Author: johnredwood

What a bizarre idea that if we gave a Free Trade agreement with the USA drug prices will go up. The whole point of an FTA is it takes tariffs and barriers off to make things cheaper. If it didn’t why would you sign it? The government has made clear it will not put the NHS at risk from an FTA.

The UK has a written constitution. It is recorded in a range of documents including various Acts of Parliament, the Standing Orders of Parliament and the law. It is more flexible than countries that have a single written constitutional document that usually is difficult to amend or change. The supremacy of Parliament is such that sometimes a simple alteration of the Standing Orders of the Commons can effect changes that would otherwise take a long time.

The Parliament which dissolves at midnight has discovered imperfections in our current constitution, and has flexed it in ways that many think unreasonable. The next Parliament, assuming it has a majority government, would be wise to look at how the constitution could be improved in the light of the tribulations of the outgoing one.

The first recommendation I have is the repeal of the Fixed Term Parliaments Act. This has given us 3 elections in four years when there is meant to be a five year gap, but it has also held a minority government hostage and got in the way of allowing a PM defeated in the Commons taking his case to the country. The previous system gave scope for the government to call for an early election if need arose. If a PM tried to do this for party advantage with no other good reason there was always the danger of a public backlash against a needless election.

The second is to legislate to place some limits on the capacity of the Supreme Court to intervene in Parliamentary matters. The advice a PM gives to the Queen, and the decision to prorogue should be matters for Parliament, not for the law courts. It makes little sense for Parliament as the ultimate embodiment of the people’s sovereignty to need to ask the courts permission over when it sits or how it transacts its business. That was the view of the English senior judges when the case came before them.

The third is to clarify in Standing Orders that major legislation requires a Money resolution and Queens consent where government prerogative is involved ( as with international negotiations and Treaties). Government needs to ensure legislation fits with its budget and foreign policy. Opposition is there to oppose and amend, not to run an alternative government.

As this Parliament struggles its way to a premature close making a further mockery of the Fixed Term Parliaments Act it has decided on one last decision to carry its waning power into the next Parliament. It has decided to persevere with the election of a new Speaker on Monday. Whilst the new Parliament could choose a different Speaker on its first day, this would be unlikely.

The election campaigns of the candidates have not been front page news. On many issues the candidates agree. They all want the role to be less flamboyant, more referee and less player. They all say they wish to raise standards of behaviour and to show respect for MPs and the institution.

To me the crucial question is how will they wish to redefine the balance in Parliament between allowing strong and telling criticism and investigation of government whilst at the same time allowing a government to govern,

Some reforms of recent years are good and should be kept. More frequent Urgent Questions and topical debates keep Parliament relevant and make governments answer when things are worrying or going wrong. Too many Urgent Questions that are not urgent, have been asked before or are not of wider interest can absorb too much time for no great purpose.

Question Times have been extended informally. The new Speaker should review with interested parties how long Questions should normally last and make arrangements accordingly. Making the PM or Ministers stay long after the appointed time is discourteous to people with busy diaries.

Opening up the House for better public access, and allowing use of Speakers House for charities and other civic institutions has been welcome. The Parliament buildings belong to us all and should serve the wider community.

The more recent constitutional experimentation should stop. Legislation should  be proposed by a government, with a Money resolution to show it fits into the budget and Queens consent where needed to show it is compatible with the way the government is using prerogative powers. Parliament rightly has plenty of powers to delay or make difficult the passage of an unwelcome government Bill. It should not create powers to speed through legislation the government opposes on a one day only temporary alliance of MPs against the government.

The next Speaker also needs to come to a view with the Commons on what remedial and improvement works need doing over the next decade to the fabric of the buildings.

I will let you into a well kept secret. Each time Conservatives have cut the top rates of Income Tax or taxes on wealth the rich have paid more tax.

When Margaret Thatcher and Nigel Lawson in budgets cut the top rate of Income Tax from 83% to 40% there were howls of protest from Labour about a loss of revenue and the moral outrage. Instead the better off paid more tax in cash terms. They paid more tax in real terms after allowing for inflation. They paid a bigger percentage of total Income Tax.

How? More rich people came here or stayed here. More kept Income and wealth here to tax. More worked harder to earn more, and more took risks with their money to set up businesses and create more jobs which in turn produced bigger dividends. It was a win win for all.

The same thing happened when George Osborne cut the top rate of tax from 50% to 45%. Lib Dems in the Coalition blocked more tax raising rate cuts. With labour they want taxes to penalise success and deter risk taking.

Corbyn’s UK were he to become PM would be a hostile place for business builders, risk takers and hard workers with good earnings. Jealousy is not a good emotion at the best of times. It is a dreadful basis for an economic policy. We need to get tax rates down.Not only will more people be more successful but there will also be more tax revenue for schools and hospitals. Labour’s launch was unusual with its lists of people and roles they want to bash.

The polls and betting suggest the choice is between a Conservative led majority government or a Corbyn Labour led minority government. There is a large divide between what Labour is offering and what the Conservatives propose.

Labour’s approach is  based on  large increases in taxes and borrowing, to finance a large expansion of the state. In particular they want to nationalise large swathes of the utility sector with discounted  compensation to existing owners, and wish to take 10% stakes in quoted companies.

The Conservative approach is likely to be based on the controlled increases in public spending on heath, education and the police they have announced, with some tax cuts to come. I would like to see the 1% of GDP stimulus from this combination that I have been arguing for.

We know from past experience at home and present experience abroad that the Labour high tax high spend high borrowing strategy will miscarry. Taxing the successful, hard working and prudent more will send some of them abroad and others will be less motivated to grow their businesses and create more jobs. Excessive borrowing by the state can crowd out credit for business and for individuals to buy assets for themselves. The Labour leadership have admired some latin American countries like Venezuela in the past for their generous expansion of welfare and state spending, only to see the misery economic collapse creates. Well intentioned socialism often ends up creating shortages in the shops,  a balance of payments and overseas borrowing crisis, and more poverty as businesses pull out and jobs are destroyed.

Conservative and Coalition economic policy since 2010 has stabilised a badly damaged economy and has created conditions for many more jobs including full time and better paid jobs to  be created. Inflation has stayed under good control, productivity has been disappointing and real wage growth like much of the rest of the advanced world weak. Banks are now stronger and debts under better control.

The right things to do  now are to pursue policies that can help lift productivity and therefore real wages at a faster pace, to ease conditions sensibly without alarming international investors.