My contribution to the Second Reading of the Finance Bill, 12 November 2018

John Redwood (Wokingham) (Con): I have declared my business interests in the Register of Members’ Financial Interests.

In the third quarter of this year, the United Kingdom economy grew considerably faster than the euroland economy, which is very welcome. It is a timely reminder that since 2010, under first the coalition and then the Conservative Governments, we have seen conditions created in which there has been rapid jobs growth, a general expansion and improvement in profitability and investment, and some return to the better growth rates we saw before the crash at the end of the last decade.

We also see, however, that in the third quarter the United States economy grew considerably faster than the United Kingdom economy, and the reason is simple. The US has decided on a bold tax reform and reduction programme, which has injected a large amount of extra money into the economy, allowing families and individuals to spend more of their own money without having to give so much to the state, and allowing companies to keep more of their profits. As a result, more American corporations have repatriated their profits to the US, where they then pay the reduced tax rates and either invest that money, give wage rises or better remunerate their shareholders to encourage yet more investment. That model is clearly working. The tax reductions are the main reason the US has experienced much better growth this year than either the EU or the UK.

The Government should not be complacent. While we have so far had a long-lasting and moderate-paced recovery, which is welcome, and a very good jobs recovery, which is extremely welcome, although it gets little credit from the Opposition, policy now is too restrictive. We have an exceptionally tight monetary policy—the tightest of anywhere in the advanced world. We have had two interest rate rises; the ending of all new quantitative easing; the removal of all special facilities from the Bank of England to the clearing banks to lend more money for enterprise and good purposes; much stricter rules to commercial banks that have been very effective in leading to big reductions in new car loans and mortgages for the higher-priced properties; and of course the attack on the buy-to-let sector in the 2016 Budget. This is quite a big monetary tightening.

At the same time, there is still a tough fiscal tightening. What worries me—and clearly the Chancellor, too, given some of the actions in the Budget—is that the fiscal tightening was even tighter this year than was planned. Between the March figures and those in this Budget, an extra £12 billion was taken out of the economy and put into the public sector, mainly through extra tax revenues, but also a bit through the shortfall in the planned spending increases. That is quite a severe extra negative adjustment to impose on an economy that we are already trying to throttle with a very tight monetary policy. I fear that the relatively good growth figures of the third quarter will be slowed by these twin actions.

Now let me praise the Chancellor. He is absolutely right to say that the fiscal squeeze was getting too tight and to take action to try to relax the involuntary fiscal squeeze next year, but he is not doing anything much this year. I would like to see something over the winter as well, because the involuntary tightening is unreasonable. That said, the measures he has introduced to relax the fiscal position a bit are very welcome. With my colleagues on these Benches, I strongly welcome the early fulfilment of the promise on tax thresholds. It was a bold promise, and it is good to see it met, as it is a good way of allowing many more hard-working individuals and families to keep more of the money they earn.

Julian Knight (Solihull) (Con): Does my right hon. Friend also recognise that the idea that people on the higher rate of tax are somehow storing their money away in the Cayman Islands is an absolute nonsense. These are hard-working people—often people such as locum GPs and deputy headmasters. Normal working people are being caught in this tax trap.

John Redwood: That is right. Many people who have been relatively successful and got to more senior positions are now being caught by quite penal taxes. I would like to see, in either this or a future Budget, more progressive work done to cut the tax rates to raise more revenue. That has come out very well so far on the Government Benches. We all strongly support what the Government have done on corporation tax rates, which have come down a long way and are coming down further. That boldness has been rewarded with a 50% increase in revenue—an increase that the Opposition do not want. They want to put the rate back up to avoid that increase in revenue. [Interruption.] They nod and say it would not happen, but it does happen. It happens every time they get into office: they put the rates up, tax revenue falls, and we have to come in and lower rates again, but we also have the problem of dealing with the extra borrowing.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): I cannot wait until half-past nine when I get to wind up the debate. I say again: causation and correlation are not the same thing. Every independent assessment of what has happened to corporation tax over the last few years, such as that by the Institute for Fiscal Studies, very clearly shows that the reductions in corporation tax have been very expensive and cost this country a great deal of revenue.

John Redwood: We disagree.

Let us take another tax where very clearly a lower rate has produced a lot more revenue: the higher rate of income tax. Labour wisely kept the highest rate of income tax at 40% throughout most of its time in government, knowing it was the way to attract people with money into the country, to attract investors and entrepreneurs, and to encourage people to take more risks. It set a more penal rate just as it left office, as a kind of tax trap for the Conservatives. When the Conservative Chancellor eventually summoned up the courage to lower the rate from 50% to 45%, there was a big surge in revenue.

