Author: johnredwood

I am writing to Liam Fox at the Department for International Trade to ask to see the UK’s proposed tariff schedules for trading with the world after March 29 2019, assuming we leave without an agreement with the EU. I will say:

I welcome the government’s determination to complete preparations for leaving the EU without an agreement and to share the details with the public and Parliament in good time. I am sure you and your department will be pleased to set out the terms on which the UK will trade with the world once we have left, and to get on with negotiating new free trade agreements with the many countries in the world which would like one with us, as well as with the EU assuming they too wish to share the ideas of their Canada free trade agreement more widely.

One of the most important statements that the UK is open for business and ready for life outside the EU will be the publication of our schedule of tariffs or trading terms for when we have left. It would be good to know the proposals as soon as possible, as business could start to exploit the advantages of a better schedule as soon as it knows what the UK’s intentions are. I assume you do not intend to simply copy the full EU tariff schedule we currently have to use for non EU trade, but would wish to set out a tariff schedule tailor made for the UK’s needs.

Once we are out the EU then of course if we continue to impose tariffs on the rest of the world we will have to impose the same tariffs on the EU. I would like to know your thinking on how we might modify their schedule, especially in the following ways.

Would we remove all low tariffs on the grounds that costs of collection hardly make them worthwhile? This could simplify business life for many.
Would we remove high agricultural tariffs from food we cannot produce for ourselves, to give consumers a better deal? Why, for example, would we want to keep tariffs on citrus fruit after we have left?
Would we adjust agricultural tariffs on products we can produce here to a lower average level than the current high level imposed on non EU product, when EU product has to face the same tariff level? Is there an optimum tariff level on products like beef and pork which would still offer good protection for UK farmers, but would cut the cost of non EU imports? Much of the competitive threat to UK farmers currently comes from no tariff product from the continent.
Would we remove all tariffs from components needed in the supply chain for the manufacture of complex goods in the UK?

Setting our own schedule gives us great scope to get rid of tariffs which hurt the UK consumer which are designed to help continental business more than us, and gives us scope to concentrate remaining tariffs in areas of UK farming and industry that need some protection as they adjust to the new global approach the UK will be taking.

I look forward to seeing the publication of your proposals. These could be good for UK trade and our economy. They are likely to result in import substitution in areas like farming.

Over our years in the EU growing volumes of legislation have been passed by the EU. Some of it is directly acting through EU Regulations requiring no UK Parliamentary endorsement. Much of it is embodied in Directives, which require the UK Parliament to pass a UK law to achieve the stated aims and reproduce the detailed proposals in the Directive. Some of these measures have replaced good UK laws, and reflect a general wish to have high standards of employment law or environmental regulation. Some have been meddlesome and damaging, as with the fishing regulations. I do not wish today to go into the balance of good and bad law that came from the EU. I fully accept that some EU law is good law we want anyway and all of it after we have left becomes UK law to ensure immediate continuity. I want instead to examine the very different approach legislators have adopted to these two types of law.

Parliament has not been able to consider or amend any Regulation. Opposition parties in the UK have very rarely objected to Directives that have come from Brussels. They have accepted a form of approval which prevents amendment to the draft law. However long and complex the EU Directive is, it is embedded in UK law as a Statutory Instrument using what are known as Henry VIII powers for government to press Parliament to pass something with little debate and no amendment. These powers are normally reserved for the detail needed to implement primary legislation which has been through a long, argumentative process with plenty of scope for amendment in the UK Parliament. In the case of EU law this does not happen, as the enabling Statute is the European Communities Act 1972 which created the most massive Henry VIII power of them all allowing any legislation from the EU to go through as an SI. Opposition parties have also always accepted government advice that they have to pass the relevant SI because it is a requirement of Brussels, backed up by the threat of court action in the ECJ and fines if we do not comply. Parliament has never turned down an EU Directive. Domestic legislation requiring SIs to implement them does sometimes encounter refusal to enact with the government having to take it away and rewrite the SI or abandon the attempt to push it through. The more law we have that comes from the EU, the less Parliament can amend and improve in future. Parliament’s role in updating and improving ourlaw codes has become more and more impeded by the rapid growth of EU competence and law.

