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Electricity blackouts in prospect

A letter to the Editor of the Daily Telegraph which was published on 27th February 2010.

Blackouts from 2015-17 were indeed implicitly admitted by the Department of Energy and Climate Change.

As someone who has repeatedly highlighted this reality in public and raised it directly with Malcolm Wicks when he was energy minister, in 2003, I would like to say that besides the obvious need to accelerate the nuclear electricity building programme, there is something that the Government and the opposition parties should do now to avert the crisis: to tell the European Commission that on grounds of overwhelming need Britain will not comply with the Large Combustion Plant Directive.

This directive will cause the closure of around one third of our coal-burning electricity plants or about 12 per cent of our total generating capacity by 2015.

The point is that the plants earmarked for closure have already used some of their permitted 20,000 hours of run-time (starting from 2008) and are therefore likely to close earlier than 2015 unless they receive assurances from the Government that they can continue to operate until Britain has replacement capacity in place.

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Reject takeover and let ICI grow

A letter to the City Editor of the Daily Telegraph which was published on 25th June 2007.

As someone also with a long asociation with ICI, I do not agree with Dr John Thornton (June 18th) that the demise of ICI is inevitable for the reasons he gives, though on current indications I agree that it is likely.

The fact is that ICI, like Pilkington a year or two back, is being threatened with takeover because it is a success.  Most takeovers, with some exceptions, destroy value because predators bid up the share price to levels which fund managers, who rarely have any long-term interest in the company, will acept.  Two or three years after a successful bid, the predator companies almost invariably find they have overpaid and attempt to recoup their expenditure by sacking staff, closing factories, and transferring the brands they acquired to other facilities.  Both sets of management, the predator and the taken-over, come out with millions paid for by those job losses and the value destroyed.

With the volume of money around, every single British company can be acquired by foreign interests.  At the present rate of takeovers, pension funds will soon have no British FTSE companies to invest in.  Is that what they want?  ICI is a test case.  The company is paying a decent dividend, now has a strong balance sheet, providing a good basis to grow and enhance its long-term value to the benefit of the pension funds invested in it.  Why don’t they give it a chance to do just that?

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The benefits of the World Trade Organisation

A letter to the Daily Telegraph which was published on 19th June 2007.

Michael Canton (Letters, June 15) denies that Britain’s leaving the EU would harm British industry because we would be able to join the European Economic Area.

Of course, he is right, but much better models are our fellow Anglosphere countries Australia, Canada, New Zealand and America, whose combined trade with the EU is comparable with our own but which, unlike Norway, pay absolutely nothing to the EU for the privilege of trading with it, nor do they have to accept the free movement of EU citizens in their countries.

The Anglosphere countries’ trading arrangements with the EU are secured by their membership of the World Trade organisation, as ours will be when the politicians are finally forced to accept that Britain will be massively better off outside the EU.

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Judge students on their merits

A letter to the Daily Telegraph which was published on 27th January 2004.

It was written by the Rev Lord Pilkington, Prof Stephen Bush, Antony Flew, Prof Anthony O’Hear, Dr Ruth Lea, Chris Woodhead and 11 others.

We are very concerned by the potential effect of some of the Government’s proposals for higher education on the fairness of admissions to university.  The funding mechanisms put in place, the creation of the Office of Fair Access and ministerial rhetoric about factors relating to student background all put pressure on universities to take into account factors other than academic ability when making decisions on admissions.

At the very least, a climate is being created where university applicants from certain schools and backgrounds may be left with the feeling that they are being judged other than on their merits.

We believe that fairness and high standards are best upheld if individual academic merit is the cornerstone of the university admissions system and that judging academic merit is best left to the universities, independent of financial pressure from the Government or its agencies.

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Arguments for the euro are an irrelevance

A letter to the Editor of the Daily Telegraph which was published on 16th May 2003.

Lord Simon of Highbury’s advocacy of Britain abolishing the pound on the grounds that it will assist inward investment in competition with euroland (report, May 14th) sits oddly with the record of his own term as chairman of BP when the vast bulk of its investment went into North America and the Far East, especially China, as it continues to do.

Likewise, claims by Sir Nick Scheele of Ford and others (Business, May 13th) that abolishing the pound will introduce vitally needed “stability” hardly squares with his company’s sourcing its engines for European markets from its factories in Brazil, a country whose currency has changed its value against the dollar by about 70 per cent in seven years and changed its name three times in the past 10.

Rick Waggoner, chairman of General Motors, who has just announced £80 million of actual, not theoretical investment, for Vauxhall’s Ellesmere Port plant, is surely right when he commented that the real issue is not the pound/euro exchange rate, but labour competitiveness.

This was borne out last week when a local engineering factory closed with the loss of 270 jobs, basically due to the fact that the competitive Chinese factory pays £15 a week compared with £330 a week here – a difference of 22 times.

This massive difference is engaging the attention of just about every manufacturing company in the land.  Compared with this, the few per cent variations in the pound/euro exchange rate are a total irrelevance.

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City not so important

A letter to the Editor of the Daily Telegraph on 8 October 2001 about the value of the City to the UK’s economic health

In his Brighton speech the Prime Minister proclaimed his wish to abolish the Pound Sterling in favour of the Euro provided Gordon Brown’s famous five tests were satisfied.  As one of these five tests concerns the effect on the City – the only section of the economy meriting such special consideration – it is instructive to measure just how important the City really is, particularly when there is so much panicky talk about our economic future in the wake of the horrific events of September 11.  Christopher Fildes in Business News 3 (Monday, 8 October) quotes the City as Britain’s “leading exporter” . . . “being worth in 1999 more than £30 billion a year to our balance of payments”.  This is a considerable exaggeration to put it mildly.