As one of my colleagues has already pointed out, there was an even bigger surge in revenue when a previous Conservative Government cut the rate from 80% in two stages to 40%. The amount of tax went up in cash terms and in real terms, and the amount of tax paid as a proportion of the total by those on the top rate went up. It was a win, win, win. I would urge the Chancellor to reconsider reducing it back down to 40% because he would collect more revenue and provide that stimulus to enterprise.

I hope that the Government will think again about a couple of tax rises that have been deeply damaging to our economy. The first is the rise in car tax, or vehicle excise duty. The graph showing car sales and output in the UK was increasing progressively between the Brexit vote and the spring Budget of 2017, but it then fell very sharply, and we now have a serious problem. The tax attack on diesel cars, allied to the threat of more controls on diesels, has been particularly damaging. Governments of both persuasions have gone out of their way to attract a lot of inward investment, and new investment, in diesel output and diesel vehicles. They encouraged that, only then to kick the props away and make such investment very difficult.

Julian Knight: Germany has started to row back and introduce “clean diesel”.

John Redwood: Indeed. Modern diesel engines are much cleaner, and are comparable to petrol engines. The Government have damaged our industry needlessly, and that, along with the squeeze on car loans, has led to a sharp drop in car output, which is not welcome.

The other issue is stamp duty. The Government have cut it for many people, which is extremely welcome, and I am pleased that they are continuing the trend so that houses can become more affordable for those who do not own them. However, we need to think about people who are trying to buy a different house, perhaps to move up the property ladder in expensive parts of the country; we need to think about the impact of transactions at the dearer end on chains and on people buying cheaper houses; and we need to think about the workloads of removal firms, estate agents, decorators and so forth.

I think that the Government have overdone the tax attack at the top. The market has become ossified, and they must be losing quite a lot of revenue. As the Red Book shows, they are having to scale back the stamp duty revenue forecast, and I am sure that that is to do with the damage that the tax attack has done in relation to the more expensive properties.

Bob Stewart (Beckenham) (Con): Personally, I consider stamp duty to be daylight robbery. The Government do nothing for it; they just take money from people who are trying to get a home.

John Redwood: I agree. I do not think we will reach the happy position that my hon. Friend and I would like to see, with no stamp duty at all, but I think we could make a great deal of progress by introducing a more realistic stamp duty rate so that people could fulfil their dream of moving up in the world on the housing ladder, or go the other way and buy a smaller home or one in a cheaper location. At present, those penal stamp duties are getting in the way of all kinds of mobility and the fulfilment of aspiration. Surely we should be helping people to fulfil their aspirations, and the wish to live in the right home in the right place is an important part of that.

I strongly welcome the relaxation of austerity in the public sector. We did need more money for health services—I certainly needed it for the hospitals and surgeries in my part of the world—and for social care. More needs to be done, but there has been a bit of progress. I also strongly welcome the extra money for road improvement and maintenance, although, again, more needs to be done.

Karen Lee (Lincoln) (Lab): The right hon. Gentleman has referred to “the right home in the right place”. Does he not agree that some people would be grateful for any home?

John Redwood: We want more housing for more people. There are people who need homes, and I am very much in favour of helping to provide them. The Government have many programmes relating to house building and more affordable housing, and that is all very welcome.

However, we need to continue the progress. We need to look at the defence budget, the social care budget, and the schools budget. Certainly, in both the West Berkshire Council and the Wokingham Borough Council areas—parts of which are in my constituency—we need more for our local schools. They are at the back of the queue for funds nationally, and the amounts that we are receiving are simply not enough to sustain the quality of service that we need to supply.

There is one big issue overhanging this debate that few people ever seem to mention. I would like us to have access to the £39 billion that some people want to spend on the European Union withdrawal agreement. We do not owe that money, and I do not think we will get anything out of a 21-month additional period for an argument with the EU about the future relationship. If we cannot secure a good future relationship by March, I do not think it will be easier to do so once we have given all the money away, and signed and sealed a deal on it.

