worse than the disease. Worryingly, nearly all our climate policies are significantly more expensive than the social cost of carbon. Onshore wind costs over £100 per tonne and offshore over £200. Rooftop solar can cost over £1000 per tonne.

In 2009, the then government stopped using Social Cost of Carbon, and switched to what is a called a “Target Consistent” value, which is the price that will have to be paid to meet the target. That is, government stopped considering the overall welfare of the population, focussing instead on meeting the targets.

That change is even more important now we have a Net Zero target. By neglecting the already strained budgets of British households and by loading the public with more and more ambitious targets – for renewables, and heat pumps, for EVs, you name it – ministers have put climate policies on a collision course with socio-political reality.

We are seeing the first signs of public resistance now, and the situation will not improve on our present course. A rational policy for reducing emissions must deal with runaway cost problems, growing concerns about security of electricity supply and pressure on business competitiveness.

The cost to consumers of the renewables drive now stands at around £14 billion a year, around £500 per household. Most of that is subsidies, but the cost of dealing with the intermittency of wind and solar is also rising alarmingly. Despite that vast expenditure, once one sets aside incorrect claims which could amount to misinformation, hopes that renewables would become significantly cheaper have been disappointed. The industry claims their capital and operating costs are falling, but their financial accounts tell a different story. And there is a large queue of renewables operators with rights to extraordinary, index-linked levels of subsidy.

On our current path, there is no scenario in which energy prices return to normal in the next decade. It’s anyone’s guess when this unsustainable position will end but end it must. In the short term, we must cut the multi-billion pound cost of green levies, and admit they have not succeeded and bring these programmes to an end.

We will also need a different medium and longer term approach, reducing emissions but being realistic about what can be engineered at reasonable cost to the British people. We need to think a little less about the targets, and much more about what people can afford.

That leads us to a strategic gas-to-nuclear policy, not all that different from the sound Conservative energy policies inherited by Tony Blair and trashed. Government must allow people to go on using their gas boilers for longer, perhaps mixing in hydrogen, and not force the adoption of heat pumps. The drive to EVs should be relaxed: Government is demanding too much too quickly.

Ministers should restore confidence in North Sea oil and gas exploration to increase domestic supply of these fuels. And it is time to get on with using shale gas. Thanks to outrageous misinformation, the public are concerned about fracking, but the evidence shows it is a technique which can be safely used.

Natural gas is an excellent and a clean fuel. It can give us time to start a major rebuild of nuclear electricity generation. There are real signs that advanced modular reactors are the answer to the production of high-grade industrial heat, one of the hardest areas to decarbonise without pricing our manufacturers out of the international markets.

In the future, there may even be nuclear fusion, but banking on it would be a huge gamble. We will need to maintain a sophisticated and capable society if we are to overcome that technology’s known difficulties, and that means keeping energy costs low today.

The quickest win for the public and the government would be to encourage the construction of a new generation of gas-fired power stations. These would have much higher efficiencies than the existing fleet, which is mostly rather old, and could reduce wholesale electricity prices by as much as a third.

This gas-to-nuclear policy is a sound, balanced approach to emissions reductions. It doesn’t rule out anything – there can still be voluntary adoption of heat pumps and EVs – but it allows the public much more freedom to decide what works for them and how fast they can afford to decarbonise.

That is rational. That is Conservative. And it would work.

Emily Carver: The Met’s failings go much further than Cressida Dick

16 Feb

Emily Carver is Media Manager at the Institute of Economic Affairs.

I imagine most people living in London want their police force to prioritise tackling crime.

It’s interesting, then, that it took a report released early this month into the culture among officers at Charing Cross police station for the Mayor of London to oust Met Commissioner Cressida Dick.

The report by the Independent Office for Police Conduct (IOPC) “found evidence of a culture of ‘toxic masculinity’, sexual harassment and misogyny”. 

Text conversations between police officers containing sexually explicit, misogynistic, violent, and racist language were published by the watchdog as evidence of institutional failures.

But, while the revelations of distasteful and downright offensive “banter” among police officers is rightly a cause of major concern, particularly in light of the horrific kidnap, rape and murder of Sarah Everard at the hands of PC Wayne Couzens, it’s curious that this was the straw that broke the camel’s back for the mayor.

Sadiq Khan’s decision to focus on the Met’s “toxic culture” of sexism and racism may appear worthy, and claims of discrimination must be dealt with, but tarnishing an entire institution by the actions of individual rank-and-file police officers within the force is irresponsible and unfair.

Interesting, too, that these revelations come at a time when there’s never been more diversity and inclusion training available, never been more money spent on rainbow-coloured pride merchandise and never been more efforts by the police to encourage the reporting of hate offences.

The mayor may talk a good game about the Met’s failures on diversity, the need for “cultural change”, and the importance of rooting out all forms of prejudice, but this also adds to a perception that tackling crime no longer tops the list of police priorities. Particularly when he appears to have turned a blind eye over the years to serious operational failures under Dick’s watch.

Accusations of prejudice must be taken seriously but we must also be wary of a culture that leads to more emphasis being placed on diversity and inclusion than tackling crime, what the police are fundamentally there to do.