The figures given in the United Kingdom’s Balance of Payments 2000 (the Pink Book) show (Table 3.6) Financial Services exports at £6,992 million in 1999, (£3,711 million in 1992 – Table 3.5).  Even if you add on insurance services exports at £4,111 million you only arrive at £11 billion (rounded).  But the financial sector is not just a City business; Edinburgh and Bristol among others would claim a substantial slice of this £11bn.

These figures for the financial sector, about which we hear so much, may be compared for instance with “other business services” which total £17bn exports.  Technical services alone came to £5.9 billion, having grown from £1.4 billion in 1992, more than twice as fast as financial services.

Income from overseas investments is often conflated in the financial press with financial services income.  But here again, by far the greater contribution to the balance of payments comes from direct investment (£11.5bn in 1999), such as the oil companies, and has nothing to do with the City at all (Table 4.4).  The contribution to the balance of payments from portfolio investment (which may reasonably be attributed to the financial sector) in 1999 was £100 million having declined from a high in 1993 of £6,400 million (Table 4.5).  The City is not therefore the biggest exporter, still less the biggest net contributor to the balance of payments.  It does however have much the biggest press to the detriment of other sectors of the economy, which also merit attention at this time.

 

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Export factor

A letter to the Editor of the Daily Telegraph which was published on 3rd August, 2001.

David Litterick is right to suggest that manufacturing accounts for about 20 per cent of the cost of our GDP (report, Aug. 1st), but what he didn’t say was that industrial products account for about 75 per cent of our exports.  Moreover, a substantial proportion of the remaining 25 per cent – service exports – depend on industrial products or expertise derived from them.

It is remarkable that the opposition parties have allowed the Chancellor to acquire the reputation of a good steward of our affairs, while the trade deficit has risen remorselessly under his administration to the present awful £30 billion per annum.  There is a similar silence about the Government’s apparent acceptance or even encouragement of a drop in agricultural production.

Since we have to eat, every £1 billion drop in agricultural output adds straight on to the trade deficit.  For the most part, this can be put right only by the men and women in the already hard-pressed manufacturing industries.

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Tory leadership race

A letter to the Daily Telegraph which was published on 17th July 2001.

Mr Portillo’s preoccupation with minorities is almost exactly what the vast majority of ordinary voters are sick of.  The drop of six million in the Conservative vote between 1992 and 2001 is greater than all the minorities combined.

Kenneth Clarke is opposed to the settled views of 85 per cent of his own party and 70 per cent of the electorate on the most fundamental issue of the day.

Mr Duncan Smith represents a chance to wrench the political agenda away from the liberal metropolitan consensus that caricatures any steps of national self-preservation as xenophobic, racist or “unacceptably Right-wing”.

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Success for whom?

A letter to the Daily Telegraph which was published on 26 June 2001.

You say (today) that “anyone looking dispassionately would have to account it (the EU) more a success than a failure”.  The question is success for whom?

Certainly it’s a success for the “rich distant élite of bureaucrats” as you describe them, and the mainly retread politicians who act as EU commissioners.  But democracy in Germany, Italy, France, Belgium, Holland and Denmark was established or re-established by the Allied military victory in 1945 and Western Europe’s peace since then guaranteed by NATO not by the EU as your editorial seems to imply.

The small EU countries may have gained in self-esteem since the EU gives their politicians a chance from time to time to act as if they are in charge of Europe’s destiny, while senior French bureaucrats actually call the shots.  But does anyone seriously believe that Germany would not be the third largest economy in the world, or that Britain’s fishing would be all but destroyed, if they were not members of the EU?

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Abolishing the pound

A letter to the Editor of the Daily Telegraph which was published on 4th June 2001 about the question for a referendum on the euro.

The Gallup poll on attitudes to abolishing the pound, reported Thursday and MORI’s (reported today), illustrate the importance of the wording of the question in any referendum on the issue.

Like the question proposed by Labour’s Foreign Secretary (reported May 27) Gallup and MORI seek a yes or no to “joining” or “membership of” or “being part of” the euro.  This question is doubly loaded.

First, these phrases will always tend to elicit a yes from the British because of their association with the word “club”, a concept invented by the British and widely used in other languages.  Manifestly a currency is not a club.

Secondly, to seek yes or no to a single proposition without stating the alternative is about as unbiased as asking the electors in the forthcoming election to say yes or no to the Labour candidate with no other name on the ballot paper.

The only unbiased way to decide the issue is to put the two propositions: (a) “keep the pound as our currency” and (b) “replace the pound with the euro”, on the ballot paper together and ask the voter to mark their preference with a cross, just as in the general election.

Judging by my own observation of posing the question to people either in the Gallup/MORI way or in the normal ballot paper way, the proportion in favour of keeping the pound rises from about 67% with the former way to about 80% with the latter.  If in a follow-up question you tell people that article 30 of the relevant Maastricht protocol on adopting the euro involves an irreversible transfer of about a third of our gold and dollar reserves to the European Central Bank in Frankfurt, with foreign control over the rest, the proportion rises to 90%.  Perhaps the Conservatives should re-read the Maastricht Treaty and tell the public about this now.

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