Author: johnredwood

Some socialists start with the best of intentions.

They say, let’s pass a law to cut the prices of basics so people can be better off.

If they do it too much businesses stop providing the goods and supermarket shelves empty.

They say, let’s tax the rich more to give money to the poor.

If they do that too much the rich take their money and their businesses, their jobs and their ideas, to a country which taxes less.

They say let’s take over profitable businesses, so we can use the profits to pay for public services

Once they’ve taken them over they usually starve them of investment and talent, driving great industries into loss and sacking employees to balance the books

They say let’s just print some money to give more to the poor

That way leads to more inflation, often leaving the very people they wanted to help worse off, unable to afford the basics.

This is something we can learn from our history books

Labour’s great nationalised industries sacked hundreds of thousands of people, lumbered taxpayers with huge losses and failed to serve the customer well.

Labour’s big spending sprees led to too much borrowing, to sterling crises and to high inflation

The final ignominy came when their policy meant the UK had to beg for a loan from the IMF, an organisation designed to help poor countries, as the country struggled from recession to recession

Labour’s tax assault on success led to the brain drain, as energetic and able people moved abroad.

This is also something we can learn again today by looking at poor Venezuela.

Mr Corbyn heralded the government of Venezuela as a new way, an alternative to the capitalism he hates in free western societies.

Thanks to laws cutting prices,to nationalisation, printing money , high taxes and state control, the economy is in collapse.

The rich and the not so rich are rushing across the border to get away from the regime that torments them

The nationalised oil industry produces precious little oil despite the huge size of the reserves, starved of capital and good management

Supermarket shelves are largely empty, with companies unwilling to make and trade in such a damaged economy

The poor have been given large increases in benefits, only to end up worse off as inflation soars to make their money almost valueless

The state keeps spending money it does not have, so inflation surges making trading almost impossible.

The UK must say No to such a dreadful diet of policies.

We can offer a much better alternative.

For the last forty years I have bought UK manufactured cars, ordering a new one to replace an older vehicle at regular intervals. I have always found plenty of choice and usually liked the products I have bought.

I do, however, find the UK based industry’s continued arguments about Just in time bizarre. As I have pointed out, the government has no plans to create additional delays at ports for imported components. There is an even more curious thing about the industry’s belief in Just in time. It does not extend to the customer.

In April I contacted my local car showroom to ask when I needed to place an order for a new replacement car for September delivery. The last time it had taken six months. They told me I was too early so I asked them to contact me when they needed the order. On June 1 st I was invited in to sign up and pay the deposit. The deposit was taken in good time to help their cash flow, well before they committed any cash to the build. I was then told that the car would not be available until November, as they has misjudged their future production schedules. In July I was advised that the car would be available in the second half of October, and in early September I was advised it would be available mid October.

One of the advantages of Just in Time systems is the factory should be able to plan its output well in advance and plan exactly when it will build any individual car, yet I have experienced variation over more than a month of time in their forecast of build date.

All this reminds us that the absolute precision some now expect in Just in Time supply chains is not a reality within the single market. Just in Time is miles off extending to customers, and factories flex their production with delays of a month or more for the customer. The customer has to pay a deposit well in advance, and is left wondering exactly when they will get delivery of the new vehicle. I am not suggesting this is some hardship for the customer, merely pointing out that people are exaggerating massively the timeliness of current production of vehicles within the EU single market. The fact that a component may spend a few more hours in a traffic jam on the A34 is clearly not mission critical when the customer has been told to wait another month. And that is something they have to deal with whilst we are still in the EU. Some components today come in from outside the EU and come on a long sea journey, but planning still allows them to fit into a JIT system. All JIT systems have to hold buffer stocks for contingencies or “events”. A current EU/UK supply chain damaged by French strike action at the ports for example, may have to turn to the expensive Plan B of flying components in.

So here are a few questions for the Just in Time worriers

1. Why cant Just in Time systems deliver cars at a specified date for a customer that is quite soon after order placement?
2. How do you currently cope with traffic jams, lorry delays, port hold ups today, and why do you think it will be any worse after we have left?
3. What new barriers to entry are you expecting at Dover or Southampton, given the government has not proposed any?
4. Don’t you have to allow plenty of time for the difficulties of road or sea transport today on complex supply chains?
5. How do all those Chinese goods get into the UK in good time to meet UK customer orders, given that China is not a member of the EU?
6. Why is the UK car industry having difficulty meeting customer orders in a timely way whilst we are still in the EU and when UK car demand has been hit by UK government tax policy?

