John Redwood: It is past time the Government took seriously the opportunities of Brexit

18 Apr

Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.

It is good news that Jacob Rees Mogg has been appointed minister for ensuring we take advantage of the freedoms and opportunities of Brexit.

He is going to have a struggle to do so, as he faces a Whitehall with too many senior officials at best wanting us to mirror the EU as they like what it does, and at worse determined we get no wins so they can prove their pessimism justified about the whole policy adventure.

I have found it extraordinary just how much concerted pressure amongst the official and legal establishment and the House of Lords there is still against the whole idea of Brexit.

Let us begin with the Treasury. It was Treasury officials led by the Chancellor at the time of the referendum who came up with an embarrassingly bad set of forecasts of what would happen if we dared to vote for Brexit and leave.

We now know for sure their forecasts for rising unemployment, a mass loss of City jobs, a big increase in unemployment, and a collapse of house prices were all the reverse of what happened.

In the year after we finally left the single market even the pound rose against their forecast of a fall. It had been down and up in the period after the vote. Interest rates fell instead of rising as forecast.

One of the big opportunities from Brexit was to take VAT off items we did not want to tax, or to lower the rates where the EU ones were too high. The Treasury has stuck to EU VAT rates like glue. When it was eventually talked into the obvious move of taking VAT off green products, the EU moved to claim they now would allow that in an effort to deny a Brexit win.

The UK still refuses to suspend VAT on domestic fuel which should be a no brainer given what is happening to the price of gas and electricity. It should be suspended until gas and oil prices have fallen back again.

Some in the Civil Service also think the Northern Ireland Protocol prevents us changing VAT in Northern Ireland which is used as another excuse not to change it in Great Britain either. Instead it should be a stimulus to clarifying in UK legislation that of course we can control VAT everywhere in our country now we have left the EU.

Not content with trying to stop VAT changes, the Treasury has also been keen to block proper deregulatory and tax advantages in the programme of freeports. Again this should have been an obvious win.

The Treasury, now led by a Chancellor who championed freeports as a backbencher, should have had a generous freeport package ready and working for our first day out of the EU. Instead we are still awaiting full roll out and a comprehensive set of advantages.

Over at DEFRA there is also a marked reluctance to diverge and take the wins available. Our fishing industry still remains damaged by a further, needless, transition designed to help large predatory foreign vessels.

The Government should legislate for a British fishing policy that is kinder to our fish and fishermen and women. Our fishing grounds need respite from the mega trawlers, all foreign owned, that hoover up too much fish, which we could do by banning trawlers over 100 metres and damaging equipment.

The Department should have a more active policy to support the expansion of our domestic fishing fleets, with a larger UK quota whilst allowing the rebuilding of stocks. The funds to lend and grant for larger British fleets need increasing.

Defra too does not wish to put in place a good plan to grow more food at home. The Common Agricultural Policy slashed our domestic output and made us ever more dependent on continental fruit, vegetables, dairy, and meat.

Orchards disappeared with EU grants to root out the trees. We were the one country with a milk quota smaller than our domestic demand. Our beef industry was restricted for a long period. The Dutch flower and market gardening industries gained advantage over our own and took large chunks of market share.

Defra now needs to put that right. It should have loan and grant schemes for more and better food production and for productivity.

The Business Department has been wedded to the idea that the UK should exit the fossil fuel business in order to rely on increasing amounts of energy imported from the continent. This is a particularly dangerous policy as the continent is very short of fossil fuel energy whilst we have good reserves.

In due course, we should be able to resolve the issue of how to keep the lights on when the wind does not blow and the sun does not shine through batteries, green hydrogen, pump storage and other technologies.

The reality is however that for this decade most people will still be heating their homes with gas or oil or solid fuel boilers and most people will be travelling by petrol or diesel car or van or truck. Most process industry will rely on gas.

In this circumstance it is madness to rely on imports when we can produce our own. Instead of the Energy Department being the department for importing energy, it should vigorously promote more British energy. Instead of being the ministry for more interconnectors to make us dependent on an energy-short continent, it should be the department of British energy opportunity, with pipes and cables for the domestic market linking home supply to demand.

The Business Department whilst it is about it should also become the department that promotes and helps more British industrial output instead of being the department to import more.

