Author: johnredwood

I do not have a vote or a voice in the US election, and am not on anyone’s side. The contest is, however, more than usually interesting and important as Presidential elections go, because the US faces a choice between two such very different candidates. This result will have a measurable impact on our economy and on the state of world politics. My comments are by way of independent analysis, not partisan intervention.

Both candidates are divisive and each are unpopular with around half the electorate. Polls to date have shown Mrs Clinton in a winning position, but recently they have narrowed and a win by Mr Trump cannot be ruled out.

Mrs Clinton has a major problem of trust. The email controversy which has dogged her throughout gnaws away at the wider question of can she be trusted? Mr Trump has also questioned her stamina and health. Her recent collapse at an important national event is therefore a double blow. Not only does it give image to exactly what Mr Trump has been saying about her health. It also undermines the line of her campaign team that her cough is unimportant. It turns out it was pneumonia, not some minor irritation of the voice box. It becomes another issue of trust.

Mr Trump has an equally difficult dilemma. He rose to fame by making comments about migrants, borders and the rest that many thought were dreadful, making him unsuited for public office. He now wishes to show he understands the need to be more mellow and statesmanlike, but does not want to lose the aggressive down to earth image that won him so many friends amongst the angry voters he spoke for. His trip to Mexico worked quite well, allowing him to appear side by side with an elected country leader, and stick to his view that he wants a wall or fence on the border. It was a good enough performance to lead directly to the resignation of the Mexican Finance Minister who had invited him! The aim had been for him not to come or for Mexico to portray him and his policy as unacceptable.

The liberals of the west on both sides of the Atlantic have no trouble in condemning Trump’s wall as barbaric, yet these same people seem to accept the policy of building ever more walls and fences around eastern and southern Europe. The Republicans and conservatives unite to condemn Mrs Clinton’s economy with the truth and refusal to reveal all her documents and emails, yet they seem happy that Mr Trump refuses to reveal all his business and tax documentation in the same election.

Beneath these personality probes, health scares and aggressive rhetoric lies some fundamental political issues. Would Mr Trump talk more and bomb less in his world order? Will Mrs Clinton continue with the aggressive military interventions in the Middle East that she initiated or supported as Secretary of State? Will Mr Trump’s tax cutting agenda allied to making US corporations bring their money back onshore yields more growth and a tax bonanza as he hopes? Or will Mrs Clinton’s beefed up public programmes and higher tax rates for the rich create a more prosperous and more equal society?

The US people have a rich choice, even if they do not like either candidate. We will feel the washback from this decision.

The TUC and the warring Labour party both agree that the UK’s minimum standards for employees, often set out in EU law, should not be watered down. I agree.

I find it curious that both bodies make this their central campaign as we come out of the EU, when as far as I am aware no-one in power or a position of influence over the government thinks these laws should be diluted.

Throughout the Referendum campaign the repeal of EU labour law was the dog which would not bark, because it was the dog that did not exist. I remember well being asked at most of the debates I attended during the referendum which measures I would want to deregulate and repeal if we left and could get rid of EU laws. Some asked me because they thought Leave would stumble and be unable to list anything.Some, including media enquiries, were hoping I would want to get rid of some piece of EU labour law, as they wished to keep it.

I always began my answer that the worst regulations I wanted to remove and replace with better ones were the extensive rules of the Common Fishing Policy. I want sensible rules to preserve our fishing grounds that allow a better deal for UK fishermen. That was not one the Remain faction wanted to discuss. They would press again. I would talk about the compulsory VAT on domestic fuel and green products and ask for that to be repealed. That was another that did not suit their purposes. I would then press to change the procurement rules, as they seem to militate against the UK public sector buying enough British product. This list would usually satiate their wish for regulatory repeal and change. I could go on.

The Leave campaign was united in saying we would keep all EU labour laws for two reasons. One, many of us want there to be decent standards at work. Two, the UK has a long tradition of improving legal minima, often above EU requirements. Leaving will not change that.

