Author: johnredwood

Mr Draghi’s recent speech about growth contained some important statements. He expressed concerns about the big increase in elderly people and the strain that will place on state budgets. He said that state debt and meeting state liabilities would become increasingly fraught if the productivity and output growth rates did not speed up. Whilst what he said seemed to mainly describe the economies of Spain, Italy, Greece and some other Eurozone countries, he sought to argue that all the richer OECD economies face these same issues. Indeed, he was a pessimist, expecting the OECD growth rate of 2% per annum pre crisis to slump now to 1% a year only.

So what was his remedy? Surprisingly his main recommendation was to intensify global competition in order to spread innovation and higher productivity more widely more quickly. He pointed to using international bodies to offer a common regulatory framework to make more international trade feasible in his terms. He gave as examples the Basel Committees and the FSB as global bodies for regulating the finance sector.

He had a notable omission from his speech. If he is keen to keep trade flowing with minimal tariffs and other barriers he should be urging his fellow officials in the EU and Eurozone to welcome the UK’s offer of tariff free trade with no new barriers. I wonder what held him back from making this obvious statement? Did he forget the clause in the EU Treaties which requires the EU to develop friendly and positive relations with neighbouring states, including free trade?

Today we learn that Mrs Merkel is responding positively to Mr Macron’s overtures for a more integrated EU government with more power and larger budget. It will be interesting to see just how much extra money in practice Germany wants to put behind these centralising initiatives.

I find it extraordinary that people still write in here criticising me for not recommending withdrawal from the EU during the last century. As I have explained, as a democrat I accepted the verdict of the 1975 referendum to belong to a common market. That meant I did not keep on campaigning for a cause which was lost. I did keep criticising the EEC/EUU for moving further and further away from the common market people thought they had voted for. I did with others seek to create an opposition to the EU’s more dangerous and undesirable policies. In the 1980s that meant trying unsuccessfully to stop UK membership of the Exchange Rate Mechanism, and in the 1990s successfully campaigning and writing books to stop the UK joining the Euro. In the first decade of this century I worked as part of the official opposition to oppose the treaties of Nice, Amsterdam and Lisbon which took the EU far beyond the common market of the 1975 referendum.

It was while helping the Conservatives form a Eurosceptic policy and argue the case against the new Treaties in Parliament that I and some others decided we had to help get the UK out of the EU. It was obvious it was going swiftly in a direction that had not been approved by the 1975 referendum and was likely to prove unpopular with the voters. Our task was made more difficult by the Labour government and establishment presentation of all the centralising changes as having no more significance than an edition of the Beano. Anyone who stood against these moves had to be personally vilified and marginalised in case their reasoned objections gained wider support.

The arrival of UKIP on the scene made things more difficult. I had many arguments with contributors to this site, and with correspondents around the country who wanted me to join UKIP. I refused to for two good reasons. The first was I do not agree with all their policies. The second, more important, was that I saw them making the task of getting us out of the EU more difficult, not easier. I explained that there was an easier route than expecting the public to elect a UKIP government. I always thought it unlikely the public would elect a single UKIP MP let along the 330 it would need to do the job of leaving the EU. As it turned out the public did once vote for one UKIP MP in a General election, one more than I expected. He was a former Conservative MP with his own following who promptly fell out with the UKIP leadership who did not like his views on a number of topics.

I pointed out those of us who wanted to leave had to do 3 difficult things. First, we had to help secure the election of a Conservative government. Second, we had to persuade that government to hold a referendum. Third, we had to win that referendum. As things worked out we were able to use the partial Conservative victory in 2010 to good effect. During the 2010 Parliament we built support amongst Conservative MPs for a referendum. When we demonstrated rebel voting strength at more than 100 with convincing prospects of commanding a majority in the Parliamentary party for a referendum Mr Cameron decided to make it official policy to hold one. He saw the strength of our case and realised that we could get the voting strength to replace him as leader if he was deaf to the cause. It was entirely the position inside the Conservative party that we were arguing about to secure the referendum. We did not sit around discussing how to deal with UKIP, as many of us agreed with their main aim of quitting the EU.

United the Conservatives went into the 2015 election offering the important popular vote on the EU. The rest is better understood history.

We hear that Mr Barnier wants the UK to set out its calculation of the exit bill. That’s easy. The bill is zero. Nothing. Zilch.

I read that Mr Barnier thinks we owe them £66bn. So he needs to present his draft bill, and the UK can explain why it’s a load of nonsense. There is no Treaty article requiring a departing member state to pay extra for the period after it has left. The UK did not receive a present or rebate on joining to take account of the liabilities existing members had entered into before we were sitting round the table, so why would there be one in reverse when we leave? The EU has had plenty of notice of our departure so they can adjust their 2020 budgets accordingly.

Many of us who just want to leave thought about recommending that the UK simply legislate in the UK Parliament to leave and go. That would be well within our constitutional rights and in accordance with our wish to take back control. We agreed to make a big gesture to the EU to go along with the Treaty over the matter of leaving, knowing that left us exposed to having to pay additional regular contributions to the EU up until the date of departure. The EU wants more. We have already been very generous. Doubtless the EU will want to spin the talks out for the maximum permitted two years to pocket more of our money.

