Well done the voters

The deliberate log jam created by the last Parliament was preventing good government, undermining us abroad and seeking to subvert the results of the EU referendum. We had to ask the voters to make a decision.

They have done so in a clear way. There was a big choice to make. Did they want a Corbyn led government with massive promises to increase spending, borrowing and taxes, or did they want a moderate reflation of the economy with some spending increases for important services and some tax cuts? Did they trust Labour or the Conservatives with the security and future of our country. They gave a convincing answer last night.

There was also the question of how many voters did wish to go back on the referendum to leave the EU. Prime Minister in waiting Jo Swinson offered the country the choice to revoke our application to leave by a simple repeal vote in Parliament. It was a bold and radical proposal. Just 11% backed it, and her own voters instead asked her to leave Parliament. I hope those who keep telling us people want to remain will reflect on this result.

Labour says they lost because the failed to back Brexit, having done so in 2017 when they got a better result. Doubtless there was some of that in the poor results they achieved, but there was also the prior questions about economic management and direction and style of leadership which dominated in many discussions.

Now this new Conservative majority government has two immediate tasks. It does need as the PM says to “get Brexit done”, which means taking back control of our money, borders and laws, and means negotiating that Free Trade Agreement the EU has promised in principle. It also means an early budget, as we are in urgent need of a stimulus, at a time of world slowdown and worldwide manufacturing recession.

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General election day

May you all vote wisely. It’s your decision.

I have said all I wish to say about this election  and now look forward to the results tomorrow morning.

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Why the USA grows faster than the Eurozone

The USA has for some years put in a much better economic performance than the Eurozone. Thus year its growth rate is around double that of the Euro area.Part of it stems from the monetary policy being pursued, some of it from the fiscal policy and much of it from the enterprise policies.

The Fed has twin objectives of keeping inflation down and promoting growth. It has been pragmatic about pursuing these objectives. It made bad mistakes at the end of the last decade like other advanced country Central banks,  but has done much better since 2010. It did tighten too much at the end of 2018 but has now corrected for the mistake. Despite over 2% growth in the economy the Fed has recently pumped $150bn extra liquidity into markets to facilitate bank lending and continued growth.

The ECB has ostensibly followed a more dovish stance than the Fed with lower rates and more recent Quantitative easing. It has, however, failed to get all the main commercial banks in its system to address their balance sheet and bad debt problems, so there is still difficulty in transmitting cheap money into more well based  loans to get the economies moving faster.

The President of the USA put through major tax cuts which acted as a substantial boost to US growth in the last two years. At the same time the Congress also put through various public spending increases. As a result there was an expansion of the fiscal deficit, which helped generate more activity. In the Euro area the strict application of the Maastricht rules with tough controls on debt as percentage of GDP has left little or no room for fiscal expansion.

The USA has a more enterprise oriented culture, with a very strong technology sector that has been leading the world. Lower taxes, more business and start up friendly regulations and a more plentiful supply of equity and credit for new business has ensured the US has grown faster and dominates the western digital world.

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We need a majority government who can boost our economy now with the right budget

As feared and forecast here UK growth in the latest figures has slowed again, as has growth in most parts of the world.

I have been recommending for sometime that we need both a monetary and a fiscal stimulus. Monetary change awaits a new Governor of the Bank of England, which in turn awaits a  government with a majority. Fiscal change also is waiting on such a  government. The outgoing minority  Conservative government did not think it could get the tax cuts through the Commons that the economy now needs to give it a boost and was apparently unable to agree with officials about a suitable new Governor.

The hung Parliament that did so much to create uncertainty and delay over Brexit did other damage as well. It diverted attention from big matters like the need for an economic boost, and made officials minded to avoid  changes on the grounds that there was no Parliamentary majority for anything worth doing.

The new government formed by a change of PM has clearly signalled they recognise the need for a budget which boosts incomes, activity and public services. We need it as soon as possible. It is a fundamental reason why we need a government with a majority on December 13th so we can get on with the changes we need. The USA has recently seen a $150bn injection by the Central Bank into markets to give things a boost even though the USA is growing much faster than the EU or UK. The ECB is administering a Euro 20 bn a month stimulus. The UK does not need more Quantitative easing but it could do with facilities for banks prepared to lend against good projects and to consumers to buy homes and cars. Consumers could do with a post Christmas present of keeping more of their earnings to spend on their priorities.

