An MP’s surgery

MPs are receiving copies of a lobby email asking us to sign a pledge not to report illegal migrants if they come to our surgeries.  Let me explain the nature of an MP’s surgery and the legal position to those who send in this email.

The main purposes of an MP’s surgery are to take up cases for constituents where government has let them down, treated them badly or failed to apply its own rules fairly, and to listen to constituents who have advice on how laws and government policies should be changed to make life better.  Constituents often stray beyond their relations with national government into their relations with Councils and sometimes even their contractual relations with private sector suppliers and employers. The MP has most chance of helping with national government, where more direct access to Ministers can sometimes trigger a review of an action or policy which resolves the problem, or where legal change can sometimes  be generated to fix the problem for the future. I work with local Councillors on local matters, as the Councillors have privileged access to local officers that the MP does not have. Just as collectively MPs can change offending national laws, so Councillors collectively can change offending local policies.  Occasionally an MP  letter to a private sector company that is misbehaving can help , but as a general rule contractual disputes between constituents and private companies are best worked out in direct dialogue with the company and through the usual complaints processes available.

Attending an MP’s surgery does not give the constituent sanctuary from the law. Whilst an MP will handle information carefully, in order to process a complaint or resolve a problem with government the MP will usually have to share the information with the government. I wish to repeat that if someone comes to my surgery they should understand I have no special privilege to give them  to protect them from the law, and will normally share their information with the authorities to seek to resolve their issue. If someone is living in Wokingham as an illegal migrant and they wish to seek legal permission to stay then I will assist them if they have a sensible case by contacting  the authorities, but I cannot give them some indemnity or help them cover up their illegal status. Similarly if someone comes to me and tells me they have not paid tax I am happy to take up their case with the authorities if they believe they do not have to pay the tax or if they think their assessment is wrong, but I am not in the business of condoning tax evasion and have no blessings to give to tax law breakers.

Quite often an MP has to explain to a constituent that the law is as it is for a good reason, and they like everyone else will just have to accept it  even though they do not like it. Sometimes  I find advising someone not to pursue a complaint but to accept the world as it is can prove  to be good advice which they accept. You can cause yourself a lot of trouble and distress by pursuing complaints that are not going to result in a  good outcome. Show me a just cause and a clear unfairness from government and I will fight tenaciously to have the injustice remedied.

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Mrs May damages the Union she wants to defend

Here’s an irony. Mrs May says defending the Union of the UK is one of her fundamental principles. Yet in three of her  misjudgements over Brexit she puts its future more at risk.

In Northern Ireland the upholders of the Union are the majority community who vote DUP and similar  parties. Mrs May instead accepts the analysis of Sinn Fein and the Republic of Ireland, used by the EU to damage Brexit. All of  this group  wish to end the union of the UK and  create an island of Ireland  economic area, as a stepping stone to an island of Ireland country. This is proving damaging to Brexit, threatens the end of Mrs May’s coalition  and is incomprehensible to Unionists in Northern Ireland. Mrs May needs to be on the side of the Unionists who want to support her.

Most of the people of the Union live in England. Mrs May ignores us. The word England rarely crosses her lips. No one speaks for England in the endless devolution/Brexit talks. The strong pro Brexit vote in England is never mentioned.It is as if Mrs May is forgetful  of the voting base that gave her the largest Conservative vote since Margaret Thatcher. It is high time she balanced her view of the Union with recognition of England’s needs, to create a more realistic and even union.

The third mistake is in her handling of Scotland. If you want to keep the union together you cannot keep giving concessions to an Independence party called the SNP who do not speak for the majority in Scotland upon the only issue that matters to them. Their understandable habit of turning every issue into one about independence wears thin after they lost a referendum on this very question. The PM has to appeal over the heads of the SNP to the pro Union majority in Scotland, Labour, Conservative and others. She  has  to say No to anti Union demands by the SNP where these are against the spirit of  Brexit. Fortunately the SNP lost two referendums in the right order. They first lost the Scottish independence referendum, so they then had to accept the validity of the  UK wide EU referendum. It’s no good them saying Scotland voted Remain, as the electorate was the whole UK. Their refusal to accept the UK wide result shows how anti democratic they are. They have become the neverendum party wanting to have more referendums on the same topics until they get a result they like.

