The Chancellor’s new model?

In his Delphic interview in Germany the Chancellor implied that if the rest of the EU does make try to make life difficult for the UK the UK has plenty of options in response. He did not spell out the detail, but the UK could cut taxes more to make itself a more attractive destination for investment. It could match anything the USA decides to do to switch taxation in ways which promote investment and manufacturing at home and for exports, and penalise imports. Financial regulation could be altered to make the City the most flexible value for money major market, whilst ensuring proper standards and disclosures.

I do not think we need worry. If we have no deal with the EU and operate under the most favoured nation status at the WTO it will be fine. I still think faced with the reality of high tariffs on agricultural products and a 10% tariff on cars which will do them more damage than us they are unlikely to want this. We carry on a good and faster growing trade with the rest of the world than with the EU. That is largely conducted under most favoured nation status with modest tariffs under WTO rules.

The question for the Chancellor is rather, if there are tax changes and regulatory alterations which would boost UK jobs and incomes, shouldn’t we be contemplating those anyway, whether the rest of the EU tries to be  nice or nasty to us? There are voices in the City now saying we should aim for the “Financial Centre” model, where we organise a strong but business friendly framework to maximise the attractiveness of London to legal business. It is interesting to see even City UK, a past cheer leader for EU engagement, is no longer demanding we keep the passports. It reminds me that the City made passionate interventions to try to get us to join the Euro, saying the City would be damaged if we did not. They soon discovered the opposite was true. The City grew faster outside the Euro.

Ireland has fought long and hard to maintain a tax advantage over the rest of the EU. Luxembourg does well in investment management along with Dublin out of low taxes. The Chancellor needs to review tax rates with the intent to charge the rate that maximises revenue by attracting more business. This will usually be a lower rate than the one currently charged.

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102 Comments

  1. Lifelogic
    Posted January 17, 2017 at 5:27 am | Permalink

    You say:- “The Chancellor needs to review tax rates with the intent to charge the rate that maximises revenue by attracting more business. This will usually be a lower rate than the one currently charged.”

    Certainly most rates and especially stamp duty, income tax, inheritance tax, VAT and capital gains (without even indexation) are far too high, even for maximum government revenue.

    But the tax rate should not be fixed for “maximum government revenue”, but for maximum good for the people. This is a rate well below the one for maximum government revenue. Government should spend no more than about 25% of GDP about half what they currently spend (and largely waste). It would of course then be a far larger overall GDP anyway.

    Maximum good for the economy and the people would mean the government had to stop pissing money down the drain on HS2, Hinkley C, heating empty barns, the green crap subsidies, payments to augment the feckless and endless other damaging waste they endlessly indulge in. Then cut red tape, relax planning, go for cheap energy, fire the half of the state sector that produces little of any real value, only do the rather few things that government can do best and stand back watch the economy boom.

    Alas we seem to have two potty socialists at number 10 and 11, judging from the autumn statement and May’s daft speeches with workers on boards, the jams and gender pay reporting.

    Let us hope they finally get real.

    • acorn
      Posted January 17, 2017 at 7:42 am | Permalink

      So what happened to this site’s dedication to the Laffer Curve theory of taxation???

    • Hope
      Posted January 17, 2017 at 9:03 am | Permalink

      I do not understand the lefty media claiming the negotiations taking two years, this is the limit not a target! May delivers her speech today then article 50 needs to be sent immediately even if legislation needs to be hurried through parliament. No more dithering or pandering to remainiacs.

      I would hope within six months to a year we have a deal with the US and other leading countries in the world. Tangential issues of EUpensions can be balanced and/or offset with repayment to the U.K. of EU building costs. Actual payments the U.K. made for any EU asset. In relation to U.K. Politicians of EU pensions they should be cancelled. It is not right to be a commissioner for a couple of years and get a pension for life! Added with a Lords tax free pension top up. We are not all in it together so the lefty recipients should not be upset.

      JR, it will be interesting how our venture in the A380 Airbus will be determined. As an equal partner the U.K. Will have access to sale the aircraft in the EU and the rest of it. How will the the EU cherry pick this one?

    • Lifelogic
      Posted January 17, 2017 at 12:57 pm | Permalink

      Well I suppose she was at long last fairly clear, but she really is a rather tedious speaker.

      The Libdim leader will try to force a second referendum on the deal he says. Has May got the ability and skills to get it through the Commons and the Lords?

  2. Leslie Singleton
    Posted January 17, 2017 at 5:45 am | Permalink

    I too thought, What a lot of nonsense, we can and very arguably should do that anyway. After all there is not the slightest reason why what suits us and what we choose to do should be the same as the EU, rather the opposite. What Trump says rings true to me sound as a bell.

    • Lifelogic
      Posted January 17, 2017 at 7:43 am | Permalink

      Of course we should do it. Follow what works, just look at Singapore, Hong Kong, Switzerland and other countries where government expenditure/waste and taxes are at sensible levels. Unlike the UK where the tumour of bloated, parasitic government (nearly at 50% of GDP) does huge harm. A largely inept government too, with its near monopoly in health and education (plus silly damaging interventions and market distortions in transport, farming, employment laws, wages, energy, housing indeed almost everything).

  3. Richard1
    Posted January 17, 2017 at 6:09 am | Permalink

    I thought the Chancellors interview was strange. It would be an excellent idea to make the UK & industries such as the City as competitive as possible whatever the result of the EU negotiation. Protectionist tax changes of the kind Trump is reportedly considering to penalise imports would be a disaster and would surely bring retaliation. Hopefully Congressional Republicans will stop his sillier plans. Let’s just have simpler lower and flatter taxes and get rid of all the embellishment and exemptions put in place by the likes of Gordon Brown and even by the supposedly tax reforming George Osborne.

    • Bob
      Posted January 17, 2017 at 11:44 am | Permalink

      “Let’s just have simpler lower and flatter taxes and get rid of all the embellishment and exemptions put in place by the likes of Gordon Brown and even by the supposedly tax reforming George Osborne.”

      That’s worth saying again.

