Author: johnredwood

Others have reminded us that Jeremy Corbyn is an admirer of the late Hugo Chavez, the author of Venezuela’s current economic and social misfortunes. Mr Corbyn praised his socialism and singled out for favourable comment the way Mr Chavez shared wealth and changed Venezuela’s society. He has been quieter about all this over the last couple of years, as Venezuela has slipped into deep recession, hyperinflation, and social disorder. There are no official economic numbers because they are too embarassing, but the IMF and others think GDP fell by more than 10% last year and continues to fall. Imports halved and supermarket shelves are often empty.

Mr Chavez nationalised a large number of businesses, including the all important oil industry. Venezuela used to be a relatively well off economy, based on huge oil reserves exploited by commercial companies and taxed by the state. As nationalisation tightened its grip on Venezuela’s oil they fell behind in paying contractors, in getting work done to expand and replace, and in pumping enough oil for Venezuela’s financial needs. This week they are in the news because a government which has run out of foreign exchange has had to sell deeply discounted bonds to Goldman Sachs to raise some dollars, bonds issued by the nationalised oil company backed by the very oil revenues that are needed for the future bills of the Venezuelan state. There are regular reports of massive food shortages with people going hungry. Now we are told of state violence on the streets against the opposition who seek a change of President and policy.

Mr Chavez gave large sums to the poor by borrowing and by taxing others more heavily. Today this generosity has been badly eroded by rapid inflation, and made worse by the physical scarcity of basic goods to carry on a normal life. Is this really the better way, the socialist dream, that Mr Corbyn recommends? Surely it should be a warning to us all. Nationalising might end up with bad malfunction, as with Venezuela’s crucial oil industry. Too much generosity with printed money may just destroy the many through hyperinflation. If people go hungry and are unable to change their government by normal democratic means you do not get an egalitarian paradise, but an authoritarian government trying to stop a civil war born of desperation.

Perhaps Mr Corbyn would like to revisit his enthusiasm for Mr Maduro, the heir to Mr Chavez, and tell us what he has now learned about socialist policies. They were as well intentioned as his, but they have miscarried mightily. Venezuela shows you cannot make the poor rich by making the rich poor. You end up making the whole society poorer, whilst the very rich and the large companies simply leave or stop investing.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Those simple eight words mean the UK has a good negotiating position when it comes to sorting out our future relationship with the EU. Without them the UK would be in a very weak position.

There are those in the EU who talk darkly of a punishment deal, seeking to make the UK pay for daring to leave. There are those who want to send us a large bill with no legal backing to it and expect the UK to pay. There are those who think it a clever idea to volunteer continental farm products up for high WTO tariffs in order to make a political point. That is why the UK has to make it clear we will not accept any such deal.

None of this means the UK negotiators should walk out in a huff at the first available opportunity if the EU’s demands are silly. There is still a good prospect of reaching sensible conclusions. The UK intends to take back control of our borders, money and laws. It is happy to have extensive agreements on free trade, security sharing, academic collaborations, transport rights and the rest. We are leaving the EU’s legal structures, single currency and budget, not leaving Europe. It will require a combination of friendly patience, stressing the advantages of many collaborations, and unbending clarity that we are taking back control of our laws, our money and our borders.

It is clear that many on the continent do wish to keep tariff free access to our lucrative market. It is obvious they like sharing security and Intelligence with us. The only way to get a good outcome for both sides is for the UK government to repeat that it makes no sense for us to take a bad deal. Nor would that in practice help them. It’s a pity the other main parties contesting the General Election do not recognise this simple truth. If they understood negotiating they would also say with Mrs May , “No deal is better than a bad deal.”

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

Time was when your late or cancelled train, your high energy bill, your rationed water or your delayed phone line was the direct result of nationalised industries. Privatisation especially when it involved competition offered more choice, better quality and lower prices. After privatisation electricity and gas prices fell in the early years of the policy. Water was available all summer without hosepipe bans. The long post war decline in rail travel ended and passenger numbers and journeys started to increase. Competition in phones meant instead access to telephony for those who wanted it, rather than a long delay for the state company to put a line in or requiring you to have a line shared with the neighbours.