Following a dip during the pandemic, London recorded 30 teenage homicides last year – the worst annual death toll on record. At the same time, many Londoners feel it’s no longer worth even reporting more minor offences such as burglaries and muggings (besides to claim insurance), as the force simply won’t investigate. Indeed, last year only 3.8 per cent of house burglaries led to a charge or other sanction.

Despite these failures, you’re more likely to hear the mayor grandstanding on matters such as climate change, mask wearing, and foreign policy than you are to see him acknowledge any responsibility for crime on the streets of London – despite the fact he is the Police and Crime Commissioner for London.

Similar accusations have, of course, been levelled at Dick and the Met. When police officers were pictured taking the knee during Black Lives Matter protests or frolicking alongside Extinction Rebellion activists, trust in the impartiality of the police plummeted.

Many are simply sick of the police playing politics.

The ousting of Dick may, as chairman of the Met Police Federation Ken Marsh claimed this week, be politically motivated, a scapegoat to “deflect from [politicians] own failings”.

But this shouldn’t detract from Dick’s well-documented failures.

Indeed, however offensive the Whatsapp messages detailed in the report are, it’s clear the Met Police has many, many more serious problems to contend with – not least the number of accusations of corruption, cover-ups and heavy-handed, politically-charged policing under Dame Cressida’s watch.

The hunt for a new commissioner is likely to be a fraught one – and there is no guarantee the replacement will restore much-needed confidence in the police force or, crucially, make London’s streets any safer. 

Further, it’s unlikely that Priti Patel’s idea of what would make a competent commissioner will match that of Khan’s. While she has the final say, Khan is likely to throw his weight around – and attempt to veto any candidate he deems inadequately committed to his own agenda.

As important as trust in the police among different communities is, ultimately confidence depends on results. 

The new commissioner must be appointed on what one would traditionally think of as police leader attributes, namely their ability to tackle crime.

Places need power if they’re to level up

3 Feb

Do you remember the Third Way?  It was Tony Blair’s attempt to spray gloss a veneer of political philosophy on New Labour’s ruthlessly focused election machine – rejecting a choice between “prosperous and efficient Britain” (Thatcher’s Conservatives) and a “caring and compassionate Britain” (Old Labour).

For a while, the Third Way attracted commentary, praise from Blair groupies, and criticism – before Gordon Brown put the slogan out of its misery.  The era of marginalising the Tories and the Left had come to an end.

Then came the Big Society.  This was David Cameron’s big idea, or should I say Steve Hilton’s?  Again, it was an attempt to give a political project definition, but Hilton was empowered to further the idea, or try to – before the then Prime Minister lost patience with it (and him).

But for a few years, the Big Society was all the rage – at least among  organisations seeking cash, thinkers and doers seeking patronage, civil servants recasting projects, and a mass of others trying to get in on the act.

Levelling up has provoked the same pattern of behaviour, and my sense as an Editor is that no subject since Brexit has attracted more submissions to ConservativeHome (with the exception of Tory MPs offering pieces backing of Net Zero, often because they have a constituency interest in green energy).

Schools, work, skills, productivity, infrastructure, transport, housing, science, procurement, high streets, law and order, elected mayors, health, broadband, sport, parks, culture: nothing human and indeed unhuman is alien to levelling up.

This provokes the criticism that if levelling up is about everything it is thus about nothing – assuming that it’s understood in the first place.  “People find it confusing and then, when it’s explained to them, mildly irritating,” Rachel Wolf, the co-author of the 2019 Conservative Manifesto, wrote on this site.

All the same, the central message of levelling up seems clear enough to me: at heart, it’s about redressing the economic, cultural and social imbalance between the Greater South East and much of the rest of Britain.

If this isn’t One Nation conservatism in post-Brexit guise, I don’t know what is.  The heartland of the Leave vote in the 2016 referendum was provincial England, which thereby rejected the status quo – including an economic model heavily reliant on unskilled migration, financial services, low wages, and London plus its hinterland.

Michael Gove said more or less as much in the Commons yesterday.  “While talent is spread equally across the United Kingdom, opportunity is not.”

“We need to tackle and reverse the inequality that is limiting so many horizons and that also harms our economy. The gap between much of the south-east and the rest of the country in productivity, in health outcomes, in wages, in school results and in job opportunities must be closed.”

It’s therefore evident not only what levelling up is but what it isn’t.  Fundamentally, it isn’t focused on prosperity, though this would certainly be a by-product of the project were it to work.

After all, a Government focused simply on prosperity, or at least growth, might well double down on the present economic model, supplemented by tax cuts, a reinvigorated private sector, and deregulation. This seems to me to be precisely what some in the centre-right thinks believe we should do.

“The intention to spread government R&D around the country could damage the success story of the Oxford-Cambridge corridor,” the Institute of Economic Affairs said in its response to the White Paper.

This suggests the nightmare endpoint of a levelling up policy which makes the Greater South East worse off than it otherwise would be while leaving much of the rest of the country not much better off than it is now.  You can bet that what the IEA is saying some Tory MPs with home counties seats will be thinking.

If levelling up isn’t fundamentally about prosperity, it isn’t exactly about people either.  Government could help to upskill the next generation only for it to up sticks and head for the Greater South East, as so many have done before.

No, levelling up is primarily about place (and therefore includes in its ambit those bits of the South East that aren’t well off at all).  In which context, that long list of concerns begins to become explicable, since all help to make a place what it is and can be.