Importing our steel and aluminium, ceramics and cement does not save the planet by cutting world CO2 . It boosts world CO2 by the extra it takes to transport these products, and sometimes by the dirtier processes used abroad.

The economic shock of tariff free trade in the 1970s when we joined the EEC accelerated the decline of heavy industry in the UK under both Labour and Conservative governments. Now we can set our own corporation tax, carbon tax, energy taxes, rules and support schemes and the rest, BEIS should be pricing good UK-based industry back into the market.

In the wide-ranging area of regulatory standards and requirements the UK now regains her voice at the global high regulatory tables. We are in a good position to guide more world standards, and to choose standards for ourselves that protect us as needed but also allow us easier access to Asian and American markets.

We want high standards for employees, high safety standards, high standards for animal welfare. We also need to remove bad or over cumbersome regulation to allow enterprise, competition and innovation more scope to offer better deals. The Government could begin by producing a better and less bureaucratic regime for data.

The Northern Ireland Office needs to respond to the anger in Ulster over the way the EU has interpreted an ambiguous and sometimes contradictory Protocol to damage the British internal market. They need to take up the idea of mutual enforcement, offering the EU protection from non-compliant products from the UK in return for no restrictions on NI/GB trade above the checks and controls we have on trade within England or Scotland.

I could give many more wins from Brexit, but space does not allow. If you send your own on to me, I can send them on to Rees Mogg.

Daniel Hannan: The Government’s new Brexit vision looks like thin, watery, tasteless gruel

2 Feb

Lord Hannan of Kingsclere is a Conservative peer, writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

On Monday, I picked up the Government’s new paper, The Benefits of Brexit: How the UK is taking advantage of leaving the EU, hoping to be cheered up. The point of leaving the EU, after all, was to remove constraints, allowing us to make different and better choices. Two years after Brexit, and a year after the end of the transition, how are we doing?

Overall, I’m afraid, the document is thin, watery, tasteless gruel. Yes, there are tasty lumps here and there. Replacing the Common Agricultural Policy with a subsidy regime that rewards rural stewardship rather than food production is in the interests of farmers, consumers and the countryside.

Taking back control over our fishing grounds is likewise in the interests of both fishermen and fish. We’ve tapped some irritating pebbles from our shoes – the tampon tax, EU passports, restrictions on Imperial measures.

But most of the gains listed here are aspirational. Yes, we could have a better alternative to the GDPR rules. Yes, we could lead the world in AI. Yes, we could be more open to trade. Yes, we could scrap the most burdensome aspects Solvency II, MiFID II and the rest of the EU’s financial services apparatus. But, so far, we haven’t.

Here are 100 pages of civil servantese. I don’t just mean that the document was literally written by officials; I mean its worldview is that of Whitehall. Again and again, we see listed as “gains” such things as a new regulatory regime, a new agency or a new subsidy mechanism. The idea that leaving the EU might mean fewer regulations – a major theme of Vote Leave, which went into granular detail in its million-word manifesto Change or Go, has been forgotten.

All talk of cheaper energy is gone. It is now clear that, outside the EU, Britain will go beyond what it was obliged to do as a member. So has any notion of a less rigid labour market: BEIS has halted even the moderate plans to apply the Working Time Directive in the more flexible way that several EU members do.

Regulations that ran into universal opposition when they were imposed are being left in place because existing producers, having assimilated the compliance costs, don’t want new entrants to avoid them. The idea that the Government should act in the interest of the nation as a whole, making things cheaper for consumers and thus boosting growth, has been sacrificed to the civil service obsession with favoured client groups – or, as they are known in the jargon, “stakeholders”.

Why is a government elected to deliver Brexit being so timid? Is it Boris Johnson’s fault? Should we blame his ministers? Or the Blob? Let’s consider the options.

A charge commonly levelled at the PM is that he lacks staying power, that he tosses out dazzling ideas only to back away when he realises that they involve short-term unpopularity. Even when they are popular, runs the argument, he often loses interest, allowing them to sink into the quicksand of Whitehall inertia.

Plainly some of that has been going on here. For example, the Trade Remedies Authority, created to assess whether existing tariffs or other barriers could be justified, gave its first judgment on the steel duties that Brussels had imposed in retaliation against Donald Trump. It called for most of them to be repealed.