Recently the Commons was asked to enact the EU’s General Data Protection legislation, even though this was already a directly acting Regulation, so keen was the civil service to see it fully into effect. I have no problem with the principle that governments and companies holding and handling data should be careful with it and protect people from harm from its theft or inappropriate use. There were already laws in place before the GDPR to do this. Maybe they needed improvement and updating. What I thought was interesting was there was little opposition attempt to amend or criticise the EU approach to this task. Small charities complained that it was very heavy handed, forcing them to spend a lot of money on advice and new systems to carry on holding lists of their supporters and communicating with them when they were not in any way unhappy or threatened. Small businesses were concerned about their marketing lists and often had to spend a lot of money on advice and systems when they had caused no problems before. If these proposals had been a UK government initiative requiring normal primary legislation I am sure the opposition would have put up much more of a fight to try to improve the legislation.

In the endless and repetitious iterations of Project Fear 2 all we hear about is trade and trade deals. We need to remember one of the central tasks the public want us to do. They want us to restore a fully functioning Parliament which properly probes and amends government legislation on all matters before the Parliament including all those that are currently fixed in Brussels and not subject to any decent scrutiny.

The trend on the continent to the destruction of the main centre left and centre right parties continues apace. The Social Democrats and the Christian Democrats in most countries have lost their supremacy as leading parties capable of polling well and even forming majority governments. That is so pre Euro and twentieth century.

Sweden still has a government led by the Social Democrats, though it is a minority administration that needs the good will of a number of opposition parties to allow it to pass a budget and stay in office, even with its coalition partners the Greens making it a larger minority. The latest polls for the forthcoming General Election show a strong spurt in the performance of the Swedish Democrats, a populist anti immigration party. The other parties regard the Swedish Democrats as unacceptable and wish to keep them out of government. Polling at 20% in the latest surveys, the SD remain around 5% below the Social Democrats.

Italy has established a government out of the Lega and Five Star, two challenger parties that did better than the Socialists and Forza, itself a remodelled centre right party to displace the Christian Democrats more than twenty years ago. Spain still has a Socialist led government, but in a minority and needing to do deals with the challenger parties to get anything through.

So what do these new parties want? They want some relaxation of EU budget controls. Several of them want a reduction in migration into the EU and a change of policy towards economic migrants. Many will be happy to stay with the EU but want it substantially reformed, whilst others think the EU is a big part of the problem and openly campaign to quit the Euro or leave the EU altogether.

The EU needs to think carefully how it responds to these mass movements. So far the Commission seems to think it can just ignore these elections. Even more bizarre is the way traditional parties just accept their fate and do nothing to get back in touch with voters as that would require standing up to the EU.

There is no chance of the government securing a legally binding agreement that implements all the proposals in the Chequers paper. The EU has made that clear, and the government itself has said it will need to make more compromises. This implies it will give the EU more wins over and above those included in the Chequers draft.

We need to remember what the EU has in mind and what Chequers glosses over in the negotiations to date. The EU wants the UK to sign a Withdrawal Agreement before we leave. This would bind us in to the EU for a further 21 months, require us to pay an estimated £39bn, much of it over the next two years, and would prevent us from exploiting any of the benefits of Brexit in terms of UK legislative change from EU laws, and deny us new trade deals with non EU countries. I have never seen the rationale for such an Agreement from the UK point of view. Delay is particularly frustrating. What could we agree in 21 months that we have been unable to agree in the 33 months from the vote until official exit day? Why is more business uncertainty after March 2019 a good thing, when Remain tell us it is bad thing prior to departure?

The UK government has in mind a Future Comprehensive Partnership. The EU sees this as meaning the UK will have to sign an EU Association Agreement, normally reserved for countries wanting to join the EU to bring them more formally into line with EU legal requirements. No-one thinks there will be a full Association Agreement ready to sign before March 2019 so it would be a promissory note of a possible Agreement. Why would any government wish to sign away so much money in a Withdrawal Agreement when the prize it says it wants will not be properly defined or legally binding at the same time?

Many people including me think an Association Agreement would be a bad idea. It would bind us into the rules of the single market – just for goods under the Chequers model but for the whole thing according to Mr Barnier. The EU would then want budget contributions, powers for the European Court and the rest of their mantra that you have to observe all the rules and pay the bills if you want to remain in the single market.

