Sterling strengthens

Parliament votes down the Withdrawal Agreement and sterling strengthens a little against the dollar and the Euro. I have often said I do not think sterling is mainly driven by views on Brexit, but it has been noticeable the absence of comments from the usual suspects. They are doubtless disappointed that sterling has edged up at a time when the only deal on offer has just been voted down.

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The EU moves to control taxation

I was pleased to see the EU is moving as planned to set more tax rates and tax policies at the EU level just as I have been predicting. The EU needs to centralise more to back the Euro and to complete its political union. It also underlines why many of us do not want this future for the UK, where we want to vote for those who tax us and have the right to sack them if they displease. As The EU’s latest document says, it wants to stop member states offering lower taxes as incentives to businesses or rich individuals. It wants ” a fair tax environment for all” which they say only the EU could guarantee for member states.

The ideas set out in “Towards a more efficient and democratic decision making in EU tax policy” concentrate on removing the ability of a state to veto a tax proposal. The EU also wants to introduce powers for the European parliament in this area. They are keen to press on with a common corporate tax system, VAT, a Financial Transaction Tax and a Digital Services Tax. They claim “co-ordinated EU action in taxation is essential to protect Member State’s revenues”. They claim “In today’s larger, modern and more integrated EU, a purely national approach to taxation no longer works and unanimity is neither a practical nor an effective way of decision making”. They want a standard system of VAT with a single form instead of 28 varieties as at present, and the ability to stop Ireland and others undercutting corporate taxes to attract business.

You cannot be an independent country and have others impose taxes o n your citizens and set your budget. The UK is getting out just in time. If we stay in or bind ourselves to their laws after technically leaving we could end up with their new taxes that would damage our businesses and our consumers.

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What now?

The predictable and large defeat of the PM’s main policy is unprecedented in my time in the Commons. I have seen governments forced into climb downs on unpopular policies, but never seen a PM put so much effort into defending a policy which united a large element of her own party with all the forces of opposition. It is difficult to fathom why she carried on with it. She knew the DUP would oppose, so that was the end of her majority. She knew 22 people had resigned from government and party posts in protest at the policy, so how were they ever going to support the policy they had so visibly opposed? She knew an active group of more than 60 Eurosceptics who had helped her secure the EU Withdrawal Act and had offered much well researched advice on how to handle the negotiations were in complete disagreement with Chequers and the draft Agreement. Maybe she decided she needed to show both the UK and the EU that the best Agreement on offer from the EU was completely unacceptable to Parliament and a clear majority of the people Parliament represents.

There is no point in going back to the EU to try to fix the Withdrawal Agreement. Even if the EU was prepared after this to take the Irish backstop out of the Agreement there is still no majority to carry the proposal, though maybe half the Conservatives against it in its current form might think again. Why would the EU offer anything when that too is likely to be rejected?

Instead the PM should come to the House to make her considered statement saying she will return to the EU with two proposals from the UK. The first is to complete rapidly the various agreements underway or needed to ensure a smooth transition on exit on 30 March 2019. The second is to table a full Free Trade Agreement based on the best features of the EU/Canada and EU/Japan agreements which we know the EU can accept. If the EU expresses interest in negotiating such an agreement and agrees broadly with the proposition it should be possible to avoid any introduction of tariffs and other barriers on trade pending the negotiation of a full FTA, under clause 24 of the WTO treaty.

Either way, exiting without a dreadful deal is the right course to follow. The PM was correct to stress No Deal is better than a bad deal. Parliament has just rightly decided that was a very bad deal. Indeed it wasn’t a deal at all. It was a very expensive invitation to more prolonged talks about a possible deal.

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Does Parliament want to deny the people their voice, vote and freedom?

Today UK democracy is on trial in Parliament.
The people voted, yet a large number of MPs want to deny them the results of their vote.

Some Remain MPs are too clever by half and too clever for the good of Parliament. They argue that Parliament will take back control, as people wanted, but their idea of Parliament taking back control is to return massive powers to the EU or to prevent us leaving EU control in the first place. What an unpleasant irony! They wish to go to war with the people, and deny them the result of the People’s Vote, cynically misrepresenting that as taking back control.