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Waiting for treatment

No-one should have to wait a long time for NHS treatment. Our hearts reach out to any child and parents who have had a bad experience. It is not what any of us wants. The government has rightly pledged more money and more staff. It is important this is well managed to prevent these unacceptable incidents in future.

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Labour knows how to borrow too much to bring on an economic collapse

Some younger voters may not have studied UK economic history. There has been a depressing pattern to it all.

The 1964-70 Labour government borrowed and spent too much. It was forced into a devaluation and had to impose austerity policies to try to rally the currency.

The 1974-9 Labour government overspent and overborrowed to such an extent that they ran out of money and had to go to the IMF for a loan. There was further devaluation. The IMF imposed tough austerity conditions on the loan  which then governed Labour policy.

The 1997-2010 Labour government lasted longer because for the first few years it followed inherited Conservative spending and tax plans which worked.  Then it cranked up the spending and borrowing – particularly through the private finance initiative lumbering public services with large debts- and presided over the crash of 2008-9.

The last two Labour governments both raised unemployment by around half a million people. Indeed every Labour government apart from the first short lived minority one has left office with unemployment up on where it started.

A sensible amount of credit, and borrowing for worthwhile investment, can help an economy. Excessive state credit and excessive state spending with high taxes is always a ruinous combination. It makes people worse off, leads to job losses and recession, and leave the Treasury short of tax revenues to pay the bills. The huge spending and taxing plans of the current Labour party would bring on an early crisis.

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Lib Dems would let Corbyn in

Jo Swinson this morning on Radio 4 confirmed her preference to just cancel Brexit by a vote in Parliament, but conceded she did not think there would be enough MPs in the next Parliament who would do that. She no longer believes there will be a Lib Dem majority government by Friday.

This is an interesting development. Every time I see her on tv in various constituencies around the country she is flanked by Lib Dem posters setting out their catch phrase, “Winning here”. It’s an odd and self serving slogan. Normally parties and candidates have slogans about what they want to do for the voters.

This Lib Dem slogan asserts that they  uniquely know what voters are going to do in each place as if they have some special prescience the rest of us do not share about how people will vote. It now appears that in many of these places the Lib Dem leader thinks they are not winning after all. The slogan was apparently misleading or simply a lie.  It would have been more modest and sensible if their posters said “Trying to win here” or “Keen to win  here”. “Unlikely to win here” would be a bit of a turn off even where it was an honest assessment.

What was more bizarre was what she said about their fall back position, the wish to hold a second referendum on the EU issue. She vacillated about supporting a Labour government offering one and  appeared to want to move straight to a second General election.

She would be under great pressure to accept a Labour minority government offering a second referendum.  Her message of vote Lib Dem to get a hung Parliament, so we can then have a second General election to try for a different Parliament again  is absurd. Why would anyone vote for a result which required another election immediately? It also looks like an attempt to cover up a likely deal with Labour were they to get their hung Parliament.  No wonder her slogan is not “Vote for a hung Parliament so you can have a second General election”

She has consistently said there are no circumstances in which she would support a Conservative government seeking to implement the result of the referendum, so that only leaves one realistic option in a hung Parliament, a Labour led government.

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Getting Brexit done

I do want the next Parliament to complete our exit from the EU  so we can move on. The uncertainty deliberately generated by the Remain majority in the last Parliament was harmful . Too many MPs pushed out negative views about the result of simply taking back control of our laws, our money and our borders. Too many MPs elected on a ticket of supporting Brexit spent the whole of the last Parliament trying to delay or stop it altogether.

Let us be clear about the Conservative Manifesto and my views on Brexit. I have not signed any secret deal as some here suggest. I do  support  the national Conservative Manifesto as  it states

  1. There will be no extension to the Implementation period
  2. We will take back control of our laws and our money
  3. We will be out of the single market and customs union, with our own trade policy
  4. We will have full control of our fishing waters
  5. We will introduce a UK immigration policy

The public now have the opportunity to elect a  new Parliament that will carry out their wish to leave the EU. Nigel Farage made a difficult decision for him not to stand in  seats which the Conservatives won the last time. The revised Political Declaration sets out how we will leave and base our future relationship on a Free Trade Agreement, not a customs partnership or surrogate single market membership.

The Conservative MPs who last time broke their promises on Brexit have now joined the Lib Dems, or retired, or are standing as Independents in favour of overturning Brexit or pressing for a much closer relationship with the EU than Leavers want.