I urge the Government to regard the £39 billion as something that we Leave voters voted to take back control over, and to spend on our priorities. What a transformation we would see both in our public services and our economy if, instead of signing that money away in a withdrawal agreement in the naive hope that it will produce something better—which it will not—we spent it on our priorities. We could have tax cuts with a tax cost, not just tax cuts to raise more revenue in the instances that I have described; and we could have quite a lot of extra money for our schools, hospitals and defence, and our other priorities, much more quickly. We know we have access to that £39 billion over a two to three-year period, because we know the Chancellor has costed it all and made provision for it. Most of it would be spent during the period, which, over that time, would provide a 2% boost for our GDP. That would be an extremely welcome addition, and it would be rather like what the United States of America is trying to do through easier monetary and fiscal policies than those that we are following.

I want a true end to austerity. I am with the Prime Minister in saying that we must end austerity, because ending it means more money for our schools, hospitals and other priorities. As I have explained, we can afford that, if only we do not keep on giving all this money to rich countries that do not want a free trade agreement with us. However, I also want to end austerity for all the people who work in the private sector, and that is about more tax cuts.

So, Government, well done so far; but be bolder, show more courage, and then you will create a much more prosperous country.

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76 Comments

  1. Lifelogic
    Posted November 14, 2018 at 5:51 am | Permalink

    They have not ‘done well so far’ they have given us the highest and most complex taxes for nearly forty years. This combined with fairly dire and declining public services. Services that provide little of real value to the public. They have OTT damaging regulations everywhere, mad employment laws, OTT health and safety, endless attack on the self employed, a poor defence procurement policy, daft projects like HS2 and an expensive misguided green crap energy policy.

    • Hope
      Posted November 14, 2018 at 10:36 am | Permalink

      On the broader picture May has unleashed tha confidence of Germany to trumpet about an EU empire and EU army the UK no longer having a veto or voice but a mere colony to fund their wishes. My goodness what has she done!

      Hague made it clear in his newspaper article he vetoed the proposed EU army is coalition when later Clegg was lying in debate with Farage to say it was a fantasy.

      A centenary of thought and regret over tens of millions of people losing their lives and May unleashes the biggest threat to mankind! Germany controls the EU, Germany still wants to march east. Its only check is that it gets its energy from Russia.

      What has this dishonest woman thinking? I hope her dishonest Kitkat policy has not signed us up to army as well.

    • Hope
      Posted November 14, 2018 at 11:04 am | Permalink

      A must read by Damien Phillips in Conservative Home.

      It is clear May has also sold our our defence and security to be controlled by the EU and its foreign policy.

      • Chris
        Posted November 14, 2018 at 4:14 pm | Permalink

        I tried to write about this deception on this website, but my comments were not posted. It has been going on behind the scenes for some years, with few Tory MPs apparently willing to come clean about it. Veterans for Britain have long been flagging this up on their website and in presentations.

    • Sir Joe Soap
      Posted November 14, 2018 at 1:27 pm | Permalink

      Look on the bright side.
      Perhaps we’ve had it wrong for all these years.

      Logic tells us that we’ll get the opposite of what we vote for.
      Corbyn Labour could easily be triangulated into reducing stamp duty and taxes to pick up centre/Tory votes. It is more likely by that course than with the Tories!

  2. Newmania
    Posted November 14, 2018 at 6:10 am | Permalink

    Searching for truth in like hunting the sixpence but you are right about the top rate . Why not have a referendum on the subject , there has never been any time when the vast majority did not want the rich to pay more tax.

    Lets put it to the people !

    • Fedupsoutherner
      Posted November 14, 2018 at 7:16 am | Permalink

      Newmania. ‘Let’s put it to the people’. Oh. You mean like the referendum on EU membership? You’re having a laugh. People like yourself might seek to overturn the result and have a second referendum. That is so funny coming from you.

      • Newmania
        Posted November 14, 2018 at 11:18 am | Permalink

        My point is that”The people” are stupid or at least wrong about most things most of the time , including the way tax works . Redders is dead right on this and could not care less what a load of people who know nothing about it think natch

        • Richard1
          Posted November 14, 2018 at 1:34 pm | Permalink

          A revealing post and very typical of continuity remain – the people are stupid. Not so, there is such a thing as the wisdom of crowds, which is why, whilst we often read surveys urging higher taxes, people tend not to vote for them.

          Snobbery has become fashionable again in liberal circles – must be for the first time at least since pre-WW1!

    • Edward2
      Posted November 14, 2018 at 7:57 am | Permalink

      Perhaps the question could be….Do you want people richer than you to pay more tax, by the government adjusting the rates of taxes?

    • libertarian
      Posted November 14, 2018 at 8:17 am | Permalink

      Newmania

      Funnily enough a referendum on tax would be a great idea. It could be easily explained then who actually the rich who are going to pay these taxes actually are and how them paying more tax is where the lower paid wage rises go and why prices are high for basic commodities .