The large Remain side in Parliament never wanted to debate EU matters before the referendum. They told us they were technical, that the EU had little control over us, and that those of us who wanted to talk about the growing power of the EU were wrong and out of touch with the real issues of the day. Now we have voted to leave they want to talk about nothing other than EU membership. They endlessly repeat the arguments that lost them the referendum and carry on hectoring Eurosceptics and trying to terrify us into changing our minds. It is high time we put this debate behind us and left the EU. If we cannot negotiate a good deal in 2 years 9 months before giving the EU what they want, there would be no chance of negotiating a good deal for the future in 21 months more if we have given away the main bargaining advantages we have through the Withdrawal Agreement.

The people made a decision. They were promised by government and Parliament it would be implemented. Today Parliament should vote down the Withdrawal Agreement, which is the stay under EU control agreement. Parliament should also make clear we must now leave on 29 March. The PM should return to the EU to ensure smooth passage out, as it is in their interest as well as the UK’s. She should also offer free trade agreement talks for as soon as we are out. The UK can trade just fine with the rest of the EU under WTO rules. The government should immediately publish our schedule of tariffs for March 30th, which should be lower than the EU schedule and should include zero tariffs on components needed by UK industry and zero tariffs on food we cannot grow or rear for ourselves.

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3 line whips and loyalties

I rarely vote against 3 line whips imposed by the Conservative party. Indeed, I have voted with Mrs May and the 3 line whips she has imposed on every occasion so far this Parliament. We have had many votes to win against a group of Conservative MPs seeking to defeat the government over every step it takes to implement the Manifesto pledge to leave the EU. We have won most of them and passed the EU Withdrawal Act as a result.

I am conscious that I was elected as an official Conservative candidate. My electors would normally expect me to vote with the Conservative government a majority of the voters in Wokingham voted for. As an MP I always try to ensure I vote for the interests of my constituents first, for the interests of the nation second and for the party I represent third. I also seek to make sure I vote to keep the promsies I made at the last General Election, and where possible to keep the promises my party made. This means that I would only vote against a three line whip in a few circumstances.

1. Where the nationally agreed policy proposed by the Conservatives has a damaging side effect on Wokingham which means I need to put Wokingham’s interest before the national and party interest. So if for example a generally approved piece of infrastructure meant the construction of an inappropriate neighbouring investment in my crowded area, I would be the voice of opposition to that particular project.
2. Where the government I usually support asks me to vote for a policy or law which violates or reverses pledges made in the Election Manifesto. Mr Cameron, for example, promised in the 2010 and 2015 Manifesto not to transfer more power to the EU, yet in government regularly did. I needed to oppose that breach of promise.
3. Where I have made an express pledge in the election that was different to the national party Manifesto. In 2017, for example, I expressed disagreement with the national Manifesto approach of making people pay more for care for the elderly . Mrs May herself then fortunately changed the pledge.

On Tuesday I may be asked to vote for the Withdrawal Agreement negotiated by the Prime Minister. I say may, as last time the government wisely withdrew the proposal when they saw they would lose by a large margin. I also say may, because if a rebel or opposition amendment was carried to the government’s original proposal then Parliament will only vote on the motion as amended. I will vote with the government and in agreement with the three line whip to vote down all Opposition and rebel amendments to the motion, and would vote with the government to vote down the motion as amended should that circumstance arise.

If, as Mr Corbyn hopes, the unamended proposal is put to the Commons, I will vote against. I will do so primarily because it breaks the Manifesto pledge of the national party, and my own personal pledge to my voters that I will do my best to see through Brexit. It also breaks the national Manifesto promise to negotiate the Withdrawal Agreement in parallel with negotiating the Future Partnership Agreement, for the obvious sensible reason that compromises offered on the one could then have levered gains on the other. The Withdrawal Agreement seeks to undermine the UK bargaining position and lock us into many more months of effective EU membership and uncertainty about the future relationship.

My decision to vote against is reinforced by the weight of opinion in my constituency and in the wider nation according to opinion polls. A majority of those talking or writing to me want me to vote it down. The national polls show much stronger support for leaving than for accepting the 21-45 month delay and further uncertainties of the Mrs May Agreement.

