This election and Brexit

I have spoken to various Remain voters so far during this election. Many say to me they accept the result of the vote and just want the government to get on and do the best deal they can. Some tell me they voted Remain because they did worry about the possible economic consequences, and they are now relieved to see the bad predictions of recession this winter and collapse of confidence did not come true.

A few have told me they still cannot accept the decision and still fear there will be bad economic results in due course. They seem to think when we leave there will be all sorts of new barriers and restrictions imposed which will get in the way of normal travel, trade and collaboration across the Channel. They have perhaps been Lib Dem voters in the past and are often particularly concerned about academic and student links, research and cultural exchanges.

Let me try to reassure. The UK government has made very clear it wants a UK open to talent and university collaboration. The UK is not planning closed borders, making it more difficult for people to come here to courses in UK universities. We will still welcome tourists,visitor performers, people with good qualifications, entrepreneurs wanting to invest. The government will be generous with visas for talented and qualified people wanting to come to the UK to be faculty members, just as we are today with academics coming from the USA and other non EU countries. It will also want to see a continuation of the many musical, artistic and cultural links and exchanges that take place with EU and non EU countries today.

Nor do I expect the rest of the EU to want to stop EU citizens travelling to the UK or undertaking university work here. Under international law the EU would not be able to block people and ideas to and from the UK, nor can I imagine they would want to. There are no restrictions the EU could place just on the UK – they would have to be common restrictions against the rest of the world. I do not think the EU wants to cut itself off.

The UK has several world class leading universities and many other good ones. Their interests will be upheld by the government. More importantly, as the UK and the EU both pride themselves on a belief in freedom and on a pluralistic society, universities,individual students and academics will remain free to travel, study, work and collaborate in each other’s countries as they see fit. I want to live in a free society. Such a society does not stop free institutions doing as they wish, and allows them under the law to pursue their aims and development. Some people think government is more important and more powerful than it is, and have a very dim view of how the EU will seek to behave.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | Leave a comment

Forecasting and the unknowns

Today I am publishing another piece with no reference to the UK or the election. I will resume normal posts tomorrow when national campaigning starts again.

Events, dear boy, events. Policy makers, governments and companies need to forecast the future as they shape their policies and decide what to do to serve their citizens or customers better. In recent years the main international forecasters like the IMF and World Bank, the ECB and the US authorities, have struggled to anticipate the banking crash of 2008-9 or the Euro crisis that followed. Many companies have expressed surprise at the turn of events from Tokyo to New York, and were not anticipating the election of Mr Trump.

As someone who tries to set out a view of what might happen next by way of important background to policy debate, it is important to think through how you can improve your chances of understanding the trends and the risks. You begin as most do by forecasting the “knowns”. You can people your forecast with factual dates for future elections, Central bank rate setting meetings, publication of important results, dates of Budgets and the like.

You can then move from this easy bit, to trying to forecast the unknown element within these events. I know the Fed will consider interest rates at its June meeting. I do not know what it will decide to do, though with many others I expect it to raise rates by another 0.25% based on what I have read from the various statements and analyses put out by the Fed and its members. Sometimes your chances of success are high because the organisation has given a steer or clear briefings in advance. Sometimes the data they will consider is available and again it may be obvious what they have to decide. I did not know Mr Trump’s budget, but a lot of what he is proposing was in his programme for government put out by candidate Trump, so it was not that difficult to guess. I did not know Mrs Merkel would decide to cancel all her nuclear power, but could see that might happen by watching the pressure she was under from the anti nuclear lobby.

There are then the unknown unknowns, as Mr Rumsfeld once famously said. No one could know that a Japanese nuclear power station would be badly damaged by a tidal wave, leading to a major change of energy policy. All you can do is adjust your view promptly if such a thing happens.

The reason some of the world institutions are so bad at forecasting economies is they have a vested interest in stability and come to believe their own reassurances. They missed the build up of excessive credit because they persuaded themselves that the world could suddenly handle levels of debt and gearing through derivatives that would have been dangerous before. Worse still, they then brought the whole structure down by lurching to too tough a stance, presumably because they did really believe all these positions were risk reducing! An outsider could see more clearly. Many of us saw the build of debt and gearing in the EU and US was excessive and said so. A few of us saw the change of stance by the authorities was disastrous. If there is too much debt around the last thing you want to do is so tighten money that people cant afford to service their loans.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1XU

Posted in Uncategorized | 23 Comments

India and China will help the world economy this year

There will be no campaigning today in the General election. Parties wish to respect the memory of those killed so cruelly in Manchester. I provide a blog today about an unrelated subject.