Mrs May should try disagreeing with the enemies of our Union more, whilst  being more in harmony with its defenders. The defenders of the Union accept Brexit, as that is the will of the majority in the Union referendum. It is central to the future of the Union that Brexit is delivered properly and promptly. England expects. Wales expects. All those Leave voters in Northern Ireland and Scotland expect. We only keep our Union if Union decisions matter and are implemented  by the politicians.

 

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A small win in the battle against waste in the NHS

The Health Minister has announced a welcome drive to get NHS equipment returned after use so it can be used again after cleaning, or recycled. Some NHS Trusts do this, and the Minister is now seeking to extend this to the whole English NHS. Readers of this site will know I have been pressing for this for some time, as an obvious way of saving money and cutting down on waste.

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Tax and spend

I read in one newspaper that we will be offered tax cuts in the budget. Just what we need to stimulate an economy being put through a combined monetary and fiscal squeeze. Then I read in another paper that the Chancellor will tear up the promises to raise Income Tax thresholds, and find some more money for Universal Credit. I read elsewhere that the Treasury  still thinks it needs to raise a tax or two to pay for the increased NHS spending that has been outlined.

Who knows which of these leaks is informed. They could all be right with a governmet still trying to make up its mind. What is clear is many of us who will have to vote on the budget when they have decided and announced it want to honour the promise to raise tax thresholds , want to cut taxes to provide a stimulus  to enterprise and want to boost spending on crucial public services. We do not however wish to run up excessive debts and do not think there is a magic money tree.

The good news is there is an easy way to do all these things. Make it clear to the EU that we do not owe them money after we leave, and announce we will be leaving on 29 March 2019 with or without agreement to a Free Trade deal. The EU  can decide whether they want  one or not.  It is in their interest to want one and I suspect they would offer one if they were sure we will just leave otherwise.

 

The government also has the option to review the large spending planned on HS2. There does need to be more spending on better targetted rail investments in the North, but even after alllowing for these the cancellation of this vastly expensive project would also free substantial resource to do other things.

 

The extraordinary thing about current Treausry thinking, as they dither over any increased spending  tax cut, is their persistent wish to give £39 bn to the EU. Why cant they transfer some of the toughness they show about  desirable UK spending and tax cuts into determined resistance to paying so much money to the EU when there is no legal requirement to do so.

 

I have one simple piece  of advice for the Chancellor. Dig in against more money for the EU and all your money problems for the next three years drop away. Grasp that we will trade just fine on 30 March 2019 if we just leave. That is what we voted for. We want to spend our own money on our own priorities. What part of £39 bn doesn’t the  Treasury understand?

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My speech during the debate on the Agriculture Bill, 10 October 2018

John Redwood (Wokingham) (Con): There has been a big decline in our self-sufficiency as food producers during the 46 years in which we have been in the common agricultural policy. As a result, we are now net importers from the continent of Europe, to the tune of £20 billion a year—a very large part of our balance of payments deficit—of food, including processed food, that we could rear or grow for ourselves, or process for ourselves if we wished. I hope that, as the Secretary of State works away at the Bill during its passage through the House, he will take on board what is being said by all of us who are urging him to make good production—high-quality food production, and local food production—a central part of his mission and what he is trying to achieve in conjunction with our agricultural businesses and our farmers, because much more can be achieved.

One of my colleagues has already pointed out that we could have new procurement rules that would allow us competitive procurement that also takes into account food miles. A really good green policy is to get the food miles down. We do not need ships and trucks carrying around bulky and quite heavy items of not huge value, when we could be growing them for ourselves and the farmer could be making a profit because transport costs would be lower, so can we please do that?