    • Anthony Makara
      Posted January 17, 2017 at 5:30 pm | Permalink

      I don’t agree that Trump’s Protectionist policies will be a disaster, in fact they are a necessary measure to rebalance the US economy. I too support lower taxes but they have to be earned by business, those enterprises that make a contribution to the growth of certain sectors, Manufacturing, Agriculture, Fisheries, should be given significant tax relief. Same goes for firms that don’t hire migrant unskilled labour, that hire more than a hundred staff, and that don’t outsource. Business that puts in to the rebuilding of the New Economy should get something back from Government.

  4. Lifelogic
    Posted January 17, 2017 at 6:15 am | Permalink

    To suggest government should tax at a “rate to maximises government revenue” is profoundly wrong. Politicians should ensure government acts in the interest of the public and maximise public good. This by having a state sector that taxes only as much as is really needed (to do the rather few things that a government can actually do better than the private sector).

    The rate should be well below the Laffer rate not at or above it, as has been mainly the case under Major, Clark, Brown, Darling, Osborne and Hammond.

    It is a bit like saying a managing agent of a block of flats should charge the leaseholders at a level to maximise the agents revenue. Even if this means they have redecorate and carpet the communal areas every other day and pay their staff £1 million pounds each PA, just to spend all the money they extract from leaseholders!

    • Lifelogic
      Posted January 17, 2017 at 6:17 am | Permalink

      MP should remember they represent the 80% who work in the private sector too and not just the 20% who work for the state.

      • matthu
        Posted January 17, 2017 at 9:56 am | Permalink

        I just wonder what proportion of taxation (current and deferred) is tied up in supporting the lifestyle of that relatively small proportion of people who work for the state?

      • Bob
        Posted January 17, 2017 at 11:47 am | Permalink

        @lifelogic
        80/20?
        I thought it was nearer 50/50?

        • Lifelogic
          Posted January 18, 2017 at 9:05 pm | Permalink

          Expenditure nearly 50/50 but people employed total about 30 million and in the state sector under 6 million.

          • hefner
            Posted January 19, 2017 at 7:29 pm | Permalink

            And how exactly do you come to this 50 % of expenditure? What exactly do you put under this heading? I am very curious to know?
            What is for defense, NHS, education, … ? Do you link these expenses to the “public sector”?
            A bit more details would not go amiss.

      • acorn
        Posted January 17, 2017 at 7:34 pm | Permalink

        Lifelogic, you are the quintessential Brexiteer; as nutty as a fruit cake. But we love you for it, you brighten up our everyday. 😉

        Anyway, the Chancellors new model? UK Corporation tax, currently slated at about £46 billion for 2016/17 – about 6.5% of total tax receipts – is a tax that really should not exist.

        All Corporations are ultimately owned by Households, even family owned firms. It is fairly easy to tax what comes out of a public or private corporation to households as income. If the corporation holds on to its profits, it becomes a savings vehicle for households, which will show up in the share price and eventually become subject to capital gains tax.

        • Lifelogic
          Posted January 18, 2017 at 9:11 pm | Permalink

          Quite right, there is no real sense in having taxation on companies or businesses. They will, after all, invest the money (in new jobs and better productivity) far better than the state will.

          Then again almost anyone would do, even a monkey throwing darts.

    • graham1946
      Posted January 17, 2017 at 2:56 pm | Permalink

      A bit like Landlords trying to get as much as possible for their rents regardless of what people can afford or of the landlords costs. Properties that were purchased donkeys years ago, have little or no maintenance on them yet are charged at ‘market rate’ – usually pauperising the tenants to enrich the landlord. No adding to the economic wellbeing there. You might think of this some time when criticising the government for the same thing. The speck in the eye as against the plank.

  5. Caterpillar
    Posted January 17, 2017 at 6:44 am | Permalink

    “if there are tax changes and regulatory alterations which would boost UK jobs and incomes, shouldn’t we be contemplating those anyway”

    Yes and No. I think a contemplation of what is meant by boosting jobs and income needs to be considered first. GDP is a bottom line measure and does not capture the whole economy, Gini for both wealth and income do matter, type of job vs. life satisfaction matters. Vision of the country does matter (some credit to the PM here), structure of money creation matters (small vs large banks will create differently, amount created for speculation not investment may be an issue), form of tax matters (e.g. Taxing income – savings rather than just income) etc.

    So Yes to thinking through, but No as simply a reaction to EU.

    • acorn
      Posted January 17, 2017 at 8:29 am | Permalink

      Cat’, have a read of https://www.ifs.org.uk/uploads/publications/wps/WP201701%20-%20Exec%20summary.pdf

      In Fig 1 you will be aware that Thatcher arrived in 1979 and the 1% proceeded to go from 3.5% of household income to 6%; Blair boosted it further to 8%. They both were – and still are – following the neo-liberal (NL), new Keynesian economic religion.

      Fig 3 is classic NL; the metric that part-time and zero hours contracts can’t hide. The difference between hourly pay and weekly pay for the bottom two quintiles of households. Neo-liberals have no interest or concern with these citizens, they just have to be policed.

      • Caterpillar
        Posted January 18, 2017 at 8:55 am | Permalink

        Thanks Acorn,

        A report that should be widely read but read critically “income inequality over MOST of the distribution has actually declined” (my stress). So Gini = 1 would be OK for these authors.

      • Mitchel
        Posted January 18, 2017 at 10:05 am | Permalink

        Look at the Davos mission statement :-“The uniqueness of the Forum’s collaborative multi-stakeholder efforts consists in integrating multiple initiatives into a systems-level approach-always with the mission to improve the state of the world”

        ie we are all no more than data imputs to be manipulated for the benefit of Davos man.

    • Mark Watson
      Posted January 17, 2017 at 1:50 pm | Permalink

      Agree with this.

  6. Peter VAN LEEUWEN
    Posted January 17, 2017 at 6:49 am | Permalink

    While the continent is waiting patiently for a start of the talks, with only slight exasperation (will it be by 31 March?? Ever??), your deeply divided country is still quarreling with itself, taking its government to court, expressing threats (Philip Hammond), trying out nastiness (the “deliberate hostility” policy – see yesterday’s Guardian).
    Is all this supposed to be a sign of strength???

