Aleppo and Mosul

Pity the poor people of Aleppo and Mosul. Pity the poor children. Our hearts go out to those who face the bombs and bullets, and try to survive in such war torn cities.

The west is rightly united in condemning the atrocities in Aleppo. The UK Foreign Office has made clear its fury, stating that “The actions of Assad and Russia are driving radicalisation and fuelling terrorism, not tackling it”. Many have protested to demand the West does more, and many MPs have spoken in the Commons of the need to relieve the pain.

The problem is what can the West do that can make the situation better? A much reviled but internationally recognised government in Syria has asked for Russian help. The area is now well armed by Syrian forces. President Obama has judged that any military intervention by a US led coalition would make the position worse so he is not proposing to try landing NATO troops or inserting more western warplanes and missiles into a highly explosive situation with all too many bombs already. Those the West would best protect might not welcome a full frontal war between the West and Assad, given the intensity of the violence that would require. Assad is able to exploit the unwillingness of the outgoing President to undertake more intense military action, and the delay before a new President. Mrs Clinton might be more belligerent.

Meanwhile the Iraqi government is seeking to evict ISIL from Mosul and the surrounding area by using substantial military force on the ground. Most agree that ISIL is a dangerous terrorist grouping with links to Al Qaeda affiliates. The problem is a military solution entails a lot of death and destruction. ISIL kill, maim and cow the civilian population, They may now take human shields and expose them to more risk as the Iraqi forces draw nearer. Let us hope that the action to recapture lost territory by the Iraqi forces does not lead to an ISIL inspired massacre.

There are no easy answers for this war torn and troubled part of the world. I Just thought I would give you, my readers, the chance to say your piece on these two conflicts. In the end these countries have to be stabilised by a political process. Governing forces have to emerge that can govern by laws and civil justice, not by force of arms. This still seems a long way off. Gaining military advantage for one side or the other does not necessarily speed a peace.

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The Court case about Article 50

I have found it difficult to take the Court case seriously, but I am assured by many clever people it is entirely serious and is part of the complex argument over how we leave the EU.

To me it is no part of the Courts’ remit to tell Parliament what we do and do not have to vote on and debate. How can we claim to have an independent and strong Parliament if we need to consult judges over what our agenda should be every day?

The idea that the courts need to come to the aid of some members of the public because Parliament has decided not to debate and vote on a topic is bizarre. Surely if you want Parliament to debate and vote on something you lobby your MPs, you do not take up an expensive court action.

There has been no vote to endorse an Article 50 letter so far for very good reasons. The government sees no need for one. It argues it is a prerogative power, and anyway it is mandated directly by the public when they made the decision to leave the EU in a referendum. We had all been told by government and Parliament before the vote that an Article 50 letter would follow swiftly once we voted to leave.

The official Opposition also clearly sees no need for one. The Opposition could have used one of its several Opposition days to table a suitable motion and call a vote on sending an Article 50 letter. They have decided not to do so. I presume that is because they say they now accept the verdict of the referendum, and see that trying to win a vote stopping an Article 50 letter directly seeks to thwart the decision of the voters. Let us hope the judges understand that a free Parliament can vote on just this issue if it wishes, but has chosen not to.

The government is sure of its case and has not therefore set out any contingency plans were the courts to decide against them. I assume were the courts to demand a vote in Parliament before an Article 50 letter the government would simply table a motion and it would pass.

I doubt Labour would want to vote down the letter or the Repeal Bill which Parliament will be debating and voting on. Were they to do so and succeed the PM would have to call an election. The election would be held to elect more MPs clearly dedicated to implementing the wishes of UK voters. On current polls it would produce a strong Conservative pro Brexit majority. That majority could then vote through the constitutional changes necessary to secure an independent UK.

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Let’s get on with it

It was good news this week that the Brexit Secretary told us the UK will want a migration policy that is open to talent, skills and entrepreneurship once we have taken back control. He also reaffirmed the Prime Minister’s view that we do need to have our own policy under UK powers, not a policy we negotiate with the rest of the EU.

It was also good news that progress is being made with preparing the Repeal Bill. That will be the way we leave the EU.

More and more businesses I speak to tell me that what they want is more certainty about the direction we are undertaking. That means accelerating progress and getting the Article 50 letter in as soon as possible. It also means reducing the number of issues we need to discuss with our former partners in the EU.

There is a temptation amongst many officials, senior business people in large companies, and amongst the politicians on the losing side, to want to complicate matters more and more. They may be well intentioned in telling us of all the complex relationships we have with people and institutions on the continent and reminding us rightly that many of these need to carry on. They are not, however, helping reduce the uncertainty or supporting a strong UK negotiating position by constantly harping on about possible problems.