Will the Secretary of State understand that perhaps the most important thing farmers need to know, from 30 March next year if we leave without an agreement or from 2020 if we leave with an agreement, is what our schedule of tariffs will look like, because Brexit is not a great threat or problem; it is a massive opportunity? Here is an industry that has been wrecked and damaged and pillaged for 46 years, almost as badly as the fishing industry in some cases, which was probably the worst hit, and we have the opportunity to take it back in hand and encourage those who work on our behalf in the industry and to bring a bit of sunshine to the operation to show that there is a huge market opportunity out there.

The great joy is that this Bill rightly takes powers so that the Secretary of State and the Government can do what they need to do with the WTO, which will be running our trade framework whatever we do by way of agreement or no agreement. The WTO also has a pretty important role in this today, but of course we cannot influence it directly because the EU handles the account, and very badly it does so from the UK point of view.

If we look at our tariff schedule, we see at the moment that we have eye-wateringly high tariffs on temperate foods that we can grow or produce for ourselves from outside the EU, but zero tariffs on temperate products we could rear or grow for ourselves from inside the EU, and that competitive onslaught from some of the intense, and often subsidised and highly capitalised, farming on the continent has done enormous damage to our market share and undermined the businesses of many of our farmers over the 46 years we have been in the EU.

The Government should set out urgently for consultation what our tariff schedule will look like if we are leaving on 30 March 2019, because I assume the tariffs will be above zero for the EU as they have got to be the same as for the rest of the world, but I assume that we would want lower overall tariffs than the EU imposes on the rest of the world, and I assume that we would want to flex the tariffs down more on the things we cannot grow and rear for ourselves and would also want to make sure there is protection in there, in the spirit of our current regime, which is heavily protected against non-EU products.

I am not sure what the right balance is; that is something I am sure my right hon. Friend and the International Trade Secretary have either worked out or will work out quite soon, but the sooner we consult on it, the more hope we will give the farming industry. It must feel part of this process, because these will be its tariffs and they offer us this great opportunity to get access to some cheaper food where we are not competing and have uniform protection at a sensible level for both the EU and the non-EU, because it is the EU that is causing the main threat.

May I remind my right hon. Friend that he is our English Agriculture Minister and we want him to speak for England? Who in this Government does speak for England? I come into the Chamber and hear debates about the Scottish problem and the Irish border, but we must not forget England, our home base for most of us on this side of the House. England expects; England wants better; England wants to be able to compete; England wants a policy designed to promote English farms. I find that a really good English farm, with really good farming, looks beautiful and deals with the environment as well as food production.

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The Treasury keeps the UK under the control of EU austerity policies.

The UK solemnly goes on complying with all requirements on a member state of the EU. This year they dutifully filed their “2018 National Reform Programme and their 2018 Convergence programme”. The Treasury has long accepted the EU’s demands that we keep throttling back the deficit and move to getting down the debt as a percentage of GDP. There are times when the EU are right about this, but at issue is who makes such a judgement and who actually runs our economic policy? The EU has overdone the austerity in some cases causing more unemployment and lost output than needed. Mr Osborne turned this into the keystone of his economic policy and claimed it as his own, but it was just the UK version of EU economic policy which we were obliged to follow by being members.

The EU duly marked our homework this year and concluded formally “The Council is of the opinion that the UK needs to stand ready to take further measures as of 2018-19 to comply with the provisions of the Stability and Growth Pact”. Presumably seeing that this would go beyond our membership, they mentioned in the supporting text the possibility that we will stay in for another 21 months transition when they would expect this policy to continue to be binding. The Council has instructed the Treasury to keep the nominal growth rate of public spending down to a maximum of 1.6%. That is a real terms cut at current inflation rates.