    • Richard1
      Posted January 17, 2017 at 8:02 am | Permalink

      Most democratic countries have active and vigorous debate involving disagreements – including the Netherlands as I understand? The only big question the UK and the EU need to resolve is do we or don’t we want a trade war. Hopefully not – and everything can continue in a friendly and cooperative way as now.

    • Dave Andrews
      Posted January 17, 2017 at 8:43 am | Permalink

      The country isn’t divided, only the polarised politicians and socialites. Britain exiting the EU just isn’t a topic of conversation for the average Brit, who is far more likely to be conversing about football, the soaps, computer games, whatever, but not the EU.
      I’m less than impressed with the British politicians engaging in talking the country down, rather than looking optimistically at the opportunities the country’s decision affords.

    • Anonymous
      Posted January 17, 2017 at 8:44 am | Permalink

      Yes. Division is what the EU does. Across the Continent too.

    • Hope
      Posted January 17, 2017 at 9:11 am | Permalink

      Not divided, people outside like you interfering to agitate and cause upset. The EU is slow at everything because of the point you make. On the world stage the EU has already caused devastation by Merkels immigration policy. Merkel points out when the UK leaves her army can be created. When you all March east under a German led EU army to upset the Russians we will watch and not interfere. It did not work out too well last time. Good luck.

      • Mitchel
        Posted January 18, 2017 at 10:10 am | Permalink

        When Merkel asks for volunteers to step forward for her Grande Armee just watch the rest of Europe,apart from possibly the Poles,take a step back!

    • matthu
      Posted January 17, 2017 at 9:58 am | Permalink

      Whereas across the EU there is absolutely no division, no threats of any state being taken to court, no nastiness … seems to be an EU hazard, doesn’t it?

    • ian wragg
      Posted January 17, 2017 at 10:40 am | Permalink

      There is no deeply divided country and there is no Wilders waiting to take over here.
      We are leaving you beloved EU so get over it.
      Already cracks are appearing in the Brussels spin machine as it becomes apparent that you are going to lose the cash cow and we are leaving all the institutions.
      The gravy train is about to hit the buffers and you will be jobless.

    • Bob
      Posted January 17, 2017 at 11:48 am | Permalink

      Thank you Lord Haw Haw.

    • Mark Watson
      Posted January 17, 2017 at 1:46 pm | Permalink

      I really wouldn’t take a lot of notice of the media Peter, it is a long way from what is actually happening in the country, most people are just getting on with things as normal. Sorry to disappointed you! However, you sound a bit anxious..why?

    • Mike Wilson
      Posted January 17, 2017 at 5:10 pm | Permalink

      The divisions are wildly exaggerated. It is true that there are a few vocal remainers who seem to have been brainwashed into a love of the EU that borders on the hysterical. Most Remainers are now reconciled to leaving and we just want to get on with it.

      As far as a ‘sign of strength’ goes, we just want to trade on a friendly basis with our neighbours. Do you want that too? We import a lot of goods from the EU. That is our only strength. I hope that trade continues.

      • Peter VAN LEEUWEN
        Posted January 18, 2017 at 9:04 am | Permalink

        @Mike Wilson: We’re still waiting if and when a Brexit will come . . . ask me after 31 March, if that turns out to be the date of the start of talks.

    • SM
      Posted January 17, 2017 at 6:54 pm | Permalink

      Whereas, Peter, in the Utopia that is the European Union, everyone is happy, there are no Far Right parties fomenting unrest, no banks that need ever-greater support, no youngsters unemployed, no countries yet again on the brink of bankruptcy, no Russian threat, no huge problems dealing with the influx of illegal immigrants……
      …..can’t think why I didn’t vote Remain.

    • Juliet
      Posted January 18, 2017 at 9:11 am | Permalink

      Peter van Leeuwen,
      I’m guessing folks have had enough of expert opinions, especially opinions that turn out to be wrong as in your case, you are an expert aren’t you. At the stage of where we are isnt it better to be building bridges instead of knocking them down, and doing away with hostility that benefits no one. I get it things are not to your liking but that’s to ve expected, the outcome cannot always be what we want it to be (win/win). And sometimes for sanity sake it’s better to accept a situation and move on. But we’re all entitled to our opinions that what makes us stronger. Otherwise you wouldn’t be trying to diffuse the truth when it glaringly hits you in the face; and scouring the Guardian for insight to draw on more bias and half truths. I’mean optimistic I believe the next chapter with UK leaving the EU is the change that Europe needs.

      Word of advice the Telegraph is a much better read than the Guardian, more objectivity and talented journalism from higher echelons in business and politics have a better understanding of the real world

  7. Newmania
    Posted January 17, 2017 at 7:13 am | Permalink

    More gloating here another drop in the pound over there

    So we are to get Train wreck Brexit. Out of the single market, out of the customs Union, cut off from selling Services into our biggest market, facing the loss of all inward investment for export to the EU( practically all of the motor industry) and the Loss of the City in that it is the center of Europe`s Financial Trade.
    The passionate views of the majority of those under 50, almost all young people, a majority of the working population, are to be ignored entirely, trampled underfoot and jeered at form the Sun as “Remoaners”
    The pound predictably took another lurch downwards at the news and the holding tactic of keeping interest rates on zero and borrowing more is failing. Inflation is rising and will hit, with an interest rate rise” After article 50 is signed” as they planned .
    Trump is already plotting a trade war with Europe and Hammond has threatened the same here , no surprise that’s how trade is done.

    I cannot imagine a bleaker outlook and all the while the lies keep coming , the Brexit line is now that we all knew the economy would suffer . That was not the leave line as I recall it . Au contraire
    What was this for? To buttress a failed democratic system currently serving up a choice of UKIP blue or Communism lightish , because we hate foreigners ( apparently ), to assist the careers of Conservative MP`s grovelling to their superannuated membership, to please Donald Trump Marine Le Pen and bring about a dark age of small minded demagoguery .
    Fantastic !!!!