I read that Labour now wants to undermine the UK’s position by arguing to pay the EU more money for longer. It’s always good to see the Opposition sign up to very unpopular policies. Parliament will not I trust vote for that act of self abuse, when we need the money to spend on domestic priorities.

This Parliament recently decided that the UK will leave the Customs Union and the single market when we leave the EU. That was approved by 322 to 101. The official Labour party could have voted against but chose not to. If they had voted against the motion would still have carried, but Parliament would have sent a more divided opinion to the EU. This clear vote followed the decisive vote of the previous Parliament to send the letter notifying them of our departure, which left the EU in no doubt of our intentions.

Does this latest statement that they now want to stay in the single market and customs union for a longer time truly represent the Leadership’s views? What do all those Remain voting Labour supporters make of this latest apparent flip flop? Presumably the aim was to try to weaken the government’s position just one day ahead of important talks with the EU, as a warm up to Mr Blair’s audience later in the week with the EU Commission on the same issue when he will doubtless want to argue for some kind of continued or watered down membership of the EU for a country which has democratically voted to leave.

The Opposition is making themselves an irrelevance on this important issue by flip flopping around following their sensible statements to back our leaving the EU after the referendum decision. Their weak and feeble changes will not in practice undermine the government’s resolve but is not designed to be helpful to the country they are meant to serve.

One of the extraordinary things about the main Opposition parties in the Commons and much of the UK establishment is their failure to engage in working out all the good things we will be able to do as soon as we can make our own laws, set our own taxes and spend our own money.

One of the areas I identified and pursued before the referendum was the question of tax cuts that are illegal under EU law. There seemed to be near universal support for the abolition of VAT on sanitary products, so I trust that repeal will go through the Commons easily as soon as we are free. There was no opposition to the idea that we should abolish VAT on green products. Currently we have to charge VAT on controls for boilers and heating systems, on draught excluders, insulators and much else that can cut fuel bills. I hope a Conservative Chancellor will propose an early removal of these charges which impede reducing needless fuel use and keep more people on low incomes struggling to pay the fuel bills. I am disappointed that the Green party does not make a bigger noise against these taxes on fuel saving.

A more expensive item is VAT on domestic heating fuel itself. We are not allowed to remove this all the time we remain in the EU. Given the political sensitivity about fuel bills and the general view in the country that they are too high, removing this tax charge would make a welcome inroad into this difficulty.

Then there is the question of spending levels. Both sides agreed there would be substantial savings of contributions when we left, though there was a long and largely pointless debate over whether you should look mainly at the gross or the net figure. I would like us to leave and cease all payments by the end of March 2019, and would like to see some of the savings announced as extra spending on health and social care in the March 2018 budget ahead of departure.

We can reform our fishing policy to reclaim and improve our fishing grounds. We can design a farming policy that promotes more home grown food. There are so many opportunities. It is high time we had a proper debate about the upside to becoming a self governing country.

One of the first votes I cast was a vote in the EEC referendum in 1975, when we were asked whether the UK should stay in or leave the EEC. My employer asked me to research the consequences of a Yes and a No vote. I constructed an economic forecast based on the two scenarios, read the Treaty of Rome, and started my lifetime study of the EEC/EU and all its doings.

As a result of this research I concluded that the UK should leave the EEC for two main reasons. The first was the content of the Treaty. It made it clear this was no mere common market. It stated the aim was “ever closer union” and sketched an ambitious project which duly unfolded in later years of creating a state called Europe. I realised that the main political parties were all arguing that this was just a free trade relationship, a common market, when it was something very different. They sought to reassure us that no powers of self government were being taken away, when that was the express aim of the wider project.

The second reason I decided against was the economic impact. My forecasts showed that we would run twin large deficits inside the EEC. We would run permanent large trade deficits – as indeed we did. They decided to liberalise the trade in goods where the continent was strong, and to resist proper liberalisation of trade in business and financial services where we were stronger. This asymmetry led to big import penetration of our markets, and loss of Uk industrial capacity. VW and BMW flourished whilst BL floundered. It was also likely to increase our state deficits, as the EEC required substantial and rising financial contributions from us. I did not forecast any introduction of a budget rebate as I did not foresee such a successful negotiation by a later UK government. Even after the Thatcher rebate the large contributions added to our budget deficits.

After the loss of the referendum I accepted the verdict of the people, and spent the next 25 years trying to ensure the EEC/EU was primarily a common market. By the 1990s this was demonstrably impossible, and I turned into an opponent of the centralising Treaties that followed, and started then campaigning for a way out via another referendum. Attending 21 Council of Ministers meetings, mainly as so called Single market Minister, confirmed my view that this was not primarily a common market. I disliked the absence of democratic challenge and accountability to what we were doing, and the use made of the so called common market to further a massive legislative programme that by passed national democracy.