Poverty and inequality

Poverty is a scourge which always needs fighting. I spoke about this on Monday. I was pleased to see the Prime Minister dedicate himself to an all out assault on poverty yesterday.  Poverty is relative as well as absolute. The west has long since gone beyond making sure people have the basics for life – enough food to survive, a few clothes and shelter. Our welfare systems are designed to let people afford  some of the benefits of the rich society around them in addition to some absolute minimum. The political argument is over how much should people enjoy from benefit payments, who should qualify for benefits,  and what is the best way of encouraging and helping more people into work, and then into better paid work.

In my speech to the Conference fringe meeting I sketched a small  society. Nine people each earned £20,000 a year. The average earnings of the community was £20,000, and there was no inequality. Total earnings were £180,000. A very well paid CEO of a multinational decided he wished to join this community, bringing his income of £820,000 a year. The socialist was against his arrival, as it would generate a huge jump in inequality.

After his arrival the average earnings of the community leapt from £20,000 to £100,000. Inequality shot up from zero, to the highest paid earning 41 times the lowest. The community  now had someone to be jealous of. The total earnings of the community reached £1 million.

Surely, however, the community should welcome his arrival. It would immediately mean the community could collect around £500,000 or more  of additional income, capital and sales taxes from the new arrival, to spend on the  existing community members and their needs. It would allow them to find new markets for their products and services, or to gain higher paid employment by working for the new arrival. Far from the new arrival being bad news, he would generate more growth  and allow the people on £20,000 a year each to earn more and to enjoy more public spending than they could afford for themselves. The inequalities need to be looked at on a post tax basis, not a pre tax basis, and need to take into account the impact of the spending by the more affluent on the incomes of the less affluent.

Poverty is the problem to tackle vigorously. Inequality is very bad if it comes about by the poor getting poorer. If inequality rises because more rich people decide to live here, it can provide money for higher living standards for all.

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Mrs May changes her mind on the EU and borders.

Mrs May has travelled a long way since 2002 and her modernising  agenda. More recently she asked the Conservstive party to vote to sacrifice criminal justice powers to the EU when we had no need to do so.

Yesterday she posed as a resolute fighter against the EU having power and influence over our borders and migration policy, and warned that allowing too much migration into the UK was damaging to our society.

Mrs May is the senior Minister charged with the duty of getting net inward migration down to tens of thousands from the current level in excess of 300,000 a year. This is a good and popular policy. I am glad she is taking it seriously.


It it happens to be remarkably similar to the policy offered by the Coalition government in the last Parliament, when Mrs May was also the responsible senior Minister. Maybe it was too difficult to do with Lib Dems using a veto on measures required to achieve it. Now she is freed of that problem, what we want to hear from Mrs May is the practical steps that she is taking to achieve the policy aim. We do not need dramatic language or warnings. We need her to preside over a harmonious and successful society, and to find fair and effective ways of carrying out her prime policy goal.

I  suspect she knows that we do need to regain control over migration from the EU to fulfil the policy objective.  Her new anti EU rhetoric needs to share with us  how she intends to get back lost powers over our borders from within the EU and how she is contributing to Mr Cameron’s renegotiation. I wish her well with that endeavour.

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We might need to leave the EU to reassert our sovereignty

At the Politeia meeting last night on Stay or Leave we ended up debating sovereignty. Most of us wish to restore or reassert UK sovereignty. If the UK people and their Parliament want to change a law or control our borders, or decide how much to tax and spend we need to be free to do so. None of that is possible under the present Treaties.


Some argued that the UK remains sovereign. They pointed out that the EU only has power in the UK thanks to the 1972 European Communities Act. What Parliament granted to the EU it could take away. Clearly having a referendum on whether to stay in the EU is the act of a sovereign country. If we vote to leave then leave we can and leave we shall. We can leave by repealing the 1972 Act.

The problem is if the UK does not wish to exercise this power, at what point does the power cease to exist? At what point are we so dominated by European Treaty law and by EU regulations and directives that we can no longer claim to be sovereign? At what point would seeking the amendment or repeal of the 1972 Act cease to be possible, as we were so bound in by EU laws?