I also now have a third reason for wanting to keep these rules. Big businesses are the ones most likely to want to dilute these standards. All too many big businesses, who should have stayed neutral, waded in on the Remain side in the debates. By doing so they lost potential support for any more dubious legal reform they might want once we come out. Why should I think their judgement any wiser or more popular on labour law than it was on membership of the EU?

I am no fan or apologist of Russia, but I am pleased that the USA is now trying to work with Russia for a solution in Syria. Russia has projected her power into this troubled country, just as the USA has sought to do, so it is better if they talk to each other about what they are each trying to do there. The people of Syria need to be spared bombing by competing large powers from outside the country.

The West has to get over Crimea. Crimea cannot be prised back by military means, and there is no obvious diplomatic solution to that issue in sight. The West needs to make clear further territorial expansion by occupation will invite a military response wherever there is a NATO guarantee as it has been saying, but we now need to reach understandings with Russia about issues where we have common or conflicting concerns.

Russia is flexing her diplomatic muscles and is creating a series of alliances across the Middle East and with other oil producing countries worldwide. The politics of oil are an important part of the question, given Russia’s reliance on black gold for her hard currency earnings.

As for Syria, the West needs to understand that its attempt to find moderate rebels against the Assad regime who can both stay moderate and fight their way to a victory against both Assad and ISIL was never a credible policy. Pouring more arms into the country for the good forces just added to the explosive mix and often led to the weapons falling into wrong hands. Selective bombing just killed more people and extended the range of violence and left open the possibility of hitting the wrong people or fuelling anti western propaganda from the opportunity western bombs create for the bad forces to spin the tragedy as they see fit.

There is no easy answer to the long and murderous Syrian civil wars. Those who think the west must do something should perhaps first say the west must avoid doing more harm.Talking to Russia is a first step in trying to explore when the warring factions on the ground will all conclude there is no victory or military solution in sight for any of them.

I have had the privilege of meeting numerous successful people in the jobs I have done over the years. Like many I have enjoyed watching sports stars, hearing fine musicians, reading great authors and seeing good entertainers. One silver thread runs through the success of all of them. Hard work.

If you want to write well, first read well. Then try writing, strenuously seeking to improve how you write. If you want to perform in the Olympics, choose your sport and spend every available waking hour practising and building your physique and technique. Take advice on how to compete with the best. Know two things. Being the best may be beyond you, but being very good is well within your abilities. If you really want to reach high standards you can do so. You will not reach high standards without belief and commitment.

I find the debate about academic selection curious. Most in the debate accept academic selection at age 18. No-one suggests sending people to top universities who do not have some GCSEs and A levels to a required standard. Most accept vigorous selection for developing football, cricket, ballet,music and other cultural talent. We start training our top musicians and dancers early, and give them a rigorous regime that the rest of us would not want. In return for a privileged specialist education we expect the best of them, and winnow out those who do not make sufficient effort.

The mistake is in thinking the grammar test is a single life changing event which means if you fail that prevents you having a good future. Some of the best entrepreneurs I know failed at school. Some of the top footballers would probably not have made it to grammar schools. Life is full of challenges, selections, opportunities and disappointments. Some people who were rejected by the Academy or turned down by the publisher eventually publish stunning books that many people want to read.

I love cricket but I never made it to a high standard team because I spent my youth reading books and trying to write better essays rather than practising my bowling. I like to go and watch people who are a lot better at cricket than I am. I am not jealous of them. I do not say we should stop selecting because it discriminates against mediocre cricketers like me. I praise them for their well honed skills, like watching their games and return to my job to do what I have trained myself to do to professional standards. I also enjoy playing cricket myself against people with similar limited levels of skill and competence who like me have not trained themselves to professional levels.

It is high time we accepted that life is riddled with selections. No one of them will prevent us achieving something or having a good life. Our present schooling system is riddled with selection by family income. The better off can afford to send their children to fee paying schools. The bit better offs can buy homes in the catchments of better state schools. Why should this type of selection be preferred to selection by ability?

You have only failed when you give up and have failure in your heart.

There are two main arguments made by some against grammar schools. One is it divides children too early and could leave many in bad schools. There is no reason why the non grammars have to be bad.