    Revenge Required and if not now then later

    • Richard1
      Posted January 17, 2017 at 8:09 am | Permalink

      Have you noticed that since the Brexit vote there have been numerous federalist proposals such as an EU wide green tax and mandatory minimum coroporation tax – exactly the kind of damaging and undemocratic impositions which were denied by Remain and were the reason for Leave winning? As ever it is very difficult to see why such as you think life will be so terrible out of the EU when there are so many non-EU countries managing very well, whereas many countries in the EU face dreadful economic problems. Nor is your characterisation of the voting breakdown correct. With a Project Fear having been proven to be rubbish a new vote would surely result in a much stronger win for Leave.

    • Lifelogic
      Posted January 17, 2017 at 8:25 am | Permalink

      The economy will not suffer, it will gain hugely after a short period of adjustment. Especially if we finally get some proper Conservative to cut red tape, cut taxes, go for cheap energy, reduce the size of the state and get the government out of the damn way.

    • Anonymous
      Posted January 17, 2017 at 8:59 am | Permalink

      Millions of young people had the chance to vote in the referendum but didn’t bother – despite the registration deadline being extended for them and it being well publicised.

      Now all this talk of revenge.

      I think you’d better have a lie down. Maybe see a doctor. You have it all wrong and it must be difficult for a man of your education and standing to admit it.

      (The biggest and most offensive lie is that we are racists. )

    • Anonymous
      Posted January 17, 2017 at 9:11 am | Permalink

      64% 18-24 year-olds voted in the referendum. The Guardian says that 70% are *thought* to have voted Remain but we can’t be sure. I’d venture that the more young who took part in the referendum then the more must have voted Leave to get the result we did.

      This compares to the 90% of over 65s who took part. The middle aged group took part at a rate of around 67%.

      There is difficulty here if we weight democracy on age and such weighting wasn’t considered when we voted to join (remain) in the EEC in 1975.

      Clearly voting breakdowns aren’t important when the vote goes the EU’s way.

      I was too young to vote in 1975 and now you’re telling me I’m too old to have a say now. Democracy has to be what Newmania wants it to be – which is not democracy at all and is very EU in outlook as it happens.

    • Hope
      Posted January 17, 2017 at 9:13 am | Permalink

      Rubbish, No one hates foreigners. Taking back control for a self governing nation does not equate to hate.

    • matthu
      Posted January 17, 2017 at 10:00 am | Permalink

      It is not just The Sun who recognise a remoaner when they hear one!

    • Oggy
      Posted January 17, 2017 at 10:25 am | Permalink

      Utter tosh.

      ‘a majority of the working population, are to be ignored entirely’
      – 400 out of 600 constituencies voted to leave the EU, the majority of which are in traditional working class areas.

      jeered at from the Sun as “Remoaners”
      – but this is exactly what you are – you and others such as Farron and Bliar never stop moaning or whingeing and will not accept democracy and the referendum result and the fact that you lost – so get over it.
      Finally if you love the EU so much go and live in Estonia or some other EU member state.

    • ian wragg
      Posted January 17, 2017 at 10:41 am | Permalink

      Thanks for your continued posts here and elsewhere.
      A voice in the wilderness.
      Must be lonely out there.

    • Mitchel
      Posted January 17, 2017 at 12:08 pm | Permalink

      Anyone remember Senna,the soothsayer,from Up Pompeii?

      “Woe,Woe and thrice Woe”

    • DaveM
      Posted January 17, 2017 at 12:35 pm | Permalink

      …..and that’s how you have a tantrum.

      Look and learn LL! ?

    • Mark Watson
      Posted January 17, 2017 at 1:49 pm | Permalink

      You mean the single market that has given us total growth of 1% since it started and the CU/CCP which has stopped us making trade deals with parts of the world which are growing strongly?

    • Kevin Lohse
      Posted January 17, 2017 at 4:13 pm | Permalink

      Another Remainer Gotterdammerung fantasy, which will go the same way as all the others we’ve had to endure since the electorate chose Sovereignty over eternal serfdom. Why should the UK tie itself to a failing supranational corrupt bureaucracy, controlled by a self-interested elite, of 400,000,000 when there is a global market of 7 Billion outside the EU to be exploited? Since 2008, the EU share of UK foreign trade has dropped from 54% to 46%. A market share of 25% would be far healthier for both the EU and for the UK. Let’s loose the shackles and make our own way in the world as a free nation.

    • Mike Wilson
      Posted January 17, 2017 at 5:11 pm | Permalink

      The pound went UP today. Doesn’t fit your narrative.

    • getahead
      Posted January 17, 2017 at 8:00 pm | Permalink

      Sounds like you’re a bad loser, Newmania.

    • libertarian
      Posted January 17, 2017 at 8:27 pm | Permalink

      Newmania

      Oh dear, being ignorant of business and trade as you are one feels almost sorry for you.

      “the pound has just had its best day since October 2008, strengthening against all major counterparts” oops… wrong AGAIN Newy .

      What are you blathering about cut off from selling services???? There is NO EU internal market in services. I sell services into European countries, nothing happening in these negotiations will stop that. You just make it up as you go along, I think you’re one of those masochist types that like inflicting pain on yourself. Inward investment since Brexit is UP by £15billion.

      Rather than complain about the over 50’s I see you still dont have the conviction to tell us from hence you get your vast experience of trade and business

      Revenge? etc ed

    • Juliet
      Posted January 18, 2017 at 9:42 am | Permalink

      Pound performed better against the dollar first time since 2008, in fact in rose each time when Mrs May confirmed …
      1. Shift from Single market, Customs union to bespoke
      2. Parliament gets to vote
      3. Options for Free Trade Agreement

  8. alan jutson
    Posted January 17, 2017 at 7:24 am | Permalink

    I have to say I was pleased Hammond at last showed some spirit in his comments last week, I only hope he believes it himself.

    Agreed we should do what is best for the UK, and now we are going to leave the EU we should be able to.

    If any Country wants to play silly “beggers” with us over trade, then they should expect similar may happen to them in return.