I want the UK Treasury to step aside from the long shadows cast by the European Semester and to announce a new budget strategy for the years ahead following our departure on 29 March 2019. We need a policy which is kinder to growth and to public service provision than the EU strategy has proved. The PM has said she is ending austerity. This is incompatible with following EU rules beyond next March, and depends on getting our money from the EU to spend at home.

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Let’s grow and rear our own great English breakfast

In my speech to Parliament on the Second Reading of the Agriculture Bill I will ask the Secretary of State to improve his Bill. It should have at its centre the provision of laws and government policies that support growing food at home, and promote more UK output. Mr Gove presents himself as a champion of the environment. What better cause than to grow more food at home, slashing food miles and taking care of our countryside for a useful purpose at the same time. It will bring big carbon savings on transport, refrigeration and storage.

During our time under the control of the EU Common Agricultural Policy we have watched as we have become more and more dependent on food we could produce for ourselves coming in as imports from the rest of the EU. Meanwhile food we cannot grow for ourselves faces substantial tariffs from non EU sources, with no benefit to us.

So my questions are

Will he put food production at the centre of his Bill? Why is he relaxed that the Great English breakfast often has Danish bacon, continental pork sausage and Dutch tomatoes? Why does traditional English roast beef often use imported beef with Spanish and Dutch vegetables? Can’t we do these things for ourselves again?

Will he with the Trade Secretary publish now the schedule of tariffs the UK will impose on the rest of the world including the EU on 30 March 2019 if we leave then, or at the end of the Transition period if we reach an Agreement? Will he cut the tariffs on non EU products we cannot grow for ourselves? Will he set a sensible tariff on worldwide temperate produce, which can be lower than current EU tariffs as we will be levying on rest of EU produce as well?

Will he examine how the current EU subsidy levels could be better spent to reward those farmers who boost output and productivity as well as dealing with environmental concerns?

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Why do so many in the media ignore the most important points about our economy?

The UK establishment media are usually slaves to Treasury spin and Bank of England error.

Throughout the Osborne years as Chancellor we were told the main thrust of economic policy was to bring down the deficit. 80% would be achieved by spending cuts and 20% by tax increases. I set out regularly from the Treasury’s own figures that public spending carried on rising in total in cash terms, and edged up a little after allowing for inflation. In normal language this meant 100% of the large deficit cut achieved relied on a very big increase in tax revenue. Some of this increase came from higher rates, particularly on VAT, and some from lower rates on higher incomes which generated substantial extra income for the state. It was of course true that some programmes suffered from actual cuts, and areas like the NHS and schools with no real cuts were squeezed more than under previous budget plans. It was also true that areas like Overseas Aid and EU contributions marched remorselessly upward. The Chancellor sought to gradually relax the tough controls and cuts Labour had imposed on capital spending towards the end of its period in government as it wrestled with its huge deficit.

More recently last spring I highlighted the addition of a monetary squeeze to the fiscal squeeze going on and predicted this would lead to slower growth. That duly happened. The tax attacks on housing in the 2016 budget and on cars in the 2017 budget meant these areas suffered especially. I have yet to hear or see interviews asking why we need a combined monetary and fiscal squeeze, or even much acceptance that this is what is happening. This slowdown has nothing to do with Brexit. The economy performed well for the first nine months after the vote, when the official forecasts predicted an immediate collapse and a recession in winter 2016-17 which did not of course happen.

There have been too few examinations of how the UK establishment so misjudged the adverse impact of joining the EEC, misjudged the dreadful impact of the European Exchange Rate Mechanism, misjudged the Euro ignoring the obvious structural weaknesses which led to a series of Euro crises, misjudged the banking boom and bust and most recently misjudged the impact of a Brexit vote. One golden strand, which in their hands turns out to be base metal, links them all. Any economic project which comes from the EU is always favourably rated, and is usually bad news. Remember the “golden scenario” they said the Exchange Rate Mechanism would bring about? Or the huge extra growth that the Euro would foster? When you look at economic history you discover that a scheme which could be good for jobs and growth has usually been at best disappointing and at worst downright hostile to progress.