Having said which, some of the core elements of levelling up – better transport, joining up towns and cities and skills – look a lot like George Osborne’s Northern Powerhouse.

Let me leave aside such disparate questions about the White Paper as: how many of the proposals are actually reannouncements?  Are targets for 2030 really meaningful?  What’s the knock on for target seats?  And will Gove now vanish from public view again?

Instead, it’s worth reflecting on the magnitude of the task which the Government has set itself, perhaps as much by accident as anything else.

The gravitational pull of London on the rest of the country is more powerful than that of the capital cities of comparable neighbouring countries. Although it has a great deal of poverty within it, the city of which Boris Johnson was once Mayor is an international hub, the centrepiece of a relatively open economy.

Read accounts of how parts of the country boomed when Neville Chamberlain was Chancellor, with a mass of housing and roads being built in and around London, and you will see how little has changed.

If one element of the White Paper has the capacity to drive change is the localism proposals – cautious though these are now that this Parliament approaches its mid-term.  The best time for radicalism is at the start of a new government and that moment has gone.

But whether the matter to hand is better skills, industrial strategy, apprenticeships, emission reduction, integrated transport or a joined-up plan to implement net-zero carbon, central government is badly placed to do the job

Gove referred yesterday to giving such local Mayors as Ben Houchen, Dan Jarvis and Andy Street more powers, and held out the prospect of creating new mayors “where people want them”.  That may be as much as he wanted to do, or his colleagues would let him get away with.

“Whatever you’re doing in terms of devolution, double it. In terms of local taxation, double it,” Osborne said last year in an interview with ConservativeHome.

Without ambition on that scale, along the localist lines of Douglas Carswell and Daniel Hannan’s The Plan, there will be no irreversible shift in the balance of power and wealth in favour of the provinces, to misquote Tony Benn.  Places need power if they’re to level up.

Matthew Lesh: Woke organisations are letting their customers down

29 Jan

Matthew Lesh is the Head of Public Policy at the Institute of Economic Affairs and a Fellow of the Adam Smith Institute.

Unilever is a righteous organisation. It celebrates LGBT+ Pride, takes “urgent” action to address the “climate crisis” and refuses to supply Ben & Jerry’s ice cream in the West Bank. CEO Alan Jope declared a few years ago that “every Unilever brand will be a brand with purpose”.

The company’s latest purpose is sacking 1,500 staff. This comes after an embarrassing failed £50 billion bid for a division of GlaxoSmithKline, underperformance compared to rivals, and criticism that the conglomerate is distracted and lacks strategic direction.

“Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business,” warns Terry Smith, the founder of Fundsmith, a top-10 shareholder in Unilever. “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.”

So much for the golden child of “stakeholder capitalism” – the notion that businesses should focus less on profit for shareholders and more on environmental, social and governance (ESG) issues. This trendy idea has become even more prominent over the last few years, driven by those seeking to exploit the crisis for their pre-existing political ends.

We can perhaps call this Disaster Corporatism: opportunistic demands to redefine the role of the state and businesses. This is epitomised by the World Economic Forum’s Great Reset. The WEF not only wants corporates to be more involved in the affairs of state, in respect to ESG, but is also demanding the state becomes more involved in the affairs of business through industrial and innovation policy. Big state and big business working together for the good for humanity – or at least their version of it.

I argue in my new report, Capitalism After Covid, that Disaster Corporatism is a recipe for economic ruin that learns the wrong lessons from the Covid-19 crisis.

To start, governments bear substantial responsibility for allowing the virus to spread, from China’s early cover-up to Public Health England stymieing the expansion of diagnostic testing. Governments introduced lockdowns, that even if necessary at points were full of arbitrary, unnecessary and damaging measures.

We are now facing a lockdown-induced supply chain crisis and damaging inflation after expansionary monetary policy from central banks – the same central bankers that have been talking ad nauseam to talk about climate change financial risks and diversity and inclusion but seem to have dropped the ball on their central responsibility to keep price rises low.

Even if economic support measures and advanced vaccine orders were valuable, it hardly seems like we should be giving an A+ scorecard to governments for successful handling of the pandemic or demanding they intervene even more.

On the flipside, it is similarly absurd to use the crisis to suggest businesses should no longer focus on profit. Businesses which achieved immense profits by delivering their services, be it Amazon, Netflix or Moderna and Pfizer, ensured we were fed, entertained and saved millions of lives with vaccines.

In this respect, shareholder and stakeholder capitalism are somewhat a false dichotomy. Profit is socially responsible. A business that returns a profit to its shareholders can provide quality and value-for-money products to its customers, pay wages to its workers, procure from its suppliers, and pay taxes to fund public services. The entire point of the free market system is these mutually beneficial arrangements, with everyone acting in their interest, that make us all better off.

Diminishing profit helps nobody. Executives who pursue ESG goals are often just corruptly using their shareholder’s money for self-aggrandisement. The actual owners of companies – including our pension savings and institutional savers – expect a decent return, not solving racial inequality and climate change. A focus on “purpose” other than profit can, as the Unilever case demonstrates, result in those with a real stake being left worse off.