The Conservative party would have liked the Brexit party to also stand down in all those seats which the Conservatives have the best chance of winning from other parties. Just winning the 317 seats Conservatives  won last time is not sufficient to form a majority government.  The Conservatives did not feel as a national party with a realistic chance of winning a majority they could stand down candidates in various parts of the country. As a result the Brexit party felt there was  no reciprocation, whilst the Conservatives are keen to avoid the  Brexit party splitting the Leave vote in some important cases.

All this is made much more complicated by the fact that this is a General election and Jeremy Corbyn is widely assumed to  be the alternative Prime Minister to Boris Johnson as the polls indicate. The General election is not a re run of the EU referendum though some people will cast their vote  on the basis of their  views of Brexit. The Conservatives are the only party which can prevent a Labour government led by Mr Corbyn from winning and taking over. The Greens, Lib Dem’s, SNP and Plaid are all in favour of stopping or delaying Brexit so only a Conservative Government with a Commons majority can deliver taking back control of our laws, our money and our borders. The Lib Dems and SNP  have stated that in a hung Parliament they would not allow Conservatives to form a government.

That is why many Brexit party members decided it was best to settle for Mr Johnson’s approach to Brexit and to back him. To lose Brexit and end up with Mr Corbyn as PM would be a double blow which many are not prepared to risk. That is why Nigel Farage decided it best not to stand in 317 seats. In these seats it would have been very difficult for Brexit to win, but in some marginal seats  easy to allow a pro Remain candidate to win from another party by splitting the Brexit vote.

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The choice in this election is simple – Corbyn or Conservatives in government?

Elections are said to be about many things. At election time lobby groups abound each with their own Manifesto trying to get prominence for their cause. A range of parties offer competing visions of what government could  be like if they were allowed to change it. The public becomes engaged, with many voters seeing it as a chance to get more political attention to their worries.

This election has debated the NHS, the economy, taxes, spending plans, Brexit, trade policy, green issues, homes, planning and many other concerns. A lot of old soundbites and a few new ideas have come to greater public attention.

In  the end, however, it comes down a simple choice. Do you want a Conservative government, or do you want a government led by Mr Corbyn and Labour?  The polls all indicate by a large margin that these are the two most likely outcomes. The media and commentariat agree. It was right that  we had  two debates between the two men who could  be Prime Minister this Friday.

No-one can deny that is a genuine and big choice. The Conservatives offer affordable increases in spending on priorities in education, healthcare and law and order, and sustainable tax cuts for the many. Labour offer large increases in public spending on most things, along with a very expensive nationalisation programme. They say they will merely tax the rich to pay for it, but confirm they will take away the married allowance. They would end up having to tax the many to pay for some of the long list of items of increased spending. Last time Labour tried taxing the rich hard we had a brain drain so many of them paid less or nothing at all.

The Labour government of the 1960s ended with a devaluation crisis and its aftermath. The Labour government of the 1970s effectively bankrupted us, forcing us to borrow from the IMF to pay the bills they ran up. The Labour government 1997-2010 created a nasty great recession and left us with no money. Each Labour government put up unemployment.

The difference with the Corbyn plans is they are so extreme we would get to the economic crisis more quickly were his programme to be attempted.

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The election in Wokingham

Over the last few weeks I have re-visited every town, village and small settlement in the constituency. I have talked to people, canvassed and delivered leaflets as a candidate does. From Parkers Corner to Norreys, from Riseley to Winnersh, from Aldermaston Wharf to Evendons I have walked and driven round  the area. I have just thrown away a pair of shoes which fell to bits  under the effort.

I have sent out two different  leaflets by free post to every two person household, and with my team hand delivered a longer four sided leaflet setting out what I and the Conservatives would like to do if elected with a  majority.

It has been a frustrating election as half the other candidates refuse to join debates. One of them has sent out a leaflet attacking me with lies about my views, with no content about what she would do if elected.

I have decided to continue with my positive campaign, explaining what I have been doing and what I want to see through and do next to make the Wokingham constituency an even better place to live in. I am also stressing how we can have a more prosperous country if we get that Conservative majority with the public service boosting and tax cutting budget we now need.

Posted in Uncategorized | 50 Responses
  • 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.

    Promoted by David Edmonds on behalf of John Redwood both of 30 Rose Street Wokingham RG40 1XU

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