Let me remind people about Just in time (JIT). I have run JIT systems for a UK factory. Our complex supply chain included components coming in from non EU sources as well as from EU sources. There were no special problems with the non EU components. The supply chain included components coming long distance by sea. Every JIT supply chain manager makes allowance for transport problems, and builds in usual delays that can come from traffic jams, bad weather at sea, delayed flights and the rest. The UK supply chain from the continent is more prone to delays from traffic congestion and road accidents than from port delays. The government should do more to improve transport capacity on our road system to assist Just in Time manufacturing. If we leave with no deal and impose customs duties these can be collected electronically without extra delay at the port. As Next has made clear in its recent Brexit statement, currently in the EU exporters selling more than £250,000 into the rest of the EU a year and importers buying more than £1.5m a year from the EU already have to complete a full Intrastat form, which is very similar to the detail needed for a customs form, so when we leave if we leave with customs dues these can draw electronically on the same information without added time and cost. All Authorised Economic Operators importing and exporting can and do settle customs electronically away from the border, as they settle VAT today on trade within the EU.

The Business Secretary should reassure Toyota and others there are no plans for new delays at our ports once we have left the EU. The UK should want to continue to offer every help to get imported parts in to meet production schedules.

Many people like their smart phones and small computers. Many large companies are keen to get us to transact on the internet, pressing us to bank on line, have on line accounts for our utilities, to shop on line and receive advice on line. There is a pressure to go further, with more robo advice, greater use of artificial intelligence, and more activity from our sitting room chair. If enough people do it the large company saves on High Street property and on contact staff. Done really well, the error rate could go down as more fail safe methods are built into computer programmes. Some say there is some evidence that able professionals assisting computer experts to record their expertise in the form of computer programmes and algorithims can set up higher quality and more consistent service than if individual professionals do it on a personal basis. The computer, if properly programmed , has the best and latest professional view and will apply the rules consistently, unswayed by the individual client.

I think there is a lot of merit in new technology. Government is slow to adapt, but it could make a difference there, cutting costs and improving service. The computer can provide the service 7 days a week 24 hours day, needs no holidays and doesn’t take sick leave. A well run system can be constantly improved and flexed to cut error and incorporate best practise. Some of the cost savings can be passed on to the consumer. We should anticipate more offers we cannot refuse to go digital, more artificial intelligence, and more computer involvement and assistance in our daily lives.

There are, however, still a good number of bugs in the systems that annoy or could prove damaging. The very same systems that give you a flexible ability to buy and to get advice and help at the press of a mouse are vulnerable to cyber attack. There has been a rash of thefts from people’s savings through fraudulent emails, instructions and diversions of money and other financial assets from on line accounts. There have been a number of damaging interruptions to service when a whole bank is no longer able to service customers and move money in its accounts. The computer may not be having time off, but the computer or the communications systems it relies on can crash and leave people without money or access. As the efforts of companies to defeat cyber criminals intensify, so the routines people need to go through to prove their ID and to authorise a transaction become that more complex. We are all suffering from password fatigue, with a plethora of passwords needed to get us through our daily routines. To improve security you need to have all different passwords, with nothing obvious or memorable, and regularly changed. Different systems anyway require different numbers of letters, numbers, punctuation and other symbols, and require different schedules for changing them.

There are also limitations to algorithms and pre programmed advice. The computer’s decision is only as good as the information the client or patient puts in, and that may be determined by the form provided electronically to put in the facts, and narrowed by the computer’s ability to understand the information. Computers do not yet do body language, read between the lines, or ask the left field question if suspicious that the person is not giving them the full story in the way a person can do.

There is plenty of talent going into the digital world trying to proxy more of the characteristics of people in the way machines and computers respond. As they do so they come to appreciate the enormous complexity and sophistication of the human muscle system and the human mind. We are still some way away from having great robots to do the dusting or peeling potatoes, as these require good hand eye co-ordination and sensitivity to the objects being dealt with.

The revolution will press on, and new generations of machines will encompass new skills. The machine has largely taken over the modern factory, but has not yet offered a value for money way of doing most of the housework. Computers help business churn out invoices, delivery documents, sales campaigns and the rest,but that still leaves most of the management and vision of the business to people. Government needs to apply more technology to its own processes so they are available longer hours, are more accurate and more productive. It also needs to make sure the UK is the right environment for education, training and development of small and new businesses, so we can be at the leading edge of this innovation wave.