      Heres the referendum question

      1) Would you like a simpler and fairer tax system

      2) Would you like to punish some foreign investors with punitive taxes

    • Anonymous
      Posted November 14, 2018 at 9:38 am | Permalink

      That’ll be at the next election. Seeing as most rich people were for Remain.

      • margaret howard
        Posted November 14, 2018 at 4:03 pm | Permalink

        You mean the wealth creators. As opposed to the old and retired and people reading the Daily Mail and Murdoch press.

        • Edward2
          Posted November 14, 2018 at 11:13 pm | Permalink

          Private sector wealth creators are generally leave supporters.
          Its multi nationals and public sector new rich elite who form most of the remain support.

        • libertarian
          Posted November 16, 2018 at 5:53 pm | Permalink

          margaret howard

          Whoops, Murdoch is a REMAIN supporter .

          The real wealth creators mostly voted leave, it was corporate management , bureaucrats and the establishment that voted remain

          ps The Daily Mail is also supporting Remain, you’re not too good at this are you

  3. Terry Smith
    Posted November 14, 2018 at 6:14 am | Permalink

    If we do not pay the 39bn, we do not get even a discussion about our future trade relations with the EU. Closing off our biggest and best export market will cost us a hundred times more than 39bn. Do, please, stop being so irresponsible

    • Edward2
      Posted November 14, 2018 at 8:00 am | Permalink

      “closing off”…what, no trade between Europe and the UK after March 29th 2019?

      You extremist remainers are getting hysterical.
      In both senses of the word.

    • Bryan Harris
      Posted November 14, 2018 at 8:01 am | Permalink

      What nonsense – we do not need to pay to trade – the EU sells us more than we sell them, so if anything, on your ideas, they should be paying to trade with us

      • Lifelogic
        Posted November 14, 2018 at 10:01 am | Permalink

        Exactly.

      • Lifelogic
        Posted November 14, 2018 at 10:04 am | Permalink

        But remainers use the entirely duff line of only x% of the EU’s trade yet only y% of the UKs. It is of course the total volume of trade that is most relevant.

      • Terry Smith
        Posted November 14, 2018 at 11:50 am | Permalink

        Do kindly ask your self why they are not.

        • Narrow Shoulders
          Posted November 14, 2018 at 1:19 pm | Permalink

          Because that deficit was built up while we were in the EU and we are net contributors.

          Why do you think?

    • Newmania
      Posted November 14, 2018 at 8:19 am | Permalink

      Quite and let us not forget this is money Redwood and co risked in the first place . There was no problem until he made one, its not Gallipoli but it must go down as one of the stupidest things any UK government has ever done

    • Know-Dice
      Posted November 14, 2018 at 9:00 am | Permalink

      And what do Canada & Japan pay for a trade agreement with the EU?

      Can we also see an itemised invoice for the £39Billion?

    • Anonymous
      Posted November 14, 2018 at 9:44 am | Permalink

      Why does trade have to be enmeshed with political and (now) military union ?

      The people of these nations will still want to buy and sell to each other. It’s only politicians who will stop it.

    • Denis Cooper
      Posted November 14, 2018 at 10:08 am | Permalink

      The EU itself, and each of its member states including for the moment the UK, are parties to the WTO trade treaties, which already exist and are already in legal force, and in the absence of any new special or preferential trade deal between the UK and the EU and its continuing member states after we have left our trade relations will just default to the terms of those existing WTO treaties. Which treaties do not permit any of the contracting parties to close its markets to another party simply because that other party refuses to pay a bribe for continued access. So what you are you saying, Terry Smith, that the EU cannot be trusted to keep any of its treaties?

    • libertarian
      Posted November 14, 2018 at 10:30 am | Permalink

      Terry Smith

      I am so fed up with this ignorant nonsense

      People buy products and services not countries

      No matter what happens we will still sell the Germans & French mobile phone tech, cancer scanners, scotch whiskey, coldplay albums, premiership football, aircraft engines etc and we will still buy German cars, French cheese and Italian pasta

      the EU is NOT our biggest and best export market

      Once out of the EU the UK will be the second biggest customer of the EU

      The EU’s biggest trade markets

      1) USA

      2) UK

      3) China

      Oh and the EU doesn’t have trade agreements with USA or China they trade on “no deal” or WTO as its properly known

      I’ve realised that the Ultra Remainers are the gullible and naive who have no understanding of International Trade

      Talking of gullible the Iceland advert re palm oil has suckered them all in again. The advert was NOT banned that is marketing clickbait , their agency issued a “warning that it MIGHT not pass muster as its political” The Facebook mob then fall for it hook line and sinker and share it a million times outraged that its been “banned”

      • Edward2
        Posted November 14, 2018 at 11:14 pm | Permalink

        Well said.