In the end each MP has to exercise his or her judgement. My judgement is that this is wrong. My main reason to vote against is the Agreement violates Manifesto pledges made to secure election, and fails to implement the wishes of voters as determined in the People’s Vote. Latest polls endorse the view that this is neither a good deal, nor a popular one.

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Spare us more Project Fear

The more the false fears are dismissed by the people responsible for organising our trade, the shriller and more desperate the Project Fear voices become. The port of Calais assures us of speedy passage for trucks after exit, so the hard core Remainers renew threats of food shortages!
European pharmaceutical companies confirm they want to carry on supplying drugs, so some go on about the need to stockpile as if we are entering some undeclared economic war. Airlines carry on selling tickets for post March whilst Project Fear is still pumping out the idea the UK will suddenly be cut off from the continent.
We currently import plenty of items including perishable food from outside the EU under WTO rules without delays and problems. Over the last year I have mainly bought home grown food, but have also enjoyed good fruit and veg that the UK could not grow from African and Latin American countries. I have not needed EU product.
I like to buy domestic produce with lowest food miles where possible. After that I prefer to buy food from developing countries. As an advocate of more trade as one of the ways of helping countries out of low incomes, I like to do my little bit with my own domestic budget.
The Project Fear blizzard on much of the media prevents us having a sensible discussion about how to use all the extra money and new freedoms once we lave. There are also some government Ministers who cannot bring themselves to tell us how they will spend the money and use the new freedoms, as if they are desperate not to. They should exude sensible confidence in our future as an independent country, and should be setting out exactly what we can do in April assuming we just leave. Setting out the advantages should be part of contingency planning for the Withdrawal Agreement being voted down.

The Chancellor needs to prepare a March budget to spend the money saved and boost the economy. The Business Secretary needs to stop encouraging fears and explain how Just in time systems will work just fine once we leave.Why doesn’t he sort out the damage done to the car industry by EU and UK regulation and by high vehicle Exicse Duty. Why won’t he publish with the Trade Secretary a tariff schedule for March 30 that is lower than the EU one, with no tariffs on any imported components? We want a better manufacturing policy after years of EU rules and subsidies helping export factories from the UK.

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My contribution to the debate on the European Union (Withdrawal) Act, 10 January 2019

John Redwood (Wokingham) (Con): This Parliament is on trial. The public voted very clearly in the people’s vote of 2016. They were told by Parliament and the Government, by the remain and leave campaigns, that they—the people—were making the decision. They were promised that this Parliament would get on with the task, and they now say to this Parliament, “Do just that. Get on with it.”

The public recall that this Parliament is dominated by Members of Parliament serving in the Labour and the Conservative interests. In the 2017 election, every one of us was elected on a manifesto that made it clear that our parties supported implementing the verdict of the British people. The Conservative manifesto went further and made it very clear that we were going to leave the single market and the customs union, as had been pointed out by both remain and leave campaigns in the referendum. The Labour party manifesto set out an interesting and imaginative trade policy for an independent Britain that is clearly incompatible with staying in the customs union. So, Labour too, along with the Conservatives, said to the public in 2017 that we would be leaving the customs union as well as the European Union when the decision was implemented.

There are many leave voters now who are extremely angry that some Members in this House think they were stupid, think they got their decision wrong, and think they should have to do it again. Many people in the country who voted remain, as well as many who voted leave, think it is high time that this Parliament moved on from every day re-enacting the referendum debate as if it had not happened and thinking that we can go back over the referendum debate and decision because it did not like the answer. All those who stood on a manifesto to leave the European Union should remember that manifesto. Those who deeply regret the decision and did not stand on such a manifesto should still understand that democracy works by the majority making decisions. When a majority has made a decision in a referendum where they were told that they would get what they voted for, it ill behoves anyone in this Parliament to know better than the British public and to presume that this Parliament can take on the British public and stand against them, because we are here to serve that public. We gave them the choice and they made that choice.

