By Matthew Barrett
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On the 18th November, the Secretary of State for Energy and Climate Change, Chris Huhne, wrote a letter to Lord Lawson (pictured right) and Lord Turnbull - both associated with the Global Warming Policy Foundation (about which I wrote earlier this month) - to take issue with Lord Turnbull's paper "The Really Inconvenient Truth".
By Matthew Barrett
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In the last few years, many conservatives have sensed a tendency within the media to give scientists, analysts and commentators who believe in global warming theories a free run. In many cases, those pro-global warming voices were unchallenged, and no balance was provided in the programmes on which they appeared.
The Global Warming Policy Foundation is a think-tank founded in November 2009, directed by Dr Benny Peiser (pictured right), and chaired by Lord Lawson of Blaby, the former Chancellor. The GWPF describes itself as "open-minded on the contested science of global warming", but "deeply concerned about the costs and other implications of many of the policies currently being advocated".
The GWPF is a registered educational charity as well as a think-tank, and it boasts cross-party support: its Board of Trustees includes crossbench, Liberal Democrat, and Labour peers, as well as the Bishop of Chester, Peter Forster. The Academic Advisory Council features leading scientists including Professor Freeman Dyson and Dr Matt Ridley.
The GWPF is one of the most important think-tanks in Britain today, because it is helping to provide the balance that has been so sorely lacking in the mainstream of our economic and environmental policy debate for much of the last decade. The GWPF offers reports, lectures and scientific analysis.
Its website includes a section called The Observatory, edited by Dr David Whitehouse, which provides analysis of recent developments. It also includes an opinion section, UK, international, energy and science news sections, and a "best of the blogs" roundup.
By Tim Montgomerie
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On our Comment pages today Mark Field MP sets out the two great truths of the economic debate:
One: We must carry on with the Osborne deficit reduction programme. When you are in a worldwide debt crisis you have to get your debts under control.
Two: The Coalition hasn't got an adequate growth agenda.
So what can the Coalition do to achieve growth? I asked some of London's top think tanks to recommend some ideas. The list below is far from exhaustive. Missing, for example, are ideas to modernise trade union laws and the Civitas think tank's thinking on better procurement. I also dismiss the idea that a growth agenda cannot have immediate effects. While it's true that many supply side measures can take years to yield benefits (this is certainly true of the Coalition's excellent welfare and school reforms) some - such as tax reforms and deregulation - can produce immediate benefits. There is also the impact on confidence. If the government looks serious about long-term competitiveness then overseas and domestic investors are more likely to stay and expand in Britain.
"If the Government keeps living beyond the means of British taxpayers and businesses, then growth will continue to be limited. By reducing the incentive to work and invest, high taxes diminish economic growth. For some tax cuts, the economic effect is dramatic enough they can increase revenue. That is the case with a lower corporate tax rate, the Government could cut a lot further and faster than they are, and abolishing the 50p rate of income tax. But there are other tax cuts that would boost growth as well, such as a cut in National Insurance. And more broadly the relationship between spending and growth shows that imposing too great a burden on taxpayers depresses growth. European Central Bank estimates imply Brown’s increase in spending as a share of national income left GDP over £100 billion lower by 2010-11." - Matt Sinclair of The TaxPayers' Alliance
"In the current circumstances it is clear that the UK cannot afford, above all unilaterally, to move to a low carbon, let alone a zero carbon, economy. A low carbon economy means a high energy cost economy. At the very least, the Government should phase out all energy subsidies of all kinds, and suspend unilateral targets until such time as all other major nations have signed up to the same course. For the UK to go it alone is not merely suicidal but pointless. Decarbonisation requires growing subsidies from the taxpayer and sharply increased energy bills for business, industry, and households. At a time when painful cuts are unavoidable, it makes no sense to make British industry – and manufacturing in particular - uncompetitive, or to drive it overseas, and thus greatly weaken our economy, by ratuitously driving up energy costs." - Benny Peiser of the Global Warming Policy Forum
"The coalition needs to create an environment much more conducive to enterprise. A systematic programme of deregulation should be at the heart of this. The government should start by dismantling employment regulation. Legislation that makes it more expensive to hire workers, such as anti-discrimination legislation, should be repealed. The minimum wage should be regionalised. If the government has not got the courage for radical reform, wide-ranging exemptions for small firms would be a start." - Mark Littlewood of the Institute of Economic Affairs