Understanding this Vote Leave campaigned to leave the single market and customs union as part of leaving the EU. Dressing up belonging as some new Partnership will not wash with Leave voters, and will not wash in its Chequers form with the EU. The one thing many people can unite behind is in ruling out signing the Withdrawal Agreement, as that on its own is very clearly a bad deal.

Amber Rudd told us there would be a government White Paper on a new migration policy for the UK durng the first winter after the Brexit vote. Iain Duncan Smith did a lot of work on what one could look like and sent it to her. 2 years on from the decision to leave we still await the government’s proposals. We are told they are coming soon. I would like them to be ready for our exit on 29 March 2019, the date the PM has promised again for us to leave in accordance with the legislation now passed.

Iain’s ideas revolve around the current government policy of bringing net migration down to tens of thousands from the quarter of million level that has been common in recent years. That should not cause the PM problems as she has defended this target and repeated it in the 2017 election. He proposes in line with the official Leave campaign that the new policy should not give preference to people from the EU over people from the rest of the world. There should be common criteria for assessing eligibility.

Students coming to study at recognised universities and Colleges should be free to come. Anyone with their own means should be welcome. Anyone with high level qualifications or with skills we are short of should be permitted. Anyone coming to visit, to travel, to be a tourist would of course be welcome.The new controls would operate on anyone coming from the EU as well as elsewhere who wanted to come to look for a job or take up a low paid job, who would need benefit top ups and social housing. The UK would of course continue to offer asylum where appropriate.

We want a policy which is good for the UK economy and fair to all from around the world. We want people who come to settle here to have access to good affordable housing and decently paid employment. We also want that for all those already here and born here, at a time when lower wages have been kept down and when housing in many areas is in short supply. The sooner we have a fair and sensible migration policy, the sooner we can get on top of the housing and pay issues.

According to a recent press report some doctors’ lists are out of date and inaccurate. This is worrying in itself, as doctors do need to know who they are responsible for and to whom they should provide treatment. It is also worrying for taxpayers, if it means that the NHS is paying doctors for patients who do not exist, or who have died, or who are counted twice by being on more than one list.

I raised the general issue recently about the delays and errors taking on board the death of an individual once it is properly reported to the state’s very own Registrar. This is one more feature of the system. The Tell Us Once addition to Registration, or the act of registering itself, should trigger the automatic updating of the relevant GP’s list. Individuals registering a death are asked to take in the dead person’s NHS card, and the death is registered in full knowledge of their full name, address and National Insurance number. This should make updating the doctors records in an age of fast computers very easy.

When the Coalition looked at the topic of doctors lists in 2010 they estimated 2.8m patients registered in error.

The Prime Minister usually includes in her big speeches praise for free enterprise. She appreciates that the Conservatives need to make the case for economic freedoms, for the role of profit and reward in driving investment and beneficial change, for a tax system which allows those who work hard and venture their own effort and money to keep sufficient of it , and for competitive markets which can serve customers well. She also knows that government does need to intervene to prevent monopoly and abuse of commercial power ,and to ensure those who cannot easily compete are looked after or given better chances in life to do well.

In order to see these grand aims through, she needs to look at the balance of what government Ministers and officials are doing and saying. Government is coming across as keener to put taxes up and to find new taxes than to cut them, thanks to the Treasury. The government is ready to ban or regulate things they do not like, often in a good cause, but less forthcoming about how they can encourage or get out of the way of new ideas and better services and goods for the market that do not pose particular problems.

I have often commented on the damage done to the housing and car markets by higher taxes. There has also been the additional business rate burden imposed on some shops from the Business rate revaluation, at a time when traditional shops need all the help they can get to compete with internet suppliers. The Treasury seems to want to tax new technology businesses more when the UK is good at them and is attracting many of the great world names here to grow and expand. Would a unilateral declaration of tax war on this sector be a good idea when many other countries would like those jobs and investments?

The decision to make larger shops charge 5p for a plastic bag has certainly changed behaviour and greatly reduced demand for plastic bags. The new sugar tax is designed to cut the output and sales of certain soft drinks, to be followed by a possible ban on selling energy drinks to young people to reduce sales and output of others. The sale of most old ivory in our successful auction houses has been banned, diverting that business abroad.

Rich Non Doms have been persuaded to leave by new tax rules, taking their money with them. Russia remains sanctioned with the Uk leading the charge to toughen the regime against her more.