The oft-repeated justification for “woke capitalism” is that customers are demanding “purpose” driven companies. But this flies in the face of polling which suggests delivering a quality products and customer service is the top priority. It also misses the increasing role of regulators and legislation that is heaping pressure onto companies to consider non-financial issues – such as Financial Conduct Authority consulting on setting targets for women and ethnic minorities on boards despite admitting that there is “inconclusive” evidence that it improves outcomes.

“Woke” politics from the boardroom is also unlikely to prove successful on its own terms. Corporate branding exercises cannot make China reduce emissions or end racism. The inevitable failure to deliver on lofty goals risks making everyone unhappy. The political left complains companies are hypocritical and acting purely for public relations. While the political right gets annoyed about companies pursuing objectives with which they disagree.

The even deeper problem is what all this self-flagellation about profit does to our successful market system. Executives who diminish the importance of profit are sending a message to society that the business of business is immoral. In doing so they are undermining the case for market economies, the foundation for their enterprises and the source of our broader prosperity.

Businesses and governments should return to their traditional competencies, be it creating quality products and delivering profit to shareholders or protecting public order and delivering basic services. They should not seek to be everything to everyone, and in the process let us all down.

Nick Hurd: The Dormant Assets Bills gives us a modest money tree. Let’s use it wisely.

28 Jan

The Right Hon Nick Hurd was a minister under three Conservative Prime Ministers. As Minister for Civil Society, he led the work on social investment. He is chair of Access – the Foundation for Social Investment.

Ministers rarely get an opportunity to drive system change that lasts. The average tenure of a junior minister is around 1.5 years. Even those who have a plan rarely have the time or experience to implement it. Too many governments start with strategies measured in years and end up managing the week. Even when major change is implemented, successive governments tend to unpick or ignore the achievements and knowledge of their predecessors. There are exceptions, such as the cross-party approach to climate change but they are rare.

This dysfunctional set-up underpins the significance of the low-profile Dormant Assets Bill going through Parliament. In the far reaches of the Government garden, the DCMS is nurturing a small but well-established money tree called the Reclaim Fund. Through rigorous processes that protect asset owners, this distributes genuinely dormant private assets to common good initiatives that have a positive social and environmental impact.

Initiated by a Labour government in 2008 and built on by successive Conservative-led governments, it has brought to life over £800 million of investment in positive change across the UK. In England, the law to date has limited the scheme to supporting youth employment, financial inclusion and social investment in charities and social enterprises.

This is a British success story, being copied in other countries, not least Japan and South Korea. More importantly, it is a driver of the long-term thinking and better system building that governments find so hard.

Take the English social investment pillar for example. Thanks to dormant assets the big idea that finance can achieve a social, as well as a financial return, has firmly taken root over the last decade. It was the Coalition Government that set out to build a social investment ecosystem to give our invaluable charities and social enterprises more opportunity to access patient capital and reduce their dependence on short-term grants.

We created the world’s first wholesale social investment bank in the form of Big Society Capital. This was swiftly followed by the creation of Access – the Foundation for Social Investment. As a result of the concerted efforts made, the social investment market has increased eight-fold in a decade to more than £6 billion invested in charities and social enterprises in the UK. This means that it is growing on average at 25 per cent a year – more than twice as fast as mainstream capital markets are growing. This would not have happened without dormant assets.

The scheme is being expanded and the Government estimates that a further £800 million could be released for investment in activity that is additional to government expenditure. Consultation on use of new money will begin before the summer.

My plea is that we continue to use this money strategically. There is always a temptation to be tactical and buy a headline. However, this money is a real asset in any serious long term plan to “level up” and reshape the map of opportunity in the UK.

In the case of social investment, there is an opportunity to evolve our strategy for even more impact. We have learnt so much about how to get money to the places and communities that so desperately need it. For example, the Growth Fund (a £50 million partnership between The National Lottery Community Fund and Big Society Capital, delivered by Access through a range of social investors) has innovated in blending grants and loans to support small charities and social enterprises with the proportion flowing into our most deprived communities four times that of the wider social investment market.

Given the well-documented importance of these organisations in creating jobs; providing better solutions to social challenges; supporting the vulnerable and bringing people together, this is critical investment in our social capital and infrastructure.

Importantly this isn’t just about money. It’s about power. Instead of relying solely on the state to solve society’s problems, this is an opportunity to bring together those making a difference in communities with the flexible, socially motivated investment they need. By encouraging investment into the grassroots through local community-led enterprises, it is putting more control back into the hands of local communities to address the needs they see.

This is a rare opportunity to build on success and drive system change that lasts. There is a modest money tree, let’s make the most of it.

Ryan Baldry: Our global security is at risk when we become distracted by events in Westminster

21 Jan

Ryan Baldry is the Communications Manager at the Coalition for Global Prosperity and former Parliamentary Staffer to a Government Minister.

When there’s political drama in Westminster, we are all guilty of being drawn in. It’s easy to think that the world stops while the events of SW1 unfold but this couldn’t be further from the truth. Those who wish to act against us or without us noticing, use these times of looking inward to act. And it’s these acts and global crises we must not lose sight of.

The international stage is as unpredictable now as it was in 2021 and the United Kingdom must not lose focus. There is incredible momentum for us to build on as a global force for good as we move forward following the successes of the UK Presidency of the G7 alongside the ongoing Presidency of COP until November.

