Author: johnredwood

The UK is a leading country in the world, with a seat at the Security Council of the United Nations. As such it has responsibilities to contribute to UN peace keeping and peace making missions, and to humanitarian interventions around the world. The UK is also a leading member of NATO, a crucial defensive alliance for the western democracies. The UK is the second largest spender on defence after the USA in the alliance, and agrees with President Trump that the non US partners need to make a larger contribution to their own defence than they have been doing. The UK has agreed to spend 2% of its GDP on defence, which means that each year as GDP rises defence receives a cash and a real increase in its spending levels.

The UK needs several important capabilities. It needs an expeditionary force, so that it can intervene decisively, usually with allies,  where there are events like the invasion of the Falklands or Kuwait that require a swift and effective military response. It needs a similar ability to project force over distance to assist with peace making interventions in regional wars as sometimes in the Middle East, and to have humanitarian capability to assist victims of flood or disease or other disasters. Above all the UK needs a strong defence to protect these islands, which includes the insurance of a nuclear missile shield to deter aggression.

The government has found the money for two large carrier ships and attendant planes. It is proceeding with the renewal of the submarines which contain the nuclear deterrent, which need to have a continuous at sea capability to be effective. It has reduced the size of the surface navy, the army and the airforce as it has sought to adjust to tighter budgets in the last twenty years.

Extra money would be welcome to expand the surface fleet needed to complete and protect the carrier groups, and to provide flexible task forces for humanitarian purpose and to provide home defence. It could  be used to relieve the pressures for a smaller army, which stretches UK ability to respond positively to the demands of allies and the UN to contribute to missions. It could add to the number of aircraft, as we resume a maritime reconnaissance ability and strengthen the heavy lift capability. To be a successful expeditionary power we need eyes in the sky and the ability to move  people and equipment rapidly to trouble spots.

The government has admitted that schools in areas like Wokingham get too little per pupil compared to the average, and too little in absolute terms. They have under pressure given us a modest uplift. Some of this has come from changing the formula to limit the losses of the lowest paid areas. Some has come by way of a general increase for all schools.

More needs to be done. Schools need to be able to recruit and retain  enough good teachers , and teachers deserve a professional salary to reflect their training, commitment and responsibilities. I would like to see a bit more cash provided overall, with a further improvement in the formula for the lowest paid areas.

Schools have considerable discretion over their budgets. The state needs to ensure the average and the minimum level of per pupil funding is sufficient for a well run school to do a good job. Some schools are better than others at getting  value for the money they spend. Some are better at attracting great teachers who encourage high standards and motivate pupils well. In such a decentralised system there are limits to what the central government can achieve. We look in particular to the teaching profession to set standards, to innovate, and to manage the school budgets well.

I see the Secretary of State is challenging the Treasury on this issue. There is money available without raising tax rates. Cutting some tax rates woukd also bring in more revenue. The government continues to collect more tax than Treasury forecasts.

Starting today I want to run a series of articles looking at how we could best spend the additional money coming from growth and from the savings in our EU contributions.

The NHS does need more money. There is the need to provide for the rising numbers of patients, partly the result of rapid growth in population. Even after a new migration policy has been put in place there will be some growth of population we need to provide for.

Under new arrangements with the EU after departure we need to make sure that if we continue with state payments for care in each other’s territory there is a fairer recharging by the UK to the EU for the care we deliver to EU citizens in the UK.  If there is no agreement then we need to require payments or insurance on EU citizens here, and to offer  a way of reimbursing UK citizens needing care on the continent.

The government has accepted the case for more money, and even accepted a general level of increased payments. Over the summer it is vital this is turned into a positive programme. The government should not sign off on any extra money unless and until there is a costed proposal that cannot be covered by existing budgets, and which will raise the quality and quantity of care delivered.

Ministers are talking about setting the Chief Executive of NHS England proper targets and requiring performance against them to justify extra cash. These targets need careful choosing and enforcement. It also needs to be clear that failure to hit agreed targets will result in financial penalties for the highly paid top team. If they wish to be paid far more than the PM, more like the private sector, there needs to genuine performance related risk for them

I do think we need more money to expand operating theatre capacity, provide extra medical teams for hospital treatments, and expand the numbers of GPs.

There are international agreements allowing overflights. Irish planes will still fly over the UK once we have left, and UK planes will still fly over Ireland. BA is of course part of IAG, an Anglo Spanish  company with a headquarters in Madrid,  so does the Irish PM anyway not see that as an EU company that will carry on flying?

I am delighted so many people have suddenly become interested in the issue of speedy delivery of raw materials, components and finished goods. Some are so interested they think it is the topic which should determine our approach to Brexit.  I want to ask the question what actions could we take to cut down delivery times more if people think this is such an issue.