Some of them deliberately go further and urge the government to give ground on freedom of movement, or budget contributions. If you want to negotiate well you do not offer any concessions unless and until it is clear that doing so will buy you something you really need. I cannot think of something I so much need from the rest of the EU to want to pay for it, or to give up control of our borders.

Why do people presume to advise on how to negotiate before we have any idea what the position of the EU 27 is, and before we have worked out how few things we do actually need to discuss at all with them.

Some of the fears are silly. Some now say we could end up not being allowed to fly commercial airliners from London to Paris or Frankfurt! That would mean they could not fly their planes to London either. How likely is that?

It’s time for the government to tell us more of the opportunities from exit, and for businesses and officials of goodwill to understand Team UK has to put up a united front to negotiate in a friendly and firm way.

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The European Investment Bank

Yesterday I was asked onto the BBC World at One to explain how the UK will manage if we lose access to EIB loans. This was a rehash of a story Remain used in the referendum campaign.

Sir Brian Unwin did the usual thing of trying to undermine the UK position by telling us how crucial it will be to retain full membership of the EIB. He pointed out last year we received 10 % of the loans advanced. So many EU enthusiasts want us to have a whole list of demands like staying in this bank which would force us to offer all sorts of compromises we have no need to make.

The UK has put up 16% of the capital so it has not got its full proportion of the loans. Over the time we have been in we have received 8% of the lending, half our share of the capital.

We could offer a simple choice to our former EU partners. Either we stay in the Bank, and they need to promise a reasonable share of the loans for us, or they buy us out.
Our shares amount to around £12bn taking starting capital and share of accumulated reserves. This would enable us to set up our own Investment Bank. If it borrowed and geared on the same basis as the EIB it would enable us to lend another £100 bn or so for good projects.

If they wish us to stay in we need to remember we are liable to supply another £36 bn if they lose money and need capital top up. The EIB earns small margins on its asset base and has substantial gearing. It is certainly not worth offering anything in order to stay in.

It owns investments in government bonds, which it could sell to buy the UK out. The UK would probably be better off out controlling our own money, but we could life with a continuing shareholding in the EIB if they want that. WEx woukd need to take a continuing interest in the management if the bank given our underwriting if the bank

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The BBC try to make so many current affairs programmes a re run of the referendum debate

The BBC seem caught in a time warp. So often their idea of news is based on reheating old Remain stories and lines from the referendum debate. We have had to go back through the debate about early recession, late recession, property crash, loss of tax revenue and the rest that were exhaustively discussed during the referendum period itself. They still seem unable to grasp that there is no such thing as the Single Market detached from the full panoply of EU laws and policies which a state can belong to, nor that the debate is only about access to each other’s markets which should be relatively straightforward.

It starts early with Farming Today. That programme endlessly reviews Brexit despite there being no news as there are still no formal negotiations to report. The Today programme allows some positive economic news on, but even this is completely distorted by seeing it all through Brexit glasses. For example, when Burberry reported their figures the Today programme “expert” and the guest expert were unable to explain why the market had not responded more positively to the great news that Burberry’s UK sales were up 30% in the last quarter. It never occurred to them that Burberry is a global brand and sales elsewhere were disappointing, and the global licensing revenue is tailing off. When commenting on movements in sterling or interest rates it is usually seen through Brexit glasses, as if these things never moved before we decided to leave the EU!

The main driver of UK interest rates and sterling is often the policy of the Fed and US government, just as that is the main driver of moves in the Euro, yen and emerging market currencies. Markets are fixated by changes in Fed language on rate rises. In recent days bond yields have been going up both sides of the Atlantic and both sides of the Channel, and this has nothing to do with Brexit.

Can we have some commonsense and better based reporting, so listeners and viewers can be given a better understanding of what is going on in the world around them? The latest Chinese GDP figures, the oil price and the impact of the US election are all more significant to markets than the UK’s departure from the EU.

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Blog postings

I am extremely busy with Parliament back in full swing. Some are sending in too many very long posts, or posts with references to other sites and non official sources which need checking. In order to catch up with the backlog I will have to delete some very long pieces or pieces with unknown references, as I want to get rid of the backlog.

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Level crossings

Network Rail doesn’t like level crossings. They are difficult to manage, and present a danger to travellers if they are abused. They are a weak link onto the railway line, where the rest of the line is usually fortified or protected to prevent casual access.
Local communities often do not like level crossings either. In busy locations like Wokingham Station main roads are blocked for more than half the time at peaks, as the barriers come down to let a train in or out of the station, or remain down because a train is at a platform. Our roads are completely inadequate for the peaks to start with, without losing their capacity altogether every time a train arrives or departs.
As a result, there is a programme to replace level crossings with bridges. I have been one of its supporters, and have wanted to see more money spent on bringing about these changes. If you observe the morning peak from the air in much of our country, you see completely congested main roads, relatively empty railway lines given the restraints on train use of track, and maximum congestion at points on the road network where traffic is trying to get across the railway. There are too few bridges.
yesterday I talked to representatives of Network Rail about our local plight in Wokingham. The much sought after new road bridge still has not got off the drawing board, though it is now on the planning map and there is agreement by both Council and Network Rail that it is needed. The temporary footbridge over the railway is an ugly and poor structure which we would all like to see replaced as soon as possible with the promised smarter new permanent bridge.
I want to see the government’s investment plans this Autumn include local transport improvements. We could have a safer railway and a less congested road system if more is done to speed the removal of level crossings and their replacement with bridges and tunnels.