Many of these measures individually have a good cause or a good case behind them. The government, however, needs to be aware that if it appears that it bans and taxes parts of free enterprise where it thinks it does harm, and does not do the opposite for the many areas where it does good, it undermines the PM’s support for the system itself. Much of what people like about their modern lives comes from the amazing dynamism of free enterprise, from the digital revolution it is pioneering and from entrepreneurial businesses whose owners and creators become very rich. People like today’s smart phones, computer pads, streamed videos and film, the wide variety of entertainment on offer, modern cars and better appointed homes. Competitive markets give us these. The countries that do best are the ones that are most positive and helpful to the system that delivers so much progress.

Mr Macron was misinterpreted by some this week who strain to discern an agreement between the EU and the UK in what he said. When Mr Macron stated he wanted reform of the EU he went back to the old idea of accelerated union and integration for an inner group. He then wants the UK to fit into an outer circle, where doubtless he thinks we should be rule takers. We would be grouped alongside eastern European countries who may want fuller integration but are not welcomed or thought to be ready by the elite countries to join the core of the Euro.

Mr Macron thinks France, Germany, the Netherlands, Belgium and Luxembourg, five of the original six founders of the EU, and maybe Spain, are ready to move to a single budget, a single Finance Minister and a joint foreign and security policy. Italy would probably be told if they want to be part of this inner core they have to forget all their wishes to change the budget strategy and to bin their request to toughen migration and border controls. There would be no room for dissenters in the core. The UK will of course be “offered” a security and defence partnership, because the UK provides more already to European defence than our GDP share would imply. The EU would like access to our two carrier groups and to the squadrons of F 35 fighter bombers, as well as to our Intelligence services. The EU has in mind some kind of Association Agreement with the UK, which is a watered down version of the EU Treaty without the voting rights and place at the table to complain in person about bad laws and bad policies.

Mr Macron’s vision is backward looking and out of time. Mrs Merkel is finding it very difficult to hold her coalition together, and will be in no position to offer a joint budget and common Finance Minister given the antipathy of German electors to the idea of Germany paying more and sponsoring a so called transfer union. As transfer unions are central to most countries with their own currencies this remains a major stumbling block for the Euro. Mrs Merkel’s traditional coalition partners, the CSU, face a difficult election in Bavaria in October, where they could lose control of their Lander Parliament thanks to AFD candidates. This means Mrs Merkel has to pose as tough on matters European and migratory for the next two months.

Mr Macron will also alienate many of the keen members of the EU that are excluded from his inner core. The countries to the south – or their governments – believe in the Euro scheme and were expecting a bit more financial and budget leeway. Instead Mr Macron seems to envisage more budget flex only for the chosen few that have passed the austerity test and joined the core. He will also continue to annoy the Hungarians and Poles who are the new naughty boys of the bloc, wanting the whole institution to adopt anti migrant policies.

It is going to prove a problematic few months for the EU, with Macron and Merkel in disagreement and with Italy pressing hard for changes to both migration and budget policies. Mrs Merkel usually gives in to pressure, so expect German policy to move to a more anti migrant stance.

The Chancellor must have expected to see car output down by 11% this July compared to last July. He and his colleagues wanted to put people off buying diesels, and many have heeded his warnings. His higher VED hit the top end of the car market, and the threats of more taxes to come on both diesels and petrol vehicles has put people off buying. Reining in car loans was also part of the successful plan.

Over the year to date UK car output is down by 4.4%, with production for the home market down a massive 16% within that. Looking at new car registrations in the UK we see diesel sales down 30% year to date compared to last year. This of course has nothing to do with Brexit, as all the alleged advantages of the EU trading system are still fully in place. This has been a car market collapse whilst still in the EU, created by domestic policies designed to cut demand for new cars.

The Motor manufacturers trade body says they need the continuation of “beneficial” EU trading arrangements to ensure growth in the future, without properly explaining why they have experienced such a big fall whilst enjoying these self same arrangements over the last year. They should instead be pressing for greater clarity on future car tax policies, and asking for some improvement in the present policy mix so UK people can afford to buy home produced vehicles in larger numbers again.

Encouraging more new cars and allowing more people to afford new cars should be good for the environment and for the economy. Modern cars are more fuel efficient with cleaner exhausts than most older cars. Governments usually want the car industry to do well.
I also see the latest consumer credit figures show a slowing there following authority’s instruction to rein in credit to slow the economy.