Why Mr Trump beat Mr Cruz – and the others

The last stand of the Republican establishment behind Ted Cruz turned out to be futile. Ted Cruz’s small c conservative platform has not normally recommended itself to many in the Republican establishment. Their belated endorsement of Mr Cruz looked like a reluctant wish to salvage the pride of established politicians against the insurgent outsider. The rank and file Republicans turned out in numbers in Indiana to tell Mr Cruz not to bother.

 

If you compare the policy platform offered by Mr Cruz with Mr Trump’s it makes an interesting contrast. Mr Cruz highlighted the need to keep “under God” in the oath of allegiance, and made “restoring the constitution” his number one issue. Second choice was defending the right to carry arms and third was a Trump lite policy of building a “wall that works” to improve border security. Jobs, opportunity and tax were all lumped together as his eighth area of interest, after religion, defence, standing up for Israel, and abortion. Mr Cruz was trying to put together a Republican coalition of the gun lobby and  the Christian lobby. There were simply not enough of these conservative Republicans interested in these rather narrow issues to give their “unity” candidate  enough votes to win.

 

Mr Trump’s slogans of “Make America great again” and we’ll be winning again were designed to lift spirits, to appeal to the many, and allow people to place their own ambitions and expectations on them. The policy platform behind the slogans concentrates on major tax cuts for all income levels, uniting rich and poor in wanting a Trump Presidency to leave them more of their own money to spend.

 

Now Hillary tries to take the full mantle of the establishment, and tries to win over Republicans who do not like Mr Trump. Fashion and the commentariat will assume she will win. She has to watch out in case Mr Trump’s  positive messages and tax cutting promises  start to take her working voters away. They  too might find the Trump enthusiasm and optimism infectious, and may buy the idea that a non politician could be a breath of fresh air.

I do not of course have a view on who I want to win, as that is a mater entirely for US voters to decide.

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Asylum, EU law and the EU-Turkey Agreement

Yesterday we raised in Parliament the issue of the EU’s wish to abolish the Dublin convention.  Anne Main MP asked an Urgent Question of the government. We wanted to know how asylum claims would be handled under the revised law the EU is discussing.

The Dublin Convention states that the first country receiving an asylum seeker in the EU should normally handle the asylum claim. The idea was to work with national authorities rather than overriding them all the time. Now the EU thinks that it ought to introduce a system of burden sharing, where the states most likely to receive asylum seekers – Greece, Italy, Spain etc – can require other member states to take a quota or share of the new arrivals and to process their asylum requests and offer those successful a home.

The Minister explained that the UK could opt out of this new arrangement, though he fell short of promising the UK definitely would opt out. He said the UK would still work under the Dublin approach, and regard its duty as being to handle asylum requests only from people arriving first in the UK, or people with family connections. He saw that if the EU abolishes the Dublin  Convention to replace it with a quota system then the new EU law will somehow have to keep the Dublin approach just for the UK. He seemed to think that would be the case. We will need to see the language of the proposals as the negotiations develop. It would make the new law more complex.

It is all a timely reminder of just how fluid fundamental matters are in the EU. The UK supports the Dublin rules, but does not seem to think it can stop major revision to the system. Once again the UK will be fighting from the sidelines for special treatment. Ahead of the referendum the rest of the EU will doubtless allow the Uk to imply nothing need change in our arrangements. But what would happen if we voted to stay in? The other countries probably think the Uk should do more and should help them in their hour of need by accepting a substantial quota under the new rules they are designing.

I asked the Minister about the extracts I published from EU documents yesterday on the question of the Turkish borders. I did not get an answer to my queries within the reply of the Minister. .

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The EU and the Turkish border

This week sees the EU offer visa free access to Turkey for the Schengen countries. In return the EU has set Turkey 72 tasks to improve her border controls, visa and passport handling and  more general human rights improvements along with better access to asylum for those fleeing terror.  Turkey has borders with Syria, Iraq and Iran. The EU, in an effort to stop illegals coming by sea from Turkey to Greece, now has to be more concerned about Turkey’s borders with the Middle East. .

The UK government claims this has no impact on us, as we are not in Schengen. That is not true. The EU is paying for some of the improvements to Turkish migration handling and border security. The UK will be expected to pay her share of the costs through the EU budget – there is no separate Schengen area budget. The UK will be affected as more Turkish people enter the Schengen area and maybe gain citizen rights within the EU, allowing them entry as residents to the UK.

