Who is to blame? Where does the power lie?

There is little limit to what you can achieve in politics as long as you are happy for others to take the credit. Some people have considerable influence but are happy to let others take the starring roles and to decide and implement the new ideas. Some with influence are civil servants, some are consultants, some are serving politicians. Much of government is a slave to the ideas of old economists and other thinkers. Much of modern government is driven by consultants who come in to recommend courses of action, design media strategies, and then take on the role of helping implement the decisions. The public never knows who they are.

Some politicians define their roles by the media. This became an acute preoccupation with New Labour, and has continued with many in government since. Some politicians have the strange idea that they can manage the media. They get upset when their agenda is displaced by events or someone else’s agenda. Too much concentration on the media can divert their attention from the day job. Often the reason they are doing badly in the media is not media mismanagement, but mismanagement of a part of government which then attracts justified pubic anger. They need to spend more time trying to fix the real problem, and less time trying to fix the media.

Advisers advise, and politicians decide. The media reports decisions and reactions to them. That is the constitutional theory. Sometimes it works out like that. There are frequently other models.
Sometimes officials decide and politicians do not realise what is going on. Sometimes officials recommend strongly and politicians acquiesce. Sometimes politicians do query an approach but are told it is the only technical, legal, practical or safe way to proceed. It then takes a strong minded and well informed politician to insist on a different way of proceeding. Sometimes the media have their own agendas and want to make the politicians follow them.

There are government Ministers who take a Manifesto or political agenda and drive it through, using officials to improve and implement. There are other Ministers who are but actors and actresses voicing the lines of departmental officials, both within and outside government.

We see in the questions about who is to blame for the Tower inferno these same issues of responsibility, knowledge and advice in local government. Is an elected Councillor allowed to rely on the technical expertise of his Council’s Building Regulation Department and the Fire Department? Does he or she ever need to challenge their technical advice and decisions? If he is told of what they are doing does that make him to blame if it is wrong? Or is he to blame even if he was not informed and it was handled as a delegated matter? Should a Councillor approving expenditures to improve the thermal insulation and look of a building have to do enough research to satisfy himself of the safety, or can he rely on the professionals designing and procuring the building to do that? The Councillor wants to take the credit for the improvement, so should he therefore take the blame if it goes wrong?

These are difficult issues. I would be interested in your views. The danger is we make the role of the Councillor too difficult so no-one good will want to take it on. The other danger is we expect too little, and the Councillors’ collective power to challenge and to improve the work of professionals and officers lapses or fails to do its job. In the worst cases in the public sector no-one is to blame. They all become good at laying off the risk, because they can claim that no one person ever took the decision. It just happened.

Posted in Uncategorized | 116 Comments

Constituency email service

The Parliamentary email system has been the subject of a cyber attack. Yesterday I was able to get access to my Parliamentary emails and to answer them. Today the system has been closed, so I have no access. I am therefore unable to provide the same day reply service I usually offer, and will answer them as soon as I have access again.
Anyone with an urgent query should notify me through this website and leave me a contact so I can get back to them.

Posted in Uncategorized | 9 Comments

Mrs May and Mrs Merkel

Some in the press and media wish to personalise the negotiation between the UK and the EU into a battle between Mrs May and Mrs Merkel. As always on the UK side there are those who want to portray it as a fight between a weak UK and a powerful Germany. They seem to think Mrs Merkel is in a strong position, whilst they wrongly allege Mrs May is in a weak position.

It starts with EU spin trying to suggest Mrs May is in a weak position owing to the recent election. That is an odd allegation to come from the continent. Mrs May and the Conservatives received 42.4% of the popular vote in June. Mrs Merkel and her party received 41.5% in the last German election. Mrs Merkel’s party currently stands on 38% in the polls, and has not been above that for two years and has often been well below it. Mrs Merkel won just 33% of the seats in the German Parliament with her party, Mrs May won 49% of the seats in the Commons. Mrs May need not face another election for five years. Mrs Merkel has to go to the polls in three months time and looks set to do worse than last time. Mrs May can govern as a single party. Mrs Merkel has to govern in coalition partnership with the SPD, the equivalent of Mrs May having to govern with the support of Labour. I would rather be in Mrs May’s position than Mrs Merkel’s.