The PM overruled it, seemingly at the behest of some MPs in steel-producing constituencies. Having made the finest defence of free trade by any major leader as recently as February 2020, he thus now has a 100 per cent record of intervening from a protectionist direction. Indeed, protectionism is suddenly being presented as a benefit of Brexit: “We created the Trade Remedies Authority to help defend UK economic interests by investigating complaints from UK industries.”

Britain’s approach to trade has been almost as prone to producer capture as the EU’s. Even when dealing with countries as well-disposed as Australia and New Zealand, we have dragged our feet (almost all the delays were on the British side). How much more mercantilist will we be when it comes to India or Mexico?

Then again, the more specific the problems, the harder it is to blame them all on Number 10. The Government is crowing about freeports, for example – and it is certainly true that freeports can create growth in ways that were illegal in the EU. But only if they have meaningful powers, especially when it comes to lowering or scrapping taxes – something that Treasury officials appear to have blocked.

Brexit gave us the chance to set aside some of the EU’s more Luddite rules on gene editing. Again, the intentions seemed to be there. Ministers fought the Blob to get Matt Ridley appointed to the relevant advisory committee, which duly proposed sensible ways in which we could seize the economic and environmental opportunities. Nothing happened. After trying several times to turn his recommendations into policy, Ridley quit politics – a real loss to the nation.

Most disappointing of all has been the failure to deregulate financial services. While we were in the EU, we voted against several pointless new rules, some of which seemed expressly designed to drive business from London to Paris and Frankfurt. Often, we lost. But, now that we are free to repeal these laws, we seem reluctant to do so – even though, by denying us equivalence, the EU has removed any incentive to stick to its standards.

Whenever you push them, Treasury ministers say that it’s all in hand, that they’re conducting a review and something or other and mimblewimble. But, more than two years after winning an 80-seat majority, the Government has done nothing. Indeed, there is a real prospect that the EU will remove the more burdensome aspects of the Solvency II regime before Britain does.

I’m afraid ministers must accept collective responsibility here. In theory, they want deregulation. In practice, they don’t want it in their own departments. And they don’t want it because change – especially change that pits them against their officials – is hard work and leads to bad short-term headlines.

Which brings us to the real problem. The only way to deliver an economically liberal agenda is to take on the Blob – not just civil servants and quangos, but all the associated corporatists and rent-seekers and CBI bureaucrats who have attached themselves to the status quo. That requires not just courage but time, patience and single-mindedness.

Dominic Cummings was supposedly brought in to get on top of the Blob. He failed. Perhaps he was better at stating the problem than at tackling it. Perhaps he lacked support. Perhaps he was overtaken by the coronavirus. Whatever the explanation, I fear the moment has passed.

How telling that this administration – this supposedly Brexit-focused, anti-nanny-state, freedom-loving administration – has dropped the one-in-one-out rule on regulations that David Cameron and Theresa May followed. Apparently it was deemed to be incompatible with the net zero agenda.

We paid a high price during the exit negotiations for the right to diverge from EU standards. I was one of those who argued for moderation – for accepting a Swiss-type deal so as to avoid many of the rows we went on to face over Northern Ireland.

I lost that argument and we went for absolute regulatory freedom. OK, fine: I’m happy to get with the programme. But it is idiotic to pay that price and then not use the freedoms it bought. There was recently a time when almost every Conservative MP understood that. Where have they all gone?

Mark Tufnell: Farming has to be at the forefront of Britain’s fight against climate change

13 Nov

Marl Tufnell is President of the Country Land and Business Association, a membership organisation which represents 28,000 farmers, land managers and rural businesses across England and Wales.

If the recent budget announcement tells us anything, it’s that the Government is greatly underfunding rural Britain’s push to help fight climate change. The additional funds to support tree planting and peatland restoration announced in the run up to COP26 is a positive step, but the Government is already significantly behind its existing targets.

While tree planting will play a key role within the government’s environmental goals, it is not a silver bullet, and we must bolster investment beyond it.

Agriculture is still responsible for around ten per cent of the UK’s greenhouse gas emissions, a figure that remains stubbornly high. With the eyes of the world on international commitments, managing domestic emissions must not be forgotten – and the responsibility falls to government to lead the way.