The crises that we face are only mounting and the world’s most vulnerable and at-risk need the UK to be a leading player in the international community. A crisis overseas quickly can become a crisis at home. We’ve witnessed it first hand throughout the Covid pandemic and with a changing climate, regional instabilities and fragile democracies, this danger isn’t going away. A crisis can come out of the blue when we’re not paying attention so while all eyes are on Downing Street and counting letters, what could be coming our way over the next few weeks and months?

First, the situation in Ukraine is one that cannot be done justice in just one oped but is one we cannot afford to lose focus on. The FCDO and the MOD have both been unequivocal in their support for Ukraine’s territorial integrity but the UK must maintain the pressure.

With the UN Security Council a non-starter with Russia and China’s veto, the UK must continue to keep the pressure on the Russian President all year round to demonstrate that any further encroachment on Ukrainian soil would be unacceptable. If anything is to happen, it will be soon with tensions already at breaking point. If Russia sees any weakness or distraction from NATO, the UK or the USA, things could move incredibly quickly with Western states paralysed by domestic politics

The next challenge would be for the UK to continue applying pressure and leading wealthier nations to help vaccinate the world’s most vulnerable. We may be nearing the end of COVID as a pandemic in the UK but globally, this isn’t the case. New variants will emerge that can undermine vaccines and continue to destabilise already fragile health systems. The UK did excellent work of pushing this through Global Vaccine Summits and the G7 but we can’t stop now.

Alongside this, we have the situation in Afghanistan which only continues to deteriorate with each passing day and could quickly become a crisis we are forced to confront. We’re witnessing a humanitarian crisis with food shortages, human rights being pushed aside and a regime that nobody wanted to see in power.

The United Nations launched a $5 billion appeal – the largest in their history. But the cost of inaction will always outweigh the cost of action. If the UK does not lead or bring other governments along with us, we will continue to see mass migration with people heading to our own shores among many others. This then creates additional crises such as the deadly Channel crossings which we have seen cannot be stopped by strongly worded tweets or political desire alone.

They must be resolved at the source and this can only be achieved by utilising our international development budget to help invest in women and girls education, nutrition and health infrastructure. The UK must ensure that the progress made in Afghanistan and the wider region is not lost to a regime that doesn’t value human rights or democratic values.

Last and by no means least, we are always facing the crisis of foreign interference in our democracy. Only last week this was thrown into the spotlight when foreign interference in our own Parliament and politics was uncovered. We are often being warned about the threat that China faces to the UK in terms of cyber attacks, operation of critical infrastructure or their territorial ambitions.

But discovering that they were able to secure influence in the corridors of power should frighten us and also serve as a wake-up call to ensure that we focus on protecting and securing our democracy from those who wish to damage it. The UK must promote our cultural exports and soft power influence further around the world to show that the era of democracy is not coming to an end but is being strengthened. Again, if the UK looks away, this is when others will act against our interests.

Now more than ever, we need a strong and motivated Foreign, Commonwealth and Development Office. We’re rightly putting record sums into the Ministry of Defence but to compliment this, we need to properly invest in our diplomatic network and soft power.

The Chancellor’s recent commitment to return to spending 0.7 per cent of GDP on International Development is extremely welcome and a sign that the importance and leading role of UK soft power has been recognised. But to back this up we need to properly invest in our embassies and consulates. UK diplomats need to be on the ground and making the most of the incredible expertise that exists within FCDO.

By investing now, we can make sure that the UK is always around the table and that we continue to secure our role on the world stage as a leading force for good in a world where the shining light of democratic values is needed now more than ever.

Stewart Jackson: A reshuffle that moved some of the Prime Minister’s critics into the Cabinet would be prudent

10 Jan

Stewart Jackson is a former Conservative MP and Special Adviser, and is the Founder and Director of UK Political Insight.

The precipitous recent decline in the poll ratings of the Prime Minister and predictions of electoral doom are indicative of two enduring phenomena: that Boris Johnson is unique and, like Margaret Thatcher and Tony Blair before him, dominates the political landscape.

Conservative MPs will largely sink or swim as a result of the electorate’s judgement of him. But there’s nothing new in these setbacks, and many Conservatives have little institutional memory, and perhaps little understanding, of the vicissitudes of modern politics.

The bien pensant liberal media classes and their cheerleaders such as Matthew Parris are loathe to concede it, but the Prime Minister is a historically significant figure. He not only led the movement (or at least the last throes of it) which resulted in the UK’s exit from the European Union but, more fundamentally, built a mighty vote-winning electoral coalition founded on culture and community rather than class and capital.

What Johnson has had in spades is not just celebrity and chutzpah, but luck: inheriting a safe Commons seat in 2001 when the Tories had detoxifying work in progress; coming to power in London during a Conservative renaissance in the capital when the voters were sick of Ken Livingstone, and quitting the Cabinet after the Chequers plan in 2018 – to usurp the pitiful May interregnum and break the Brexit impasse.

The Prime Minister’s greatest weakness is that he loves to be loved but, ironically, the more hysterical and cacophonous the shrieks of his critics, the stronger he becomes politically. To many Tory voters, all the usual suspects hate the Prime Minister – not least bcause they believe that he was and should be one of them.

However, he lacks a Praetorian Guard in Parliament who will walk through fire for him (even John Major had one) and the relationship that many Tory MPs have with the First Lord of the Treasury is cynical and transactional.