The posturing by the EU in response to the UK proposal on reassuring UK and EU citizens resident in each other’s territories shows they are misjudging the strength of their position. It looks as if they think delaying and being difficult could lead to the UK giving up and staying in the EU. That would be a bad misreading of the situation, and of the recent election where voters decisively rejected the Lib Dems who offered just that approach.

If the EU wastes too much of their negotiating time on making silly claims for large sums of money, and on pressing for future freedom of movement as well as accepting past free movement, they will run out of time to secure tariff and barrier free access to our market. French dairy famers, Danish pig farmers, Dutch market gardeners, German car producers and many others who would face tariffs will not be amused if that happens. Maybe Mrs Merkel’s forthcoming encounters with the German electors will make her more realistic. It will certainly remind her of how she lost popularity over her migration policy since she last asked the voters to vote for her.

There are signs that business on the continent wants their leaders to get on with it to ensure smooth trade in 20 months time. It would be good news if the UK media started submitting the other EU governments to the barrage of difficult questions over how their businesses will fare in 2019 that they give us daily at the UK end.

Posted in Uncategorized | 145 Comments

Home ownership

Many more people want to own their own home than currently do so. Generation Rent tells us they want more opportunity to buy, but feel crowded out of the market by high prices and scarcity of homes.

I agree with the majority view that home ownership is usually the best answer for people.  It is good to have control of our property, so you can decide how to decorate it, how to arrange the internal space, and how to organise the services. Above all home ownership is a good lifestyle choice as you get older. Once the mortgage is repaid it is much cheaper living in a home you own than living in rented accommodation. Those who rent all their lives end up paying most for their property once retired, on a lower income than they had when working.  If you pay rent for 60 years rather than a mortgage for 25 years, you pay so much more. If you rent a property for £1000 a month that would be £720,000 over a lifetime, but of course it will be so much more as the rent is likely  go up a lot over the next 70 years. If you buy  the home instead for  £250,000 home on a mortgage you might end up paying £400,000 of interest and capital repayments over your lifetime.

None of these numbers requires house prices to go, though in the past they have done so. If they do then of course the home owner is better off again. In old age they can sell the property and move to a smaller place, releasing capital to spend if they wish. The person living in their own home also can pass it on to their heirs  or to a charity of their choice , whilst the person in rented accommodation just leaves the termination costs of the tenancy to their estate.

Many Conservative MPs and advisers think there is an urgent issue of how we can help more people to own. We want to empower a new generation of home owners. The last government put in place schemes to help purchasers. There is the Help to buy scheme to assist with raising the money for the deposit. There are various affordable homes for sale projects. The question is what more needs to be done.

Reducing the numbers of new migrants arriving and needing homes would help. This is something the government can do with its new border control scheme for when we leave the EU. Increasing the supply of new homes would help, which the government is working on.  Looking at ways to help finance homes and to make them more affordable is moving to the top of the agenda.

There can be more sales of public sector owned homes at a discount to tenants. There could be a rent to mortgages scheme, where good public sector tenants get credit for regular rent payments and build a stake in their home. There can be more shared ownership schemes, with easy ways of a person buying a   bigger share as they can afford it.

We need to make the case again for ownership. Doubtless we will be told that selling existing public sector homes reduces the supply and adds to the problem. This is the most absurd criticism of them all. If a tenant buys the home they are living in the supply of homes is totally unaffected, as the same family are living  in the same home after the transaction. The advantage is twofold. That family have something they want , and the state has money from the sale that it can spend  on building an additional home, thereby expanding the supply of property.

Yours thoughts on what we could do would be appreciated. I will return to this topic with more specific proposals in due course.

Posted in Uncategorized | 140 Comments

The economy one year on from the referendum

The Remain campaign told us it would be bad short term news for the economy if we voted to leave.

They told us  interest rates would go up.  One year on the base rate is down from 0.5% to 0.25% ,and the government 10 year borrowing rate is down from 1.4% to 1.02%.