    • fedupsoutherner
      Posted November 14, 2018 at 11:05 am | Permalink

      Terry, there is no way the EU could afford to break off trade with us and lose their expected (for nothing) £39b free gift from the British tax payers. Get real.

  4. oldtimer
    Posted November 14, 2018 at 6:14 am | Permalink

    There are two measures in the small print of the Chancellor’s proposals that need removal. One cuts the time allowed before a home can be sold free of CGT from 18 months to 9 months. This is outrageous. The other is another monopolist’s gouging charge for granting probate.

    • Narrow Shoulders
      Posted November 14, 2018 at 8:24 am | Permalink

      Those two and the huge increase in the upper earnings limit where 12% percent NI becomes 2% NI.

      It is not as if the increase in these insurance costs gets us better health, pensions or social care

    • Alan Jutson
      Posted November 14, 2018 at 8:29 am | Permalink

      oldtimer.

      The devil is always in the detail, never the headlines.

      Its Phil on a money grab again, quite depressing that he continues in this vain.

      Probate variable rate quite disgusting, time scale on house sale can depend on the state of the market at the time.
      Not much you can do about it, and he knows that, he’s rather like the bully at school.

    • Stred
      Posted November 14, 2018 at 9:36 am | Permalink

      Absolutely. These changes show the Treasury to be a money grubbing team of confiscators. The see a source of money which cannot be moved and move in for the kill like jackals. Hammond will be claiming gold fillings from corpses is he gets his way.

  5. javelin
    Posted November 14, 2018 at 6:26 am | Permalink

    Never in British Political history have so many been shafted by so few.

    That was a battle, the next battle will come at the ballot box, when careers, reputations and The Conservative Party will be destroyed with no quarter given.

    • Lifelogic
      Posted November 14, 2018 at 9:16 am | Permalink

      Indeed the government are mad to be pushing this vassal state lunacy. Listening to William Hague’s totally disingenuous drivel, just now on radio 4, was profoundly nauseating. He used to be quite sensible once.

      Remove ‘Brexit means sweet FA May’ now before she buries the party and gives us a a Corbyn/Mc Donnall/SNP disaster for years to come.

  6. javelin
    Posted November 14, 2018 at 6:33 am | Permalink

    It is far better to let Corbyn take us out the Customs Union, so he can nationalise a couple of industries, than it is to stay an the EU colony.

    • Fedupsoutherner
      Posted November 14, 2018 at 7:19 am | Permalink

      Javelin, I almost agree except for all the other damage Labour would do.

      • percy openshaw
        Posted November 14, 2018 at 7:39 pm | Permalink

        Unfortunately this time Labour damage would probably be terminal. Don’t waste your vote. If you’re in a Tory Brexiteer’s constituency, vote Tory; if not, support UKIP.

    • Roy Grainger
      Posted November 14, 2018 at 9:15 am | Permalink

      Corbyn’s position is interesting – he wants us inside a permanent CU but so far the EU have said if that’s what you want you need to accept all our “level playing field” state aid rules and give away your fishing industry – those two items will play badly with Labour voters outside London and would scupper half of his economic policy. At this point I’d like to see Corbyn take over negotiations with the EU because ultimately he is a man of principle (unlike May) and in the end would reject the EU offer.

    • 37/6
      Posted November 14, 2018 at 9:42 am | Permalink

      Those industries nationalised will not deliver his unions the pay-off they think they’re going to get.

      Before the industries were privatised the workers in them were piss poor, more skilled and working longer hours.

      What’s to lose then ?

    • Sir Joe Soap
      Posted November 14, 2018 at 1:08 pm | Permalink

      We might now do better inside the EU and Euro. The only limits on Corbyn than would be the EU.

  7. Oliver
    Posted November 14, 2018 at 7:21 am | Permalink

    I wonder if you can offer some simple explanation of why it is beyond, apparently, both the wit and the desire of the Treasury and the government to eliminate the grotesque unfairness of the marginal tax rate of 60% between £100k and £125k, resulting from the progressive elimination of the personal allowance?

  8. Mark B
    Posted November 14, 2018 at 7:36 am | Permalink

    Good morning.