  9. oldtimer
    Posted January 17, 2017 at 7:34 am | Permalink

    The UK government needs a new business model to get its own house in order. That should start with review and reform of it’s the grossly inefficient tax system. It should also include a hard-nosed review of government spending choices. Mr Hammond should be doing this regardless of Brexit, but if he believes he needs Brexit as the excuse to embark on such reform then so be it.

  10. Nig l
    Posted January 17, 2017 at 8:21 am | Permalink

    Totally agree. He seems a very cautious person, a follower not a leader, note how he towed the Treasury EU line initially seemingly dragged to his current more confident position by the positive economic news rather than creating it.

    I wonder if he is now floating these ideas to see the reaction he gets and if positive, will proceed. Obviously you are in favour, so over to you and your colleagues to ‘badger’ him into proceeding.

  11. Richard1
    Posted January 17, 2017 at 8:52 am | Permalink

    Lord Mandelson has commented today on the apparent plan for ‘hard’ Brexit. He repeated the referendum argument which boils down to: if we dont accept the whole shooting match – unlimited immigration, payments to the EU and rule by EU institutions, especially the ECJ – the EU will punish the UK by starting a trade war. It’s incredible this very weak argument is repeated by such as Lord Mandelson. John Humphreys picked up on the essential point though – if Mrs May is not prepared to walk away from a deal with the EU there will be no satisfactory deal, as Mr Cameron discovered. Mandelson had no answer to this.

  12. Jack
    Posted January 17, 2017 at 8:53 am | Permalink

    Capitalism runs on sales, and jobs are a direct function of total sales. Cutting corporation tax, which seems to be the rumoured plans of the government, will not increase jobs much at all. Sure, it’ll reduce prices, but for more jobs and GDP growth consumers need ££ to spend. So let’s have massive payroll tax cuts!

  13. a-tracy
    Posted January 17, 2017 at 9:03 am | Permalink

    Every single household in this Country received a goverment 14 page leaflet that cost £9.3 million to produce backing EU membership, the document was to help the public make an informed decision. It showed the choices the UK would face if we voted to leave. Even with all of this the majority voted to LEAVE. It is not us with the threats it is the EU we will just have to go along and change depending on how they as a group decide they want to move forward. They can make the statistics show we are low contributors all they want but they know the truth.

  14. Bert Young
    Posted January 17, 2017 at 9:11 am | Permalink

    Lowering taxes should be on our agenda anyway . Attracting and retaining investments from large and small organisations is bound to increase all aspects of our wealth . It was unfortunate that the media picked up the statement from Hammond as a form of retaliation ; it is a dynamic way of putting our interests into perspective .

    PvL : Guardian readers ought not to take its views as a reflection of our society ; it is a very “liberalistic” paper . The majority of the public do not agree with its sentiment .

  15. Mark B
    Posted January 17, 2017 at 9:11 am | Permalink

    Good morning.

    The Chancellor needs to reacquaint himself with the Laffer Curve. But first, he must cut Public Spending and borrowing. We must also put pressure on NHS Managers to recover ALL monies from other EU member Countries and, we must make it law that anyone who transports people into and out of the country can only do so if they have suitable medical insurance. This would go someway to end health tourism and massive losses in revenue.

    • Know-dice
      Posted January 18, 2017 at 3:25 pm | Permalink

      The NHS should just send the bill to the Department of International Development. It can come off “I’m proud to give away 0.7% of GDP” Clegg’s DfID budget.

  16. alan jutson
    Posted January 17, 2017 at 9:17 am | Permalink

    Newmainia

    Anyone would think the EU is the most fantastic place on earth given your thoughts.

    Guess you could always move there, lots of people seem to be moving there of late, no proof of identity required, so it would seem no problem getting in and then making a choice as to where you want to go and settle after that.

  17. margaret
    Posted January 17, 2017 at 9:37 am | Permalink

    It simply demonstrates the pettiness of the powerful. Did they get to the top with hair splitting and accusations. It is a hard lesson to learn, but can bear fruit. All need to know when to let go, when to make it easier for all and when to say yes we can work with you at a small profit for all.
    Bauman died 2017 but was quoted as quoting Goethe . His theme was happiness . I just cannot understand why clinging on to a nation at the expense of happiness is worth it . Why make it difficult for themselves and start a fight. Like a divorce a decision has been made .. make it easy .. for all concerned.

  18. alastair harris
    Posted January 17, 2017 at 9:43 am | Permalink

    Why not accept economic reality. Scrap corporation tax, and watch the overall tax receipts rise.

  19. Denis Cooper
    Posted January 17, 2017 at 10:31 am | Permalink

    Plenty of media attempts to dilute Brexit today; according to an article in the Times, attitudes towards freedom of movement of persons in the EU are now changing (too late, they should have done that at least two years ago rather than being so pigheaded); according to Daniel Hannan the optimal outcome would be “EFTA membership à la Suisse” (which apart from EFTA as it is now under the 2001 Vaduz Convention including a solemn commitment “to progressively liberalise the free movement of persons” also means having immigration and trade inextricably linked so leaving the Swiss open to EU blackmail); while in the Guardian the erstwhile left-wing BBC journalist Paul Mason reckons that we should “ask the EU for a 10-year, temporary suspension of free movement in order to make one small but effective tweak. We redesign the National Insurance (NI) system …” (we should not “ask” the EU for anything at all connected with immigration, we should just tell them that we are taking back complete control of our immigration policy, and that is non-negotiable) and deceives himself that the other EEA states and the EU would allow us to stay in the EEA knowing that we intended to abuse one of the provisions of the EEA agreement to unilaterally and routinely control inward migration from the other EEA states (it’s taken some time for that false message to percolate down from the northern regions, and no doubt Paul Mason would have been one of those who flatly rejected the “Norway option” before we voted to leave the EU.)

    Well, I certainly hope that Theresa May does not say any of those things.

  20. ChrisS
    Posted January 17, 2017 at 10:43 am | Permalink

    Peter and Newmania, I think you are both wrong.

    Britain is not an isolationist, inward looking country.