They told us the economy would dive and there would be a winter recession. Instead the economy has grown by 2% over the last year, more than the Eurozone.

They told us the stock market would fall. Instead the FTSE 100 Index of leading shares is up by a massive 25%

After the vote with the FTSE 100 rising, they said they meant the FTSE 250, the Index of domestic companies, would fall. That is up by 20%

They said housebuilding would be hit and there would be a housing collapse. Starts of new homes are up 15%.

They said the car industry would be damaged. It has instead achieved record output and record exports for this century.

I said none of the above would happen, and forecast continuing growth. I was told I must be wrong because the IMF, the World Bank, the President of the USA, the UK Treasury and the leading US Investment banks all knew voting leave would do short term economic damage.

They got one thing right. The pound did go down more – it was falling well before the vote. I always ducked that question, as I thought it might go down.

Posted in Uncategorized | 72 Comments

Adjusting the Manifesto

The lack of a majority has confirmed a rethink on some of the Conservative party’s Manifesto policies. That would have happened anyway, as many Conservative candidates in the election disliked the policies themselves, or came to dislike them when they heard the public reaction. I did not want to remove the triple lock or leave many pensioners fearing the loss of the winter fuel allowance. I certainly did not welcome the social care proposals. That was why I did not include any of these in my personal election address, and did treat these policies as consultations, encouraging people to write in with their views.

There is no mention of legislating for changes to social care or winter fuel payments or the triple lock on pensions in the Queen’s speech. The Conservative party in Parliament assumes these have been dropped and is happier for their disappearance. It was strange during the election that our cries for more information and for sensible changes to these policies went unheeded. Many of us said if they insisted on removing the winter fuel allowance from some, would they please tell us what the income cut off would be to put the minds at rest of the many who would presumably still receive it. Some thought it should be removed from higher rate taxpayers, others thought it should be made taxable. I was in favour of no change. We also urged them to tell us what the cap on social care costs would be, an important part of their draft policy. Again there was no figure given, leaving many worried about how much they would have to pay.

I spent considerable time during the election explaining by email and in conversation to electors in Wokingham what the current social care system entails. Many did not know that if an elderly person has to move into a care home then the home they are leaving is taken into account in their assets. If they have money then they have to pay themselves for the care home. There was also some confusion over the need to pay social care costs if you carry on living in your own home. The boundary between healthcare, delivered free, and social care that you pay for is a difficult one to define. The public tends to the view that social care is healthcare.

Posted in Uncategorized | 117 Comments

The DUP : No deal is better than a bad deal

It is proving difficult to explain to some politicians how negotiations work. If you want to buy someone’s house you do not say you want to buy it whatever the price, and then pay up when they take advantage of your folly. If they ask double the market value you refuse.

So it has to be with political deals. A Supply and confidence agreement with the DUP would be helpful. People would know in advance that the government has a majority to get through spending plans and to see off any No Confidence motion. If we do not have a formal agreement it is still very likely the DUP will vote with the Conservatives, given their views on Brexit and Mr Corbyn. There is a lot of common ground on the EU, the Union and the economy.

The main issue that has held up an Agreement seems to be money. How much extra can we afford for Northern Ireland, and what will be the reaction of the rest of us representing English or Welsh or Scottish constituencies?

I am relaxed with or without a deal. I think the government will have a majority to pilot the main legislation through, even allowing for the likelihood that Labour will be difficult and seek to undermine the very Brexit they proposed in their Manifesto.

Posted in Uncategorized | 120 Comments

The rich and their responsibilities.

 

To Labour anyone earning more than £70,000 a year is rich.  Many people on such an income  do not see themselves as rich.  It seems as if having savings and assets is also a crime to some in Labour. Yet many people save hard for their retirement pension, and struggle to repay the mortgage on their homes. They do not see themselves as rich either. They also like it if something remains to pass on to their children. Today we are witness to a big debate about who is rich, and what contribution should they be expected to make to the wider society. In the recent UK election Mr Corbyn claimed that the rich as he defined them  should pay more tax to help those on lower pay and pensions.