I want us to be much more interested in the opportunities that Brexit provides and to have proper debates about all the things the Government should be doing for when we leave, as I trust we will on 30 March 2019. I see nothing in the withdrawal agreement that I like. It is not leaving; it is sentencing us to another 21 to 45 months of these awful, endless debates and repetitions of the referendum arguments as we try to get something from the European Union by way of an agreement over our future partnership, having thrown away most of our best negotiating cards by putting them into the withdrawal agreement in the form that the European Union wants. That would be ridiculous, and a very large number of leave voters would see it as a complete sell-out. That applies to a very large number of remain voters as well, many of them in my own constituency. They have written to me and said, “For goodness’ sake oppose this withdrawal agreement, because while we do not agree with you about the ultimate aim, we are united in thinking this is even worse than just leaving”, or, in their case, staying within the European Union. I find myself in agreement with the overwhelming majority of my constituents on this subject. For both those who voted remain and leave, this is a very bad agreement that suits neither side.
The opportunities we should be discussing today in respect of fishing, agriculture and business are very considerable. I again ask my oft-repeated question of the Government: when are they going to publish our new tariff schedule? The United Kingdom can decide how much tariff, if any, to impose on imports into our country. I think that the EU tariff schedule on imports into our country is too high. I proposed to the Secretary of State for Business, Energy and Industrial Strategy that he remove all tariffs on imported components. That would be a huge boost for manufacturing in this country. Instead of having to say to manufacturers that we might end up with some tariffs on components coming in from the EU, because we have to charge the same to everybody, let us be bold and say that we are going to get rid of the tariffs on the components coming in from non-EU sources so that we cheapen the costs of manufacturing in the United Kingdom and give people a better choice on components.

George Freeman (Mid Norfolk) (Con): Will my right hon. Friend address the worries of farming families, communities and industries up and down the country facing tariffs on their products going into Europe? This is a £3.15 billion industry facing a very serious tariff threat.

John Redwood: I was going to get on to food, and I will do so immediately as I have been prompted. We run a massive £20 billion a year trade deficit in food with the European Union, and tariff-free food competes all too successfully against some elements of our farming industry. I want the Government to choose a tariff structure on food that provides lower overall tariffs against the rest of the world but produces some tariff against EU production so that we will produce more domestically. I want to cut the food miles. I want to see more of our food being produced and sold domestically. Our domestic market share has plunged seriously during the time we have been in the European Union. I think it was well over 90% in 1972 when we entered, and it is now well under 70%. There is absolutely no reason why we cannot get back there.

We need to know urgently from this Government what tariff protection there is going to be against EU food once we have left; whether they will take advantage of the opportunity to get rid of tariffs on food coming in that we cannot conceivably grow or produce for ourselves; and whether they will lower the average tariff, because some of the tariffs that the EU imposes are eye-wateringly too high, to the detriment of the food consumer. As we will be collecting more tariff revenue in total when we start to impose some tariffs on EU products, we should be having a debate on how we are going to spend that money. I trust that the Government would rebate it all to British consumers by direct tax cuts of the right kind. There is no reason why the consumer should be worse off, because we are heavy net exporters and we are going to collect an awful lot more tariff revenue on the EU’s goods than they are going to collect on ours, unless we do something very radical on our tariff schedule. We therefore need to discuss how to spend that money.

We also need to discuss how we rebuild our fishing industry. I am impatient to get on with this. I do not want it to be delayed. We need to take control of our fish and our fishing industry this year, not sometime, never. Under the withdrawal agreement, we have no idea if and when we would get our fishing industry back. Doubtless it would be in play as something to be negotiated away, because the Government have given everything else away that they might otherwise have used in the negotiation. I want to get on and take back control of the fish now. I want a policy from the DEFRA Secretary on how we can land much more of the fish in the United Kingdom, how we can build our fish processing industries on the back of that, and what kind of arrangements we will have with the neighbouring countries both within and outside the EU whereby we will be free to settle the terms and negotiate our own conditions.
This is a huge opportunity. The fishing industry is one of the industries that has been most gravely damaged by our membership of the European Union, and we owe it to our fishing communities around the country to take that opportunity. From landlocked Wokingham, I can assure colleagues from coastal communities that there is huge enthusiasm throughout the country to rebuild our fishing industry and to see those fishing fleets again expand and enable us to land much more of our own fish. We can, at the same time, have a policy that is better on conservation by getting rid of many of the big industrial trawlers that come from the continent. We can get rid of the system where there are discards at sea or, now, the system where people are actually going to be prevented from fishing completely because the fishery cannot be managed sensibly, to the detriment of the fish and the fishermen and women undertaking the work.