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Interest rates, savers and borrowers

Many people over 50 have money on deposit. They would like interest rates to go up. Some retired people think it is unfair that they have been prudent, not spent all they earned, and now find tiny returns on the cash they put by to supplement the pension.

Their children and grandchildren may see it differently. Lots of people in their twenties and thirties think house prices are too high and think they cannot afford to buy. This generation of twenty somethings has more graduates and higher wages than previous generations, but a lower percentage of home owners than their parents at the same stage.

So what is the right answer on interest rates? To keep them low for a bit longer. There is no great inflationery pressure to worry about.The UK government is pursuing a fiscal squeeze and keeping taxes very high, so higher rates as well would be damaging overall. It would redistribute a bit from young to old which we do not need to do.

Relieving the pain of higher taxes would also help. Take down the cost of buying a home by cutting Stamp Duty. Cut business rates which are worsening the pressures on traditional businesses. Upward only rent agreements for shops are being overthrown by market forces, by renegotiation and by bankruptcies and financial restructurings. Business rates remain obstinately high and rising.

These judgements are always a difficult balance between the interests of borrowers and lenders. Past gross mismanagement by Central Banks and the commercial banks they lead and control has made an extended period that favours lenders more of a necessity. Japan had a more spectacular boom and bust crash at the end of the 1989s and is still living with zero interest rates as a result. Japan also has no inflation.

During this period when long term borrowing costs are very low by historic standards, there is a good case for businesses and individuals to borrow more for worthwhile projects and investments. There is also still a good case for shifting borrowing longer where possible to take advantage of still relatively low long term rates. The UK is short of capital investment in a wide range of areas, and needs to press on with substantial new investment in the digital wave, to increase productivity to allow more better paid jobs and to replace future low cost jobs with technology.

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Beware the cold winds from Central Banks

The Bank of England has pursued an energetic monetary tightening since the spring of 2017. Two interest rate hikes,a withdrawal of credit facilities to commercial banks and a major FPC tightening on car loans, some mortgages and consumer credit have helped slow the economy markedly. This has reinforced the fiscal squeeze,with higher taxes and a lower deficit, which is also pushing the economy into slow growth.

In the USA the government in contrast is keen to promote growth. It has done so by tax cuts for all and some state spending increases. As a result the US economy has accelerated well. This week the Chairman of the Federal Reserve Board declared war on this policy by letting us know that there will be more interest rate rises to come to brake the economy’s progress.

Markets had been expecting a shallow rate cycle, with a peak official rate of around 3%. There is no undue inflationary pressure, and wages have been going nowhere in real terms despite the low levels of unemployment. The Fed now seem to be implying they think their current rate of 2.25% is “behind the curve” or too low. Markets were duly spooked. Longer term rates rose sharply, the cost of US government borrowing went to a new high for this cycle, and stockmarkets fell.

This icy blast will be felt around the world. There has been a general tendency to higher rates and monetary tightening all year, and that will now get worse.Most at risk are the badly run emerging economies with too much dollar and other foreign debt. We have seen big currency falls in places like Turkey, Argentina and Brazil, with falls by most currencies this year against a dollar buttressed by rising rates.

Central Banks should ease up a bit. Their ruinous policies caused the boom and bust in 2005-10. They have been rightly in atonement for their bad decision to deflate their credit bubble too quickly in 2008, keeping rates low and encouraging banks to rebuild damaged balance sheets to make the system more resilient. Moving too quickly to higher rates is a destabilising move which they should avoid. There is no “normal” higher rate they have to get to.

Debt is sustainable all the time the borrowers keep their jobs and all the time the interest charges stay around current levels. Pushing rates too high too quickly undermines both these conditions for sustainability.

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  • 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.

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