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Closing Calais

The French authorities say they will be closing the Calais camp in a few days time. They have a lot of work to do in the meantime, to find out who is there, what rights they have to stay or to work or to receive an education in the EU and how their futures should be taken care of. There are many adults, and all too many unaccompanied children.

The UK has said that it will take unaccompanied children who have family in the UK willing to look after them, and will help the French by also taking some children who do not have family members who can take care of them. The Home Office has sent officials to Calais to help the French talk to the migrants to see who should be eligible to come to the UK, and then to make the necessary arrangements. Of course the UK is a guest in Calais and has to work under French direction.

The Calais camp is what happens when large numbers of migrants and refugees are allowed to enter the EU elsewhere without proper consideration of their legal rights and needs. It is not good for the travellers or for the host nations. Putting off making a decision about their eligibility and needs leads to delay and to these worrying encampments which are far from satisfactory for those living in them.

The priority in dealing with the children should be in putting them back with family members capable of looking after them. Presumably some adult put the child on the long road to Calais and provided money to pay for the perilous journey. It would be good to know in each case who did this and what help they or other responsible adults in the family can now offer the child if they are not resident in a war zone.

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Free trade deals

We can only negotiate free trade deals with the USA, China, Brazil, India, Canada, New Zealand, Singapore, Australia and the others if we leave the EU and its internal market. If we stay part of the customs union or if we stay in the EU we are banned from even discussing freer trade with these important partners abroad. As the government has set up a department expressly to promote our trade in this and other ways, it follows they rightly intend to take us out of the EU and its internal market.

People object and say that it takes many years to construct a Free Trade Agreement. They point out when we leave the EU we will end up with WTO tariffs on the schedule the EU imposes on other foreign countries already. This would enable us to trade reasonably with the EU, but there is no reason why they and we would wish to limit our ambitions to such an outcome.

The reason it often takes a long time to conclude a free trade deal is each country negotiating actually wishes to protect certain features of its economy and limit free trade. A process of bargaining ensures to try to get the barriers removed to your exports whilst keeping up some barriers against imports. Our negotiation with the EU would not be like this, as we already have barrier free trade in goods with them and reduced barriers in services! If we and they wish we merely say we want to carry on with it, and it is already negotiated and recorded.

To speed it all up and get rid of the uncertainty the easiest cause is to say either carry on as we are, or go to WTO existing terms. Neither needs renegotiating and each is already written down. Our current deal would be registered as an FTA with the WTO to make it legal for a non member of the EU. It would take longer to sit down and negotiate a half way house deal, less freedom than now but more freedom than under WTO. As WTO suits our profile of trade better than theirs we might as well just offer either our current arrangements or WTO.

Under WTO we would have the nice problem of how to spend all the tariff revenues on their large imports into the UK. Spent intelligently this would remove adverse effects from tariffs on our exports.

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Why do the SNP think leaving the UK single market is a good idea?

If Scotland wishes to be independent then it needs to leave the UK. That means ending the supremacy of UK law and taking back control of its own laws, borders, money and currency.

I am happy for Scotland to stay in our Union and glad they voted to do so. If they truly want to be independent then of course they are free to do so following a referendum. Its not the sort of thing we should expect to have votes on every couple of years, as you have to assume people made a longer term decision than that. Current polling shows Brexit has made little difference to the balance of opinion on independence. A new referendum would require a decisive shift in Scottish opinion to be worthwhile and for the SNP to risk it anyway.

The SNP got into a muddle over the currency during the recent independence referendum. Of course an independent Scotland cannot stay in sterling. Nor would Scotland be independent if it did manage to continue with the UK currency!

Now the SNP is in a big muddle over single or internal markets. It says it is crucial to stay in the EU internal market when this is not possible as we leave the EU. Yet the SNP recommends leaving the UK which similarly entails Scotland leaving the UK internal market which is a far bigger proportion of Scotland’s trade than the rest of the EU.

True nationalists would want out of both the EU and the UK, to take back control. The SNP always seem to be shuffling various kinds of dependence, not independence, with a strong bias to control from Brussels rather than London. It gets them into all sorts of contradictory arguments. The advantages of internal markets can be exaggerated. Getting out of an internal market which is also a currency union is both more difficult and more expensive than getting out of an internal market with different currencies.

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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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