Author: johnredwood

Some contributors have not responded to my appeal. I have to reduce the amount of time I am spending on moderating this site, which is now considerably more time than it takes me to write my pieces for it. As a result, from today I will not be publishing comments which are

1. Long
2. Part of a series of multiple comments the same day from the same person
3. Require me to investigate a named third party site or other sources to check out allegations about named people of named institutions.

I value  all contributions from constituents, who are welcome to  make a longer comment or comments on relevant issues under a local issues story. They should include the first part of their post code as an identifier if they want to submit long or multiple postings.

The EU is always quick to point out that there will  be discussions about the details of our departure, and these are different from the discussions about our future relationship. Some in the Commission fondly imagine they can make a meal of the former. There is even talk of presenting the UK with a large leaving bill! A few people write into this site to ask if we have to pay it. Of course we don’t.

There is nothing in the Treaty to provide for the calculation and presentation of a leaving bill. There is plenty in the Treaty to say the remaining member states need to have good relations with neighbouring countries in Europe. Presenting a big bill would be a violation of that part of the Treaty.

The truth is the UK has a share in a wide range of assets built up by the EU over the years we have been a member, including our small shareholding in the vast  bond portfolio of the ECB, our share of the many expensive properties the EU institutions own and occupy  and our share of the cash and other financial assets held by the EU. I doubt the EU will be totting them all up and wanting to send us our share. Our rights to those assets will be unenforceable once we leave.

Similarly, the EU has borrowed a lot of money whilst we have been members, to spend on itself and other countries in the Union. There is no enforceable claim on us for any part of that debt after we have gone. If they send us a bill we will tell them we will not be paying it. If I resign from a club which has borrowed money and has a  valuable club house, I immediately lose my stake in the property and end any responsibility for the debts.  If just after I left the club they sell the clubhouse and distribute some  cash to members I don’t get a share as a past member. The assets and the liabilities are assumed by the remaining members. When a new nation joins the EU it signs up to share in the present and future assets an liabilities for the duration of its membership.

Some in the EU seem to think we should be liable for the pensions of Euro officials who happen to live in the UK and are UK nationals. It is difficult to see the logic behind this. They acted as EU officials, as EU citizens, and swore an oath to the EU. No-one asked the UK to underwrite their pensions at the time they were accruing them. Surely the EU has to accept it incurred the debts and it needs to meet them. It is a pity it didn’t invest the money from the pension contributions at the time, because then there would be no future problem.

The UK will have to pay the pensions of all those UK civil servants who have been effectively working for the EU for many years putting in place all their regulations and directives in the UK. The UK promised to pay their pensions and we will keep that promise. I was pleased to see senior German politicians  now talking about how they will need a trade deal with us to keep their exports flowing. This is an early sign of some realism returning to the continental debate.

President Trump could make a big difference to US foreign policy. He is likely to confine interventions in the Middle East to assisting the defeat of ISIS, often where requested by the incumbent government of the country concerned. He is unlikely to pursue the policy of his predecessor of seeking to confront both sides in the Syrian conflict, struggling to find a third force that he can credibly support with some chance of winning. This also means he will reduce some of the tension with Russia, which could flare under the previous policy given the proximity of Russian and US jets to each other over Syria and the disagreements over how to handle some of the present incumbent governments.

There will be three big changes of foreign policy. The first will be a more assertive attitude towards China, particularly on trade matters. Mr Trump will be wanting some wins to show that he is tackling what he thinks is unfair competition from the world’s most successful goods exporter.

The second will be a more sceptical approach to the EU. No longer will the US actively encourage EU political integration, and no longer will the US see Mrs Merkel as the de facto leader of the an EU coming together to be a single cohesive unit. Mr Trump may well prove to be on the side of history in this, as Brexit is followed by political advances of parties hostile to the Euro or to more EU integration in various continental elections this year.

The third will be what he sets out to achieve in his first well advertised summit with Mr Putin. I doubt Mr Trump and his experienced and tough Cabinet members are a pushover who like all that Russia does and says. They do look as if they are willing to seek common ground on reducing nuclear warheads, and seeing how the world might combat ISIS whilst bringing the Middle East closer to peace.  From Russia’s point of view they have a US President who might be willing to take them seriously and strike some common ground around the world as a token of the US understanding of Russia’s role. From Mr Trump’s point of view it would be good to draw a line under the numerous not very successful wars the US has fought in recent years in the Middle East, and to gain more time to concentrate on the economy at home which is his prime concern.

My main worry about Mrs Clinton as a candidate  was her bellicose approach to the Middle East and Russia, wishing to do more of the same which has left the Middle East with too many civil and religious wars. Whilst the west did not cause the disputes or want to bring about civil wars that combusted from within, recent policy has made too little progress in trying to resolve the conflicts and rid the region of its extremists. Lets hope the new team has some better ideas.