Today when things go wrong or prices go up in several of these areas it is the result of actions by privatised companies as the public see it. This is not always true. The bulk of rail assets are nationalised, with public ownership of all track, signals and stations. So often if there is a delay or cancellation it is owing to signal failures, overhead track power systems, or physical problems with track and points. It is true Southern Rail has let commuters down and that is a private company. The granting of near monopoly rights for train services is not ideal, but the franchise can be taken back, or the operator may lose it for poor performance when it comes up for rebidding.Energy prices may also be the result of EU renewables and energy policy, not the result of a company trying to up its margins.

Today people have issues with some large private sector companies. The popular enthusiasm for new social media, new mobile phones and modern computing is obvious from the fast growth rates of these businesses. There is also some disquiet about the power and governance of some large corporations. Large banks have been hauled before courts and Regulators for misdeeds. Various companies have been accused of paying too little tax in various countries. Some companies have not been sufficiently customer friendly, have been too keen to push up prices or keep out competitors.

The new challenge is to provide a legal and regulatory framework for more enterprise, more choice and more competition. There is also the problem of some international and EU governmental interventions in policy which make energy dearer or prevent banks lending, or impede new transport investment. Going back to nationalisation which added monopoly to a lack of innovation is not the answer. Today we need more enterprise for all, to take advantage of the fast moving technologies for growth and improvement.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1 XU

I was asked to explain why I do not favour nationalising the railways, the Post Office, the water industry and the energy utilities yesterday on the radio.It was a trip down Memory Lane to the arguments of the last century, when Labour made the case for continued or more nationalisation despite all the evidence of the damage their policies did.

Nationalisation was the best way to lose more employees their jobs, to charge customers more, and to sting the taxpayer to pay the losses. The coal industry lost most of its workers when nationalised. The workforce of 704,000 of the newly nationalised industry in the late 1940s had fallen to as few as 235,000 by the time of the election of the Margaret Thatcher government. Despite all the closures of mines and sackings, the losses mounted to be paid by taxpayers.

The railways under public ownership experienced continuous decline. In 1950 they employed 606,000 staff and had 19,471 miles of operating track. By 1976 then under a Labour government staff numbers had more than halved to 244,000 and route miles had fallen to 11,189. The market share of the railways halved, and the number of stations fell by two thirds. The nationalised steel industry too, under Labour and Conservative governments, spent most of its time discussing how to curb the losses by cutting back on capacity and jobs.

Labour say they wish to renationalise the railways. The truth is the main cost and the main assets of the railway are already nationalised. The tracks, signals and stations are owned by Network Rail, itself wholly owned by taxpayers and financed by the Treasury. Many of the delays which affect rail services are the result of signalling failures or other Network Rail caused events. It is Network Rail’s job to expand capacity by improving signalling so more trains per hour can run on the railway.

I was asked why we did not buy shares in water companies whilst keeping in place current private sector management so we participate in the profits. I replied that we have other more important priorities for public sending. In the past government ownership of industries has not brought dividends and profits overall, but losses and the need for more subsidised capital.

The main way to improve service quality and bring down prices of utilities is to increase competition. That is what we need to do in some cases, as there is clearly room for improvement. What we do not want to do is to go back to a world where customers, employees and taxpayers all get a bad deal, which was the typical experience of our nationalised industries.

Labour’s big nationalisation programme has not been costed and is unaffordable. From past experience it would lead to worse service and huge bills for taxpayers.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU

There has been a squeeze on real incomes in most of the advanced world this year. Inflation has risen to higher levels in The USA and Spain than in the Uk and almost the same as the UK in Germany. The two main causes have been the higher oil price affecting motor fuels and domestic energy, and rises in Chinese export prices as the Chinese reflect higher commodity prices and increasing Chinese wages. Wages in the west have struggled to keep pace with prices, so real incomes have been squeezed. The good news is it looks as if we have seen the worst of the commodity price rises. Many forecasters expect real wages to be rising again in these western economies including the Uk next year.

The big collapse in incomes during the credit crash of 2008-9 followed by a slow recovery has left many people feeling squeezed. The government in the UK needs to do more to accelerate real wage and spending power growth. Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12500, benefitting all Income tax payers. It also promises to raise the 40% tax threshold to £50,000 as £40,000 is too low an income to have to face such a high rate. Lower taxes on Income will help boost family spending power. They will also stimulate the economy to generate more jobs and incomes.

The government has also promised to do more to promote apprenticeships, technical training and higher educational standards. The main way to a better paid workforce is to have a more productive better equipped workforce with the skills and training that command higher wages. I want to help build such a world. The alternative government on offer would tax success and hard work, drive people abroad by triggering a brain drain, and put taxes up to try to meet some of the huge public sector bills they wish to incur.They might start by only taxing the rich more, but once they had taxed them into doing less or leaving, they would have to tax everyone else more.

