Author: johnredwood

Everywhere I went yesterday at conference people wanted to talk about Brexit. By far the best attended of the four meetings I did was the one about next steps for Brexit. Most delegates are pleased we are leaving and want us to get on with it.

There was some surprise that the Chancellor is still genuflecting to the absurd Treasury pessimism that was fashionable under his predecessor by using the word “turbulence”. I suspect it is just a matter of time. Even the Treasury will have to catch up with all the good news about the econony that has come in since June 23.The Chancellor himself was admirably clear about the need to leave the EU and the opportunities it presents. He also referred to the better figures he has seen since June 23rd. He may have to face unrealistically pessimistic forecasts for this year and next from the Treasury as well as those we have already seen from the Bank. Let us hope they have revised them up a bit from current Bank pessimism before he has to make a judgement at the Autumn Statement.

I look forward to the Treasury thinking it should be a force to encourage confidence and sticking to the facts. The Chancellor himself is wise to leave himself room for manoeuvre on the deficit figures. If the Office of Budget Responsibility comes up with very pessimistic figures for growth next year then the apparent deficit will be much larger from the lower tax revenues that implies. The Chancellor would be sensible to ignore it, as such forecasts are likely to prove wrong. The Bank has already had to raise its pessimistic forecast for Q3 this year in the light of the evidence that the economy continued to grow.

As someone who argued with the last government that they were being too tough over disability benefits, I welcome the recent announcement that people with long term conditions which are not going to get better should not have to go through regular re tests to keep their benefits. It will reduce their stress and worry, and will also save money and effort on the tests at the same time.

Minutes of Brexit Seminar, All Souls College, Oxford 9 September 2016
I am grateful to the College for hosting this event. The College was of course neutral on the issues raised and gave a platform to people of varying views about Brexit to participate.
Ministers and officials who attended kept to stated official public government positions. The minutes draw together the main strands of the discussion and explain where the non government people present found consensus or general agreement.

Main conclusions

The Conference concluded that the government should now act with due speed with sending an Article 50 letter and introducing a Repeal Bill for the 1972 European Communities Act. The country and business wishes to reduce the uncertainties. The Conference was swayed by a survey of larger businesses and by the business debate into seeing the need for speed, and the opportunities that flow from exit.

The Conference was persuaded that leaving the EU is primarily a UK Parliamentary process, repealing the 1972 Act and renewing EU law as UK law to ensure continuity. There was general agreement that this is best done by means of a short general principles and powers Bill, mirroring exactly the short legislation of the 1972 Act to impose the EU legal authority in the first place.

There were mixed opinions on the timing of the Article 50 letter given present court cases, but general agreement that subject to the legal position an early letter is the best approach. There was a general view that the government will win the court case anyway, and that the government could also win a vote in Parliament given the stance of the Leader of the Opposition to put the matter beyond doubt and pre-empt the court proceedings. The best course could be to pass a Commons motion in support of a letter and to send it as soon as possible, whatever the state of the legal proceedings.

The Conference was sympathetic to the view that the trade negotiations can be short and simple. The UK can offer either to carry forward current tariff free trade with service sector passports, or to fall back on the WTO standard tariff trade. The UK would recommend the former, but could live with the latter. Rather than negotiate it is just a question of which the rest of the EU will choose. Whilst the EU Commission is likely to threaten WTO, the member states are likely to opt for the status quo of tariff free trade given business lobbies in their own countries. The balance of trade and tariff rates under WTO rules is more damaging to the rest of the EU than to the UK, given the UK’s bias to services which are all tariff free, and given the devaluation of the pound which has already made rest of the EU products less price competitive without extra tariffs.

The UK government has ruled out belonging to the EEA or copying Norway or Switzerland. The UK government should not negotiate over taking back control of borders, laws and taxes. The UK should not be willing to negotiate its future sovereignty with the rest of the EU.

The referendum said Leave. The government and both campaigns clearly stated this outcome would be implemented. The ballot paper did not suggest a renegotiation or partial membership as options, so the government has rightly ruled these out.