 

There is no agreed definition of who is rich. People’s idea of what rich looks like is heavily influenced by how much wealth and income they have. If you have nothing someone on £40,000 a year is well off. If you own no assets someone with a £200,000 house  is well heeled. Someone living in a £200,000 house with a large mortgage, family commitments and an income of £40,000 may not have anything over at the end of the month and may feel a bit squeezed. They do not think they are rich.

 

A better description of rich is probably one based on lifestyle than on any particular figure for assets or income. Let’s consider two widows, as I have done before on this site. One lives on her own on a State Pension and top up benefits  in her one bedroom flat in prime London. It is worth £1.2m but she has no other assets and finds it difficult to afford the living costs .All the time she lives there she is hard up.  Another lives in a £200,000 larger  property  200 miles from London and has £1 million in financial assets to augment her State Pension. She can afford a decent lifestyle.  Are either of these millionaires rich? Or does a rich person  need to be someone with a £1 million plus home of their  own, and several millions in investments so they do not need to work but can live on their investment income?   Or is true rich a senior Director or executive of a large corporation, or a footballer, with a telephone number salary and plenty of assets from past earnings? How much more of these people’s earnings should the state take?

 

In the end these are political judgements which have to be translated into tax law. All parties in UK government believe in income redistribution, taxing the better off more highly to provide support for others. Governments also impose some taxes on capital, usually when assets are  bought and sold. These questions  are also attitudes of mind which affect how people live together in society. If you try to tax at too high a rate rich people leave the country or find legal ways to arrange their affairs that thwarts the aim of the tax rise. 

 

Many people with savings have thought it a good idea to buy an extra property or two and let it out. They like the rental income, and have usually benefited from rising capital values as well. It does mean the rich individual has a special relationship with his or her tenants. The wealth is on show, and there can be difficult relationships if the landlord is thought to be too hard or unreasonable. Modern tenancy law has tried to move the balance a bit in favour of the tenant. In a world where the leader of the Opposition says the homes of the rich if they are not being properly used should be requisitioned for those in need,  the  landlord has to be sensitive to the mood. The  individual who has bought a holiday home or spare property which they do not live in may be unpopular in the community where  the property usually stands empty.

 

In this climate of opinion those with higher incomes and assets have to be well on the right side of tax law. Tax evasion is a crime and  some see clever tax avoidance as equally unacceptable even though it is legal. Portfolio investments in bonds and limited liability companies have advantages over direct ownership of property or companies for the better off , as the investor is shielded from much of the responsibility of ownership by the professional managers employed. If a multinational treats its employees badly or causes deaths by lax safety management it will be the well paid Directors and executives, not the shareholders, in the dock. If you are the landlord and the tenant is put at risk, or if you own the company and the employee is badly treated, you will be in the dock.

 

Limited liability companies were a great breakthrough for everyone because they allowed people to put up money without putting the rest of their wealth at risk. It also now means the investor lays off the risk for misconduct on those who run the company for them, which in the current climate is also important in keeping people investing. It should  not be an excuse however for  no-one being to blame.  

Who do you think is rich, and what more should we expect of them? 

 

Posted in Uncategorized | 150 Comments

Why won’t so many in the media ask questions of the EU?

For a year many in the media have recycled old tired materials from the referendum. They have invented something called soft and hard Brexit and have gone on and on trying to find weaknesses in the UK government position, and trying to shift the negotiating aims. They have failed to show impartiality by doing the same to the EU. Why aren’t they ringing round their contacts in other member states governments and business and finding out their differences on what the EU wants?  Why don’t they analyse all the different claims and protests the EU Commission has made, and set them against the views of individual countries? You could make a programme about all the varied claims for large sums of money which seem to have no legal basis whatsoever.