    Bob Stuart MP is right. It is therefore a pitty that our kind host does not fully agree with him. Stamp Duty is legalised state theft.

    I agree with our kind host last sentence. Austerity needs to end for the Private Sector also. Ending so called austerity for the Public Sector was just an excuse to spend more of the money raised from tsxing people like me. Enough !

    Jonathan Reynolds MP needs to ask himself, what would the state do with all that money if it was not in the pockets of business’s and individuals. To answer my own question, they would spend it on things we do not need. i.e. Waste it.

    Government needs to learn, that less is more.

    • Lifelogic
      Posted November 14, 2018 at 11:15 am | Permalink

      They would certainly spend it far less well than the people they took it off on average. Plus of course so much of it is wasted in the collection process (by both the tax payer and the government) then further wasted in choosing what to spend it on and then in spending it hugely inefficiently often on totally the wrong things.

      I and my businesses (for example) spend about £300K PM in my costs dealing with tax matters yet pay only about the same in tax. So that is 50% wasted already mainly due to the absurd complexity of the tax system.

  9. javelin
    Posted November 14, 2018 at 7:40 am | Permalink

    It appears the payback for the Great Brexit betrayal will be Labour reforming the House of Lords and nationalising Thatchers corporate utilities.

    Putting myself in the boots of Brexiteers that actually sounds like a fair, measured and balanced punishment to the betrayal by elitists and corporates.

  10. Bryan Harris
    Posted November 14, 2018 at 7:58 am | Permalink

    Some very good points…. But it ought to be clear to all concerned that one major aspect of taxation is the cost to companies and individuals of collecting that tax.
    We have an estimated 50, 000 tax collectors working for HMRC, while companies have to employ God knows how many people to manage PAYE etc.
    On top of that basic survival items are taxed, such that those on benefits require more benefits to pay that, just to live – Which is a total nonsense.
    WE all know the ever expanding tax bible is complex, and causes many conflicts, but that’s only part of the problem. It would be fair to say that our tax system is unfit for purpose – So when is the government going to grasp this, and design a tax system, fit for purpose, that doesn’t penalise the unfortunate nor the aspiring hard worker – and does so in such a way that it doesn’t cost a fortune to collect

  11. libertarian
    Posted November 14, 2018 at 8:21 am | Permalink

    Andy, Newmania, Helena & the Remain Troll Army

    I have a question for you.

    In the last few days the President of France and the Current Chancellor of Germany have both called for an EU Army to fight the USA

    Does this not in any way alarm you or set bells ringing that you may have been duped about the end game of the EU project?

    • Mark B
      Posted November 14, 2018 at 5:37 pm | Permalink

      These people are nothing but worthless Trolls. Quite why some here seem happy to feed them is beyond me but, there you go.

      I’d doubt they will answer you question. After all, I posed one myself quite sometime ago and got no answer. And if I may repeat it, just for those who may not have read it.

      Name one thing that the EU can do for its members that no other sovereign country cannot do for itself ?

    • acorn
      Posted November 14, 2018 at 6:11 pm | Permalink

      More worrying is why Trump has budgeted $893 billion on the US war machine for 2019 (UK = $60 billion; EU = $180 billion). Plus, he intends to run a $1,000 billion budget deficit for 2019; averaging circa a 5% of GDP budget deficit for the rest of his (possible) two terms of office. Not much sign of UK / EU style neo-liberal austerity in the US.

      Trump is becoming the poster boy for Modern Monetary Theory (MMT). He is injecting spending power into the US economy with increased federal Treasury money creation; and, tax reductions; hence, the larger budget deficit. The only thing he has to monitor closely is inflation cropping up in sectors and sub-sectors of the economy where resource capacity is getting exhausted.

      The US federal Treasury debt level is irrelevant, it is the currency issuer. The interest it pays out you should think of as being free money for US private sector pension and insurance company funds, that invest in “risk free” government savings.

      • libertarian
        Posted November 16, 2018 at 5:56 pm | Permalink

        acorn

        I guess the US defence budget is so high because currently they are paying to defend Germany etc as well. Bring on the EU army I say and watch as the fabled German surplus disappears in a puff of gun smoke

    • hefner
      Posted November 14, 2018 at 6:56 pm | Permalink

      If one is to believe some of your posts in the last few months you are a successful businessman with some business interests in France. I would therefore assume that you are, if not a fluent French speaker, at least able to skim over French-issued news. I might have expected you to check that particular piece of news in its proper context and not rely blindly on whatever your favorite Brexit “feuille de chou” is. And what about being reminded of what Charles De Gaulle and Konrad Adenauer were already saying in 1963, roughly translated as “To have allies is good, but to be able to decide for oneself is better, as alliances do not possess absolute virtues whatever the feelings were that started those alliances”. Isn’t it something even more relevant in the present Brexity-Trumpy situation?

