Boris faces the same fate as John Major if he persists with the elite dogma of net zero

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As this New Year dawns, I am struck by a parallel from 30 years ago. At the beginning of 1992, the pound was in the Exchange Rate Mechanism (the ERM) of the European Monetary System.

According to the then prime minister, John Major, membership was essential to stabilising sterling and controlling inflation. In fact, however, the ERM’s insistence that the pound must be worth at least 2.7780 Deutschmarks kept interest rates fearsomely high, hitting businesses and mortgages and inducing recession.

Eventually, the markets disbelieved the government’s increasingly shrill promises to do “whatever it takes” to keep the pound in. On September 16 1992 (“Black Wednesday”), they tested Major’s commitment. For a few mad hours, interest rates rose to 15 per cent. Then the government admitted defeat. Britain fell out of the ERM that evening and for ever.

This humiliated Major and demolished the orthodoxy of the time, but reality returned. The pound found its natural level, the British economy recovered. The chances of Britain ever entering the European single currency receded.

Thirty years on, the parallel is with net zero. As with the ERM, which sterling entered with fanfare in October 1990, the Government is proud of its policy. In late June 2019, the dying days of Theresa May’s premiership, Britain became, in its words, “the first major economy in the world to end its contribution to global warming by 2050”. Under the new law, greenhouse gas emissions would have to reduce to net zero by 2050, compared with the previous target of at least an 80 per cent reduction from 1990 levels. Boris Johnson, who succeeded Mrs May, has boasted, notably at Cop26, of this legislation and is acting on it, seeking applause from elites otherwise hostile because of Brexit.

In the course of 2021, however, the measures required to fulfil this edict have grown unpopular. Policies such as banning pure new internal combustion engines by 2030, the imposition of low emission zones in big cities or talk of new mortgages only for energy-efficient homes have caused alarm. Energy costs seem the worst – the impracticality and expense of green technology like heat pumps to replace gas boilers, and the dizzying rise in gas prices.

There is also resentment that our Government is not protecting us from global bad faith. Although net zero pledges have risen in two years from covering 16 per cent of the global economy to 68 per cent, these look highly dubious. Countries such as China, India and Russia are most unlikely to comply with the 2050 timetable. This saddles Western countries with policies that cannot achieve the sole purpose of net zero – a universal reduction of carbon emission levels. So they will hit our consumers and businesses even worse. We are the victims of the attitude satirised in the Beyond the Fringe Battle of Britain sketch: “We need a futile gesture at this stage!”

During 2022, these problems can only increase. Probably the Government can avoid one spectacular day of disaster like Black Wednesday 1992 – although even that might not be true if, for example, there are suddenly drastic power cuts.

Under present policies, detestably high price rises are unavoidable. A recent poll for Net Zero Watch recorded three out of five saying they would not be willing to pay higher taxes on their energy bills to meet net zero targets. As with the ERM/European issues 30 years ago, Tory rebels are picking up on discontents which ministers – and all the Opposition parties in Parliament – ignore.

In April, the energy price cap is expected to rise to £2,000, doubling what it was a year ago. And price caps – which drive smaller firms out of business – are no solution to price hikes, only delaying their impact.

Some price rises are attributable to temporary market problems, but we are trapped in high prices because government has deliberately eschewed alternatives. In the United States, natural gas prices are ten times lower than in this country. Britain’s shale basin is far thicker, and therefore potentially more productive than America’s, but the government’s shale fracking moratorium has left it untapped 10 years after its possibilities became available.

For similar reasons, we are not fully exploiting our offshore drilling capacities, or digging out coal needed for steel production. Yet the absolute need for fossil fuels, because of the intermittency of wind and solar power, remains. Environmental dogma simply raises the prices to distress levels, thus rewarding less green countries.

The economic costs to us ought to be obvious – the loss of competitiveness, of energy-intensive manufacturing and of key advantages which Britain gained from the Industrial Revolution; the vulnerability to foreign politics; the retrograde inconvenience of many green technologies.

So should the psychological damage. The idea that your long-term investment in equipment to keep your house warm is being undermined by vain attempts to meet arbitrary targets (there is nothing scientifically special about the date 2050) is frightening, especially for the old, as is the fear that you could not afford to heat your home or run your car.

At the Greta Thunberg end of the environmentalist spectrum lies a belief that the Western way of life should be destroyed. It is disturbing that a Conservative government seems to toy with such ideas.

Surely it is time to ditch the dogma and coercion and find friendlier ways of controlling emissions. There are signs of this happening in the EU, where the European Commission is changing its “taxonomy” so that natural gas and nuclear power can be treated as sustainable forms of low-carbon energy rather than the work of the Devil.

Why is it that a Government skilled, as we learnt at the general election of 2019, at appealing to public opinion, is so out of touch on these issues?

Again, the ERM comparison is instructive. It is a great feature of the modern world that bureaucracies want to build institutions that increase their power by transcending national borders. It is a founding principle of the European Union that it should be forged not through referendums or elections, but through systems above democracy. The ERM was part of this. Although usually presented in Britain as a technical question of monetary management, it was always intended as the transitional method of creating a single currency and a European central bank, thus stripping each nation state of the right to its own currency.

As the ERM developed in the 1980s, a parallel process (though not a specifically European one) was developing over global warming. The United Nations Intergovernmental Panel on Climate Change (IPCC), and the Conferences of the Parties (Cop), sought to build a new global order. This has involved great deference to “experts”, not unlike that paid to Sage over Covid, and misrepresentations of what the conferences have actually agreed. The tax-paying, energy-using public have been ill-informed about how it will affect them.

As with the ERM, so with net zero, a weird unanimity took over the process, backed by a largely compliant media. John Major repeatedly lamented after Black Wednesday that “everyone” had supported ERM. It was not so, unless by “everyone” he meant most people holding senior official positions. Such people are most likely to be wrong when they are nearest to unanimity. They need watching. As a journalist, Boris Johnson was a genius at detecting when the official orthodoxy ignored the facts of most people’s lives. He will need to recover that skill in 2022 if he wishes to avoid the eventual electoral fate of John Major.

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