Reading the documents the EU is seeking to make Turkish systems and policies the same as EU ones. It is clearly preparatory to full Turkish membership of the EU, which is underway at a slow pace with a formal Turkish application. This border agreement could result in some speeding up of the full application, as it deals with many of the issues the EU has found difficult about Turkish membership in the past. The 72 measures Turkey has to implement for the visa free movements includes the right to a fair trial, freedom of expression and no discrimination against people on racial or religious grounds. This week will see the EU say in terms that Turkey has gone far enough in fulfilling these requests to justify visa free  status, whilst no doubt urging further improvement.

The Turkish authorities have to offer judicial protection to asylum seekers, and a proper appeals process. At the same time the EU is assisting Turkey to strengthen her borders with Syria, Iraq and Iran. This according to the EU official report includes “ditch excavation, lighting, wire entanglement, trellis fence, road maintenance and construction and modular wall construction”. Turkey is required to negotiate readmission agreements with 14 countries including Afghanistan and Algeria, and to impose airport transit visas on travellers from 18 countries.

In 2013 25,121 “irregular” arrivals of people were recorded by Turkey.In 2015 this shot up to 888,457. Turkey is housing many Syrian refugees and others and wants help from the EU neighbours. As a result the EU’s border controls now require strong controls on the Turkish borders, and the UK along with all other member states has to help design and pay for a better border system for Turkey.

 

 

 

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We have already lost around £200 bn of income and output by belonging to the EU

Using Mr Osborne’s method of assessing economic loss we have already lost far more than he fears we might by belonging to the EU.  (The approx.  figure for losses  is based on current price levels and level of GDP). Just look at the losses we can directly blame on our membership:

  1. Membership of the European Exchange Rate Mechanism forced on us by John Major, the CBI, the TUC and the Labour party. It led directly to a large recession, costing us 5% of our National Income, with losses in the years that followed.
  2. Membership of the Common Fisheries policy, losing us a third of our fishing output and putting us into trade deficit on fish.
  3. Forced premature closure of our coal fired power stations, and consequent loss of coalmines.
  4. Loss of heavy industry as a result of high energy prices required by EU energy regulations.
  5. Loss of export opportunities during Euro crisis of 2011, and over the long term thanks to slow growth in Euroland resulting from the currency scheme and its austerity policies.

 

There is no evidence that our growth rate increased as a result of our membership of the single market, and no favourable upward wobble in growth when they “completed” the single market in 1992 or widened it again in the years thereafter. This is not surprising as the “single market” is a set of complex and expensive rules and laws, not a proper free market. The growing complexity of EU single market measures coincides with the last decade when growth has been slower than before.

It would not be right to blame the EU on its own for the banking crash of 2008, as this also occurred in the USA. The EU version of the banking crash has however turned out to be deeper and longer lasting than the US version thanks to the ill constructed Euro.

 

It is right to blame the EU for the recession  of 1992 when the European currency scheme swept aside any possible benefits of the single market completion that year.

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Our hyperactive EU government

The latest work programme from the EU shows little let up in the manic energy to regulate, legislate and continue its wish to impose its will on most of our government activities and law making.  There are 38 proposals in energy, 66 in so called financial stability and many others from everything from competition to agriculture and from fishing to the digital economy. There are no nooks and crannies of our daily lives free from further EU intrusion.

 

I wish to concentrate on some of the measures in the 39 proposals for Home affairs. The secret is in the name. These matters used to be regarded as central to a member state’s own powers and self definition. The UK used to opt out of all these things, and used to insist on them being undertaken by unanimity to protect state independence and national democratic control. Now under Mrs May and with the active encouragement of Labour and the Lib Dems more and more of our controls over borders, entry requirements, visas, serious crime, terrorism and the movement of people is passing to the EU.

 

Central to this latest drive to EU control is the issue of migration, refugees and border controls. The EU is waiving visa requirements for Turkey and Ukraine. We have been assured this does not apply to the UK.  It does mean however, if more people abuse the visa free system to establish themselves in another EU country they could  become eligible in due course to come to the UK under freedom of movement rules.

 

Of more concern are the proposals to have an EU wide resettlement system  and the proposed revisions to asylum application processing. Under 2016/Home 078 we are promised “greater international solidarity of the EU towards countries hosting large numbers of refugees”.  Is the UK opted out, as it claims to be an EU wide system? Will we see quotas re-emerge? How will people be made to move from one country to another, and how do you require them to stay in the country the EU allocates if they wish to move elsewhere?

The intentions of the EU are obvious. They wish to reimpose common frontiers and move away from all asylum applications taking place in the first country of arrival, as that puts too much stress on Italy and Greece. The EU wants the UK to take part in a sharing of the pressures. The UK government says it has kept out of it, but the work programme is for an EU wide scheme. Even if the UK manages to defends its opt out i n due course, once people have been accepted into the Schengen area they soon qualify for freedom of movement to come to the UK if they wish.