    Our entire history over the last six hundred years has been as a global trading nation. Membership of the Common Market was a logical step at the time but we were never going to be a comfortable fit in a European Superstate dominated by Germany and effectively ruled by Merkel with idiots like Juncker doing her bidding.

    When history assesses the 20th century it will regard the Common Market as a sensible idea to avoid a third catastrophic European conflict but that it morphed into a protectionist, undemocratic and overbearing bureaucracy that over-expanded and became unmanageable.

    They will conclude that the desire to become a superstate was never going to work because the people didn’t want it and the Euro was so flawed from the start and it could not have succeeded. They will go on to say that misguided mainland European politicos broke all the rules to allow their grand project to limp on despite the fact that the Euro ruined the economies of at least a third of its members before it failed when Italy or France finally decided enough was enough.

    They will write that it was unsurprising , given our history, that the Brits were the first to leave the sinking ship.

    Again, looking at history, they will conclude that it was always a reasonable prediction that the French and/or the Dutch would be the next to leave.

    The undemocratic structure of the EU, the ignoring of the results of successive referenda and the failure of politicians to listen to the people over immigration caused a rise in populism in Europe and the US. For Europe the tipping point was Merkel’s catastrophic decision to open the floodgates and unilaterally change the immigration policy of all 26 of the Schengen countries without consulting any of them – or her own people.

    The immediate outcome was Brexit, the election of President Trump and Marine LePen in France. It was the latter that brought about the end of the Euro and led directly to the break up of the EU.

    The historians will conclude that Britain left it a little too late to leave the EU to escape from the worst economic consequences of the break up but we were at least well on the way to re-establishing our former global trading tradition.

    The historians will conclude that the damage done by the failed EU project was repaired within 20 years.

    After some initial resistance, the thirty plus independent countries of Europe togethewr with, thanks to Britain, the Anglo Saxon Countries of the USA, Canada, Australia and New Zealand, formed a true Common Market with free trade but none of the previous bureaucracy.

  21. Lifelogic
    Posted January 17, 2017 at 10:48 am | Permalink

    I see that local authorities not only mug motorists, then now even pick on pensioners who pour their coffee down the drains in Ealing Broadway. Even an appeal was turned down until it got into the press and they backed down.

    All those salaries and gold plated pensions to be paid somehow I suppose. Thank goodness we have all these dedicated public servants delivering all these vital public mugging services.

  22. Antisthenes
    Posted January 17, 2017 at 11:04 am | Permalink

    The chancellor making those remarks is music to a Brexiteers ears especially as he is a committed remainer. The reality of not taking a take it or leave it approach to Brexit are hitting home no doubt in great part because of your campaign to open peoples eyes to the dangers of not doing so. Also probably because people are waking up to the fact that the EU are signalling intransigence will be their negotiating position which for them is self defeating because they are not bargaining from a position of strength. It is the UK that is in the best bargaining position once the myth of the single market’s omnipotent importance is dispelled.

    It is now being realised the EU single market is market like any other and so can be traded with in much the same way applying the appropriate trading rules. Either, bilateral, multilateral or international the mechanisms are there and are proven. It is just a matter of adopting the one that circumstances dictate. The EU single market is also an adjunct to another non trade related entity. It is this symbiotic nature that is clouding perceptions. It is thought the two are inseparable but are only so if the desire is that they should be. The UK did not join the single market 40 years ago with that desire and that desire is not there now for the majority. So the UK leaving the EU is a natural step as it wishes to ditch any association with it’s not trading activities.

    It is the EU’s multiplicity of objectives; single market and political and economic union that is causing conflicts of interests that have debilitating effects on all those objectives. So function so badly that much of the time they regress not progress and throw up problems where there should be solutions. Phillip Hammond’s options. tax and regulation remarks demonstrates how vulnerable the EU is because of it’s dysfunctionality due to it’s forced inflexible approach. Inflexible because of having to reconcile a single market that is predisposed to being open and free and a union that is predisposed to be closed and formal.

  23. Richard Butler
    Posted January 17, 2017 at 12:26 pm | Permalink

    Listening to May’s speech live I am concerned we ought not to be entering protracted negotiations with the EU squabble shop. Instead we should just leave and then offer tariff free trade. Brussels is a talking shop, lets not waste years of energy and focus there.

    Remember, successful trade is mainly done in the absence of trade deals.

  24. pleb
    Posted January 17, 2017 at 12:34 pm | Permalink

    What I don’t understand is how academics, intelligentsia who support the Eu don’t get it.
    Haven’t they read 1984, Brave New World, the Coudenhove Kalergi Plan, the origins of the EU ?

  25. Prigger
    Posted January 17, 2017 at 12:41 pm | Permalink

    One of my ears stopped listening to Mrs May’s speech when she said the Final Negotiated deal with the EU would be voted for in Parliament. What if the SNP, Labour vote it down?

    My other ear stopped listening to Mrs may’s speech when she said Transition Arrangements “might include immigration”

    One moment after Brexit…if we EVER get there..should mean that any additional migrant should immediately be transported do Mrs May’s constituency and live there in perhaps perfabs, schooled there, and work there. Appropriate school and factory building should commence now.
    #She has just dodged a question as I write, from a journalist on the Vote on the Deal issue to which she says; “I am sure the British Parliament will respect the decision of the British people. Go tell it to the marines Mrs May!

    What a load of nonsense she has uttered.

    It looks like populist parties ( Far Right ,to some Alt-Right in the UK ) are going to have a field day at the expense of the Tories, Labour and LibDems.

    • Denis Cooper
      Posted January 18, 2017 at 8:34 am | Permalink

      They won’t all be needed in her constituency. Realistically if a business or other organisation has become accustomed to relying on immigrant labour than it may take time for them to adjust their recruitment policies and working arrangements.

      More important is this passage which came a little earlier in her speech:

      “By this, I do not mean that we will seek some form of unlimited transitional status, in which we find ourselves stuck forever in some kind of permanent political purgatory. That would not be good for Britain, but nor do I believe it would be good for the EU.”