Innovative techniques have led methane emissions from British cows being 50 per cent lower than the global average thanks to our grazing techniques. In fact, half of all agricultural land is given over to grassland or rough grazing, storing an estimated 10 billion tons of CO2. Additionally, 60 per cent of the food we eat comes from domestic farming, helping to support our rural economy and keep food miles low.

When it comes to farming, the UK already has very high environmental standards. Many farmers and landowners are actively planting more trees on their farms, such as one of our members, Ed Milbank, who is planting 680,000 trees over the 350 hectares on a former sheep and cattle farm. Likewise, many members are now powering their farms from on-site, renewable energy sources.

However, now the EU subsidy schemes are being phased out, the new Agricultural Policy for England must ensure to prioritise and incentivise environmentally-friendly farming. The promised system of rewards for nature-friendly farming has, to date, only been roughly sketched out to farmers and landowners.

Custodians of the land need confidence to be able to invest in activity which, in the short term, may hurt the profitability of their farms. Cuts to the previous subsidy regime are now underway in England, and without full clarity as to what is to follow, many farming enterprises are at risk.

But as well as championing the farmer, so too should government champion the food they produce. After all, the more food the UK imports (often on high-emission planes and ships), the less control we have over the environmental standards to which such food is produced.

With a large body of evidence showing a reduction in meat consumption would be beneficial to the environment, and with such claims being backed by the National Food Strategy published earlier this summer, Ministers should encourage the market towards high standards and short supply chains. Promoting ideals of ‘better meat’ and ‘buy British’ are good places to start.

But when we do import produce, our political leaders must be strong when it comes to trading with countries whose agricultural standards do not live up to our own. In a globalised economy, we cannot avoid the fact that our interactions with other countries also impact on the climate.

For example, countries that destroy large tracts of rainforest to grow soya for livestock should be low down on the UK’s list for new trade agreements. Indeed, ending such practices should be the condition the UK places on countries seeking enhanced trading arrangements in the future.

In doing so we should take the lead in promoting and implementing regulatory frameworks that hold all parts of the supply chain to high environmental standards. Climate climbdowns, such as that seen in the UK dropping climate targets from its trade deal with Australia, cannot be allowed to become the norm.

Finally, most farmers are no longer solely focused on the business of food production, but diversifying their businesses to explore new opportunities and markets. More and more, the private sector is interested in working with land managers as part of Corporate Environmental, Social and Governance strategies. This trend is creating new environmental markets, such as carbon offsetting, bringing tremendous potential to speed up the path to net zero while also addressing biodiversity decline.

But as yet there are precious few rules around how such markets may operate. We strongly encourage the Government to take a global lead in creating a high-quality regulatory regime to govern environmental markets, giving farmers certainty and the confidence to move forward with opportunities that could both help their businesses survive, and improve the environment.

The challenge facing land managers should not be understated. Just as they are among the first to notice the impact of climate change through extreme weather events, they are also well placed to lead the fight against it.

But they can’t do it alone. People need feeding, and the environment needs rescuing. By working with farmers, the Government can prove to the world that the two can, and should, go hand-in-hand.

Catherine McBride: Truss must free our farmers and consumers from the EU’s shackles

19 Mar

Catherine McBride is an economist and a Fellow of the Centre for Brexit Policy.

The Department of International Trade’s (DIT’s) latest report on the benefits of trade for UK employment is reassuring. However, if trade is to benefit British consumers, then our markets must be open to import competition allowing the best value global products to be sold here.

While Liz Truss’ department has done a fantastic job signing trade agreements with non-EU countries, too often these deals have simply rolled over EU agreements, and continue to exclude or limit more competitive agricultural products. This means that the UK is still a captured market for EU farmers and food producers.

Use FTAs to facilitate farmers’ natural advantages

The UK is not large enough to supply all of its agricultural needs. It must therefore concentrate its agriculture on products where it has a natural advantage and improve its farm productivity with innovation previously prohibited by EU regulations. In parallel, DIT should be opening up two-way trade agreements with other agricultural producers, not just rolling over EU trade agreements designed to limit agricultural trade.

Meanwhile, British producers should be helping their own cause by developing higher value products and creating recognisable brands. For instance, the UK is a net exporter of milk but a net importer of dairy products. The UK could be processing its surplus milk into value-added dairy products such as butter, yogurt, kefir, lassi or cheese. These products have longer shelf lives and are easier to transport.