So far what has been fascinating about the rest of the EU debate is how unlike the UK media and Commission briefings it has been. I have not heard the Irish government say they think high tariffs on Irish agricultural products into the UK is a price worth paying to teach us a lesson. The Dutch government do not say they want their farmers to pay tariffs or stop supplying us with all that market garden produce and all those flowers. The German government has been noisier about how the UK must not gain from leaving, but has fallen short of saying a 10% tariff on cars is a good idea. Why don’t the media do more interviews to establish what are the economic and business interests of the rest of the EU? And why don’t they say the UK offer meets their needs far better than the Commission’s general idea of punishment for the UK which would mean more punishment for the rest of the EU given the balance of trade. In a world where the UK was forced by the EU to accept high tariffs on agricultural trade, the UK would gain the option of buying cheaper product elsewhere  by cutting tariffs or growing more at home where we are able to, which the EU under their own rules would not be able to do.

The UK right from the beginning said we wanted to reassure all EU citizens living in the UK they are welcome to stay. In turn we would need the same reassurance for UK citizens living in the rest of the EU. Why didn’t the media put more pressure on the EU to agree to just this decent and sensible approach? Why did the EU want to delay, and want to propose changes to a sensible arrangement? I have never thought the EU would end up forcing UK pensioners out of their homes on the Costa Brava, so why not say so immediately? I am glad that the EU now agrees this issue should be one of the first to be tackled. I hope they will not continue to make pawns of people living abroad, and look forward to the media directing their questions to the EU over this.

The UK also made clear in its Article 50 letter of withdrawal that it accepted the EU view that you cannot stay in the single market and Customs Union when you leave the EU. This letter and supporting policy was backed overwhelmingly by the Commons when it was debated and voted. It was also placed in the Manifestos of the Conservatives and Labour who went on to get 82% of the vote in the election. Maybe the media should recognise this.

In summary the people decided to leave the EU. The last Parliament voted overwhelmingly to leave the EU and sent the letter which means we are leaving the EU. The aims for the future relationship are straightforward and cross party. We seek continuing tariff free trade on a  similar basis to today, and many collaborations, joint investments, student exchanges, tourism and the rest as close neighbours should. This is not the UK begging favours. It is commonsense, in their interests as much as ours. What’s stopping them sorting out the detail to back this up?

Posted in Uncategorized | 179 Comments

Let’s try negotiating with the EU rather than ourselves!

At last today the UK will start negotiating with the rest of the EU. Some in politics and the media have been making our country look stupid by persisting in having a negotiation amongst ourselves over how weak a negotiating stance we should adopt in Brussels. Some do this because they do want to wreck our negotiation proper. Others do so because they do not understand how a serious negotiation is best handled, and doubt the underlying strength and fairness of the UK position.

We have heard siren voices tell us we need to pay large and maybe continuing sums of money into the EU. Of course not. There is no legal requirement to do so. The rest of the world trades happily with the EU without paying budget contributions or one off payments.

Some say we have to stay in the single market and or Customs Union. Of course not. Most countries that trade with the EU are in neither. We do need to leave both bodies, as the Manifesto of both Labour and Conservative made clear in the recent election, in order to negotiate better trade deals with the rest of the world. The rest of the EU stated categorically we cannot stay in the single market without accepting the laws, freedom of movement and budget contributions that go with it. In other words to be in the single market we would need to be in the EU.

Some say the UK cannot expect to get a free trade deal with the rest of the EU when we walk out. Why not? We have a comprehensive free trade deal with them at the moment, and the UK is happy to offer continued easy access to our market. The rest of the EU sells us so  much more than we sell them. Why would they want to lose some of that?

Some say you cannot negotiate a  free trade deal in 20 months. That is probably true, but we don’t need to negotiate one. We merely need to renew one that exists already.

Of course it is possible the rest of the EU will want to harm their trade with us. In that case the negotiations will take the form of the EU proposing barriers to their trade with us and ours with them, whilst we urge them not to. We will also of course be pointing out they cannot do so against WTO rules, which will greatly limit their scope to do damage. It will mainly come down to them imposing large tariffs on agriculture where WTO does allow such practises, and us retaliating. The UK can once out also remove tariffs on agricultural products from the rest of the world that we cannot produce for ourselves.

Tomorrow I will talk about a new range of stories the media could pursue on this topic, to get us away from the boring and repetitious “Lets water down and undermine the UK position” pieces that they all have been running for a year.

 

 

Posted in Uncategorized | 150 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.

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