Covid restrictions, tax rises, self-inflicted wounds such as the Paterson affair, ethical issues, the fall out from reshuffles and recurring problems of miscommunication between Number Ten and Conservative MPs have all soured the glad confident morning of December 2019.

Johnson still has the power to forgive – and a reshuffle that pulled some hitherto irreconcilables and malcontents back into the tent would be prudent politics.

My erstwhile colleague at Crosby Textor and electoral wunderkind, Isaac Levido, has compared the post Covid scenario as like when the tide is at its lowest: all the Prime Minister’s problems lie like broken boats on the harbour floor.

Brexit and future relations with the EU, the cost of living crisis and soaring energy prices, social care and the demographic timebomb, delivering the levelling up agenda and regional and national infrastructure, the busted local government funding and planning systems respectively, fighting the “Blob” in the delivery and reform of publc services and the endemic problem of uncontrolled immigration – all are moving up the list of voter salience.

But there’s nothing new under the sun. In 1979, Thatcher wrestled with an inflation rate of 13 per cent and interest rates of 17 per cent. Even John Major, barely a year before besting Neil Kinnock in the 1992 General Election struggled with a jobless figure in the millions, 10 per cent interest rates and annual price rises of seven per cent – none of which Johnson will experience next year or, most likely, before the next general election.

The last two months will have actually helped Johnson and his most devoted supporters to shake free the contagion of complacency and “BoJo is teflon” exceptionalism: the Cabinet revolt against further Covid restrictions was  timely and good for efficient government. It means that in future, controversial policies are likely to be more routinely challenged, and will be improved upon by robust critique.  The Iraq War showed that Cabinet government by fan club very rarely ends well.

The Prime Minister’s most urgent strategic challenge is the same as that for Thatcher, Blair, Major and David Cameron – namely, how to reinvent his Government. For Brown and May – similar personalities – it was already too late. But such reworking was done in 1986 after Westland and in 1991 before the ERM catastrophe.

Most recently, David Cameron offers hope and inspiration. (Yes, I did write that sentence!) His clever decision to back a Private Members’ Bill to give effect to an EU Referendum in 2014 soothed the Eurosceptic fever in the Commons, and allowed the Conservatives to focus on their retail offering to voters at the 2015 election.

What also helped teamwork and discipline then was a narrow but consistent poll lead for Ed Miliband’s Labour Party, and the prospect of a re-energised Opposition and a possible SNP-Labour colation government.

Today, Keir Starmer’s Labour Party is off life support, is winning the right to debate, is more credible than during the last six years, and sp tighter polls will concentrate the minds of fractious Conservative MPs. For all that, though, Labour is miles from looking like a government in waiting and, frankly, if Wes Streeting is the answer, it’s a very silly question.

Specifically, the Government must rebuild its demoralised electoral coalition, keep the Right broadly united and it develop a positive case for the continuance of a Conservative Government – a compelling narrative and a legacy.

Support amongst Leave voters has slumped from 72 per cent to 56 per cent during the last six months, and Red Wall voters are disilusioned and impatient.

Currently, many Tory supporters in the South and South West, ABs and C1s who voted Remain, but were terrified of a Corbyn government, are angry about tax rises, general incompetence, planning, Tory Sleaze 2.0 (sic) and are shopping around for a protest vote.

Ironically, Theresa May’s entrance speech on the doorstep of 10 Downing Street in July 2016 provides the Prime Minister’s own template for rejuvenation.

There’s more than enough time to deliver on a commitment to localism – a repeat of the successes in Tees Valley and the West Midlands. Michael Gove has the acumen and strategic nous to understand that building enough houses for young voters is now existential for the Conservative Party – after all, you can’t create capitalists who don’t and can’t own capital. And deregulation, tax cuts and demonstrable Brexit wins, such as freeports, must be front and centre in the Conservative story.

The voters don’t care for Singapore on the Thames, but they generally favour traditional Tory values.The Cabinet, for all the media criticism, still has condident and pesuasive voices, such as Steve Barclay, Grant Shapps and Ben Wallace.

Johnson still has aces to play: by historic standards, he’s still polling reasonably well, even if the May local elections will be brutal. And as public opinion in the wake of the Colston statue trial has shown, the War on Woke energises his base, and is a cultural wedge issue which drives many newer Conservative voters.

But such action will be hobbled without firm and radical action on immigration.Similarly, “barnacles must be scraped off the boat” – such as socially liberal tokenism in new legislation, tax rises to fund green initiatives and appointing political opponents to public bodies.

It surely isn’t too much to ask for a Conservative Government to be, well, fundamentally Conservative? Competent, compassionate and communitarian. Johnson has limited time to deliver but at least he now knows and comprehends more than ever, as a classical scholar, the immortal words of the Roman slave to his Emperor: “respice post te, mortalem esse memento” – “look around you, remember you are mortal.”

Sam Hall: The solution to a gas crisis is not to deepen our dependence on gas

10 Jan

Sam Hall is the Director of the Conservative Environment Network.

With Ofgem’s price cap review weeks away, political attention is turning to an inevitable hike in energy bills and the rising cost of living.