Lets take a complex supply chain. The company concerned needs imported components from India and from Slovakia to meet an automated manufacturing   system. The typical delivery time from Slovakia by road transport is four days. The typical delivery time by sea transport from Mumbai is 20 days. Immediately when we look at this issue we see that the short time it takes to get through the port of Dover from Slovakia or through the port of Southampton or London Gateway from India  is tiny compared to the lengthy time it takes by sea or road.  The sea journey is probably a bit more predictable than the road journey, as it is less open to congestion and delays. The sea journey does also need two road transport journeys to get to and from the ports involved, whilst the road journey from the continent needs a short sea crossing to tackle the English Channel.

The investment needed to cut journey times and unreliability includes investment in the road networks involved. I do not know all the details of the road congestion from Slovakia on the continent, but can vouch for the delays and unreliability the shortage of capacity from Dover or from Southampton to a factory in say Birmingham can  cause. This would seem to be a more sensible worry than the idea that after Brexit lorries will face unacceptable delays at our ports.

We need to remember that the bulk of our trade with the EU is imports, not exports. That means the crucial port movements occur in UK controlled ports. It is the UK authorities  who will have the task of checking standards and tax liabilities, as they do today whilst we are still in the EU. We have no reason to set up a complex system at the port which will cause more delay or so called friction. We can continue to use Authorised Economic Operators. electronic manifests and on line assessment, tax collection and clearance of most cargoes. Trade within the EU today requires complex calculations of VAT, other transaction taxes, quality and safety checking and other compliance. Most of this occurs away from the port. We have no need to make it too difficult when we are  out of the EU.

Whilst the EU carried on with colourful and misleading language about parts of Brexit, its document issued today also showed it is beginning to want to look after the business interest on the continent and help with sensible business continuity. In particular it confirmed that  current contracts which span the exit date will of course remain valid with parties fulfilling them. It thinks the UK should   be part of the Common Transit Convention to speed transport crossing borders. It gets close to saying the UK out of the EU will of course have high standards of data handling so there will still  be close arrangements for data transfer.

One of the welcome features of the short document was the repeated statements that much of what needs to be done to keep trade flowing is down to individual companies and member states, who are likely to want it to work well. The EU comes close to suggesting member states roll over certain permissions where the UK  will still meet the same acceptable standards after exit.

There is a lot of bad and misleading language used about Brexit. Apparently Mr Barnier is about to embark on his own version of Project Fear, claiming the so called “No Deal” option will be difficult. The UK government will  make sure all is ready to depart without a Withdrawal Agreement if necessary. Why would the UK want to sign such a one sided Withdrawal Agreement anyway? What is Mr Barnier offering to make it worth our while?

Let me attempt to adjust the language to be more  balanced and descriptive.

“No Deal” is the WTO global trading option. Far from being without trading rules and without a working system for importing and exporting, the UK would rely on the WTO system for its EU trade just as it relies on that system for the bulk of its trade today which is conducted with non EU states.

“Crash out” are the words often used by Remain to describe leaving without paying the EU £39bn for the privilege of leaving. As we do not owe them any money, most people would call that just leaving, not crashing out. We will not crash, and will have lots more cash.

“Fall off the cliff edge” is another fatuous phrase they use. There is no cliff edge. Planes will fly and lorries will move through ports the day after we leave just as they did the day before. We will carry on trading and travelling, investing and being tourists in each other’s countries, as we do today in numerous non EU countries.

The EU talks about a “disorderly Brexit” if we leave without a Withdrawal Agreement. That means we leave without paying which annoys them but is good for us. The EU will find that people, companies and global rules will work just fine. The continental exporters to the UK will make sure they can still sell to us as they sell to other countries not in the EU. There is nothing disorderly about the way EU states trade with non EU states.

The use of this pejorative language is silly and misleading. The proponents of the EU say they wish to defend the international rules based system. Presumably their beloved EU does just that. In which case, as a law abiding member of the World Trade Organisation, the EU will not be able to discriminate against the UK after we have left and will not be able to impose new additional tariff or non tariff barriers. The EU has to treat us as it treats all other most favoured nations under WTO rules.

As the bulk of the UK’s trade with the EU is imports, I assume even Mr Barnier will understand they need continued decent access to the UK market. The good news for them is we are offering that, as long as it is reciprocal and within WTO rules.

The good news is governments  need to promote and tolerate trade as well as unfortunately doing their best to harm it. Governments like to tax trade, with excise duties, VAT, other sales taxes and customs dues. This both harms it, but also gives them a rationale to want to promote more of it at the same time.  They like to regulate it for a variety of good and bad reasons. They rightly want to stop people selling dangerous items that could be misused and want to supervise the safety of everything from planes to drugs, but they also often want to control the style, performance and method of manufacture of things where variety might not be harmful.  The EU both poses as an advocate of more trade within its zone, and acts as an impediment to more trade outside the zone by imposing a barrage of controls and taxes on items coming in from non EU sources. The US objects to VAT on its sales into the EU, as well as to the higher tariffs like the ones on food products.