In my constituency we have no grammar schools. The comprehensives usually produce results well above the national average, with the best schools producing excellent exam results. The most highly motivated academic pupils go on to Russell Group Universities.

This demonstrates that grammar segregation need not diminish the other schools. Whilst there are no grammars in my area, children from the Wokingham constituency can apply for places at the Reading grammars. The Wokingham comprehensives lose some of the most academically gifted and hard working children to the Reading selective schools. This does not impede them from pursuing their own academic excellence within their schools and producing high quality undergraduates for elite universities.

The second argument against grammars is that low income background children find it too difficult to get in against the competition from middle class children whose parents help them or hire tutors to get them through the entrance procedures. This is too wild a generalisation. It is certainly true that the grammars need to have tests and selection procedures that gives weight to varied levels of preparation, or preferably eliminates as much of the advantage from better preparation as possible.

It is also the case that advantage does not always need money to buy it. A child from a low income home may have parents who provide much time and attention to reading to the child, encouraging the child and engaging the child in the world around them. Some higher income households may have parents too busy to provide the one to one encouragement that can help. Whilst the figures show more higher income household children get in, we should not ignore the non financial support which low income families can supply as well. We need to remind people that any adult with good intentions can help educate a child by sparking their interests or taking time to encourage a love of learning.

A great deal has happened politically since the March Budget and during the passage of the Finance Bill. Therefore, on Third Reading, when we are invited to consider the Bill in the round, we should ask ourselves how this set of composite tax measures and forecasts for revenues and budget deficits fits into what the Bank of England thinks is a rather revised picture today, although its gloom is probably exaggerated.

We also had a very significant event from the Government themselves over the summer recess, which has not been reported to this House or debated in this House, but which should not go without comment: the Chancellor of the Exchequer gave his consent for the creation of up to £170 billion of additional money and for the Bank of England to buy large quantities of Government debt and substantial quantities of corporate debt, making available a lot of cheaper money to the banks. As a result of that needless monetary relaxation—there was absolutely no evidence at the time that the economy had suffered an output or retail sales shock in the way that the Bank foolishly thought was happening—we see that interest rates have been driven down. In particular, longer-term interest rates, which are the Government’s price of borrowing, have been driven down, and so we now must imagine that the Budget arithmetic has changed quite a lot in a very favourable direction, as there is now presumably a substantial reduction in the forecast interest rate costs for Her Majesty’s Government over the balance of this year and into the next financial year, assuming that those programmes of aggressive bond buying continue to depress the rates in the way that is clearly planned.

At some point the Government need to explain why they endorsed the Bank of England’s very aberrant view. The Government’s forecasts for the economy, which are the thought behind this perfectly sensible Budget that we are in the process of approving, look forward to the UK economy growing by 2% this year and by 2.2% next year. The Bank of England now says that the British economy will grow by only 0.8% next year. I have no idea why the Bank thinks that, but it would of course change the arithmetic, and instead of us welcoming this Budget with an even smaller deficit, because of yield compression and cheaper borrowing, we should be worrying at this juncture about the shortfall in revenues next year on the back of a much-revised Bank of England forecast. Clearly revenues will be down by quite a lot next year if growth is to be only 0.8% rather than the 2.2% that was the premise of this Budget.

I fully support the Treasury’s March view. It is extremely likely that the British economy will grow by 2.2%. I do not have my own model but I understand how the Treasury model works and I do not think that the underlying assumptions behind the model for the March forecast were unrealistic. I do not think that they have fundamentally changed as a result of the events of the summer, with, perhaps, the one exception that if the Bank perseveres with injecting anything like £170 billion into the economy, growth could be even better than the Government were expecting, because that is a far bigger monetary stimulus than they clearly had in mind when they constructed the March Budget.

The Bank of England needs to be careful. One of the curious things about the timing of its decision was that it made that announcement before we saw the real economy figures for the first eight weeks after the Brexit vote. Those figures turned out to be perfectly reasonable. They were not negative in the way that the Bank had thought. The Bank also made the injection of money just after some very important figures came out, ones that it had obviously read in a different way from me.