  26. The Great Ear
    Posted January 17, 2017 at 12:53 pm | Permalink

    The price the Remoaners would want from negotiations with the EU in order for them to vote for May’s negotiated deal are unacceptable.

    We voted to Leave the EU. We did not vote for the Remoaners to be part of the negotiation process by their Final Vote on negotiations.

    This is a violation of the Will of the People!

  27. Liz
    Posted January 17, 2017 at 12:58 pm | Permalink

    Newmania,
    Tell us what you love about the EU and if you are not happy with the political parties here what have you done about it – joined one? Become an active member to influence it? Started a new party more to your liking? Why do you think we should be governed by an unelected bureaucratic commission in an organisation so without financial controls that the accounts have not been approved in recent memory?
    You obviously approve of free movement without borders so how should the strain on the public services as the NHS, the housing crisis this has created in England be tackled. Do you approve of wages and salaries being held down here by the influx of cheap labour from the EU? How do you think those whose wages have been held down feel? Nobody really knows how the vote in the referendum broke down by class, age or gender as opinion polls have proved themselves to be little better than guesswork. An increasing number of people would not tell a pollster how or why they voted – quite rightly so.

  28. Norman
    Posted January 17, 2017 at 1:01 pm | Permalink

    Amidst all the ‘rough and tumble’ of Brexit, (and one has to say, that includes quite a lot of insularity and mean-spiritedness) it’s really refreshing to hear the PM put things in a firm, positive and friendly context. What she said in the following statement is exactly right.
    ‘She told the remaining 27 EU member states: “We will continue to be reliable partners, willing allies and close friends. We want to buy your goods, sell you ours, trade with you as freely as possible, and work with one another to make sure we are all safer, more secure and more prosperous through continued friendship.”‘
    I hope Britain will be faithful to that commitment, and remain upbeat and positive, whatever sparks fly in the negotiations ahead.

  29. Happy BirthdayAltRt
    Posted January 17, 2017 at 1:20 pm | Permalink

    The Home Secretary on Sky News now, post-Mrs May’s speech, talks of MORE control over immigration which merely affirms the ongoing commitment of the UK government to continue immigration in absolute violation of the intentions of the Leave voters. In this connection the banning of “right-wing” groups planned by the Home Secretary will only make the problem bigger. But the true Alt-Right has just been born today 17th January 2017 thanks to Mrs May and a naive Home Secretary. It is hard to believe though that this birth is not their sneaky intention: they are bright after all…and politicians.

  30. Denis Cooper
    Posted January 17, 2017 at 1:43 pm | Permalink

    Good speech by Theresa May, on the whole.

    Typical of the unpatriotic BBC that its correspondent should immediately try to undermine the position of our Prime Minister. They cannot accept that they lost the referendum.

    • Know-dice
      Posted January 18, 2017 at 3:30 pm | Permalink

      Agreed, very childish question from the BBC’s Laura Kuenssberg.

  31. John B
    Posted January 17, 2017 at 1:46 pm | Permalink

    “…and penalise imports.”

    Rephrasing that… “and penalise consumers.”

    • Denis Cooper
      Posted January 18, 2017 at 8:20 am | Permalink

      The consumer’s loss is the taxpayer’s gain, and the two sets overlap extensively.

  32. Mark Watson
    Posted January 17, 2017 at 1:53 pm | Permalink

    I dont recall the EU gaining control of Canada or South Korea’s tax rates when they did FTA’S with them.

  33. PaulDirac
    Posted January 17, 2017 at 2:11 pm | Permalink

    The PM’s speech was a master stroke, I’m minded to ask my MP to try and pass a new law that all future PM’s must be female.
    Logical, realistic and BRITISH (in the best possible way), but it also has a visible dagger, she said it plainly- we want to be friends, but if the collective EU want to hurt our country, then you are not friends and we will act accordingly.

  34. 40 moaning winks
    Posted January 17, 2017 at 2:18 pm | Permalink

    Listening now to the Brexit Statement on BBC Parliament by the Brexit Minister.
    Again we are listening to a almost weekly reiteration by Remoaners of the Remoan then Remain position on the EU which they unsuccessfully put to the British people.
    If in fact Mrs May does have the “Royal Prerogative”, could she not exercise it in laying off the Remoaner MPs, send them back to their constituencies as their role in Parliament is now redundant and can be replaced by digital means in perhaps a disc produced by each Remoaner and played back by anyone who cannot get off to sleep at night?

  35. E.S Tablishment
    Posted January 17, 2017 at 2:40 pm | Permalink

    Paradoxical or ironic as it may be, we may regret as Brexiteers getting sovereignty back to the UK Parliament. If you listen to the Labour and Libdem MPs, ( unless they are remarkable actors ) they actually look and sound genuinely and sincerely daft.
    They prate on with deep furrowed brows and tears in their eyes about how they may all fall down the lavatory not knowing exactly where they are heading after Brexit. Do we wish , really in our patriotic hearts to give this lavatorial flotsam and jetsam the reins of power?

    • APL
      Posted January 18, 2017 at 8:34 am | Permalink

      E.S. Tablishment: “If you listen to the Labour and Libdem MPs, ”

      Ben Bradshaw Dec 14th 2017: ““Russia’s strategy is to weaken and divide the free world and that driving the biggest refugee flows into Europe since world war two, is a deliberate, a deliberate part of that plan”

      The man is a buffoon. It was the Clinton, Cameron and French chappie’s collective bombing of Libya back to the Stone age that opened the flood gates of immigration from Africa through Libya across the Med., and into Europe.

      So, yes, T.S.E. I share your concerns. But do you think these people are any saner, just because they get elected/appointed to the European Union Parliament/Bureaucracy?

  36. turboterrier
    Posted January 17, 2017 at 3:02 pm | Permalink

    Well that’s that then?

    Going by the BBC we are all doomed as they rolled out every negative known to man. No mention of the elephant in the room the internal problems within the EU. It could still end up that the self survival streak will kick in and some countries who would rather still have business with the UK than see the EU throwing up the barriers.

    We are not even out on the pitch let alone kicked off.