It is time to be bold.
The world teems with opportunities for us once we leave the EU on 29 March next year.
We must show how we will use our new financial freedom from paying so much to the EU.
We must become again the low tax party. We believe individuals and families are best spending their own money on their own priorities. We need to cut the rates of Income tax so people keep more of what they earn.
We must be the party that backs enterprise and lets people enjoy the rewards of success. That means cutting the rate of Capital Gains tax.
We must be the party that helps people own their own home. Lets begin by getting Stamp duties down from the high levels George Osborne wrongly imposed.
We should want to have a strong car industry, and allow people to buy good modern cars made in the Uk . That means taking Vehicle excise duty back down to more realistic levels.
Its not just a case of cutting corporation tax for the bigger companies , but cutting taxes on small businesses and individuals who take risks, create jobs and drive innovation.
Whilst we are about it lets cut business rates as well.
Some of these measures will raise more revenue, as the Treasury has imposed high rates which bring in less revenue. Others have a cost to be paid out of the savings in the EU budget.
We need to make the case again for freedom and free enterprise. This week we heard the marxist alternative. They tried that recently in Venezuela.The nationalised oil industry which was meant pay for it all now struggles to produce half the output it used to produce when in the private sector. They ended up gravely damaging the golden goose, a country with more oil reserves than any other now has empty supermarket shelves and an economy in collapse. Marxism has driven them into needless poverty.
So lets explain that price controls, nationalisations, government interventions may look well meaning but end in tears. Those policies hit the poor instead of helping them, and drive the rich out of your country. If government does not support and promote free enterprise it makes the country poorer. You can tax an economy into poverty. You can spend and borrow too much in the public sector leadig to a rapid inflation and a fall in your currency, which also hits the poor you are trying to help. You do not make the poor rich by making the rich poor.

The latest figures show a further decline in the UK output of cars for domestic sale, as the government wished. They imposed higher taxes and threatened more taxes and bans. How much bigger fall do they want?

There were many years ago apparently  scientific experiments to test the idea that if you left an amphibian in water which you heated up gradually it would not notice, dying when it got too hot. I always thought that a strange idea based on most cruel experiments. Most people think it is untrue. An animal will jump out when it senses the water is getting too hot. I am glad they do, for their sakes.

Some in the political world use the story of the boiling water as an analogy based appropriately on a falsehood  to describe the way some people apparently will stick around supporting policies and proposals they dislike intensely if they are introduced slowly and stealthily. There has been a rumour about the Remain forces in the government using this technique to get more Leavers to accept more and more of the EU they are seeking to leave, by gradually introducing these features back into the promised Brexit the government is arranging. Thus we saw a progress of more EU controls, payments and laws being introduced from the original Lancaster House statement to the Florence speech, and from Florence to the Mansion House text, to end up with the Chequers proposals.

Gradually the crucial features of Brexit were eroded or removed. Instead of getting all our money back from Day 1 we were told there would be a big and lingering bill. Instead of getting freedom to set our own benefits and work permit policies, we were told we needed to accept some freedom of movement and some payment of benefits to EU citizens on arrival. Instead of getting full freedom to negotiate our own trade deals, we were told we had to live with  accepting many EU rules and regulations which might get in the way of trade agreements. Instead of leaving on 29 March 2019 we were told it would be delayed for another 21 months for no good reason. Instead of getting control of our fish from next year, the timetable slipped and the language implied we would continue to give away much of our fish stock.

As any sensible person would predict, the latest version of Chequers represents unacceptably hot water, so the Brexiteers have indeed jumped out. The government has kindly proved again the commonsense view that you cannot get people to change their minds on fundamental issues by seeking to change them gradually and by stealth. They do notice, just as any animal spots the water getting too hot.

The main issue tackled at Salzburg is of great interest and concern. How many migrants should the EU admit? What controls should it place at its external border to control numbers arriving? How many of those borders should be hard physical borders with walls and fences, watch towers and plenty of staff? The EU has helped fund just such a tough border for Turkey with the states to the south, and some states like Austria and Hungary have also built their own walls and fences with razor wire.

The EU has a European Border and Coastguard service or Frontex, with a headquarters in Warsaw. The informal Council discussed whether this should be substantially beefed up with 10,000 new recruits to help member states handle the big issues of entry into the EU. To date Frontex has always claimed member states have the responsibility for policing their own borders, to an approved set of common rules. Frontex has access to specialist personnel and equipment to come and assist where there are particular problems or pressures. Recruiting many more staff would be a precondition for Frontex becoming a much more active participant in border security. Frontex offers ships, trained personnel and surveillance equipment.

Member states are divided on this issue. There is a strong wish to see tougher common EU border security, but also in some cases a reluctance to surrender power to police the border to an EU authority. Some states like Hungary and Austria have pushed their interpretation of EU policy a long way in the direction of hard  borders and tough controls. The EU is now responding. It has a good relationship with Egypt to deter migrants from that country. It is now collaborating with the Libyan coastguard so more people rescued at sea who started out from Libya are returned to Libya. It is looking to enter agreements with more North African states, just as it has done with Turkey. In return for substantial sums of money, Turkey has agreed to provide a home for Syrian refugees and not to send them on to the EU.

Mr Salvini in Italy is pressing hard for a much tougher EU stance on migration. He has been refusing boats the right to land, and has recently organised the removal of a Panamanian flag from a charity boat that brings migrants from the sea to the shores of Italy, to remove the boat’s right of passage. The EU do not like his approach, but so far have been unable to stop it.