The danger is the EU already has a very different view of our legal position to our view of it. They see us as subject to the superior law of the treaties and European Court. Re asserting sovereignty comes down to a question of political will. Either the government has to show it in its renegotiation, or the British people have to show it in, the referendum. If we leave it too long we will discover our sovereignty is no more, and the EU can control us by court judgements and new laws.

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Opportunity for all, prosperity and home ownership for the many

I wish to hear today an optimistic message from Conference. Conservatives must use this period in office to promote greater opportunity and prosperity.

To do so requires lower taxes. People should keep more  of what they earn, and more of what they make by venturing their savings.

Lower tax rates on income and gains will also yield more tax revenue to help those in need. the state should be generous to the disabled, and to the elderly who need care.

To do so requires us both to build more homes and to limit inward migration. House prices are too high and rents too dear in places around the country and especially in London.

To do so requires more gas fuelled power stations providing more reliable and cheaper energy.

To do so requires a transport policy that makes it easier to get work by car or by train, with more commuter rail capacity and more road capacity.


I go to Conference to further my campaigns for these improvements.

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Europe and the Conservative conference

Some in the media have already written the script for the Conservative conference – splits on Europe. It was a silly script to write during the Opposition years, when the Conservative party was happily united opposing the Nice, Amsterdam and Lisbon treaties, opposing the Euro and resisting more powers to Brussels. It is an even sillier script now we are united in offering the UK people a referendum on our membership, with all enjoying the freedom to express their own view on what is wrong with our EU relationship and how we wish to change it.

The good thing about the Conservative conference is it offers the government an opportunity to remind other members of the EU that behind Ministers lies a party and a country that is far from happy with our current relationship. We have alerted people to the growing political union on the continent, and how the UK needs a new relationship with that emerging union as we have no wish to join it. Today those who want to stay in the EU agree with many of the current Eurosceptic criticisms of the current EU. They do not defend the present borders and migration policy or our lack of control over our own borders. They do not defend the dear energy policy which is hitting our industry, the lack of trade agreements with India, China and the USA, the high bills sent to UK taxpayers for spending elsewhere in the EU, or the mass unemployment being created by the Euro in many countries of the Union.  They need to show us how the UK can negotiate a settlement from inside, as many of us are happy to leave to solve these problems once and for all.

Conference should be primarily about how we increase the prosperity of our country. It is time to explain and to develop the policies we need to offer home ownership to the many at affordable prices, to create more and better paid jobs, to rebuild industry and embrace new technology.

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John Redwood at Conference

I will be speaking at



Think Tent  (just inside secure zone by conference hall)     “Does caring about the poor require caring about inequality?”   IEA   14.45   Monday 5 October


Politeia  Arora Hotel Princess Street Manchester  M1 4LG    “Britain and the EU   To stay or go?    18.30  Monday 5 October  (outside security)


I will also be attending other events to discuss the state of the economy and social policy.

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The west loses its way in the Middle East

Mr Obama dithers and changes his mind too often on foreign policy. He now watches as Russia moves in to fill the vacuum where the USA once was the dominant influence on  Syria and Middle East policy. The present situation is full of both danger and opportunity.

Russia’s relationship with the Obama regime was badly damaged by the annexation of Crimea. The West condemned Russia for an illegal occupation. Russia condemned the USA and EU  for helping destabilise a Ukrainian President who just about held the country together only  to see him replaced by a new President who could not get on with the Russian speaking peoples in his own country. The West imposed sanctions on Russia, and turned its attention to the deteriorating situation in Iraq and Syria. Russia sought to build its long standing diplomatic and economic links with the Syrian regime of Assad and with Iran as a prelude to possible intervention of its own. Russia offered sufficient help to the rebels in the east of what remained of the Ukraine to keep the Ukrainian civil war going. Both the rebels and the Ukrainian government used military means to extend their dispute, killing civilians caught in the crossfire.

