Author: johnredwood

I see some contributors here are out to belittle the amount of money we save when we leave the EU. Let me set out the official figures again:

OBR March 2018  p217 EU financial settlement

 

2019 figures (assuming we still pay full amount that year)

GNI based contribution   17.7bn Euro

VAT payments to EU         3.4bn Euro

Own resources (customs)   3.8bnEuro

TOTAL GROSS CONTRIBUTION   24.9bn Euro

UK rebate      4.7bn Euro

Public sector receipts  (money back)  6.3bn Euro

NET CONTRIBUTION   (Gross payments minus rebate and cash back) 13.9bn E   (£12bn)

We could save all this if we leave with no  deal or an improved deal. If we leave with Withdrawal commitments we will save all this once the transition and leaving payment is over.

 

 

The Bank of England has taken a lot of action to tighten money and credit since early last year. As this gets little attention I thought it might be helpful to remind people what it has done:

 

1. Increased rates from 0.25% to 0.5%
2. Cancelled the Term Funding Scheme which allowed banks to borrow at low rates to lend on to the UK economy  (£127bn used by end of scheme in April 2018)
3. Increased Counter Cyclical Capital Buffer banks have to hold to 1% from November 2018 to reduce bank lending for any given amount of bank capital
4. Toughened “prudent affordability limits” on home loans
5. Imposed new tight limits of mortgages above 4.5 times income
6. Warned against credit card zero interest rate promotions
7. Required tougher standards for car loans related to future value of vehicle
8. Warned that Central London office properties were expensive
9. Set out to “tighten consumer credit conditions”

Given this, as predicted here, it is not surprising the UK economy has slowed. Similar action is not being taken in the USA or the Eurozone. The Eurozone continues with zero interest rates and still more Quantitative easing. The USA is deregulating banks to allow more credit, and undertaking a major fiscal stimulus  though it is raising rates.

There has been a long running argument within government over health spending and how to pay for future increases. That is why I wrote about efficiency and quality last week, and set out the case against a hypothecated health tax sometime ago on this site.

I am pleased to report that the idea for a hypothecated new Health Tax seems to have been dropped. I explained how such a tax  would not  be enough on its own, how there would still be plenty of arguments about how much extra money the NHS needed as well as the hypothecated tax, and how you cannot throttle back health care simply because one particular tax has fallen short.

I am also pleased to report that those of us who argued a substantial part of the Brexit dividend should be used to meet increased future health costs have also been  persuasive. There will be an extra £12bn a year available for spending and tax cuts once we have terminated our payments., I am in favour of doing this immediately  after March 29 next year, unless the EU suddenly comes up with a good deal which is worth letting them have a bit more of our money after we have left.

There is still work to  be done on whether there is any need for extra borrowing. That will depend on how fast the economy grows and how quickly the revenue increases. Lowering tax rates would help raise more revenue in several cases, which would be a welcome boost to the economy with beneficial consequences for future spending. When the US is going for a top Income Tax rate of 37% and  Italy for a top rate of 20% the UK needs to stay competitive to ensure enough well paid and successful business people stay here and pay their taxes here to help our public services. The UK economy needs a fiscal boost to offset the monetary tightening administered by the authorities since March 2017.

It is also important to grant increased spending for the NHS on the basis of something for something for something. Just granting a blanket increase could result in wasteful spending, as we saw in the big increases in the middle Labour years before they had to slash public spending generally after the crash.

Sone of you have written in suggesting I post less on this site in order to have more time to moderate. Some of you have written in with your own views on what this site is or should be . Maybe it would help you if I told you what I think this site is.

This site is not a conventional MP website. Such sites are paid for by the taxpayer and present the MPs work in a favourable light. They are not allowed to be party political. This site is paid for by me and ranges beyond my work as an MP, though it does cover the ways I am seeking to influence the national debate in the interests of my constituents, and has local pages for constituents.

This site is not a Conservative party site. It does not reproduce the party line as this is readily available on official party sites. If I disagree with the party line or am trying to amend it  I will say so here. The pieces are  often about things where there is no party lines, or are about controversies raging prior to the formation of a party or government line. It is of course a site written by someone who does support the Conservative party and takes the whip.

This is not a Brexit website, though all the time press and Parliament are preoccupied by the Brexit process this site will provide commentary on that.

This is not a business website. It refuses adverts or sponsorship and does not promote any individual company interest.

The idea of the site is to provide insight, commentary and a contribution to the national debate, laced with pieces about topics I am interested in that may be of interest to others. I have, for example, run pieces about historical events and anniversaries,about cultural events,  pieces about continental politics , and insights into the global economy.

I am still happy to post the views of others who want to extend the debate or add their own facts and perceptions. I will, however, simply delete pieces which may offend others, are potentially libellous or repetitiously unpleasant. Two people who try to contribute have all their pieces binned as their descriptors could give offence.  I am going to bin more submissions from the one or two who disagree with anything I write and seek to undermine any positive idea or action. I also do sometimes bin long and potentially worthwhile submissions  if they come from someone who has already published more than I have written that day on my site and has laced the comment with references that need checking.If the workload gets too high on busy days I will post fewer incoming messages but will not stop my own postings as I need to keep people informed.

I do not knowingly post false allegations about anyone, including about myself.  Those who have tried to post false allegations about me will be able to find the true position in what I have written here.

The recent refusal of the new Italian government to accept a boat carrying many migrants has thrown into sharp contrast varying attitudes on the continent to this vexed issue. Mrs Merkel who used to speak for Germany and the EU still thinks the EU should welcome in all who want to come. The newly constrained Mrs Merkel trying to keep together a coalition of opposites on this as so much else after her bad defeat in the election is having to compromise and toughen her position. Her one time allies, the CSU, are in open disagreement from inside government.

The Italian government and the German AFD Opposition, along with the CSU, challenge the idea behind the EU humanitarian policy of picking up anyone from the Med who is seeking to come to the EU and delivering them safely to Italy or Greece. Doesnt this, they ask, just encourage more nasty get rich quick people smugglers to take their money and embark migrants on unsafe boats in the knowledge they will soon be picked up by EU naval vessels? Why are economic migrants brought to the EU if they do not have permits rather than be returned to the last safe country they left? On the other side Mrs Merkel points out that the EU is a group of decent nations who come to the humanitarian aid of those in peril on the sea, however this has come about. Indeed at the peak of the recent migration Mrs Merkel went further and saw the migrants as a plus for a strong German economy in need of extra labour.

The large number of migrants places demands on housing, infrastructure and public services. Electors in Eastern Europe, Germany, Italy and elsewhere are voting in larger numbers for restrictions on migrant numbers. The EU has allowed countries to build big walls and border fences to arrest the flows, and has helped finance a very long Turkish border defence now there is free movement between Turkey and the EU. Mr Salvini in Italy and the CSU in Germany are now in a position to demand change. Meanwhile the UK can get on with designing a new border system which is generous to asylum seekers, helpful to business needing skilled people, but capable of delivering the controlled migration Mrs May has always promised us.