Conservative MPs were right last weekend to highlight that affordability is a critical energy policy goal and that steep bill rises should be curbed. But this can and must be pursued in tandem with our net zero goal, which insures us against much greater economic costs and national security impacts in the future due to dangerous levels of climate change.

There is little disagreement among experts on the root cause of the current price spike: rocketing wholesale gas prices, which increased by more than 400 per cent across Europe last year.

It’s important not to conflate security of supply and cost. The UK will keep the lights and the heating on this winter. The issue is that we are having to pay over the odds for gas because it’s in high demand, particularly in Asia, and supply to the European market is being strategically constrained by Vladimir Putin.

Some commentators have argued that the UK is in a poor position to manage this global price rise due to climate change policies which prevent us exploiting domestic fossil fuel reserves.

But the fact is that climate policies have not constrained gas production from the North Sea, as gas production has been roughly flat for a decade according to the latest official statistics. The main constraint on North Sea production is the relatively high cost of production compared to other gas basins.

In fact in 2015, seven years after the Climate Change Act, the government passed legislation to give the oil and gas regulator new duties and powers to maximise the economic recovery of oil and gas from the UK Continental Shelf. Arguably, this should be amended now to include a Net Zero duty, reflecting the faster projected falls in fossil fuel demand and increased risk of stranded assets, but the maximising economic recovery duty remains in law and Ministers have been clear that North Sea gas will be needed during the transition.

Climate policies are not to blame for blocking fracking, either. Despite the Government removing multiple regulatory barriers to fracking in the 2010s and expending huge political capital in the process, shale gas companies were unable to frack without exceeding legal limits on earthquakes and alienating local communities.

It was the regulator’s report on seismicity which led to the government’s decision to impose a moratorium, not any climate policies. I’m sure the fact that only 19 per cent of the public support fracking made the decision easier still.

But even if we’d offered more tax breaks to North Sea producers and somehow overcome the various economic, environmental, and political barriers to fracking, it is highly unlikely that the UK could have produced sufficient gas to make a significant dent on the 400 per cent increase in natural gas wholesale prices currently being experienced in the European market to which we are connected via multiple pipelines and whose prices we therefore follow.

The fact is that if we’d had more renewables on the grid, and had put in place a long-term set of financial incentives for homeowners to insulate their homes, we’d have lower demand for gas for heating and power now and therefore be less exposed to the current price rises.

Yes, more variable wind power on the grid would have reduced aggregate demand for gas over the course of the past year, enabled gas power stations to be used more as back-up on calm days rather than as baseload all year round, and reduced our exposure to European gas prices.

And yes, clean technologies already exist, from hydrogen and battery storage, to interconnectors and demand response, to keep the lights on when the wind doesn’t blow.

But rather than relitigate past debates, we must deal with the current acute situation and look to our future energy policy.

First of all, the Treasury should consider providing some short-term relief – with options including targeted support to vulnerable households via Universal Credit or existing schemes such as the Warm Homes Discount, or wider measures such as funding some of the legacy environmental and social levies on bills out of general taxation on a temporary basis.

Funding some of the levies from the Exchequer would be expensive, but would also support Net Zero by making lower-carbon electricity cheaper relative to higher-carbon gas, which the government has already committed to doing in the Heat and Buildings Strategy.

Long-term funding could come from a carbon tax on gas, once prices stabilise. In the short-term, this would offer a de facto tax cut to the many businesses and middle-income households who will struggle with rising energy bills, as well as the fuel poor. While none of these proposals would be sufficient to halt the rise entirely, this is a key opportunity for the Chancellor to burnish his tax-cutting credentials and alleviate some of the cost of living pressures this spring.

In the medium-to-long-term, though, the focus must be on reducing our dependence on gas, by insulating more buildings, improving industrial energy efficiency, and investing in new home-grown energy generation that delivers reliable, clean, and affordable electricity, as well as creating jobs and export opportunities in sectors that are forecast to grow rapidly.

As we do so, we must be extremely cautious about adding further costs to energy bills through future policy choices. As ministers commission a new fleet of nuclear power stations, for example, the industry must demonstrate it can achieve significantly lower costs than Hinkley Point C. Bioenergy should do more to prove its positive climate impact and reduce costs before it gets new subsidies. And when establishing support schemes for nascent technologies, such as low-carbon hydrogen, the Treasury should opt for taxpayer-funded mechanisms rather than bill levies.

Ultimately, we need to break away decisively from this cycle of fossil fuel price shocks, which have been weaponised for decades by unsavoury regimes to advance nefarious geopolitical objectives. Russia provides a third of Europe’s gas, and this is unlikely to change any time soon due to Nord Stream 2.

With Russian gas exports to Europe around six times total UK gas production in 2019 (the last ‘normal’ pre-Covid year), there is no plausible scenario for increased domestic production which would insulate us from Putin’s grip on the European gas market.

The solution to a global gas crisis is not to deepen our dependence on gas. For the sake of our bills as well as our security interests, we need to double down on homegrown green energy instead.

Sarah Ingham: No, Prime Minister, Britain does not need to atone for so-called ecocide

7 Jan

Sarah Ingham is author of The Military Covenant: its impact on civil-military relations in Britain.

“We were the first to knit the deadly tea cosy of CO2 that is now driving climate change.”