President Obama came to power implying he would withdraw from Afghanistan and seek diplomatic rather than military solutions to Middle Eastern problems. He was talked into augmenting the military presence in Afghanistan and fighting for longer before withdrawal. He promised to end detention at Guantanamo Bay for suspected terrorists and others who were not put on trial, but was talked into holding people for longer who subsequently were not accused of any offence in a court. He was contemplating removing Assad from Syria by force, but did not do so. More recently he says he wishes to defeat ISIL, but will not use ground troops to do so. It is no wonder Russia sees weakness and uncertainty in these changes and attitudes.

Russia now sees an opportunity for a win/win. Russia would probably on suitable terms settle Crimea and join a joint action against ISIL, as long as Assad’s regime was not the target as well. If the West will not accept Russian terms for collaboration, Russia thinks she will get away with military intervention in Syria to weaken both ISIL and other enemies of Assad, strengthening Russia’s position as an ally of Syria and Iran with an important place in the region. I understand Russia’s strategy( I do not of course support it), but struggle to understand the USA’s reply. The USA says she welcomes help with tackling ISIL though it needs to be co-ordinated, but condemns attacks on some other forces fighting against Assad. What is the USA going to do about it if Russia does bomb non ISIL opponents of Assad?  Will the USA help Russia identify who they do want to kill?

Having both the USA and Russia intervening with  bombs in a highly unstable country with no clear agreed political strategy is dangerous. Involving Russia and Iran in a solution to Syria’s problems might be helpful, if it were done by talking. It is high time there was an attempt to get serious talks underway between the interested parties on the future of Syria. At some point war war has to give way to jaw jaw. Does Syria have a future as a unitary state? What happens after Assad? How will the expectations of the Kurds be handled? Can Sunni and Shia find a way of power sharing in a unified state? There are many questions to tackle. Bombs will not provide an answer to most of them.




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Reply from Health Secretary about the use of the NHS by overseas visitors

In my blog of 11 August, I said I would write to Jeremy Hunt MP about the use of the NHS by overseas visitors. This is his reply, dated 3 September 2015.

Dear John

Thank you for your letter of 11 August about the use of the NHS by overseas visitors.

There is no provision whereby visitors to the UK can automatically be entitled to free NHS hospital treatment. Anyone who is not ordinarily resident in this country is subject to the National Health Service (Charges to Overseas Visitors) Regulations 2015. The Regulations place a legal duty on NHS hospitals to establish whether a person is ordinarily resident, or exempt from charges, or liable to be charged. Where it is established that charges apply, they cannot be waived for any reason.

Where a person claims exemption from charges under provision of the Regulations, the hospital will ask them to provide documentary evidence to support their claim to free treatment. For example, an overseas student claiming he is here for a three year degree course might be asked to provide documentation to confirm he has leave to enter the UK for that purpose and that he is actually attending the course.

A person who is found liable for charges, or who refused to provide the appropriate evidence to confirm their claim to free treatment, will be asked to pay in advance of receiving any treatment. However, when, in a clinical opinion, medical treatment is immediately necessary it will not be withheld and should go ahead without delay. The NHS is essentially a humanitarian service and no-one in need of immediate treatment will ever be left to suffer just because they cannot pay. Treatment that is not immediately necessary, but otherwise urgent in that it cannot wait until the patient returns home, will also be provided without delay, although hospitals will have time to try to obtain payment in advance. Non-urgent treatment should not be given until the patient has paid in full in advance.

In cases where immediately necessary/urgent treatment is given and the patient is without funds to pay, the hospital should provide only such treatment as is clinically required to stabilise the patient to allow them to return to their own country. This decision will be made locally, based on clinical judgement. This will ensure that the hospital does not incur additional expenditure that it cannot recover, which has a knock-on effect on services that can be provided to NHS patients.

Furthermore, a new health surcharge for non-European Economic Area (EEA) temporary migrants, such as students and workers, who come to the UK for more than six months was introduced on 6 April. This is paid alongside their visa fee.

With regard to your concerns about the European Health Insurance Card (EHIC), the Department of Health takes any case of possible misuse of the EHIC seriously and is continuously working to detect and tackle any suspected fraud. We are currently reviewing the EHIC application progress, and began a major piece of work a few months ago to examine and identify any areas for improvement on all of our administrative systems relating to EEA healthcare payments, including the EHIC. We expect to complete this work by the end of the year.