The UK could follow the example set by Denmark, Ireland, and New Zealand who export their dairy products globally. This may need some Government marketing assistance, in addition to some trade deals, if a British butter brand is to compete with Lukpak, Kerrygold or Anchor. But with a high quality British product, this would not be impossible.

Similarly Sweden’s ‘oat milk’ brand, Oatly, seems to be lacking competition even though the UK is a net exporter of raw oats. Oatly should be an inspiration to British agricultural entrepreneurs: a Malmo-based company that has capitalised on the growing international market for milk substitutes and is about to list publicly in the US with a value between $5 and $10 billion. The UK also exports a large amount of barley, but exporting Brtish barley, pre-brewed as beer or pre-distilled as whisky, would be a more profitable exercise.

Use most efficient suppliers for necessary imports

While Truss’ speech to the National Farmers Union Conference a few weeks ago was correct that the UK should be targeting the growing middle class Asian markets, Britain is unlikely to be selling these markets any commodity where it is itself a large net importer, such as pork and beef.

The UK is a net importer of roughly 20 per cent of its beef and 40 per cent of its pork – these are areas were the UK should be prepared to open its import markets to non-EU suppliers. According to DEFRA’s annual survey of UK agriculture 2019 , the UK imported a whopping 756,000 tonnes of pork from the EU in 2019, while exporting only 158,000 tonnes in return.

While there is obviously some potential for import substitution, where British farmers supply more of the UK’s consumption, we should also be considering if the huge amount of pork the UK is importing from the EU is the best value available, or if there are more efficient suppliers.

If British farmers demand protection from more efficient suppliers – having grown used to this protection under EU trade barriers – then fixing the total import quantity at the five-year average might quell their anxiety. That would give the UK a maximum import quantity of 530,000 tonnes of pork and 200,000 tonnes of beef, yet still benefit local consumers as imports would move from protected EU production to world prices.

But these import quota limits must be temporary and gradually increased to force British farmers to become competitive in the international marketplace through innovation and farm consolidation.

Furthermore, there will be some obvious two way trade with other agricultural producing countries. The US, for example, exported over 2.1 million tonnes of pork in 2020, increasing their production by over 300,000 tones to supply the increased demand from China after its Swine Flu outbreak. So the US could supply most of the UK’s pork requirements. Yet the US produced only 63 thousand tonnes of lamb in 2019, while importing 120 thousand tonnes of lamb from Australia and New Zealand.

This is good news for British farmers. Lamb is seasonal, so our lamb farmers won’t be competing directly with the antipodeans. And supplying lamb in the spring may suit US seasonal menus better than Australian and New Zealand lamb produced in the American autumn.

Does EU harmonisation serve our farmers?

Truss is right: there are real opportunities for British farmers outside of the EU. But these will also require that the UK is outside of the EU’s non-tariff trade barriers such as their sanitary and phytosanitary regulations.

There is currently an EU-rophile lobby pushing the UK to align with EU regulations by claiming that this will solve the problems created by the ill-thought through Northern Ireland Protocol. Giving in to this lobby would be a mistake. There are much larger markets and much better food suppliers outside of the EU – with both higher quality and lower prices. Trading with these markets would reduce British food bills, increase farm exports, and benefit the economy as a whole.

Any fears that British farmers would be unable to compete in international markets demeans them. If allowed to innovate outside of the EU’s precautionary principle, encouraged to consolidate their farms; and to focus their production on higher value products, our farmers should be able to compete with the best in the world. It is time that the Government let them do so.

Tony Hockley: The future of farming must be diverse

1 Oct

Tony Hockley PhD is Director of the Policy Analysis Centre and a Visiting Senior Fellow at LSE.

When Farmers Weekly magazine used an image of five white male speakers to promote an event entitled “What does the future of farming look like?”. No irony was intended.

 

Like many working in policy I cannot recall the last all-male panel at a mainstream event. I suspect that most would also agree that the change has been for the better. It is now the case that most men who would bring value to a policy event will decline an invitation to participate in one that is comprised entirely of white men of a certain age. Whoever organised the September 30 Farmers Weekly event was probably just lazy and unimaginative, rather than prejudiced. But this speaks volumes on how much must change if the countryside is to live up to the rhetoric, to play a leading role in the pandemic recovery and to deliver a “Green Brexit”. If ever there was a time for fresh thinking then that time is now. This also requires fresh voices.