Welcome to the new President. On his Inauguration day I want to send him best wishes for his period in office. I want to encourage him to concentrate on improving the economic lot of voters in the USA. Tax reductions and tax reform can be a crucial element in his programme.

Mr Trump himself campaigned to cut income tax for the many, to reduce the number of income tax bands from 7 to 3, and to take more people out of income tax altogether. He argued for a corporation tax rate of just 15%, and an incentive rate to get offshore profits of US corporations repatriated to mainland and Main Street America.

To get any of this through he needs the active engagement of Congress. Paul Ryan, the Speaker, is also a tax cutter and reformer by instinct. He has made more radical proposals than Mr Trump’s. The two of them need to get together and sort out their differences, so something can get done.

Speaker Ryan wants to change company profits tax to a cashflow tax, where the destination of the goods or services matters. He wants to tax imports and exempt exports. He believes his proposals would pass muster with the WTO, though others disagree. Mr Trump is not persuaded by this element of the Ryan plan, maybe because he does worry about the international repercussions of such a direct intervention in favour of domestic as opposed to traded activity.

Some Republicans worry that Mr Trump’s reforms would lose the US too much revenue at a time of large deficits already. Others reckon the positive effects on growth and the onshoring of profits would mean the tax cuts were affordable. There is no doubt that a sensible tax package for companies can assist the President’s aim of making more in the USA. Cutting taxes on individual earnings can boost incomes, increase consumption, and start to deal with the feeling of many that they have been left behind in recent years.

The Prime Minister’s Brexit speech was well crafted and delivered. Many Remain voters like the vision that the UK will have strong and positive relationships with the EU once we have left. They like the vision of the UK leading the cause of free trade worldwide, and offering continuing free trade to our former partners. The Commission may still want to find some way of harming the UK at the expense of the EU member states themselves, but the member states are likely on reflection to want to avoid tariffs on their exports and to resist new obstacles in the way of selling into the UK.

One of the most important features of the government position is it narrows the areas for disagreement. By saying we do not want to be in the single market we avoid that planned row over what level of budget contribution and what elements of free movement we need to retain to keep us in the single market. I never thought it would be possible to be in the single market and not  be in the EU, and agree with Mrs Merkel on that matter. The UK government has spared the EU that argument.

It means the discussions to leave will be on narrow issues of when the liabilities stop and when we lose the use of the assets. We can move rapidly on from the question of departure to discuss the more important questions of what future trading arrangements we will  enjoy and what collaborations and joint programmes we mutually wish to continue.

The EU is under a clear legal obligation from its own Treaty to be friendly and positive in its relations with neighbouring countries. I am sure many of the member states, if not the Commission, will want to obey the Treaty law, as we have always been told we have to do. It is more likely they will because it is commonsense to get on well with the neighbours. It is imperative to get on well with the customers, and the UK is a mighty big customer.

Mrs Merkel has been feted and courted as the de facto leader of the EU for the past decade. Mr Obama was a strong believer in the Euro and EU project, and looked to Mrs Merkel to provide its discipline and to be its voice. Mr Cameron decided Mrs Merkel was the main person he had to win over when he sought to renegotiate the UK’s relationship. She did not offer him much, which led to the decisive vote by the UK electorate to leave. It was another of her damaging misjudgements, to go alongside the mistake she made over migration into Germany.

Today Mrs Merkel’s power is visibly waning. The UK now has  a Brexit government. It sees Mrs Merkel as an obstacle when she blocks early resolution of the residency issues, or when she grandstands telling us we have to accept freedom of movement. In the USA President Trump has launched public criticisms of her immigration policy and has said he sees the EU as a “German vehicle”. He speaks up for European countries which want to restore their own identities.  Her voting base is also under attack from the anti Euro anti migrant AFD party.

The diminution of Mrs Merkel’s power is helpful to UK as it seeks to negotiate its future relationship with the EU on leaving. Mr Trump will be aware of the huge size of Germany’s balance of payments surplus, which matches part of the large deficits the USA and UK run up. He wishes to alter this, and is busily seeking to repatriate motor car capacity and investment to the USA given the large stake Germany has in the world car industry.

The German electors will have their say on whether she should continue as Chancellor this autumn. They will also be voting on how big a contribution will Germany provide to the new EU absent its UK paymaster. What is clear is that Mrs Merkel, or any replacement to her, can no longer count on the automatic support of the USA to keep Euro and EU together. Nor can they count on UK cash and support in the Council for lower budgets and better discipline.