Between them India and China account for almost two fifths of the world population. Both have in recent years been growing quickly. China enjoyed a major growth spurt based on industry, exports and heavy investment. More recently India has moved ahead of the slower Chinese growth rate based on a more balanced growth, coming from a lower average income level.

China is now the world’s second largest economy thanks to the size of her population and the dominance of her industry. She makes half the world’s steel and similarly large proportions of many manufactured goods. There are constant fears expressed in the West that China will experience a hard landing. Commentators who missed out on predicting the western banking crash think China might have one of her own. It’s an odd argument.

They usually compare total economy debt in China with state debt in the West. If you compare total debt with total debt as a percentage of GDP China is still below a number of western economies. It is true there are potential bad debts within the Chinese nationalised sector. As the Chinese authorities own both sides of the transaction they can sort it out without bringing down the banking system.

Meanwhile India is getting the taste for modernisations and reform from Mr Modi. Following his successful conversion of a lot of cash into bank account money, he is now turning to sales tax reform. He wishes to sweep aside numerous complex transaction taxes imposed on a state by state basis and replace them with one GST India wide. It will greatly simplify doing business across borders within the country.

It looks as if this year again both India and China will make important contributions to world growth.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1 XU

Posted in Uncategorized | 70 Comments

Manchester bombing

I send my condolences to the families of those who died in the explosion, and my wishes for a speedy recovery to the injured. This is reported as a senseless and cruel act of terrorism, attacking families just having a good time on a special evening of entertainment. Such evil violence wrecks the lives of those caught by it.
I have delayed the publication of the piece I had written for this morning and will not be campaigning in the election today.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1 XU

Posted in Uncategorized | 57 Comments

Social care

I am glad the Prime Minister has confirmed that the social care policy will be set out in more detail in a Green Paper with a proper consultation, as I assumed when I first wrote about it. That was why I decided to consult through this site on the changes. She has also made clear that there will be a cap on how much social care cost someone has to pay. This means there are now two ways the proposals are more generous than current policy. There could be a £100,000 higher cut off for anyone in a care home having to spend their own money on the fees, four times the current permitted capital sum. There could be a ceiling on how much care cost someone living in their own home has to pay, where there is none for someone with substantial savings today. The Prime Minister also confirmed that under the proposals no-one living in their own home would have to sell their home to pay the social care costs.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 71 Comments

Why I am still optimistic about our future relationship with the EU

Those who fear no deal or a bad deal are too pessimistic.

They exaggerate the importance of government, treaties and rules. They underestimate the energy, good will and positive approach of most people on both sides of the Channel.

The first thing to grasp is the UK will not be on her own. Under WTO rules which govern the EU as well as us, the EU cannot do anything adverse to us that it does not also do to the USA, China, India and the other major countries of the world. Similarly, under international law, the EU cannot pick on UK people, evict our citizens from their homes on the continent, or impose special taxes and requirements on UK people and companies that it does not also apply to Americans, Chinese and all other non EU citizens and companies.

The second thing to grasp is many people and governments on the continent think it a good idea to get on with their neighbouring states, particularly where they sell lot of goods and services. Just in case they don’t, the Treaty they all drafted and signed makes them pursue good relations and trade with the neighbours. I alway find it odd that the people who most love the EU have such a low view of the way it will behave, expecting it to be petty, nasty and to seek to operate outside international law and outside the norms of civilised behaviour. I think many of them are better than that, and those who might fall short have self interest to push them to keep open their access to the UK.

The third thing to grasp is all those companies on the continent wanting to carry on selling us goods and services, all those individuals wanting to come to the UK to take skilled job or to study, will still be a pressure on the governments of the EU. Just as there are many people in the UK who value their ability to travel on the continent, to study there, or to trade there, so there are many people on the continent wanting the same access to the UK.

Of course the EU institution will try it on and ask for lots of money from us, as they will miss our large contributions. They also know there is no legal basis or political reason why we should pay them any special extra payment on leaving. They also know that in the end, after much huffing and puffing, they need a deal. We know we can get on fine under WTO terms, if they really do want to be difficult.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 145 Comments

Options for social care

The current system has been uneasily defended by the main parties in recent years,with growing criticisms. This system seeks to define a distinction between normal living costs, and care costs. An elderly person,whether living in their own home or in a care home, gets some state financial support with care costs but is expected to make their own provision for accommodation and daily living and to pay for other social care provision. All healthcare is free for all.