      • libertarian
        Posted November 16, 2018 at 6:00 pm | Permalink

        hefner

        I can , I did, I also checked what the German chancellor said too.

        Thanks for your post proving me right. Currently Germany has 4 working tanks. I assume as you’re such a devout European you can speak fluent German and have read about the German military capability .

        Good luck to the French and Germans paying their own defence budgets in their EU Army

        • libertarian
          Posted November 16, 2018 at 6:02 pm | Permalink

          ps

          You won’t know this Hefner but English is the international business language .

          When I worked in a Paris based engineering company in the mid 1970’s all the French staff spoke to each other in English at work

          • hefner
            Posted November 17, 2018 at 10:33 pm | Permalink

            Thanks, but nothing new here: it is just as I had to do in France, Canada, USA and Britain where I also happened to work … as English is not only “the international business language” but also widely used in some other non-business-related working communities.

  12. Chris
    Posted November 14, 2018 at 10:23 am | Permalink

    If this tweet by Tom Newton Dunn is true, then the situation is very grave indeed. Are you proud of your Brexiter colleagues, Mr Redwood? My own view is that your Party deserves to be crushed. Those who deceive will have their payback, and I suspect it will not be too far into the future. Maybe Arlene Foster will save us yet.

    “Brexit deal latest: Cabinet sources say May’s pivotal 5 senior ministers – Raab, Hunt, Javid, Gove and Cox – will back it. Leadsom and Grayling also on board. McVey and Mordaunt so far not.

  13. FranzB
    Posted November 14, 2018 at 11:02 am | Permalink

    Well good luck with all of your endeavour’s.. am sitting here on the sidelines wondering about the stupidity of it all. And then today’s diary, reminds me of Nero fiddling while Rome burned

    • Mitchel
      Posted November 14, 2018 at 3:08 pm | Permalink

      More like the last Roman “Emperor” in the West,Romulus Augustulus,impotent and waiting for his Germanic controllers to retire him from his nominal rule.

    • L Jones
      Posted November 14, 2018 at 7:06 pm | Permalink

      Better stay on the sidelines, then. We can do without spiteful and narrow-minded people smugly and gleefully ill-wishing our country.

      If you think you can recognise ‘stupidity’ perhaps you should read your own post and see it through our eyes.

  14. fedupsoutherner
    Posted November 14, 2018 at 11:13 am | Permalink

    I don’t know who it was but someone on the news programme this morning said that the obvious person to take over from May would be John Redwood. It was music to my ears. She went on to say that John is a business man and knows much about trade and economics and a staunch support of Leave. At least we would get what we voted for. Quite simply, Mrs May has lied to the people. She was elected on a promise that we would leave the EU. That does not mean tied into the Customs Union and Single Market both of what she said we would also leave. She was elected on her promises and she has broken them. The woman is a disaster and she has hoodwinked the electorate believing we are all stupid enough not to notice. Get rid of her now!!! I do believe the Tory party is finished unless a miracle takes place.

    • Lifelogic
      Posted November 14, 2018 at 7:18 pm | Permalink

      She will surely be removed no one want to repeat the John Major ‘follow me over the cliff’ disaster do they?

  15. Paul H
    Posted November 14, 2018 at 1:40 pm | Permalink

    With all due respect, important ‘though these matters may be, they are totally insignificant alongside the treachery that we are currently witnessing – and the ruling classes are giving a giant “**** you, what are you going to do about it?” to the electorate. I never thought I would see anything like it in my lifetime in the UK. If May succeeds then Parliament will eventually be reduced to an irrelevant and expensive talking-shop, with your debates just so much hot air.

    You have previously assured us many times that we should ignore UKIP, as only the Conservative Party could deliver Brexit. I know (or believe) that you were sincere in that, but just look where it has got us! The Conservative Party will take a very long time to recover any trust whatsoever, if ever, by which time it will be impotent in the face of EU dominance.

    Staggering, quite staggering. I do hope you realise how much white-hot fury this is going to generate?

  16. rose
    Posted November 14, 2018 at 2:52 pm | Permalink

    This morning, a representative of the Lowestoft fishing industry suggested Mr Redwood should be our next PM, to sort out the mess. My only reservation about this is that we desperately need him as Chancellor.