In his Delphic interview in Germany the Chancellor implied that if the rest of the EU does make try to make life difficult for the UK the UK has plenty of options in response. He did not spell out the detail, but the UK could cut taxes more to make itself a more attractive destination for investment. It could match anything the USA decides to do to switch taxation in ways which promote investment and manufacturing at home and for exports, and penalise imports. Financial regulation could be altered to make the City the most flexible value for money major market, whilst ensuring proper standards and disclosures.

I do not think we need worry. If we have no deal with the EU and operate under the most favoured nation status at the WTO it will be fine. I still think faced with the reality of high tariffs on agricultural products and a 10% tariff on cars which will do them more damage than us they are unlikely to want this. We carry on a good and faster growing trade with the rest of the world than with the EU. That is largely conducted under most favoured nation status with modest tariffs under WTO rules.

The question for the Chancellor is rather, if there are tax changes and regulatory alterations which would boost UK jobs and incomes, shouldn’t we be contemplating those anyway, whether the rest of the EU tries to be  nice or nasty to us? There are voices in the City now saying we should aim for the “Financial Centre” model, where we organise a strong but business friendly framework to maximise the attractiveness of London to legal business. It is interesting to see even City UK, a past cheer leader for EU engagement, is no longer demanding we keep the passports. It reminds me that the City made passionate interventions to try to get us to join the Euro, saying the City would be damaged if we did not. They soon discovered the opposite was true. The City grew faster outside the Euro.

Ireland has fought long and hard to maintain a tax advantage over the rest of the EU. Luxembourg does well in investment management along with Dublin out of low taxes. The Chancellor needs to review tax rates with the intent to charge the rate that maximises revenue by attracting more business. This will usually be a lower rate than the one currently charged.

I am surprised how long it is taking some in the media and politics to grasp that the UK will leave the single market and customs union. It should not be news. Both the official Leave and Remain campaigns made this clear in the referendum. It was one of the few things they agreed about. Staying in the single market whilst leaving the EU is not offer. There is no legal structure that allows that.

Nor should the UK apply to join the European Economic Area, a body we belong to only by virtue of being an EU member. Again, the official Leave campaign made clear we did not want to apply to belong, and Remain explained it could be difficult and would come with budget contributions and freedom of movement attached.

I came to the conclusion a long time ago that we needed to leave the single market. I did so because I saw the single market close up. As a senior businessman working in a large industrial group I saw how it did not work for the UK or for innovative companies. As the UK’s single market Minister helping construct it I saw how anti innovation and enterprise the whole structure was designed to be.

In the 1980s I was chairman of a large international industrial group. We had successful businesses in the UK, USA, Australia, Malaysia, South Africa and various other Asian countries. The only European country where we had a business was Greece. We found it difficult to sell into the EEC’s single market. During the Conservative opposition years this century again I was involved international business. Again it was difficult to do business on the continent despite putting in effort to do so with local people working in the relevant languages. We flourished outside the EU as well as in the UK.

As single market Minister the whole scheme seemed to me to be wrongly constructed. It was a con. It was not about free trade or free access. It was all about piling more and more laws and rules onto business and citizens in the name of the single market. It ended up favouring large companies already dominant in a market, and the status quo. The danger was it could make exciting innovation illegal. The definition of a single market measure could range from employment and welfare policy through environmental policy to transport and taxation.

Yesterday during one of my sessions knocking on doors and listening to views, I was struck by the force and regularity of the view on a single issue – traffic congestion. I just ask people to tell me what is on their mind without prompting. In so many cases people said they thought the traffic jams in the  Wokingham area are too great. They recognised the need for additional housing and understood the new building going on, but were keen to say more has to be done to provide capacity for people to get to work, to take their children to school and to go to the shops.

I agree. I was able to report that  both the Council and the government agree, and are making more cash available for road improvement. In the Wokingham/Reading area we see major investment underway. On the A 327 to Reading there is the Shinfield by-pass (nearing completion), the new bridge over the M4 (completed), and the planned Arborfield by pass. On the A 329 work is in hand on the Winnersh by pass. In the town of Wokingham the new station link is open. There are plans for the new southern and northern distributor roads to the east of Wokingham, with a planned new bridge over the railway. There is also a proposal to widen the road under the railway bridge on the Finchampstead Road.

I have asked the Council to look again at smaller schemes and traffic management issues. There are criticisms of the phasing of lights at the Station approach from Wellington Road, with  red phases when the level crossing gates are already down, and at Winnersh crossroads. There are a number of places where traffic sensitive lights would be better, or where lights could be withdrawn from roundabouts or made part time. There are various junctions where segregation of left and right turning traffic, different phasing of lights, and more carriageway capacity at and near the junction would help. Bracknell has recently upgraded capacity at the Coral Reef junction of the B3430 with the A 322.