"Coherent reform of public services is a necessary part of the recovery. It will enable public spending to be restrained while meeting the demands for improved services and it will increase the productivity of the economy, raising living standards for everyone. Poor performing education, health and welfare systems already impose significant costs on the wider economy. Demographic changes mean that the costs facing government in areas like pensions and healthcare are accelerating rapidly. The Treasury has made the right call on the big question of deficit reduction, but has undermined the Government's commitment to value for money by ring-fencing certain public sector budgets. The commitment to the National Curriculum is just one example of the fact that neither Health nor Education have dismantled central regulation and made services accountable to their users." - Andrew Haldenby of Reform
“Any growth strategy has to deal with the problem of excessive employment law. According to the World Bank, UK labour market flexibility has slipped down the international league table – from 17th in 2007, to 21st in 2008, to 28th in 2009 and then to 35th in 2010. What was once a source of strength for the UK has become a source of weakness. A moratorium on new laws combined with some deregulation would boost business performance, job creation and restore the UK’s labour market competitiveness. For example, we need to deal with the fact that too many employers are being held to ransom in employment tribunals by vexatious employees and their ‘no win no fee’ lawyers.” - Alistair Tebbit of the Institute of Directors
"There are two fundamental requirements of competitive markets: first, the possibility of 'free entry' for new players and 'free exit' for those that fail; second, that cartels do not dominate a market. British banks fail on both points. That is why they are still not lending enough to small businesses. Why they are still paying senior staff huge bonuses (on top of salaries that were increased to make up for supposed cuts in bonuses). And how the top five banks control 80% of the market (a percentage that is climbing higher and higher). Deep seated banking reform must break up this cosy cartel. We need a new Financial Competition Commission to carry out investigations of individual firms or of product areas, with the power to make recommendations to the Bank of England to promote competition between banks; to remove barriers to entry (and promote new competition); to take steps to permit the orderly exit of failed institutions (break up institutions that are ‘too big to fail’); and to do more to ensure products and services offered are themselves subject to competition. Finally, state-owned banks must be returned to the private sector as soon as they are strong enough; and at the best possible price and greatest reward for the taxpayer (who took on all the risk when the shares were nationalised)." - Tim Knox of the Centre for Policy Studies
"Domestic competition is seen as good because it keeps producers sharp. So why resist it from abroad? Yet we slap import duties on shoes, cereals, electronics – there’s even a tariff of up to 48.5% on Chinese bicycles. Such protectionism allows our producers to coast along instead of becoming world class. It means less choice and value for consumers. And if we are buying less from abroad, people in other countries will have fewer pounds in their pockets to spend back here, so other UK exporters suffer. Let’s not wait for world agreement, but push for bilateral free trade treaties with any country we can – particularly the poorest, who have most to gain." - Eamonn Butler of the Adam Smith Institute
"Welfare reform should not go faster nor deeper than an £18 billion cut. It should, however, move beyond ‘making work pay’. This would mean: Increasing conditionality by asking more of individuals who spend as little as eight minutes a day looking for work; introducing welfare accounts that re-instate the link between what people contribute through national insurance and what they can get out; and privatising some functions of Jobcentre Plus and re-negotiating parts of Work Programme contracts to allow some claimants to get personalised support from day one of their claim. These reforms would provide a critical boost to growth: they would make the welfare system effective in matching claimants to jobs and make the best of the talent of the UK population." - Matt Oakley for Policy Exchange
"In terms of short term hindrances to growth, the total annual cost of family breakdown is £41.74 billion or £1,364 for every taxpayer. Reducing these direct costs would plug a big hole in national and local finances but there are other harder-to-measure indirect costs which hamper our long term economic prospects. The fallout from broken family relationships can hinder children’s educational achievement, dampen their self esteem and affect their physical and mental health - ultimately threatening their creativity, well-being and future productivity. We need to make sure the next spending review includes specific investment in universal credit to eliminate the couple penalty; local councils should collect data on relationship statuses and be set delivery outcomes by national government so they can demonstrate how their policies are providing relationship support and stabilising relationships in their area; other initiatives that help families (such as Family Nurse Partnerships and Family Intervention Projects) should specifically include couple support - often most effectively delivered by the voluntary sector." - Samantha Callan of the Centre for Social Justice
More: Action on the family.