The Prime Minister’s speech at the 2021 Global Investment Summit at the Science Museum back in October was initially a zinging endorsement of the free-market capitalism which had delivered the Covid vaccine.

Conservative cheers could well have turned to bafflement when the PM warned that Britain must atone for being a world-leading scientific and engineering pioneer more than two centuries ago. As the first nation to industrialise, sending up plumes of smoke from the Midlands, “We have a responsibility to set an example – and we are.”

Two weeks later at COP26, that gathering of private jets on Clydeside, Boris Johnson was at it again. The Industrial Revolution, one of the most seminal shifts in human history, was painted as a historic eco-crime for which Britain must make reparation. It is “one minute to midnight on that doomsday clock” of climate change. That clock had begun to tick 250 years ago in Glasgow where “James Watt came up with a machine that was powered by steam that was produced by burning coal”. Consequently, nations like Britain have a “duty” and “special responsibility” to divvy up $100 billion a year to support developing countries finance green alternatives.

The Prime Minister is not alone trying to establish a narrative that the apparent threat of looming ecocide demands that today’s Britain must pay for yesterday’s wrongs. In February 2020 Michael Gove told the Green Alliance that, as the first country in the world to industrialise, the UK must acknowledge “our debt to the planet and our debt to others”. As the earliest adopter we now have a “moral responsibility” to lead a green revolution – and to make Britain’s voters pay through the nose.

The agenda-setting Committee for Climate Change (CCC) might well have encouraged the Government into following this line of argument. Back in May 2019, it stated Britain should “bear more of the costs of transition to a low-carbon economy”, not least as the birthplace of the Industrial Revolution. Apparently, in the past we have made a “large” per person contribution to man-made global warming. (p.106 of Net Zero: The UK’s Contribution to Stopping Global Warming, should interest be, er, ignited).

How large is large? It seems that since the start of the 19th century, a whopping two to three per cent of global warming attributable to greenhouse gas emissions has come from the UK, according to the CCC, whose members don’t seem too troubled by that other large 97-98 per cent coming from elsewhere. This of course raises the question of whether, over the past 200 years, we in Britain have indeed knitted a deadly tea cosy, or even crocheted a lethal egg-warmer.

Preoccupied in the last decade or so by the impact of a global financial crash, Brexit, a pandemic and matters woke, we have all been in a comparative slumber as the new green orthodoxy embedded itself in public policy, spurred on by the 2008 Climate Change Act. Hands up if you were paying much attention in June 2019 – during the Conservative leadership contest – when the Act was amended by Statutory Instrument, ushering in the target of Carbon Net Zero by 2050.

Created by the 2008 Act, the CCC wields the sort of influence enjoyed by SAGE, whose previously off-the-radar members have been gracing the airwaves seemingly non-stop for the past two years. Like SAGE, the CCC includes a behavioural scientist. (Why?) Unlike SAGE’s pandemic priesthood, an economist sits on the CCC. This is just as well, because like a drowsy giant, the public is beginning to awaken to the impact of green taxes and Net Zero on their pockets.

Rainforests of paper can be sacrificed by government agencies and quangos in an effort to push their pet policies, but nothing cuts through like hitting taxpayers where it hurts. In November, The Financial Times reported that getting to Net Zero by 2050 will cost £1.4 trillion – or the equivalent of £1,700 per average household per year.

Green taxes are now on the media agenda, with reports this week that they might account for a quarter of the cost of rocketing fuel bills. Poll tax, anyone? One MP has recognised the thin political ice. On Wednesday, the Education Committee chairman Robert Halfon called for the suspension of green levies.

Just as SAGE seems to lack any lockdown-sceptical scientist, it must be wondered whether the CCC has ever included a member who might not sign up to its doomsday world view. Perhaps Lord Deben’s successor as Committee Chairman could be self-styled sceptical environmentalist, Bjorn Lomborg. He argues that trillions of dollars set to be allocated to the impact of climate change could be better spent. Think of it as levelling up, just on a global scale.

The rural poverty in the developing world today was last seen in Britain in the pre-industrial era. If late 18th and early 19th century life in Britain was indeed an Eden of artisan produce, hipster beards and charming cottage industry, why did so many flee to the new manufacturing towns?

The Industrial Revolution was precisely that, a revolution. A seismic, shattering upheaval. It wrought enormous change, enriching the country and its people. It was a force for global good and thank goodness for it. Life for one day today without electricity, piped water and a mobile phone is a glimpse of yesterday’s Hobbesian nightmare.

The United Kingdom is currently responsible for generating about one per cent of global greenhouse gases. However, that is too large according to our Net Zero-fixated government, which is deploying the past to justify present and future public policy.

By invoking a two centuries-old deadly tea cosy the Prime Minister unwittingly raised questions about collective moral responsibility, usually best left to theologians and lawyers. How far should any of us be punished for historic actions of others? What about considerations of intent and agency? Didn’t the prophet Ezekiel have something to say about children not being punished for the sins of their parents?

The Industrial Revolution-reparation narrative just won’t (green)wash: as an attempt to explain away ripping out 30 million gas boilers and justifying a surge in fuel poverty, it’s a tea cosy short of some stitches.

Like SAGE, the CCC needs far greater scrutiny over the quality of its advice to government. And Conservative ministers and MPs should be mindful that, like civil servants, quangocrats are never voted out.