2016/Home 075 states their will be new rules over which country is to handle an application for asylum when a migrant seeks asylum on entering an EU country. The old rule stated they had to seek asylum in the first EU country they reached. This new system implies  “fair sharing” of asylum requests. Again it suggests some kind of quota system.

 

The EU is taking more and powers over borders and migration. Many of its members wish it to do so. If the UK stays in its position is going to become untenable. Mrs May has given great ground to the EU in other Home affairs surrounding criminal justice. More power could go soon on borders if we do not leave.

 

 

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The GP service

On Friday I turned my attention again to the GP service. I have been working on this issue most of this Parliament, as there has been an increase in the number of complaints from people unable to obtain a  timely appointment to see the doctor. There have also been requests from doctors themselves for assistance with  more money and support to enable them to expand their practices and meet the extra demand.

I have been sympathetic and have taken these matters up with the government, as have other MPs. I was pleased this week to hear from the Health Secretary that considerably more money will be made available to the GP service over the next five years. Spending on GPs will now rise from £9.6bn this year to more than £12bn by 2020-21. This is  estimated to be a 14% rise above inflation, and will take the GP service to a 10% share of the NHS budget. This year funding increases by £322 m or 4.4%.

On top of this money will come a £500m national sustainability and transformation package  to support GPs. There are three smaller specialist funds totalling £112 m to help struggling practices and doctors under pressure. There will be measures and money to increase the numbers of GPs , adding more pharmacists to the service, helping train  more practice nurses and encourage others back to work, and training new physician assistants. There will also be a substantial £900 million capital investment programme.

It is quite clear there is a substantial increase in demand and workload. Some comes from a rising population.  In Wokingham substantial new housing development brings with it an obvious need for more surgery capacity. Nationally controlling migrant numbers better will make a contribution to managing increases in demand, which will be much easier to achieve if we leave the EU. Some of the increase in demand comes from people living longer, as the frail very elderly need more treatment. This is a  good development which just needs more medical care to be available. Some of the demand  increase comes from rising expectations of what doctors can achieve and help with. Locally I was told the average patient on a GP list has six consultations a year, with some users asking for as many as 50. Some need the appointments, but some are the worried well or could be treated by the practice nurse or pharmacist. GP practices are encouraged to experiment with  new ways of assessing patient need and booking the right appointment with the right person promptly.

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Negotiating trade

I am amazed at how the media still go on and on about future trade, just as Remain wishes them to do. Remain wishes to muddy the water. Most countries trade just fine with each other under WTO rules. The average world tariff under WTO rules is now very low, and considerably lower than the costs of EU membership as a proportion of our EU trade.

More importantly Remain can never answer the question what new barriers do the rest of the EU want to impose on their trade with us, given that they sell us so much more than we sell them. By what mechanism would they be able to impose new barriers? How do they get the changes through? How do 27 other countries decide new barriers? How do they impose them unilaterally without us retaliating? What barriers could they agree that are compatible with their and our membership of the WTO?

 

The Remain issue seems to have narrowed now to the question of passports. Most Remainians now seem to accept that Germany and the others will not wish to face a 10 % tariff on exporting their cars, so they have shifted to services. All the main banks that say they are worried about the passport have subsidiaries in other EU states, so after Brexit they can use one of their subsidiaries to route service around the EU whilst still doing much of the work in London as they do at the moment. The most popular of all the passported products, mentioned in the government publication is the UCITS  fund. Most of these are based in Luxembourg or Dublin any way so Brexit will make no difference to their domicile.

What the Remainians seem to forget is the current arrangements for our trade remain in place unless and until they are amended. It is best to amend them by mutual agreement. If the rest of the EU wishes to amend the current tariffs and non tariff barriers in an adverse direction without our agreement they need to make sure they do not infringe World Trade Organisation rules in doing so, as they are bound by them as we will be on exit. They will also need to remember that if they vary them adversely to us unilaterally then we can vary them adversely to them unilaterally, subject to WTO limits on both sides. They have rather more at risk, as the higher tariff of 10% on  cars is permissible under WTO rules, whereas most other products are limited to much lower tariffs. The UK has no wish to impose new tariffs and barriers on the rest of the EU despite being a heavy importer, and assumes the rest of the EU will come to the same view as they export so much to us.

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What does staying in look like if you do not join the Euro?