Entitlement to the EHIC, which provides access to any immediate and clinically necessary state-funded medical treatment in all EEA countries and Switzerland, is based on ‘insurability’ under EU law, not on a person’s nationality. Therefore, as healthcare in the UK is based on residency, it is correct that non-UK nationals, and in some cases their family members, will have a right to a UK EHIC if they meet the UK’s insurability criteria and are not covered by another EEA country. Similarly, there will be UK nationals who carry EHICs from another EEA country because they are insured there, and these people are expected to present their EHIC when accessing NHS treatment in the UK.

The UK reimburses other EEA countries for the cost of providing treatment to people we are responsible for under EU law, irrespective of nationality. In the same way, other EEA countries reimburse the UK for the cost of the NHS providing treatment to people they are responsible for under EU law, including UK nationals insured in another EEA country.

Yours ever

Jeremy Hunt

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Carbon dioxide disasters

I have long argued it makes no sense to make energy so dear in the UK that the main industries that need energy leave our shores to burn cheaper fuel somewhere else. That was one of the reasons I did not support Labour’s Climate Change Act, and why I disagreed with the Lib Dem policies on energy under the Coalition which a Lib Dem led DECC championed.

We have seen again recently the damage dear energy does. The mothballing of Redcar steel making is about high energy prices as well as about low steel prices. Many industrial jobs have been lost thanks to the EU/UK dear energy policy.

The decision at Drax to curb its investment in anti Carbon dioxide was a response to this government’s decision to cut back on renewable subsidies. Many have thought it odd that it is environmentally friendly to cut down trees in Canada, ship them across the Atlantic and take them to Drax to burn. Wood after all produces similar CO2 and pollution to coal.

The UK needs to revisit more of its dear energy policies. The march of the makers and the Northern Powerhouse require more cheap energy and more things made in the UK. That does not add to CO2 output worldwide, merely brings more of it home for the goods we intend to consume.

As many of you have pointed out, the UK also needs to adjust its CO2 targets for a rising population.  If we keep inviting in so many extra people CO 2 output will go up.

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The UK recovery continues – with higher public spending, not austerity

Yesterday the government published the latest quarterly figures for output and earnings to June 30th 2015.


The UK economy is now producing 6% more than at the peak in early 2008 before the crash. The USA is producing 10% more, the EU just 1% more and Japan has the same output as Quarter 1 2008.  The UK recovery has been a steady one since 2009. The last annual figure shows growth of 2.4% , after 2.9% for calendar 2014. GDP per head is also now a little higher than at the pre crash peak, and rose by 1.9%  comparing the second quarter of 2015 with the same quarter the previous year. Japan’s stagnant output since 2008 is partly owing to population decline.


The best news in the figures is the growth in incomes and real incomes.  Compensation for employees is up by 4.7% in the last twelve months (Q2 2015 over Q2 2014), and real  disposable incomes rose by 2% just between the first and second quarters of 2015.  A greater feeling of job security for many, coupled with increases in earnings, is allowing service sector expansion and more retail purchases.


The figures once again remind anyone interested in the reality that public spending continues to rise. Government spending is up 0.4% on the previous quarter and 1.6% over the last twelve months, in real terms. The balance of payments improved sharply in the second quarter after a weak first quarter. Exports were up, imports down, and the current account deficit narrowed from 5.2% of National Income in the first quarter to 3.6% in the second.


Whilst the overall money supply figures show a small contraction in money, and no growth in lending to finance a recovery, the picture is of 4% growth in money (M4) adjusted for other financial corporations as the Bank of England likes to do. Lending taking out the other financial corporations was up by 2.3%. The Bank regards this narrower measure as a closer proxy for the real economy.


All this points to a steady performance. There is no great inflation threat as higher wages are coming at a time when productivity is improving as well, whilst the prices of imports and commodities remain weak.

It would be good if the political debate and interviews could be based around this factual portrait of the UK economy based on the official figures. More needs to be done to boost output, real wages and productivity. High energy prices remain a big problem, but we have a good base for further advances in employment and living standards.

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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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