The Conference saw various opportunities for improvement out of the EU. It thought the UK could become the world leader for free trade once it has the right to negotiate its own trade deals. Being an open economy with a high proportion of service business is ideal to pioneer free trade. University representatives thought the UK could do better in various scientific and technological areas like medicine and agriculture when we can set our own regulatory framework, as the EU is often cramping for new ideas. The University also sought reassurance and more work on EU funding schemes and collaborative research.

Overview of the negotiations.

John Redwood led the discussion on the overall picture. He reminded the Conference that Vote Leave had throughout campaigned “to take back control”. It had mainly illustrated this by urging taking back control of the money, but had also talked about taking back control of laws, taxes and borders. It had recommended abolition of VAT on domestic fuel and green products, spending more on the NHS, introducing a work permit based system of controlling migrant numbers from the EU, and negotiating free trade deals with the many countries in the world that the EU does not have special arrangements with. These were clearly not government policy, but are important background to why so many people voted to leave.

He proposed an early launch of a Repeal Bill for the 1972 Act, and a parallel Article 50 letter. He supplied a draft letter, and reminded Conference that Article 50 confers a right on a member state to withdraw from the Treaty using its own constitutional arrangements. In the case of the UK this will be an Act of Parliament.

He argued that the rest of the EU is likely to agree to tariff free trade and to reject the Commission’s wish to punish the UK, given the large commercial interests on the continent in keeping their export trade with us – their largest market. He stressed that as leave means taking back control of our own laws and decisions, this cannot be negotiated or brokered with the rest of the EU. There may need to be negotiations over trade and other arrangements where the EU has a right to a view as do we, but not over the resumption of our control over our own laws, taxes, borders and budgets.

He pointed out that the Article 50 2 year period is a maximum period for negotiations – unless all 28 states want to take longer – but there is no reason why it need take anything that long. It is in both sides’ interest to reach an earlier agreement to reduce business uncertainty. If there is break down or no likelihood of agreement then the UK should withdraw and after the 2 year period the UK will be formally out. Trade will revert to WTO rules.

Some expressed concern about the court case over whether the government has power to send an Article 50 letter without Parliamentary approval. John Redwood pointed out that the Commons probably supports sending the letter by a large majority, as any such vote would be supported by a Conservative 3 line whip and also has the support of the Leader of the Opposition and his followers.
There will be implied consent if the Commons does not demand a vote on the letter – which it could always do – or the government could table a suitable motion. The courts are likely to see the absurdity of their seeking to dictate to Parliament what it debates and votes on, given Parliament’s ability to debate and vote on anything it wishes. The issue could be removed by tabling and passing a suitable motion.

Trade

Peter Lilley led the debate on how to conduct trade negotiations with the EU and in due course the rest of the world. He explained that it is much easier than many have argued. There are only two realistic outcomes. Either the UK and the rest of the EU continue with tariff free trade as at present, or they revert to WTO MFN status trade with tariffs averaging about 4% on our exports to the EU.

He argued that the member states influenced by strong business lobbies are likely to opt for a continuation of tariff free trade. German cars, for example, are already 12% less competitive than last year thanks to the devaluation of the pound. They would not want to be another 10% dearer thanks to a 10% tariff. UK cars in contrast are currently 12% more competitive, and would still be 2% more competitive even with a 10% tariff. France and Spain would be very worried about the possible high tariffs that can be imposed on their substantial agricultural exports, whereas the UK’s service exports and aerospace products will continue to be tariff free under WTO rules. He argued that we should reach a decision on trade before the French and German elections to maximise business pressure on their governments.

Peter Lilley argued that once out of the EU, the UK could negotiate the most worthwhile trade deals, which are with the fast growing but protected markets of Asia, Africa and Latin America. The two largest countries in the world – China and India – are unlikely to reach any agreement with the EU but could with the UK. In addition, the UK could set an example to the world by using trade to promote development by offering better access to our markets to developing country agricultural and manufacturing businesses. And we could become a leader for free trade worldwide.

During a productive discussion world trade experts confirmed there were substantial gains to be had from pursuing a freer trade agenda with developing countries, with the UK as a natural free trade leader. It was also confirmed that the UK remains a member of the WTO, and that we could inherit the existing EU external tariff arrangements registered with the WTO and either apply that to EU trade or continue de facto to trade tariff free with the rest of the EU. What takes time in international trade is negotiating a new deal between two countries with substantial barriers, which is the opposite of the case of the UK/EU where all tariff barriers have been removed.

Migration and benefits

Iain Duncan Smith introduced this topic. He proposed that the UK should say in future no EU migrant (or non EU) to the UK should be eligible for in work or out of work benefits for the first five years of their stay. This is a development of the Cameron government’s wish to have a four year period when the migrant pays National Insurance and taxes before being able to claim. Mr Cameron had not been able to negotiate this right with the EU. Most EU migrants do come here to work, and most benefit considerably from in work benefits and allied social provision.

He also proposed that the government introduce a work permit and cap system to control the numbers of EU migrants coming to the UK in future, just as we have controls on non EU numbers today. With such a system it would be possible to insist that people entering the UK should already have a job to go to. He argued that students, people with their own money, people coming to work for multinationals that already employ them, Scientists and people with highly valued qualifications such as software engineers, should be freer to come, (subject to the existing checks on students and sham marriages).

Other people seeking lower paid and lesser qualified work would not get permits, unless there was a skills or labour shortage where the government judged appropriate migration was the best short term answer. Areas such as farming where there may be a need for seasonal workers will be best covered by the ‘Seasonal Workers Scheme, (SAWS).

He also urged the government to reassure all EU citizens already legally here under current rules that they can stay. He was strongly supported in this request by Peter Lilley and John Redwood. He proposed a cut-off date, probably the date of the Article 50 letter, saying that anyone coming after that date will be subject to new rules.

In the discussion some businesses sought reassurances that skills and labour needs they had will be met under a new system. The University also supported freer movement for students and faculty members, and they made it clear that such a regime would reassure higher education in the UK and abroad. The issue of the border with Ireland was also raised, with reassurance proposed that a work permit and cap system does not require new border controls on the Irish border for enforcement, as Irish passport holders would be entitled to the same rights as UK citizens.

Competition Law

Sir John Vickers led the discussion on cross border competition law. His presentation is attached. He has helped set up and chairs an expert group looking into how the UK out of the EU could best handle the outstanding n cross border issues, which will be reporting next year.

He pointed out that current UK law is derived from and fully compatible with EU law on mergers and unfair trade practises. There will be issues over the adjudication of larger cross border mergers and Europe wide abuses of market position where the UK will need to decide how much it wishes to settle these things for itself, with double jeopardy for the businesses involved, and how far the UK wishes to go in finding some basis for international decision. The UK will need to legislate over any changes to the jurisdiction and criteria for competition which it wishes to introduce.

The UK constitution and the 1972 Act

Sir William Cash set out how he has drafted a short Repeal Bill. A Government Repeal Bill drafted by Parliamentary Counsel will repeal the 1972 Act, and will need to cancel the powers of the ECJ and Commission in the UK, and will carry over into UK law the full body of EU law and decisions that are not already in UK Statute. It will also provide UK appeal and competence where matters are currently subject to the jurisdiction of EU organisations and the Commission.

He explained the official Conservative party’s opposition to the Nice, Amsterdam and Lisbon Treaties as a whole, on the grounds that they transferred too much power to the EU, and his own similar disagreement with the Single European Act of 1986 and also the Maastricht Treaty in the early 1990’s, which split the Conservative party in office.

He advised that the Repeal Bill should be short, based on main principles and introduced early into Parliament. This is because, as Sir William said, it is impossible for us to be outside the single market and to have our own trade policy or to bring in our own immigration laws or any laws relating to EU jurisdiction without the Repeal Bill having been enacted. It should mirror in style the 1972 Act itself, which was also short and general.

He also confirmed his view that Article 50 was a prerogative act for the Government and that it was not for the judges to tell Parliament what to do about invoking or voting on Article 50.

In the discussion it was pointed out the Bill would need to tidy up jurisdictional issues where UK matters are currently referred to EU institutions for decisions.

Higher Education

Professor Ian Walmsley spoke of the importance of universities in the UK, their collaborative work with similar institutions on the continent, and their use of EU money for research. He wanted reassurances that there would continue to be similar levels of funding as today, that they would still be able to attract and recruit continental talent and students, and would not be cold shouldered out of European projects. He reported that there are already some research grant applications and joint projects where the UK is not wanted for fear of it harming access to funds.

In the discussion several stressed the desirability of the UK government guaranteeing to pay all the money that would otherwise come from EU sources out of the saved contributions we make to the EU. The government has gone some way in making such a promise up to 2020. The government explained that 2020 was the date, both because the EU itself had to make new budget decisions for post 2020 in due course, and because 2020 would see a General election where parties and electors would make new decisions on spending levels and priorities.

Some of the collaborative projects and funding sources that are pan European are not EU specific. Israel also joins in some EU schemes. There was a general welcome for the idea that the UK should be willing to participate in many research projects and funding schemes without being an EU member. The chairman asked the University to produce a schedule of the main sources of European funds, and a commentary on which we might wish to stay in and which the government should fund instead. All agreed that the HE sector is most important and a UK success story which needs to be properly supported and assisted.

Identity and Accountability

The Conference had a break from the detail of Brexit, and heard a very thoughtful talk by Sheila Lawlor on why the UK voters voted for leave and how their decision was in keeping with UK traditions of democracy.

She reminded the audience that the UK came early to giving rights and freedoms to every man. By the early twentieth century these rights has been spread to all women and included the mass franchise.

For a hundred years UK voters have taken pride in their domestic democracy. It was not disrupted by the evil ideologies of Nazism and communism which took over large parts of the continent. The UK eschewed revolution and illegal seizure of office. Electors cut their governments some slack, but dismissed them if they failed or got too far out of line with the popular mood. A realistic people do not expect their governments or politicians to always get thigs right or to behave perfectly, but the people can use their power to fire them when they judge it necessary.

The decision to take back control was a decision that reflected the romantic view of the relative success of UK democratic discourse and supervision of public policy. It should be contrasted with the lack of accountability of the Euro scheme to national electorates, which is now destroying the older large parties on the continent. It is undermining political stability in many countries from Greece to Spain and now spreading into France and Germany with the rise of the AFD and the Front National.

Business opportunities post Brexit

Shanker Singham talked about the details of WTO procedures and the opportunities for more free trade deals once the UK is able to make its own deals.

Business Forum

Mark Gallagher of Pagefield introduced the topic by reporting details of a survey of 400 larger companies conducted recently after the summer break. 80% of the companies had been officially neutral, 15% declared for Remain and 5% for leave. In practice the big majority wanted a Remain outcome. He told us that business has largely got over the initial shock of the vote, where they had not wanted the result. Now a majority wish to get on with implementing the decision. There is a strong feeling that the uncertainties can best be reduced by a faster pace of change to get the UK into a new relationship more quickly. More also now see advantages in exit, eyeing the scope to reduce and improve the substantial regulatory burden the EU has imposed on business. They also want the UK to do more to improve education and infrastructure. They anticipate gains from more free trade deals with the rest of the world. Some are still nervous about market access within the EU and about their future ability to recruit migrant labour.

During the course of a wide ranging debate and discussion, it was argued that EU controls over clinical trials, stem cell research, Genomics and data analytics was holding back UK universities and deterring worldwide investors and researchers attempting these areas within any EU country. The UK could assist its scientific development if it had a more permissive regime, as the USA and others do.

This was echoed by Owen Paterson who pointed out UK farming was held back by EU controls over the use of technology in agriculture. He also reminded us that the UK had lost its vote and voice on many important global regulatory and standards bodies. Once out of the EU the UK will have more influence by being around the table over issues like environmental and food safety standards. Instead of having to try to influence the EU negotiating position, and then accepting the way the EU implements the world decisions, the UK will be able to directly influence world standards and undertake her own implementation. We have a unique opportunity to tailor a new rural policy specifically to our own industry and environment. He saw great potential for a much improved UK fishing industry, again designed for our marine environment without the crude EU discards policies. The UK will need to negotiate new limits, quotas and arrangements with Iceland, Norway and various EU countries, but it should be able to end up with a much better working fishery policy like Norway’s.

The issue of passports was explored again. It was pointed out financial passports are two way – the rest of the EU needs them to get special access to the big London markets, just as London based businesses can use them for access to the continent. Is it likely the rest of the EU will want to lose this benefit?

Others thought the importance of passports was greatly exaggerated. There are few examples of large scale successful passported products. Where there is, as with UCITs, they are almost wholly established in Luxembourg or Dublin for tax reasons, so London is not the place of registration. London does contract work for the funds, which would continue with them as EU entities once we have left. Soon MIFID II will grant passports to companies in jurisdictions with equivalent regulation, which must apply to the UK as we have identical regulation at the moment.

When asked which regulations could most profitably and easily be got rid of once out, the two favourites mentioned were various VAT impositions which the UK could scrap, and the fishing regulations which have done so much damage to a whole industry. John Redwood stressed that the Leave campaign had recommended no dilution of any employment rights offered by EU legislation, and he expected the government to confirm that approach. It was also confirmed that big business is not lobbying to dilute workers’ rights.

SUMMARY

The Conference had considered detailed plans for a smooth and speedy Brexit. There was general buy in to the idea that both an Article 50 letter and short Repeal Bill are needed quickly to get the process underway. It was also thought that more work is needed on the changes and opportunities that can follow a speedy exit.

The following statement appeared today from the Conservative party. It is good news for business who want to reduce the uncertainties, and for all who want to see progress with our exit from the EU:

“• On 23 June the British people voted to leave the EU and the Government will deliver on their verdict. We are not going to give a running commentary on every twist and turn of our exit negotiations. But when there are things to say – like today – we will keep the public up to date.

• First on timing: there will be no unnecessary delays in invoking Article Fifty. We will invoke Article Fifty no later than the end of March next year. Second, on process: the Government will shortly introduce a Great Repeal Bill to remove the European Communities Act from the statute book on the day we leave, meaning that the authority of EU law in Britain will end.

• The Prime Minister will set out further detail in her speech to conference this afternoon. ”

The German state claims to have strong finances. It is true it has no running deficit for the time being. It is true the German economy runs a huge balance of payments surplus, which causes all sorts of stresses and strains in the wider European markets. It is true Germany has huge surpluses held in the form of claims on the European Central Bank. So far so good for Germany, though not so good for the rest of Europe. Germany’s surplus is the mirror image problem of the southern countries deficits which Germany herself is so unhappy about.

All is not strength elsewhere in Germany’s financial arrangements. The state has relatively high levels of government debt like much of the rest of Europe. Germany’s commercial banks cause worries from time to time. Whilst German politicians are busy lecturing the Greeks, Spaniards and Italians to run a more prudent policy, at home Germany has to work away at improving the balance sheet strength and profitability of her commercial banks.

This week unnamed hedge fund raiders and others have had another go at the Deutschebank share price. They appear to have driven it down on unsubstantiated rumours of withdrawals of money from that bank, and on interpretations of the bank’s capital and cash positions that are unflattering. They ignore the relatively strong balance sheet ratios the bank points out, and discount the ECB’s continuing confidence in the bank. The US authorities large fine on the bank will make an impact on its capital if it all has to be paid. Negative interest rates and low rates for lending longer make it more difficult for the bank to make good profits from traditional activities.

Commerzbank has also had to announce changes to try to improve its profits and future balance sheet ratios. It has decided to cut 9600 jobs or around one fifth of its workforce. It is reducing securities trading activities, merging company banking and cancelling dividend payments to conserve cash. All these are usual corporate responses to tough times.

All of this is one consequence of the continuing negative interest rate policy, allied to the creation of a ramped market in bonds meaning rates are low across all time horizons. The authorities are making savers lives a misery, and impeding the generation of profits by banks out of lending to rebuild their financial strength. Banks may well continue to be very unpopular, but the truth is you cannot have a sound and sustainable economic recovery without properly functioning banks and sensible levels of new debt to support investment and larger item purchases.You can only have stronger banks if they make a bit more profit which they retain, and distribute better dividends to allow them to sell more shares to raise more capital. The policies the ECB is using to stimulate the Euro area economy are in practice delaying bank repair, which in turn impedes a proper recovery. Low rates also probably make savers more cautious about spending, which hits demand.

Yesterday saw the ONS publish the output figures for the second quarter, which they revised upwards to growth of 0.6% for the three months, 2.2% higher than the previous year. This is right in line with the Treasury March forecast before they slashed it as part of Project Fear.

More importantly we also got their first version of the July service sector output figures, the first full month after the vote. This was the month where the gloom mongers said we would see a sharp shock into recession as confidence was undermined by the UK decision. Instead the service sector grew by 0.4% on the month, and by a lively 2.9% over the year from July 2015. As services are 80% of total GDP, this augurs well for general growth in the economy.

I am sticking with the Treasury March forecast of 2.2% growth for 2016 as a whole, and see no reason to revise that forecast downwards. I note that many of the official forecasters and the Investment banks are busily revising up their stupidly low for casts for 2016, made as part of their belief that there would be a large confidence effect from a Brexit decision. It is difficult to get to a short term post Brexit recession from those July figures. August may not have seen similarly fast growth, but it did not tip us into recession from 2.9% annual growth a month earlier!

There were also surveys yesterday showing growing confidence in business as well as amongst consumers. I am always less inclined to trust surveys, given how misleading the surveys taken a few days after the vote were. What seems to be happening is those answering the questions seem to be wanting to get their answers more into line with the reality on the ground, after letting off steam and anger about the vote in its immediate aftermath.

The previous Chancellor did take actions in March against Buy to let, against purchase of dearer houses, and against insurance policies which are still having some negative impact. The Chancellor has recently announced he sees no need for the special help with borrowing to buy a second hand home, and will be withdrawing parts of the Help to Buy scheme. There’s a sign of confidence for you.

The new Remain media line is to draw an absurd distinction between hard and soft Brexit.

We were asked to vote to remain or leave. We voted to leave the EU. The Vote Leave campaign made clear that meant taking back control of our laws, our borders and our money. Polling after the event shows starkly that Leave voters understood that and mainly voted to take back control. It also shows that very few Remain voters (about 10% of total voters) bought into the idea of European Union and wanted further integration along continental lines. ( Michael Ashcroft post vote polls)

The PM has already rightly ruled out the Norwegian and Swiss options, and ruled out staying in the EEA. We leave what the EU regards as the single market as this is fully integrated with the EU as a whole and includes freedom of movement and financial contributions to the budgets.

The main issue we need to sort out with the rest of the EU is access to the single market. All non EU member states have access to the single market. The rest of the EU has to make a simple choice. Do they want to retain tariff free access to the UK market or not? If not, then their access and our access will be under MFN WTO rules, which allows an average tariff of 3.5%. That leaves us 6.5% more competitive, and them 13.5% less competitive after the devaluation of the pound against the Euro.

They will of course want to stay tariff free. If the EU institutional vindictive policy did win out despite the commonsense of most member states and the interests of business on the continent, then the UK will enjoy tariff free trade on things we are good at like aerospace and services, whilst French agriculture will face quite high tariffs and German cars a 10% tariff.

None of this need take a long time to settle, nor does it require a complex negotiation. It is a simple choice. Carry on tariff free as at present, or revert to the WTO ready made schedules.

There is no soft or hard Brexit. We do not negotiate taking back control – that is a contradiction in terms. Nor do I expect us to lose trade over this, as I do not think our EU partners are both vindictive and stupid.

I will be speaking at four meetings at Conference on Monday 3rd October.

12.45 Great or gloomy? – The UK economy in the next five years” (Bright Blue) Executive Room 1 Level 5 International Convention Centre Birmingham (conference pass needed)

4.15pm Britain after Brexit Embracing Openness not isolation (Taxpayers Alliance) Think Tent Level 3 ICC (at front of Convention Centre) (conference pass needed)

6.00pm Devolution and the Union Where next? (Conservative Home) Library of Birmingham, Room 101 (no pass needed)

6.45pm How to leave the EU Next steps for Brexit (Politeia) Novotel 70 Broad Street B1 2HT (no pass needed)

Mrs May spoke about the need to make it more difficult for certain foreign investors to take control of UK companies in her economic speech prior to becoming PM. She wants to design a new industrial strategy, which would need to incorporate her latest thinking on this topic as part of it.

I approach this issue from a largely liberal position. If people in the UK own shares in a business and want to sell them to foreigners, I generally have no problem with that. It would be wrong usually for a government to intervene and tell owners they cannot sell their assets. it would put other investors off venturing here, for fear of not being able to sell when they wish to move on.

If the shares being sold represent substantial investments in UK infrastructure and real estate, perhaps as the facilities for a manufacturing or service business, the foreign owner cannot parcel up the road or railway line or office building and take it abroad. They remain important UK assets which the new owner has to operate or sell on to someone else to operate. In that sense UK investments are not at risk from a change of owner.

The legitimate fears that people have are threefold. The first is what if the foreign owner buys up UK factories in order to close them, to reduce world capacity and make his factories and products elsewhere more valuable? The second is what if the buyer is a foreign state or nationalised industry which is buying strategic assets in the UK to gain power over our economy and to increase its leverage at times of tension? The third concern is about intellectual property. What if the purchase is to take crucial technology or other information that could be harmful to us to share?

Our current policy allows normal competition rules to be suspended over defence technology. We can buy from ourselves, and can restrict access to defence companies as part of a national security override. As the ubiquitous digital technology spreads more widely so we may need to broaden our definition of what is a defence interest.

The first worry of future closures to concentrate world output elsewhere can partly be tackled through current anti monopoly provisions. When a large company seeks to take over another in the UK it has to demonstrate that this does not lead to an anti competitive concentration. Maybe stronger or enforceable requirements need to be placed on businesses about maintaining capacity in the UK if it is an option for the buyer to promise to keep our factories whilst intending at a later date to close them. Where someone wishes to acquire a central infrastructure asset, like the Stock Exchange, the answer should usually be No. It will be too easy in the future for foreign owners of the Exchange to switch business from London to Frankfurt.

The second needs new policy. It is wrong if a foreign state or nationalised industry can buy our businesses in a given sector but we cannot buy theirs owing to their public ownership structure. There should be a ban on foreign state purchases where we cannot have similar access to their market, unless the UK authorities think it is in the UK interest to allow it.

The third area also requires some broadening of the areas where the competition authorities can halt or add conditions to an acquisition.

I thought the whole point about Jeremy Corbyn was his different stance to the Blairites and Brownites. They compromised socialism and tried to trim and alter their views as they tacked to the media’s winds. His second convincing victory seemed to give him the platform to try a new approach, to stick to principles and to offer something very different to the disaster that Mr Brown created by cosying up to the Bank of England and the commercial banks.

I always thought Mr Corbyn was principled and different to establishment Labour on three big issues. The first was his lifelong opposition to the UK having a nuclear deterrent. In his first year as Labour leader it looked as if he was fighting to make that the position of the party he leads, or at the very least to preserve a strong body of anti nuclear opinion by offering a free vote. With his re election just a few hours old, he now decides to sweep aside the principles of a lifetime and to accept that his party does support the renewal of Trident. It appears that a combination of Union and Blairite MP pressure has forced a re think.

The second area of difference was membership of the EU. As a backbencher he seemed to see the EU as a corporate lobbyists plot, with the EU unelected government working closely with big business, leading to social and economic consequences he hates. He is no natural supporter of Euro austerity policies. He seemed happier with the idea that we should leave, or avoid ever closer entanglement. Yet in the referendum he was forced or persuaded to offer lukewarm support for staying in. He went round saying he was fighting to keep EU labour protections. This was bizarre as all parties involved agreed we should keep them, whether in or out. Now we see him moving even more in the direction of wanting to impede the very Brexit he said we needed to implement. It seems he does want to lead his party away from the Leave camp, despite the fact that very large numbers of Labour voters in the cities of England voted to leave and are alienated from their party by its unthinking support for all things that come from the EU Commission.

The third area of disagreement in the past has been over UK military intervention in the Middle East. It looks as if here, too, he is watering down his opposition. There is no pledge to campaign to stop the UK raids over Syria and Iraq, no passionate speeches about the outcomes of interventions in Libya, Syria, Iraq and Afghanistan.

It looks as if he is exhausted by his victory, and moving towards the Brown and Blair supporting MPs who have been trying to get rid of him. If he compromises too much with them he will surely lose that very socialist stardust that his many Labour supporters admire. I had thought Mr Owen Smith would be better from the Conservative point of view, but a Mr Corbyn shorn of his principles will struggle for support.