If we read the money supply growth figures and credit growth figures for the second quarter of the current calendar year, we will see that they started to accelerate. We had pretty steady 5% growth for quite a long period, which was giving us a combination of low or no inflation and 2% or so growth, but then those figures suddenly accelerated to around 7% or 8%. It is therefore even more bizarre that, on the back of those numbers, the Bank of England should suddenly decide to try to pump so much money into the economy, at a point where it looked as if the commercial banking system was sufficiently strong and confidence had returned sufficiently to mean an even faster rate of money growth than the one that was achieving 2% growth overall.

I am not suggesting that we need to drop this Budget because of that very large monetary stimulus, but the House should be aware that a very large monetary stimulus has been added at exactly a point where we had a perfectly sensible Budget based on perfectly sensible assumptions. The Government also need to be very careful before authorising any further monetary stimulus given what look like perfectly satisfactory numbers.

How could the Bank be that wrong—it is quite difficult to understand—and why did the Government endorse its strange interpretation? It says two things. It says that a Brexit vote could damage trade. Well, the one thing we seem to know from the very relaxed timetable the Government are proposing for getting us out of the EU is that in all probability we are going to be trading under existing single market arrangements this year and next year. There will not, therefore, be any damage to trade. I do not think there will be any damage to trade when we are out, but we are going to be trading under the current arrangements for the forecast period, so it is very difficult to see why we would knock anything off GDP because of trade. Indeed, we should be adding quite a lot in relation to trade, because clearly exports will rise quite a lot on the back of a much weaker pound.

The other thing it says is that there will be an effect on confidence. We have seen from recent surveys that there was a very short term hit to the confidence of big business executives who did not like the result of the referendum, but there was no hit to the confidence of consumers. They went out and spent more in the shops immediately after the Brexit vote than they were spending before. We saw, in the following month, that many senior company executives regained a lot of their lost confidence because they saw they were wrong and that the customers were returning to, or staying in, the shops. They are buying cars and new houses.

Confidence has not collapsed, something the banks seemed to think would happen.

I urge those on the Treasury Bench to think about these matters extremely carefully. The very long procedure on the Finance Bill means that, in all probability, we are approving a Bill that was constructed in what the Bank of England thinks were very different economic times. I think the economic forecast and the economic times of March are very similar to the ones we should now accept, and I urge the Government to take that view. The House needs to note, if it is the view of the House, that on top of a Budget that has a reasonably relaxed fiscal stance compared with intentions a few years ago—something I am quite happy with—we now have a very large monetary injection. The Government need to be aware of what that might mean.

PS I have since seen the board money numbers for the 3 months to end July (just before the Bank’s stimulus) and they show an annualised rate of growth of a very rapid 15.9%. This makes the case against further monetary easing even stronger.

I had hoped to clear up my point in an earlier intervention on the Minister, but I fear that I was not happy with her answer so I shall try again and extend my case a little on the important matter of VAT on energy-saving materials. That is the principal issue at stake in new clause 15. As I was trying to explain to the Minister, many of us feel that it would be quite wrong to increase VAT on energy-saving materials, given that the House decided to choose the lowest rate that we are allowed to impose under European Union law. A case was then lost in the European Court, and the Government have wisely been undertaking a very long consultation into how they might implement this ill-conceived and unwanted judgement. The longer they consider it, the better, and the sooner we get out of the European Union, the sooner we can bring the whole charade to a happy end.

To many of us, this illustrates exactly what was wrong with our membership of the European Union, and this is something that we can offer to our constituents as we come out. They voted to leave and to take back control of their laws. That includes their laws over taxes. During the campaign, we on the leave side made a great deal of how we wanted to scrap VAT on energy-saving materials. Like many people in this House, we believe that we could do much more to save and conserve energy and to raise fuel efficiency, and if we did not tax those materials, perhaps they would be a bit cheaper for people. That would send a clear message that this was something that we believed in.