"The Government needs to push for a long-term solution to the eurozone debt crisis – bailouts aren’t working, debt restructuring will be needed. The longer the crisis goes on, the worse the prospects for eurozone growth and stability look and, as our biggest trading partner, this will have an impact on the UK economy. In the medium-term the UK needs to seek allies in pushing for a better-functioning single market, including deregulation, removing cross-border barriers to services and digital industries, and protecting the interests of the City of London from the EU’s new financial supervisory architecture. This includes securing the flexibility to apply capital requirements for banks as the UK sees fit. In the longer term, the UK should look to diversify its trade away from the eurozone, tapping into the growth potential of emerging markets, which will be necessary in any case but also provides a Plan B if the eurozone fails to get its act together. The UK also needs to continue to push for a reduction in EU external trade barriers and encourage the expansion of free trade agreements with other economies/trading blocs." - Stephen Booth of Open Europe
“The Competition Commission needs to be reformed so that it rewards, rather than punishes, firms who share their knowledge on product development and innovation with other UK firms. At present, the UK’s institutional approach encourages firms to compete with each other at every stage, rather than cooperate. Vital information for businesses tends to remain in a particular sector instead of spreading around the whole economy. This puts UK firms at a disadvantage compared to many of their international competitors. Through better knowledge transfer, they can share their ideas on the best strategies to increase revenues and, hence, economic growth.” - Ian Mulheirn of the Social Market Foundation
"Our Government should start by not making matters worse, which means cutting the 50p tax rate, reducing costly regulation, and reversing climate-change policies that are adding so much to the cost of electricity that our key industries will be forced overseas. It should also pursue our enlightened national interest through industrial policy. It should encourage local enterprise banks to restore the initiative to localities. People in the North East, for example, would rally to a local enterprise bank that provided a safe home for their savings and invested them in providing solid, sustainable jobs in the North East." - Dr David Green of Civitas
Read more about Civitas' ideas for a new industrial policy.
"The discussions about boosting the economic performance of UK economy lack clarity and focus. Everyone understands that entrepreneurship and innovation are important for growth, and also that the government has a formidable aptitude to discourage both by ill-advised tax and regulatory policies. We need to move beyond these truisms towards more specific proposals. While we subscribe to many of the views expressed by our colleagues from other London-based think tanks, we believe that any credible pro-growth policy needs to reflect the following two insights, which are conspicuously missing from our present-day discussions.
- Dalibor Rohac of Legatum
By Tim Montgomerie
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Scepticism about climate change takes at least four forms:
The various forms of "denial" are lumped together by those environmental fundamentalists who would discredit any voices of caution about expensive action to combat climate change. Another tactic of the climate change industry is to portray sceptics as fringe characters. That tactic is getting harder especially when figures as serious as Lord Turnbull are joining the sceptics. Lord (Andrew) Turnbull was, until recently, the most senior British civil servant and he's just written a paper for the Global Warming Policy Forum setting out his worries. Download a PDF of his full paper. He expresses many concerns about climate change science but some of his biggest policy concerns are highlighted in extracts below:
Britain should NOT act unilaterally: "Our Climate Change Act imposes legal duties, regardless of what ever else other countries do, or do not do. The UK, producing only 2-3 percent of world CO2 emissions, can have only a minimal effect on the global warming outcome. If we push too hard on decarbonisation by raising the price of carbon through a range of instruments we will suffer double jeopardy. Energy-using industries will migrate and, if the climate pessimists are right, we will still have to pay to adapt, e.g. by raising our flood defences."
Are we right to try and stop global warming or should scarce resources be invested in adaption? "Policy has been based on a preponderantly warmist view of the world. Many such as the Institution of Civil Engineers think that too little attention has been paid to adaptation, i.e. being more resilient whichever way the sum of natural forces and CO2 takes us, up or down."
One of the big casualties of the recession has been action against climate change.
The Global Warming Policy Foundation - formed by Nigel Lawson - highlights an article by Lawrence Solomon of the Financial Post which lists the increasing number of political retreats from action on climate change:
It's not just the sceptical GWPF that is of this view. Fleet Street's greenest are agreed. The Telegraph's Geoffrey Lean blogged this after George Osborne's Budget:
"Greenery took up all of 52 words in the Chancellor’s 57 page budget speech."