There is a huge agenda there. Above all, I want the Government to set out how we are going to spend all the money that we will be saving. The Government say that we are going to give away £39 billion—I think it will be considerably more—under the withdrawal agreement. I would like to take that sum of money, which they have clearly provided for as it is their plan to spend that money, and spend it in the first two years when we come out in March 2019. That would be a 2% boost to our economy—a very welcome Brexit bonus.

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Labour’s approach to Brexit

Labour says it wants to be involved in Brexit. It is and will be. Next week if there is a vote on the government’s Withdrawal Agreement Labour’s votes against will matter given the divisions on this proposal within the Conservative party. Labour is understandably reluctant to set out a positive approach to Brexit given the wide range of views within the party, but will oppose most of what Mrs May produces as an opposition usually does. They have set out a wide range of reasons for being against the Withdrawal Agreement.

Mr Corbyn is treading a careful path against the background of trying to lead a party much more divided over Brexit than the Conservatives. The Conservative party in the Commons contains up to 12 MPs who cannot reconcile themselves to Brexit and who used a number of opportunities to try to derail or modify the Withdrawal Bill as it went through. There is now a slightly larger group who say they want to prevent leaving without an agreement. The rest of the Conservative Parliamentary party accepts Brexit, including more than 100 who were Leave campaigners and strongly believe in it. The Conservative membership is also strongly pro Brexit, and an increasing proportion of the Conservative vote in the last General Election came from Leave voters who saw the party as the best way to get Brexit implemented.It is easy to unite practically all the Conservative party on Brexit by ensuring it happens.

In contrast there is a much larger group of Labour MPs who cannot reconcile themselves to Brexit, who try various Parliamentary tactics to seek to derail or delay our exit from the EU. There is a small group of pro Brexit Labour MPs, and some who accept the verdict of the voters and who fear for Labour’s future if it is seen to stop Brexit. There is a larger group of pro Jeremy Corbyn MPs who wish to use Brexit to try to secure a General election. The membership is heavily in favour of Remain, whilst the voters are split between some very pro Leave constituencies and some very pro Remain constituencies. There is no way the leadership can suit all their audiences. The Manifesto said it would want to implement the referendum result. The best course for the leader is to oppose much of what the government does, to unite his forces by concentrating on trying to force an early election, and hoping that in practice the Brexit issue gets settled by the Conservatives so he can move his party on to more unifying terrain.

Next week the question is a simple for or against the Withdrawal Agreement. It’s not a difficult question. It is difficult to see why many would want to vote for it, given the way it guarantees another 21 to 45 months of Brexit rows and likely continuing political paralysis because of the continuing talks with the EU. That would make a deeper split in Labour that much more likely.
Labour seems to understand that adopting a second referendum as their policy as their pro Remain group want to do would be very damaging to their poll position. It would mean losing more of their Leave supporters who would feel insulted and let down by telling them they got it wrong the first time. The Lib Dems found backing a second referendum left them a poor third in the 2017 General election.

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Jaguar Land Rover hit in China and on the European continent by falling sales

The sales figures for 2018 were down in 2018 on 2017 by 4.6%. Within this the pattern was

North America plus 7.2%
UK minus 1.5%
Europe minus 7.8%
China minus 21.6%

The Uk performance was especially good given the fall in the overall market thanks to higher Vehicle Excise Duties, the attack on diesels and the general squeeze on car loan credit. As JLR said “The UK’s performance in particular has been encouraging”

It is a great pity JLR has to reduce its workforce thanks to a nasty decline in China and a marked slowdown on the continent.

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The Speaker’s ruling

I have been asked to comment on the Speaker’s ruling on Wednesday. I will do so when I have heard the Speaker’s further consideration, which he promised to Jacob Rees Mogg and Iain Duncan Smith who raised important questions at the time. At issue is the question of whether a Business motion tabled by government should be amendable, and what putting a motion forthwith means as this is often referred to in Standing Orders.

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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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