I urge the Minister to go as far as she can in saying that this Government have absolutely no wish to put up VAT on energy-saving materials, and that they would not do so if they were completely free to make their own tax decisions. I would love her to go a bit further—this might be asking quite a lot—and say that once we are free of the European Union requirements, we will be scrapping VAT on energy-saving materials altogether. It is not a huge money-spinner for the Government, and its abolition would send a very good message. It would particularly help people struggling in fuel poverty, who find energy-saving materials expensive. The extra VAT on them is far from helpful.

The Minister suggested to me that the Brexit Secretary was dealing with this matter, but I can assure her that he is not. He made a clear statement on these matters in the House yesterday and wisely told us—I repeat this for the benefit of those who did not hear him—that it is his role to advise and work with the Prime Minister to get our powers back. His job is to ensure that this House and all of us can once again settle the United Kingdom’s taxes without having to accept the European Union’s judgements and overrides. However, it will be for Treasury Ministers and the wider Cabinet to recommend how we use those wider and new powers and to bring to the House their proposals once they are free to do so.

I hope that we trigger article 50 as soon as possible. This is another reason why we should not rush to impose higher, crippling taxes on energy saving, because it is something we want to encourage. It is another incentive for us to get on with actually leaving the Union. A bigger cash incentive that is relevant to Budget matters in this Finance Bill is that we would soon be able to get back the £10 billion a year. Remember that every month we delay getting out of the European Union we have to raise another £850 million through a Finance Bill such as this to send away and not get back. I urge the Minister to take the matter seriously and to say that this Government have absolutely no intention of increasing VAT on energy-saving materials unless they are legally forced to do so. Will she confirm my view that the sooner we are out, the sooner we can have a rational policy on this most important matter?

I believe in the sovereignty of the UK people. As a democrat I believe that the people exercise their rights and freedoms by choosing representatives for their Parliament, and dismissing them at general elections if they cease to please. Between elections the sovereign people can either let their Parliament get on with the job they were elected to do, or the people can argue, lobby,  press, campaign for their Parliament to vary its plans. The people accept that they, like their elected representatives, must obey all the laws and commands Parliament makes until such time as they are repealed or amended. Parliament has authority and exercises the people’s sovereignty subject to the popular  will.

The present clever lawyer arguments over whether Parliament needs to vote to approve an Article 50 letter or not is based on a number of foolish misunderstandings.  Parliament did have its very decisive  say over whether we remained in the EU or left the EU. After an election and extensive debate and votes, Parliament by an overwhelming majority approved the Referendum Act. When most of us voted for it, the government made clear we were voting to hand the decision over whether to remain in or leave the EU back to the sovereign people. There was no doubt about that. Labour did not object to that from the Opposition benches.

This was reinforced in the Referendum campaign. The government sent a leaflet to all households stating that the people would decide, and then government and Parliament would implement the people’s decision. Both official campaigns were asked if the result was binding, and both confirmed the result would be implement by Parliament. Both campaigns ruled out any need for a subsequent referendum. Parliament made no provision for a second referendum, though we could have done so easily in the Referendum Act if that had been the plan.

There is therefore no obvious need for Parliament to vote to approve an Article 50 letter, as it simply reflects the will of the people. If a sufficient number of MPs wanted a vote on one, there could be a vote. I doubt the official opposition will want to press for one, as it would reveal big disagreements within the Labour party, with many of their MPs accepting they now have to vote for UK exit as that was the national result in a national referendum. Practically all Conservative MPs would respond positively to a three line whip to approve an Article 50 letter.

I see no need for the law courts to get involved with what Parliament debates and votes on. That is no part of our constitution. Law courts are there to enforce the laws Parliament enacts. Sometimes they help make law by handing down judgements that force Parliament into amending or rethinking what it has written in Statute. The courts are not there to thwart a referendum result or to dictate the Parliamentary timetable. Once the powers of the ECJ have been removed Parliament resumes its role as the UK’s highest court, the court that reshape and instruct the others.

Parliament will be fully engaged in the detail of our exit arrangements. Parliament will have to approve legislation to remove the EU powers in the 1972 European Communities Act. Parliament will doubtless question and debate many facets of our new grade based relationship with the EU, and make the case for various new and continuing arrangements for anything from research collaboration to security exchanges.