Prosperity, not austerity is what we need. The deficit has been brought to down to sensible levels. Some tax cuts and reasonable spending increases for health and education will help boost the growth rate and bring in more revenue.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1XU

One of the central themes of the Conservative Manifesto is to promote growth and prosperity more widely around the UK. This is an aim I strongly support. This week the ONS brought out some figures to remind us just how much needs to be done to generate more income and wealth in large parts of our country. The ONS calculated tax revenue per head by region, and public expenditure per head by region.

The figures revealed that the UK’s single currency area is also an important transfer union, switching large sums collected in taxation from the richer areas to the lower income areas through higher levels of spending. London topped the lists for tax revenue per person, contributing £15,756 per head. The South East provided £12 449, and the East of England £10,833. At the other end of the revenue table was Wales at £7986 per person, the North East at £8200 and Northern Ireland at £8581.

On the expenditure side The South East was bottom at £10582 per head, with the East of England a close second at £10592. The highest spending per head was in Northern Ireland at £14018, and second Scotland at £13054. London at £12 686 was relatively high, but London still contributed the largest amount net to the rest of the country owing to its very high levels of tax contribution. Only three regions put in more revenue than they took out in spending, London, the South East and the East of England.

The Scottish figures in the past when they have been calculated have been the subject of some controversy, as you could either allocate most of the oil revenue to Scotland, or allocate it according to population on the grounds that it is a national resource for the UK. Last year, the year for these figures, it makes no difference how you do it as there was no North Sea revenue.

I draw several conclusions from this. The first is you do need large transfers of money in a currency union to make it work. The absence of these transfers in the Euro area lies behind the rolling Euro crisis we have seen in recent years as the zone struggles to find ways to send the surplus from the rich areas to the rest of the Union.

The second is the gap between London and the rest is high. We need to help bring the others up by adopting policies that promote more enterprise and new business in the lower income areas.

The third is transfers help balance things up, but they do not in themselves correct the longer term imbalances which stem from too little successful private sector business in the lower income areas. It is that issue which education, training, transport, planning and other policies need to address to encourage more businesses to expand their provision in the areas away from London.

Successful modern cities are particularly good at attracting or producing well educated and highly trained people, and linking them up with entrepreneurs. Cities like Oxford and Cambridge are showing the way outside London. This raises the average income which creates demand and jobs across the spectrum of economic activity.
Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1 XU

I have spoken to various Remain voters so far during this election. Many say to me they accept the result of the vote and just want the government to get on and do the best deal they can. Some tell me they voted Remain because they did worry about the possible economic consequences, and they are now relieved to see the bad predictions of recession this winter and collapse of confidence did not come true.

A few have told me they still cannot accept the decision and still fear there will be bad economic results in due course. They seem to think when we leave there will be all sorts of new barriers and restrictions imposed which will get in the way of normal travel, trade and collaboration across the Channel. They have perhaps been Lib Dem voters in the past and are often particularly concerned about academic and student links, research and cultural exchanges.

Let me try to reassure. The UK government has made very clear it wants a UK open to talent and university collaboration. The UK is not planning closed borders, making it more difficult for people to come here to courses in UK universities. We will still welcome tourists,visitor performers, people with good qualifications, entrepreneurs wanting to invest. The government will be generous with visas for talented and qualified people wanting to come to the UK to be faculty members, just as we are today with academics coming from the USA and other non EU countries. It will also want to see a continuation of the many musical, artistic and cultural links and exchanges that take place with EU and non EU countries today.

Nor do I expect the rest of the EU to want to stop EU citizens travelling to the UK or undertaking university work here. Under international law the EU would not be able to block people and ideas to and from the UK, nor can I imagine they would want to. There are no restrictions the EU could place just on the UK – they would have to be common restrictions against the rest of the world. I do not think the EU wants to cut itself off.

The UK has several world class leading universities and many other good ones. Their interests will be upheld by the government. More importantly, as the UK and the EU both pride themselves on a belief in freedom and on a pluralistic society, universities,individual students and academics will remain free to travel, study, work and collaborate in each other’s countries as they see fit. I want to live in a free society. Such a society does not stop free institutions doing as they wish, and allows them under the law to pursue their aims and development. Some people think government is more important and more powerful than it is, and have a very dim view of how the EU will seek to behave.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU