Author: johnredwood

I trust the Treasury and Bank are revisiting their forecasts for 2017 as we speak.

Yesterday the UK’s largest housebuilder, Persimmon, announced another good set of figures. New home sales were up 19% year on year. They have pre sold their homes for 2016, and are ahead of last yea’s performance in sales for the following year. House prices have stayed up, despite Bank and Treasury forecasts to the contrary. Even better news came with Persimmon telling us they are putting in a new brick factory in Doncaster, and aim to be making bricks there next summer. That is exactly the kind of import saving investment we need, to cater for rising domestic demand. Persimmon also pre fabricate parts of their homes from a Midlands factory to speed site construction and improve precision.

A new potash mine investment is going ahead in Yorkshire with a £2.5bn investment. Output of automotive engines was up 6.7% so far this year at end September. Car manufacturing output is up 10.5% over the last year.

Various retailers have confirmed that sales of luxury brands to visitors to the UK have risen sharply following the decline in sterling. Burberrys, for example, said UK retail sales were up 30% when worldwide sales were pretty flat. Meanwhile retail prices fell again last month in sterling terms, despite the fall in the pound. Overall retail sales have been strong since June 23rd and real incomes have continued to rise.

The Bank’s pessimism centres on fears that major companies will postpone or even cancel investment projects. It is difficult to see why, when money, credit and demand are all growing so well. The Nissan news reflects the need for highly productive investors in the UK to reinforce their success for what is an important growing domestic market. UK manufacturing has just become 15% more competitive, underwriting the success of Uk factories for foreign investors. I want to see the government promote UK purchasing. The government itself is a mighty buyer of products. Once free of the EU controls, you would expect exciting new approaches.

Money and credit are growing faster than before the vote. This implies continuing good growth next year. The average forecaster has now revised up their 2016 forecast to the levels last seen before the vote. isn’t it time they did the same for 2017?

The OBR/Treasury forecast matters because it will inform the Autumn Statement. If they persist with a downbeat and inaccurate estimate for next year they will claim tax revenues are lower than the March forecast and spending higher. It is important markets look through this and understand that in practice things are likely to turn out as forecast in March, with a lower deficit as a result.

I agree that people should not end up working for one employer for less than the living wage, under duress to say they are self employed. Uber made clear this is not what they do. I am also in favour of people being able to suit themselves when they work by opting for self employment, and having other jobs at the same time if they wish and if they can manage them. Many of the drivers like the flexibility they gain from their work, and they do other things as well.

I mainly get around central London by walking or by tube. Sometimes I am given a lift in a hired vehicle if I am going to a studio to provide a tv or radio interview. More of the production companies now offer their guests who take no fees a drive there and back, and may use a hired car. When this happens I often ask the driver to tell me what he thinks of the remuneration system and how it affects his life.

The drivers I have talked to so far are either very positive about the system, or neutral. I have not yet been driven by a strong critic of the scheme. One driver told me he had come to the UK as a migrant. He earned good money because he drove long hours. He had recently managed in his spare time to qualify as a technical computer specialist of some sort. He was now setting up his own computer service company and would flex his driving hours down as his business developed. I asked him why he had not left driving to work for a computer company with his new qualification. He said because that would be a pay cut, and because he wanted the flexibility to set up his own business whilst still having sufficient income.

Another older driver had a different approach. Instead of working long hours to make good money, he set himself a target each day of how much money he wanted to earn. On a good day he got home early, offering and needing less than a day’s work. On a bad day it took all day to hit target. I was with him on a bad day, largely because there was unusually high congestion stopping drivers completing enough jobs.

This issue needs some commonsense to resolve it. Of course no-one should be made to be self employed yet work for just one firm and end up below the living wage. But shouldn’t people who want to be self employed, want to do more than one thing, and want to be flexible about how many hours they work and how much they earn also have the right to do just that?

Before and after the referendum I have heard Remain people say we would have to apply to rejoin the WTO, as it is the EU that is currently the member. I always said this was untrue. The UK is a founder member of the organisation. We are still members, but whilst also being members of the EU we have to allow the EU to have our voice and our vote. We suspend our own.

Last week there was a welcome confirmation from the Head of the WTO that Leave were correct. He said “The UK is a member of the WTO today, it will be a member tomorrow. There will be no discontinuity in its membership…” (when we leave the EU). “Trade will not stop. It will continue and members negotiate the legal basis under which that trade is going to happen”.

I also consulted a WTO legal expert. He confirmed that whilst the EU exercises the votes and voice for all EU states, the individual member states are not just members in their own right as well, but each member state pays its own membership subscription. This shows just how wrong it was to say we would have a long process to rejoin. We are full paying club members who will get our vote and voice back when we leave the EU.

As the WTO is an international organisation set up with the express purposes of facilitating trade and pulling down barriers to trade, they will of course welcome the UK as a leading exponent of freer trade worldwide. They will also want to help ensure a smooth transition for EU/UK trade, and will recognise it is the member states, not the EU, that pays the subscriptions.

The liberal Europeans and the EU have been quick to condemn or distance themselves from Mr Trump. They particularly say they dislike his Mexican wall policy designed to reduce the number of migrants.

I find this confusing. All across Europea border walls and fences are springing up. The EU itself is encouraging Ukraine and Turkey to build these barriers, and offering EU tax revenue to help pay for them.

There are now walls and fences between Hungary and Serbia; between Hungary and Croatia; between Greece and Macedonia; betwenn Greece and Turkey; between Slovenia and Croatia; between Spain and Morocco in Ceuta and Melilla;between Russia and Ukraine; between Austria and Germany and between Hungary and Slovakia.
Some of these barriers are high razor wire fences, some heavy concrete walls, some have watch towers and some have planned ditches and surveillance strips. In sone locations surveillaince technology is being deployed to stop tunnelling or other ways of evading the barrier. Others are fences.

Can someone explain why all this is fine, yet the Trump plan for Mexico is unacceptable? The EU seems to be aware of the dangers of large scale migration through the lands of Turkey, Ukraine and other neighbouring states with access to the Schengen area. That’s why the grant of freer movement to these countries through Association Agreements includes joint action to control their borders with third countries. How should the EU develop their free movement policies? Is the price of free movement a Trump like armed wall all round the EU? Did Mr Trump copy the idea from the EU’s constructions?

What do we think of walled and fenced Europe? How does this sit with the emphasis on human rights and the general policies on refugees and migrants?

When you get one leak, suddenly another turns up. Dr Roy Spendlove has apparently written back to Dame Lucy to tell her why he has moved departments.

Dear Lucy

I thought I should let you know privately my reasons for putting in for a transfer to the Brexit department. I can assure you I was not unhappy working for you and will be sad to go. I felt, however, that it was important the new Department should have some people like me well versed in the ways of the EU. They need to understand the immense complexities of the relationship, and appreciate the difficulty of severing these important links.
It was not as easy as I expected securing the transfer. There was a surprising amount of interest in the jobs. I guess it was the thought of working closely with Ministers in a new venture, based in Downing Street itself. Fortunately I can speak a bit of Brexit, which I needed to do to secure my place. I studied what these Ministers had been saying on the Leave campaign, as I do need to know where they are coming from if I am to give them hard hitting advice that is grown up and realistic.
I am pleased to report that it has been decided that we will need a substantial staff to deal with all the aspects of the relationship, though I think current numbers will prove inadequate and we will need to revert on that when it becomes clearer just how much is at stake here. I am also pleased to report on this occasion that we will be using external consultants, as they may assist us in mapping all of the difficulties. They also include a large number of Remain voters who understood in advance the magnitude of the task.
I will not be allowed to offer a running commentary on the negotiations. There are quite strict rules about all that. However, as the negotiations get underway there will be plenty of people in business, in the European Parliament and in the Commission who will want to put out their view of it all, which may in due course force some kind of reply from ourselves. In the meantime the danger for the government is a continuous and one sided briefing about where we are, coming from those on the continent who want to make it painful for the UK. We have warned them this could be the result of their policy.
We are proposing that the government shows flexibility on migration, on budget contributions and the supremacy of UK laws in order to secure continuing membership of the single market. I can’t believe they think we can simply turn our backs on the whole thing. There will be powerful voices for compromise, and many pieces of advice stressing the weakness of the UK position.
The Department has accepted the need to talk widely to people in business, the academic world and the arts about what they fear and what they need from the discussions. I am quietly confident that we will get across the need to have very wide ranging negotiations where all aspects of our relationship with the EU are on the table, and where therefore there has to be very thorough examination of all the downsides before committing ourselves to an irreversible course.I am sure the rest if tge EU is watching listeningvery carefully as business and UK commentators point out all the problems and troubles with our exposed position, which will push us to Brexit lite. As the Canadian trade deal showed, these apparently straightforward things can take seven years, and may still have an unexpected hiccup in the end. Rome was not built in a day, and the Treaty of Rome cannot be repealed in a day, whatever some in Parliament may wish.

Yours

Roy

Yesterday Mr Blair told us all we should have another referendum or Parliament should ignore the results of the vote on leaving the EU. He took my breath away, both by the hypocrisy of his position and by the vagueness of his proposals.

I recall Mr Blair won 3 elections in a row and formed a majority government each time. In each of those elections the south east of England voted by a substantial majority for a Conservative government. I and my fellow MPs representing that Conservative majority of the south east did not

1. Turn up at Parliament and say Mr Blair had no right to govern our voters
2.Take a case to court to say that as the south east of England is a larger part of the UK than Scotland and Northern Ireland combined in terms of voting population the UK government had no right to tell us what to do
3. Demand a re run of the election to try and get a better nationwide result
4 Say that because Labour lied, telling us there would be no more boom and bust and assuring us there would be very few EU migrants, the election was nul and void
5.Demand debates and votes on specific topics from the government in court actions when we were quite capable of tabling such debates and votes ourselves in opposition time

In a mature democracy like the UK we accept the verdict of the majority. A loyal Opposition in Parliament will oppose, challenge and try to influence a government, but accepts the government’s right to govern, and accepts that the main features of its Manifesto have every right to pass through Parliament.
Why does Mr Blair now think all these conventions and rules have been suspended, because he this time was on the losing side?