  17. Captain Peacock
    Posted November 14, 2018 at 3:21 pm | Permalink

    Have to wonder how any Tory MP can show their face at the next election after May’s sell out.

  18. am
    Posted November 14, 2018 at 3:38 pm | Permalink

    Meanwhile back in the real world Bone stands alone though he claims there are like minded mps standing in the shadows behind him.

  19. John S
    Posted November 14, 2018 at 4:00 pm | Permalink

    Fantastic speech.

  20. Mike Wilson
    Posted November 14, 2018 at 4:45 pm | Permalink

    I wonder how you feel today Mr. Redwood as your leader and your party deliver Brexit in Name Only. This really is beyond farce. Let’s just give up and stay in. Clearly we do not have the ability to elect politicians who think this country can function on its own.

  21. Whatabout
    Posted November 14, 2018 at 5:04 pm | Permalink

    Well it’s 1700 hrs and the cabinet meeting is still going on..Fox and Gove still in there and no resignations yet?
    The DUP are outside throwing shapes..wonder if they are going to return tje one billion?

  22. Whatabout
    Posted November 14, 2018 at 5:06 pm | Permalink

    As Gove once famously said..it’ll all work out ok provided we take the right decisions

  23. Steve
    Posted November 14, 2018 at 5:22 pm | Permalink

    My God they STILL haven’t flung her out !

    Right that’s it as far as I’m concerned, after the big stitch up is formally announced I will require to know why, if we’re governed by brussels then why do we need to pay the salaries of 650 or so obsolete MP’s who are in effect just fat cat middlemen. Nice little earner if you can get it, eh ?

  24. Arnie from Newington
    Posted November 14, 2018 at 7:22 pm | Permalink

    Osbourne took landlords votes then stabbed them in the back. Hammond endorsed this and the attack on buy to let landlords continued with UK Gaap being pushed aside in their desire to enforce loony lefty policies dreamt up by the Greens.

    The sooner May, Hammond and the rest of the red Tories are out of office the better.

  25. Iain Gill
    Posted November 14, 2018 at 7:51 pm | Permalink

    This is not Brexit

    Its worse than staying in the EU

    The political class really have outdone themselves

    May must go!

    • Turboterrier.
      Posted November 14, 2018 at 11:03 pm | Permalink

      @ Iain Gill

      To quote some of the old soldiers I have met over the years:-

      Biggest **** up since Mons.

      May must go and hopefully takes a lot of back stabbing two faced politicians with her. Will they resign? Not a snowball in hell chance.

  26. Chris
    Posted November 14, 2018 at 8:09 pm | Permalink

    I have just read the reports on May’s Cabinet meeting and their decision to back her Withdrawal Plan. I am sorry, Mr Redwood, but your Cons government is guilty of out and out treachery in my mind. What an absolute disgrace, and those Tory MPs should hang their heads in shame, particularly the turncoat Brexiter MPs. I make one last impassioned plea to those Tory Brexiter MPs who have honour and integrity and with to uphold democracy, please ACT, and swiftly.

    • Turboterrier.
      Posted November 14, 2018 at 11:06 pm | Permalink

      @ Chris

      It just ain’t going to happen. You can count on the fingers of both hands MPs with honour and integrity

  27. Steve
    Posted November 14, 2018 at 8:45 pm | Permalink

    So –

    “no deal is better than a bad deal”

    “we will not allow NI to be treated and differently”

    LIES, LIES AND MORE LIES ! from a pathological liar and top rate back stabbing shyster.

    I should think a list of cabinet names who did this will come in useful in the not too distant future. Met them one by one she did, then made much of their “collective decision”. Why the one-on-one I wonder ?

    We shall see in due course how they got bribed…..err, sorry meant to say; ‘career prospect enhanced’.

    If these supposedly conservative dumb asses masquerading as a bona fide political party think they’ll ever get re elected after this, they’re in for the shock of their lives.

    I would say RIP conservative party, but then I prefer to think every last one of the cowards is going to hell, and deservedly so.

    Still, at least the DUP have seen the light. Now May doesn’t have a majority hence Labour could see off the Withdrawal Agreement.

    • Turboterrier.
      Posted November 14, 2018 at 11:09 pm | Permalink

      @ Steve

      LIES, LIES AND MORE LIES ! from a pathological liar and top rate back stabbing shyster.

      But she was clever enough to pick like minded ministers for her cabinet.

  • 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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