Author: johnredwood

In the muddle of the tv debate on Tuesday there were three positions advanced on how to get out of the EU, and effectively three positions on when to get out.

Mr Stewart argued that Parliament had to pass the Withdrawal treaty it has thrice rejected. That looks very unlikely. In default of that he invented all sorts of new processes which would entail a long delay in exit. HIs further consultation with the public might well be designed to move towards a  second referendum or some other way to stop Brexit altogether.

Messrs Hunt, Javid and Gove argued there had to be a renegotiation, with efforts at least to remove the backstop from the current Withdrawal treaty. It is difficult to believe any of this. The EU has made clear they do not intend to re open the Withdrawal Treaty issues. Changing the Political declaration would not change the backstop or any of the other bad features of the draft Treaty. There is no obvious authority to negotiate with before the new Commission is formed. It seems impossible for a new PM to engage in talks, get meaningful changes to the Treaty and put it through Parliament before October 31. Two of the three countenanced a short delay to get an agreement, with Mr Gove favouring a delay until  end December 2019.

Mr Johnson insisted on exit on 31 October. He has in mind offering a free trade deal to the EU. If they will agree to talks on such a proposition then the UK need not impose any new tariffs on them as we leave, nor them on us. Under GATT 24 there would be ample time to discuss the Free Trade Agreement whilst continuing to trade without tariffs whilst doing so. If the  EU refuses to discuss a Free Trade Agreement then we leave without a deal and impose the same tariffs on the EU as we impose on everyone else. They do the same to us. The EU has always said they are interested in a free trade agreement but it has to be negotiated after we have left.

The elimination of only one  contender drags out the contest a bit longer. The contest anyway has become  a race for second place, to see who would be best to go up against Boris in the  lengthier phase of the contest appealing to the members in the country. I think a Johnson/Hunt contest would be best.

It was unfortunate that Rory Stewart wishes to turn the contest into a re run of the referendum, in denial of the clear stance for Brexit all Conservatives put to the electorate in order to become MPs in 2017. He studiously avoided even contacting many Conservative MPs he knew to be committed to our 2017 promises, preferring to attract the support and good wishes of the media, especially the BBC, and sections of  the general public  wanting a second referendum. He then claims he could get the completely unacceptable Withdrawal Treaty through the Commons after its three big defeats.

The contest has had an unreal air for another reason. Several of the candidates claimed they could renegotiate the Withdrawal Agreement in time for  our exit on 31 October. There has  never been any glimmer of reason to suppose the EU would enter deep and serious talks about rewriting the Agreement, or that such work could be completed between the end of July and the end of September allowing time to ratify the Agreement by both sides.

The BBC debate was dreadful. It was set up  and chaired badly so we learned little. There was no wish  to allow or require a serious discussion of the major issues facing the country. Boris was constantly interrupted by the presenter and the BBC pursued its agenda to make sure the candidates could not discuss the great opportunities that follow if we just get on and leave.

The Foreign Press event about my book “We don’t believe you” may not allow the public tickets we now learn. I will keep you posted if the press relents over wider public access to the event on  24 June

Owing to strong demand I have arranged a new  presentation and event with Politeia for 2 July at lunch time at the Oxford and Cambridge Club, Pall Mall. They can help you with tickets on 0207 799 5034. This will help those who were too late for tickets for the IEA. It will be a different talk with a  panel to follow up interesting and topical issues.

The Fed realised late last year it was raising rates too much and tightening the money supply too severely. It backed off and announced a re think. It is currently working its way through how it can change its approach and make it friendlier to economic growth.

The Bank of England needs to do the same., It has been tightening too much for the last two years. Like the Fed, it relies on out of date theory based around the concept of national capacity. It thinks it knows what national capacity is, and argues that there will be inflation when we reach close to that capacity. For an open economy like the UK it is an odd way of thinking about it. We import goods and services and we import labour so our capacity is not constrained by UK resources, whilst world products, services and labour keep prices and wages down as a result of  global competitive pressures.

The Bank seems to want to prove a point about its errant pessimistic forecasts over Brexit. It should listen to what the Fed is saying, and back off from its current over tightening. The UK economy needs a bit more Bank flexibility at a time of slowing world growth and little inflationary pressure. They need to revise their views on how to settle interest rates, in line with the Governor’s lecture explaining  h0w the Phillips curve was now flat . Given this there is little need to raise rates as unemployment falls unless there are other signs of overheating or too much credit.

I spoke on Saturday at the Anniversary Conference at the Thatcher Centre, Somerville College Oxford.

I spoke about wider ownership policies, about the poor economic background to the start of her premierships and about the impact difference on European policy had on her period in office. I am asking for a copy of the video of the speech to be available here for those interested.

The more the UK cuts emissions of O2 the more the rest of the world increases them. Someone sent me the 2018 latest figures from the BP Energy Review. Since 2010 world CO2 emissions are up 9% whilst the UK has been cutting. Last year there was a 2% global rise, with only the UK and Europe down. The increases were led by China, India and the rest of the world excluding the USA and Europe.

China still uses coal for more than half her energy demands, whilst the UK has eliminated coal in its generation mix. Last year an additional 280 million barrels of oil equivalent of gas, oil and coal was consumed, compared to just 100 m barrel equivalent increase in non carbon renewables and nuclear.  Renewables now account for just 4% of world energy, with hydro and nuclear 11%, whilst coal represents 27% and oil and gas 54%.

Those who see rising carbon dioxide as  a major threat need to answer the simple question what are they going to do about the huge increases in fossil fuel use outside the UK and  Europe. The figures show even if the UK succeeded in eliminating net carbon usage world use and output of CO2 would continue upwards with no visible impact of the UK on the world graph. It will take major changes of behaviour and investment in China,India and the other large carbon users to shift the numbers in  the way climate campaigners want.

The Economic Adviser to the Lega party, the larger of the two governing coalition partners in  Italy, has come up with a scheme for mini BOTs or low denomination Treasury Bills. The Italian Parliament recently passed a motion in favour, though this is not binding and the Treasury is not yet printing and issuing  these bonds.

The Italian state like others issues Treasury Bills to institutional investors. These are usually short term loans to help finance public spending. They can be traded against their electronic certificates.

This  new scheme is to issue so called Treasury Bills or  bonds with no repayment date and no rate of interest payable.  They would be issued with physical certificates or notes in 10,20, 50 etc Euro denominations. Individuals could pay tax bills with them, or buy any goods or services from the state like petrol from a state owned filling station.

The European Central Bank has been asked about this. They have said if this is a parallel currency it is under the rules of the Euro scheme illegal. If these are debt instruments they have to be under the overall budget deficit and borrowing controls that apply in a single currency.

The mini BOTs look much like banknotes and would give the Italian state the effective right to print a money substitute to get round some of the controls on their economy from the Euro scheme. It is a provocative idea. So far they have put the idea into circulation but not the notes. If they did start to issue them it would be a major challenge to the Euro.

On 24 June I will be briefing the foreign correspondents interested in populist politics at the Brand Exchange 3 Birchin Lane EC3 at 2pm

I will talk about the success of  populist parties in the EU and the last European election, look at what they want and how they are developing their power and influence, and explain how Brexit has changed UK politics radically.  The thoughts in  part come from my latest book, “We don’t believe you”  (available on Amazon) and will assist with further updating of that book.

Please let me know if you are wanting to come.