Mr Lean may get a £2.5bn tax on the airline industry in the autumn (Sunday Times (£)) but this is driven primarily by the need to raise revenue rather than motivated by green politics. Lean himself noted that movement on the environment was "backwards" at last week's G20 gathering.
Meanwhile, China continues its large-scale opening of new coal mines.
Madsen Pirie of the Adam Smith Institute: "Basically the coalition's first budget was a reality check, and an indication that Britain is on the way back from the madness of the Brown years. It will be a slow haul, but this was a positive start."
BIG CUTS IN SPENDING...
Matt Sinclair of The TaxPayers' Alliance: "There is plenty of very good news in the Budget. A two year public sector pay freeze, the abolition of the Child Trust Fund and cuts in welfare spending are all longstanding TPA recommendations that will be absolutely key to getting the public finances under control. As a result of all the measures proposed, annual spending will be £31.9 billion lower than planned by 2014-15."
...BUT NOT IN BRITAIN'S CONTRIBUTION TO THE EU
Open Europe: "While today's emergency budget in the UK provided many talking points for the media at large – it also provided new information for those with an interest in the UK’s ever-increasing contribution to the European budget *(courtesy of one T.Blair). Hopefully this graph should illustrate how sharply our contributions climbed last year, and will continue climbing until 2014/15 when the contribution will hit an estimated £10.3 billion."
...WITH PAIN SHARED FAIRLY
Neil O'Brien of Policy Exchange: "As a share of their income, the richest 10 per cent are contributing twice as much as the poorer half of the population towards fixing the debt crisis. The richest tenth will be about £1,600 a year worse off, while the poorest tenth will be less than £200 worse off."
ALTHOUGH VAT HIKE WAS UNFAIR
Matthew Sinclair of The TaxPayers' Alliance: "Voters might be left wondering why they should bother paying attention during elections if campaign rhetoric bears so little relation to reality on such a big issue. The increase in VAT from 17.5 to 20 per cent means that instead of the higher income tax threshold being a welcome break for millions of families on low to middle incomes, it is just inadequate compensation for their increased VAT burden."
BUT WHERE IS THE REFORM OF PUBLIC SERVICES?
Andrew Haldenby of Reform: "Two weeks ago, when launching the Spending Review, George Osborne called for a once-in-a-lifetime debate about the shape of government in the UK. He implied that there is a right and a wrong way to cut the deficit. It would be right to cut spending by addressing the structural causes of the deficit - i.e. public sector inefficiency and the UK's unwillingness to cut its pensions and health entitlements. It would be wrong to leave the shape of public services and welfare unchanged, but limit their costs temporarily – “salami slice” – with public sector pay freezes for instance. Today George Osborne opted for the slice: a two year freeze in public sector pay (rather than linking pay with performance), a three year freeze in child benefit (rather than withdrawing it from middle and high earners), a slightly lower rate of increase of benefits and a slightly lower rate of increase of tax thresholds. The general sense was that his ambitions for government were similar to that of the last administration."
AND WHERE IS THE ENVIRONMENTALISM?
Global Warming Policy Forum: "Chancellor George Osborne has today left low carbon businesses disappointed with arguably the least green budget address in recent memory. The low carbon economy and the need to cut carbon emissions barely received a mention as the chancellor's first budget address focused almost exclusively on the spending cuts and tax rises required to tackle the UK's budget deficit. There were a few bright spots for green businesses as the chancellor confirmed that the coalition government would "bring forward" plans for a green investment bank, although he provided no further detail on how such a bank would operate. He also said that the Treasury would "explore" proposals to replace Air Passenger Duty with a per plane levy that the Chancellor said would help to cut carbon emissions. However, a report on the proposal will not be delivered until the autumn, despite the reform being included in both the Conservative and Lib Dem manifestos."
...AND A WELCOME FOR THE END OF REGIONAL DEVELOPMENT AGENCIES
Matthew Elliott on The TaxPayers' Alliance: "A quick scan through the document this afternoon for information on the Regional Development Agencies (RDAs) threw up something worthwhile: they are to be abolished through the Public Bodies Bill, for which a White Paper will be produced later this year. Of course, we will be keeping a close eye on it to ensure that this Budget promise is not reneged on or fudged in any way."