In the never ending UK Parliamentary debates on trade the advocates of us staying in or rejoining the EU customs union, or inventing a customs union with them similar to one we are leaving, never give up and never find any new and convincing arguments. Three times Parliament voted down staying in the customs union by a large majority. Last night Parliament voted it down yet again by a small  majority. As someone who likes Parliamentary democracy and thinks things should be settled here by lively debates and votes, I am also allowed to ask how many more times do we have to make the same decision? I want this Parliament to tackle issues like housing, economic growth, real wages and the other things that matter to voters, but its ability to do so is constrained by so many MPs wanting to go over the same old topic day after day.

I am an MP who wants business to succeed and wants to see more prosperity and more better paid jobs in the UK. So why don’t I want a customs union? Let me have one more go at replying to the tired old statements of the Remain campaign that we hear daily in Parliament on this subject.

1  Remain claims that industrial business operating Just in Time supply chains with imported components will not be able to work efficiently  from outside the Customs Union!

a) Many businesses today in the UK operate Just in time systems with components coming in from the USA, Japan, China and other sources that are outside the EU. Some JIT systems operate well with seaborn deliveries from outside the EU. They know how to get their products through the docks in London or Southampton just fine. The products have been many days at sea and the short time taken at the port is minor compared with total travel time.

b) Both EU and non EU components come in under a system of Authorised Economic Operators. They file electronic manifests of the consignment, and the calculation of any  VAT, customs dues ,excise and other taxes occurs as the goods transit. The lorry driver at the port does not have to wait whilst they work out the payments and pay them by cash or card in a queue of trucks. There has been a long standing system of TIR trucks, with sealed cargo sections that have permission to cross borders because the authorities know what is in them.

c) Both the EU and the UK are members of the WTO. Its Facilitation of Trade Agreement covers the main issues requiring member states to minimise friction at borders.

2. Remain claims that any non EU system of imports will be too expensive and administratively difficult, especially given rules of origin which require specified proportions of local content.

a) The current EU system also requires substantial electronic paperwork and complexity. The EU levies VAT which requires great detail about process and where value was added, with issues over transfer prices. It also needs to police rules of origin. Importing from outside the EU need not be more onerous, and once out of the UK we will design our own system which can be friendly to business.

b) The information the authorities need to police and tax is very similar to the information the company needs to supply to its customers and counter parties. If you are supplying a component for a complex machine like a plane or vehicle you need to send great detail about how and where the components was made, what the tests results were, and  what its price is. Modern manufacturers require individual component traceability in case something goes wrong . It means the information the authorities need is already known to the company  and in its computer, so a simple computer programme can extract and present the relevant information for transit papers.

I welcome the fact that the government is pressing on with taking the necessary legal powers to run our own customs and trade policies.  They tell us the bills will allow them to set tariffs, impose trade penalties and do what it takes to be a full voting member of the WTO. So far so good. I support that.

Buried in the detail of the legislation are some areas where I and others sought reassurance or amendment. The government has agreed to make improvements. The government should not  have the power to put us back into a customs union or similar arrangement without needing primary legislation. Parliament has agreed to leave the EU Customs Union – voting decisively three times on this matter  after extensive debate. Any wish to reverse this decision should also need substantial debate and a formal legislative process. I agree with Dominic Grieve’s line on the need for primary legislation in such circumstances, as he required us to do for the Article 50 letter and all aspects of leaving the EU in the Withdrawal Act.

We also want to see the UK outside the EU VAT system. On March 29 2019 VAT must become a UK tax which we can change as we see fit. The government agrees.

The government supports an amendment that rules out a customs or tax border between the island of Ireland and the UK. All parties to the negotiations tell us they do  not  want such a border, so we might as well make that clear in legislation. The amendment proposed makes clear Northern Ireland will  be part of the same customs and tax arrangements as the rest of the UK. I have always thought the Irish border issue was much exaggerated by the EU for their own purposes. It already is a Vat, Excise and currency border, but these matters are settled away from the border itself. The UK government does not  want to put in big barriers and seek to calculate customs or VAT at the border point, nor does it need to. What we have today can handle customs as well if that becomes necessary as it already does for non EU trade.

The government has also agreed to accept an amendment which says that the UK would not collect EU customs duties  for the EU unless the EU collected UK customs for the UK.

Yesterday’s debate was dominated by people who have never run complex supply chains who were unwilling to accept they work fine with  non EU as well as with EU parts. We needed to explain all over again how TIR, Authorised Economic Operators, the WTO Facilitation Agreement, electronic manifests and calculations and checking loads away from the border currently operate to speed goods across borders. The electronic paperwork is detailed and sometime complicated, but it is also needed by the customer and required for product audit purposes. If you supply a part into the supply chain for a complex and safety crucial product like a plane or truck, you do need to supply the customer with very detailed information about  where it came from, when and how it was made, and how it has been tested. Your computer can share the parts of this information that is needed with the Customs, Vat, Excise and other authorities electronically.