This means when someone moves from their own home into a care home for the rest of their lives a decision has to be made about the use of the home they are vacating which will have implications for any means tested benefits and support Clearly the elderly person no longer needs the home they leave, and that home should be used. The most likely outcome is sale to a new owner occupier, releasing capital. This capital is then used to pay for the day to day living costs at the care home. Alternatively, if the property has a high rental value, the elderly person could rent it out and use the rental income along with any other income to pay the care home fees.

There have been many critics who say this is unfair on grown up children hoping to inherit. If their parents live in their own home until death they will inherit a valuable property. If the last surviving parent moves into a care home they may inherit very little. To address this different outcome the Conservative Manifesto says why not increase the amount of capital someone in a care home can keep to 100,0000 pounds from the current 23000 pounds, but also have the same rule for people continuing in their own home.

Judging this needs detail over how the distinction between healthcare, free to all, and other care which you will be billed for, would work out. The proposal allows an elderly person living in their own home to defer any payment, making it a charge on the estate.

The different outcomes that will still arise come from the high costs of care home provision. The basic accommodation and meal costs will tend to be much higher than living alone in your own home. Many more staff are involved and we want them to be decently paid.The owner also needs to cover the cost of capital to provide the property.

A lot of the grown up children, many of them pensioners themselves, have their own homes and savings by the time their last parent dies. The debate is whether they should pay more tax to help pay more of the costs of living of their parent’s generation through the state, or whether they should accept as possible heirs that their own parent has to spend more of the money they have accumulated during their lives to pay the bills of their old age. One way or another the children have to help finance the very elderly. The truth is the state has no money, only the money it takes off us one way or another.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 195 Comments

Tax cuts to continue under Conservative plans

The Conservative Manifesto has confirmed the 2015 promise of raising the starting threshold for Income Tax to 12500, and the threshold for 40% tax to 50000.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 66 Comments

Who should pay for care?

There are three possible answers to who should pay for an individual’s care. The individual themselves may have the money to do so. The individual’s family may have the money and the capacity to provide the care. The state – in other words the rest of us – could do so.

By common political consensus in the UK we take a differing view on who should pay for a child’s care, and who should pay for an elderly person.

All mainstream parties and most people agree that as a child cannot work and does not usually have any money of their own, the parents should normally provide. We expect mother and father, or mother or father, to offer food, shelter and clothing, and to look after the child when not at school. Both parents are expected to contribute financially where they can. The state steps in if the parental income is insufficient, offering help with money and housing. The state also has powers in extreme cases of poor parental behaviour towards the child to remove the child and find surrogate parents willing to look after the child.

In the case of elderly people more emphasis has been placed on the elderly person themselves contributing financially to their care and maintenance where they have substantial savings. No party has proposed making children responsible for their elderly relatives,nor would that be an acceptable proposal, though in practice many families do provide answers to the care needs of their elderly members. The state provides all healthcare free, and provides free places in care homes for those who need them and have little by way of assets or income. There has also been an issue over differing treatment of an elderly person who chooses to stay living in their own home, and those who move into care homes, vacating their old property. There are issues over what constitutes free healthcare, and what is normal living cost.

The contentious question revolves around how much capital an elderly person should be able to pass on after death, and how much should be used up during their later years on paying for their living costs and care.I am interested to hear your thoughts on the right balance over who pays for what. In the next post I will talk more about the various options.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 77 Comments

More money for schools and social care

As one who has lobbied for more cash for local schools and social care, I was pleased to see both in the Conservative Manifesto.

The document confirms the government will press ahead with fairer funding, giving larger increases for schools with the smallest per pupil sums today. It also offers an additional 4000 million pounds over the next Parliament to the schools budget, so the gap can be narrowed without cutting the budgets of the better funded.

It also proposes more money for social care, paid for in part from removing the winter fuel allowance from better off pensioners.

Both increases will be welcome in West Berkshire and Wokingham Council areas, as the budgets are currently tight.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Posted in Uncategorized | 88 Comments
  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

    Promoted by Fraser McFarland on behalf of John Redwood, both of 30 Rose Street Wokingham RG40 1XU

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page