On Thursday I spoke to the Wokingham Conservatives Lunch Club event. It was great to be able to meet again for a lunch together instead of the Zoom calls we had been using. When I went around the tables there was a good range of questions on President Biden’s Afghan errors, on the response to covid, on access to the NHS post pandemic, on migration, on economic recovery and on pensions. My answers were similar to those you can read on the website.
As usual I am working over the week-end for urgent matters. If any of my constituents has close contacts with another constituent who is also a UK passport holder or former employee of the UK government in Afghanistan and they are having trouble getting on to one of the rescue flights, please let me know as there is an MP hotline I can try to see if more assistance can be given.
The recent minutes of the Fed’s Monetary Policy Committee show they think there is still insufficient recovery to justify any reduction in the amount of dollars they create each month. They plan to continue with an extra $120bn a month and renew their discussions at their next meeting. Meanwhile the Bank of England has signalled an end to creating more pounds by the end of this year, and has throttled back the monthly amount in the meantime. The UK has received much less monetary stimulus than the USA relative to the size of the economy. UK inflation on the official numbers is at 2% and US inflation is at 5.4%.
In addition the US Congress and President are contemplating further large increases in public spending and the deficit whilst the UK Treasury is rightly letting recovery bring the deficit down as it will do without further government intervention to spend more. This week’s foreign policy disaster by President Biden will not be good for confidence and consumer sentiment in the short term in the USA and may give the Fed further excuse to seek to run the economy hot. There is a lack of clarity over just how far the Congress will go in crafting a big spending big deficit budget for next year, though with Bernie Sanders as Budget Committee Chairman there are plenty of pressures to spend on a huge scale.
The main Advanced countries and the EU have shown they can get away with substantial money printing and large deficits for a limited period of artificially depressed demand brought on by their choice of anti pandemic policy. There is however no proof that they are all now like Japan and can enjoy zero inflation, huge budget deficits and endless money printing as the state buys back much of the debt it issues. Japanese society and its economy has a strong savings culture, an ageing population that is cautious and a long post 1990 crash tradition of no inflation. The US economy is showing that it still has a lively turn of speed on prices when stimulus is applied. The Fed assures us the rises will be temporary. That would be a more certain outcome if the Fed recognised as the Bank of England has done that Quantitative Easing has to come to an end as the economy recovers. It seems quite a lot of the dollars end up wanting to invest in UK companies, with a rash of bids outstanding.
This week the government announced its support for hydrogen as a transport fuel and as a way of heating our homes. It said that it thought the hydrogen sector could create an additional 9000 jobs by 2030.
The UK economy has 31 million jobs, so the limited ambition for hydrogen this decade only sees an increase of 0.03% in employment if these hydrogen jobs are all additional. It contrasts with the current 1,000,000 vacancies the job market sports. It implies pessimism about the speed of expansion and take up of this new wonder fuel. These jobs would add just 0.9% to the total available if they are extra jobs.
Hydrogen has obvious advantages over some of the other proposed technologies. Heat pumps for homes would be much dearer and less effective than adapting our current gas boilers to run on 100% hydrogen instead of natural gas. Batteries cannot offer sufficient power relative to weight for heavy trucks and other large vehicles.
The intermediate plan is to see if they can introduce 20% hydrogen into our current natural gas. That at least has the advantage that we can keep our current boilers. I never saw how it could be green to make us dump our gas boilers long before they have worn out, given the amount of energy it would take to replace them with Heat pumps.
The energy policy priority I am urging is to secure the construction of some more electricity capacity before thinking of new ways to use more electrical power directly or indirectly via hydrogen. Producing green hydrogen will take a lot of renewable power.
I am also pressing to make COP 26 about China, Germany and other large producers of CO2 to catch up with the closures and changes the UK has already pushed through in the name of net zero.
John Redwood Conservative, Wokingham
Does my right hon. Friend agree that President Biden decided unilaterally to withdraw without agreeing and negotiating a plan with either the Afghan Government or the NATO allies, and that the response of the UK Government in the circumstances has been fast, purposeful and extremely well guided to protect the interests of UK citizens?
Theresa May Conservative, Maidenhead
What President Biden has done is to uphold a decision made by President Trump. It was a unilateral decision of President Trump to do a deal with the Taliban that led to this withdrawal.
What we have seen from the scenes in Afghanistan is that it has not been all right on the night. There are many in Afghanistan who not only fear that their lives will be irrevocably changed for the worse, but fear for their lives. Numbered among them will be women—women who embraced freedom and the right to education, to work and to participate in the political process.
My right hon. Friend the Prime Minister was right to make the education of girls a key aim of his Administration, but in Afghanistan that will now be swept away. Those girls who have been educated will have no opportunity to use that education. The Taliban proclaims that women will be allowed to work and girls will be allowed to go to school, but this will be under Islamic law—or rather, under its interpretation of Islamic law, and we have seen before what that means for the lives of women and girls.