    I do wonder how the hell this country has survived all the crisis and upheavals we have experienced over the years with the standard of some of the politicians we have at the moment. Fifth Column resurrected.

    For far too long this country has swanned along on the back of the EU membership as we weren’t salesman we became order takers and just accepted the discrepancy of difference in import and export figures as the norm. We now have the opportunity to get out there in the big wide world and walk the talk and sell our stuff. Start supporting our internal market. Government can surely have some clout on the agencies, charities and major projects they they fund highlight it is expected in their and our interest to buy British.

  37. Denis Cooper
    Posted January 17, 2017 at 5:14 pm | Permalink

    Given that it’s commonplace for treaties to include transitional provisions it’s a puzzle that some people have such difficulty grasping the concept.

    On another blog, where the narrow claque of people who (are allowed to) regularly comment on articles are going frantic after Theresa May’s speech, one asks:

    “Under this phased, multi-speed Brexit – at which point do we legally secede from the EU?”

    Well, ask another question – with the various transitional provisions running for various periods of time which were built into the UK’s treaty of accession to the EEC, at which point did the UK legally join the EEC?

    The answer is perfectly clear: the UK legally joined the EEC on January 1st 1973, and for some years after it had joined certain provisions were gradually implemented. And it will be the same when we leave, there will be various matters which will be implemented over a period of years after we have left.

    Which is not a problem, provided that the “period of years” is limited and no longer than is necessary to sort out the required legal and practical changes.

  38. hefner
    Posted January 17, 2017 at 5:32 pm | Permalink

    A beautiful day in the SE of England, a glorious day for Britain. The PM was brilliant.
    Now could the usual moaning Brexiters (I will not give names) keep a bit quieter. Thanks in advance.

  39. Step One awaits
    Posted January 17, 2017 at 6:12 pm | Permalink

    So we are at the 24th June 2016 with Mrs May’s speech. A repeat of most said prior to it. Now sign Article 50 in the next 20 odd hours and we shall try to forget Mrs May is 7 months overdue.
    Not one single step has been taken to get us out of the EU.

  40. John
    Posted January 17, 2017 at 7:08 pm | Permalink

    An interesting stat if I have it correct.

    The US exported $247 billion to the EU in 2016.

    Going by your stated average tariff the US pays to the EU of 3.5% that comes to $8.65 bn in tariffs.

    In Sterling that’s £200 bn that the US exports to the EU (incl UK) and a tariff of £7 bn average. About 25% of that was to the UK.

    In 2015 the UK exported £223 bn to the EU and our ‘net’ contribution to the EU was £8.5bn being 3.8%.

    We are paying more than America does in tariffs to the EU than we pay for membership and that’s just one country.

    Our ‘net’ contribution alone is a higher tariff than what the US pays. Then there is all the rest, I assume we don’t receive the tariffs on imports from rest of the world.

    • John
      Posted January 17, 2017 at 7:17 pm | Permalink

      And that omits that we don’t receive tariff income on imports from rest of EU and that we have to pay tariffs to the EU’s largest export partner, the US which we can do a trade deal with.

      • John
        Posted January 17, 2017 at 7:26 pm | Permalink

        The EU exports nearly $400 billion to the US so broadly we are paying double what the US pays in tariffs to the EU in membership fees.

  41. ChrisS
    Posted January 17, 2017 at 7:47 pm | Permalink

    I was immensely impressed with Mrs May’s speech. She took exactly the right tone.

    I was particularly impressed with “No deal is better than a bad deal” although I was worried when she conceded that we could continue to pay something but not “vast sums”

    My opening position would have been to start with “paying nothing” but then be prepared to help fund some of the admin costs of the services we remain involved in, I would, however, I would rule out any payment whatsoever for access.

    Labour appears to have been wrong-footed but that idiotic little bloke, Whatsisname, from the Libdems : he has gone completely overboard. Ludicrous.

    • alan jutson
      Posted January 18, 2017 at 4:53 pm | Permalink

      ChrisS

      Agree, my thoughts entirely.

  42. Czech Year-Glass
    Posted January 17, 2017 at 8:13 pm | Permalink

    Prime Minster The Rt Hon. Mrs May is like an old English posh female version of Josef Švejk , the chief character in The Good Soldier Švejk by the Czech author Jaroslav Hašek.

    Seemingly is loyal, affable, always appears to do his duty, goes and does whatever he is told yet accomplishes absolutely nothing. More, she is more like the statue of Josef Švejk in Poland.

    Has Mrs May been taught to sign her name on Article 50? She could put a thumb print instead and have the print verified by some legal body or other. Maybe a Supreme Court Judge once his Christmas has come to an end and he is winded by patting him on the back over nan’s shoulder.

  43. yulwaymartyn
    Posted January 17, 2017 at 8:41 pm | Permalink

    Dublin is the winner today. And then they will join Schengen. And twist the knife.

    • rose
      Posted January 18, 2017 at 10:45 pm | Permalink

      That is not how they see it. They must be sorely tempted to come out themselves, having voted twice against EU treaties, and been bossed about on their tax rates. Moreover, they are now net contributors. They value their trade with us more than that with the EU. Only problem is, their politicians love the EU as ours do. It is so nice for them being able to go over there and live it up at public expense, all the while giving themselves the illusion that they are a great world power.

      They will not be joining Schengen. Why do you think they followed us in not joining? To twist the knife?

  44. Pardon my Gwammar
    Posted January 17, 2017 at 10:04 pm | Permalink

    Only a girls’ grammar school education could lead you to think that exit from the EU means exit from the single market. Not much cop Grammars are they! With months of homework it finally clicked. Well done May! Go to the front of the class, hand the pencils out! You are promoted to class monitor!

    • matthu
      Posted January 18, 2017 at 11:00 am | Permalink

      Then Cameron, Osborne, Gove, Johnson (and others too) presumably all had the benefit of a girls’ grammar school education? Because they all confirmed that leaving the EU meant leaving the single market.

      • rose
        Posted January 19, 2017 at 9:10 pm | Permalink

        And Donald Tusk also thinks leaving the EU means leaving the single market.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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