It woukd be ridiculous to join a football club but state you do not wish to play or watch football. It would be even odder to complain about the consequences of other club members playing and watching, leaving you on your own at club events. Yet the UK government thinks it sensible to belong to an international organisation based on the Euro and free movement of people, whilst not wishing  to do either of those things. It’s even stranger  to then demand a lower club subscription because you disagree with the main purposes of the club and its spending patterns.

It will  be increasingly difficult to maintain the semblance of UK independence and self government as the EU comes to take over more and more aspects of our lives and laws. The UK already finds it difficult to stay out of Euro area bail outs, willingly helping with the Irish one and unwillingly being dragged into the short term Greek loan. Regulation of the City is increasingly settled in the EU in ways designed to assist the Euro area.

The Treaty architecture does not make a proper separation of Euro decision making and budgets from the wider EU. The UK will be dragged more and more into the huge transfers of money that will be needed to enable the  poorer and less economically successful countries to survive within its austerity driven policies. There is no proper legal Treaty based opt out from the regional transfers and economic promotion policies the Euro area needs.

The Germans and others see the so called “single market” as embracing freedom of movement, all the regulations, and the Euro. They think staying out of the Euro allows a country to try to get an advantage through devaluation. There will be more attempts to divert business from London to Euro area centres both by competitive actions and by regulatory creep.  The City will often find itself regulated in ways it does not wish, and in ways which may drive business out of London to non EU centres. The UK government has lost important court cases in recent years over regulations which do send business outside the EU altogether.

I find it difficult to understand why most UK pro EU advocates do not wish to join in with the Euro and free movement. After all, many of them backed the Euro before it was established and told us we should join. They refuse to talk about the wild ride to political union that is the driving force of the modern EU. They are keen for us to stay in as they want us to help pay the bills of their ill fitting single currency. The only logic to joining a football club is you like football.Surely these EU enthusiasts must be disguising their love of the single currency and freedom of movement.

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CBI says improving outlook for second quarter as pound rises on better polls for leave campaign

The latest manufacturing trends survey and forecast from the CBI are at variance with the doom laden nonsense from some of the Remain campaigners.

The CBI states that  “Firms’  outlook for the upcoming quarter is a little firmer. Both output and demand are expected to grow, with the latter underpinned by strong expectations for export orders. Looking to the year ahead , manufacturers’ plans for investment in buildings and in plant and machinery are at robust levels. Stronger investment intentions were primarily driven by chemicals and food and drink manufacturers… With the expected pick up in exports it’s likely that firms will be looking to increase capital expenditure”.

The first quarter in the UK produced slower growth as in all the major economies. The second quarter is anticipated to be better by the CBI member firms, with a likely increase in construction and more exports and investment. The leading car firms based here in the UK have announced five years plans for additional investment. None of this is contingent on the UK staying in the EU. It is interesting that the CBI did not mention Brexit as a second quarter dampener in its summary forecast for second quarter manufacturing.

 

As the poll gap between Remain and Leave has narrowed in recent days sterling has risen. The Remain campaign have gone strangely quiet on the pound, which they said fell over Brexit fears when a Brexit win was less likely according to the polls. Now it is more likely shouldn’t Remain comment on the strength of the pound? Maybe markets have worked out how the UK balance of payments improves once we stop making all those EU contributions.

Sterling went below $1.39 on February 26th and rose to $1.45 yesterday. Sterling reached a low of 1.23 Euro early this month and reached 1.28 Euros yesterday on better polls for leave.

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Why we will be better off out

1 We will be able to spend £10bn a year on our priorities instead of sending that abroad and not getting it back. That adds 0.6% to our GDP.

2. We will regain control of our fishing grounds, which will enable us to rebuild our fishery and return to being net exporters instead of net importers of fish.

3. We will be able to buy more of our food free of interventions by the EU designed to cut UK output and foster EU  imports. Past EU milk quotas and their response to BSE did damage to our dairy and beef farmers. Our food will be cheaper.

4. We can have our own energy policy geared to delivering more cheaper power. This means more of our income to spend on other things, and will be a big boost to industry which relies on energy.

5. We will be able to disapply  costly and unhelpful regulations  and EU requirements on all domestic business and exports to non EU destinations if we wish, whereas in the EU every rule has to apply to everything we do.

6. We will be free to negotiate our own trade deals with other countries, including the US one Mr Obama confirmed.

7. Our balance of payments will improve when we stop sending such large contributions to the continent.

8. There is no evidence that our growth rate accelerated when we joined the EEC, nor is there any evidence of much boost to our output from being in the Single market. The single market was completed around the same time as the European Exchange Rate Mechanism, a cost of EU membership, which slashed output and incomes very badly in the UK before we got out.

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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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