The UK has arrived at a point in which there is almost no connection between the population and the countryside that sustains its food and landscape. Divisions in debates around the countryside reflect this disconnect. There are very few voices of mutual empathy between the increasingly divergent worldviews. Positive progress needs an end to groupthink.

This year has shown what happens when a population cut off from the countryside are forced to staycation and have nowhere else to go. Decades of failure of engagement have led to huge damage to precious sites for nature. From the pristine ponds and biodiverse grazed heaths of the New Forest in the South to the summit of Snowdon, some of the UK’s best sites for nature have been driven over, dumped on (in all senses), and burnt by disposed barbecues. It is hard to blame the families involved, when so little has been done to engage for so long.

There is an opportunity to change this after the pandemic and outside the Common Agricultural Policy (CAP). Farmers must be willing and able to engage, and to welcome renewed interest in our own countryside. Appreciation of nature and fears for its loss and for climate change are high. But few seem to connect these fears with the UK landscape, or with our own behaviours. We seem to worry more about the fate of the pangolin than the fate of the hedgehog, the adder, or the curlew. It is, of course, easy to blame others in foreign lands or faceless corporations, rather than look closer to home.

The Agriculture Bill includes public access, enjoyment and understanding of the countryside in its short list of public goods worthy of receiving public money. This needs to be a priority, not an afterthought. It is not something to be left to agencies, but for everyone in the countryside. Despite the alarming damage to precious landscapes in 2020, a warm welcome needs to be the default approach, not the “Keep Out” sign. This will be a far cry from the insular mentality of the CAP, where the occupation counts more than anything.

Outside the CAP we can now invest properly not only in restoring nature, but also in building understanding of it and in helping everyone enjoy the countryside sustainably. Inside the CAP those who would like to do more have had to rely on the National Lottery to support local, time-limited projects. The Agriculture Bill offer the chance to scale up; the Heritage Lottery Fund has, for example, allowed New Forest commoners to create a free toolkit which local primary schools have incorporated into their curriculum.

This is helping re-connect the next generation to the countryside on their doorstep, and its special nature sustained by centuries of common grazing. The new GCSE in Natural History is an important step in the same direction. There is no silver bullet, but without much greater inclusivity and engagement damaging behaviour will only get worse. Then those who access the countryside for the first time will only see barriers, warning signs, and policing.

It is too easy for those of us who benefit from regular countryside access to fail to understand the psychological and behavioural barriers to those who do not and who are often visibly “different”. The Glover Review of designated landscapes highlighted this collective myopia, reflected in appointments to our national park authorities. Landscape conservation has become insular and process-driven. Politicians cannot deliver adequate public funding unless the population at large appreciate the need and feel the value.

That is why, even from a position of self-interest, it is deeply dangerous for discussions about the future of farming to lack diversity. It not only excludes half of the population by gender, but also ignores wider demographic change: The proportion of the “White British” population in the UK is declining. The proportion of the population who are not White British or Irish is forecast to continue to grow, from 17.5 per cent in 2016 to almost 40 per cent over the next 40 years.

There is, of course, also a strong moral obligation to change. The events of 2020 have added emphasis to this obligation. Ethnic minorities in the UK and disadvantage groups of all ethnicities have suffered disproportionately during the pandemic. Many of the towns and cities worst hit by Covid-19 are on the doorstep of incredible landscapes, but engagement is low. The pandemic has drawn attention to the health benefits of regular access to green spaces and of a deeper connection to nature.

Anyone who doubts that the countryside has much more to do on engagement would do well to read a blog by the earth scientist Dr Anjana Kathwa for the Council for National Parks. The future of farming after the pandemic and after Brexit must be very different to the past. Diversification of practice will need to be matched by diversification of culture if the general public are to be expected not only to put their money into the countryside’s public goods but also prioritise support for domestic farming within future trade deals. There will certainly be no shortage of alternative and very popular uses for public money as the UK recovers from the pandemic, nor of other priorities in trade talks. The future of farming really is a choice between diversity or decay.