Author: johnredwood

Yesterday I published proposals for a new UK economic policy through Politeia. I set out why I think Brexit is a great opportunity to promote more UK growth. The freedoms we gain will enable the UK government to follow policies friendlier to jobs and domestic output.

One of the big themes I suggest is to correct the worst of the balance of payments deficit. 25% of the deficit in 2015 came from UK government payments abroad in the form of net contributions to the EU and overseas aid. The sooner we are out of the EU the sooner we will benefit from that saving on the external accounts. The government should make sure more of the money spent on overseas aid is spent on buying goods and services from UK producers, where the money cannot be spent directly in the country we are seeking to help. \That will boost UK business and cut the strain on the balance of payments.

36% of the 2015 deficit came from the excess of interest and dividends we pay away to foreign lenders and owners of UK assets over the money we receive from our investments and loans abroad. There is no quick fix to this, as the longer we remain in deficit, the more the claims of foreigners on UK assets will build up. However, the government could work to ensure that in future when adding to our power stations and other privately financed infrastructure the investment is offered on decent terms to UK savers and institutions rather than to foreign interests. The Chinese financing of Hinckley will b e a long term drain on our balance of payments.

The remaining 38% of the deficit comes from the deficit on trading in goods with the rest of the EU. The UK is in surplus with the rest of the world on trade account, and in surplus on services with the rest of the EU, but has a huge deficit in goods. Some of this will reduce as a result of the devaluation of the pound. People will look  to buy domestic substitutes or cheaper goods from non EU destinations. Some will reduce as a result of new UK policies. Why need we continue with a deficit on fish, once we take back control of our own fishing grounds? Won’t a UK farming policy be more helpful to UK flower and vegetable growers? Won’t more market gardens flourish?

The government’s quest for a higher productivity economy needs to stop at the railway and the roads budget. Getting around the country is difficult, with too much traffic congestion and delay, and with too few rail seats and fast trains on commuter lines at busy times of day.  We have too little road space for vehicles, and too little use is made of the substantial track space we do have available for the railway.

Tackling the trains requires three main changes. The first is new signalling on board each train, so a train can go closer to the train ahead safely, knowing the position and speed of the trains on the line. Currently we only get around 27 trains an hour on UK track, with less on some mixed railways. It should be possible to get that up to 40 with more precise signalling. The second change reinforces this. Let’s have lighter trains with better braking and faster acceleration, to take advantage of new signal types and to use the track more effectively. The third thing we need is more bypass capacity at places along the main tracks, to allow mixing slower and faster trains more readily, with easier overtaking.

These methods of increasing capacity and improving speed and efficiency will be considerably cheaper than building complete  new track, or electrifying existing track.

Road capacity also needs increasing to cut congestion and improve safety. Congestion and accidents occur most frequently at poorly designed junctions. The government is producing a pinch points fund which could help pay for improvements on main highways that could tackle these twin problems.  Roundabouts often flow better than light controlled junctions. Light controlled junctions flow better if there is a segregated right turning lane. Junctions are safer if there are other ways for pedestrians and cyclists to cross the road without using the main vehicle carriageway, which can also allow faster crossing times for pedestrians and cyclists without the need to wait for a change of lights.

Many places need new bridges to get traffic across railway lines and rivers. Level crossings are dangerous and need to be replaced by highway bridges or underpasses. The congestion in many towns and cities can be traced to a mixture of junctions and a lack of ways of getting over the railway or river.

Being stuck in traffic jams is wasting hours of time for delivery drivers, service providers who travel to their customer homes, builders getting themselves and materials to site and office workers trying to get to their office. The UK will be much more productive when we do some serious jam busting, and put in enough seats on busy rail lines.

I preface this post by reminding people I do not support any  candidate or party in the forthcoming election,  but think we do need to know more about Le Pen given her popularity in current polls.

The NF website in France is critical of the EU, seeing it as a source of unemployment and too many migrants. Arguing that France is suffering from “L’Europe contre les peuples”, the site chronicles the loss of industrial jobs, open borders, dominance of market forces, destruction of public services, poverty, uncertainties and substantial migration as features of modern France in the EU it does not like.

The party disagrees with an ultra liberal world ideology which it thinks is there in the EU to serve financial sector interests at the expense of others. The EU is seen as a client state of big money interests run by powerful unelected officials. It delivers long recessions, mass unemployment, and financial crises as shown in Greece. It has ignored the votes of the French, Dutch and Irish against the original Constitutional Treaty.

France is seen as getting a particularly bad financial deal from the EU. As the EU’s second largest contributor according to the site, the country does not benefit from the Euro and the internal market in the way Germany does. Large scale immigration is seen as lowering wages and destabilising society.

The website proposes that France uses Article 50 to get out of the Euro and to change its relationship with the EU fundamentally. France needs to restore control over her borders and law making, and be able to spend her own money. Control is seen to rest in Brussels and Frankfurt, and needs to be brought back to France herself.

The party offers a range of policies to help and support veterans, to promote economic growth and to improve public services.

US GDP per capita $56000 per head

Cuba GDP per head $6000

Why do some people think dictator Castro did a good job?

The EU officials who speak out and a few of the other member states politicians join them in expressing  great dislike of the UK and say they wish to punish us.

They also seem to want us to stay in the EU. I guess that is because they see that being made to stay in would indeed be punishment. It would mean continuing to pay all those bills, accept all their laws, and make our energy, our agriculture, our fishing  and much else ever more dependent on them.

It is a very strange club that thinks the way to keep you in is to threaten you if you decide to leave. Why don’t they think of ways of making their institutions friendlier to member state democracy, to jobs and to living standards. At least it made it an easy choice for the UK, as so much of the EU is hostile to prosperity and freedom.

The truth, O EU, is most of the UK is not scared of you and does see how we will be freer and more prosperous out of it. We do not think under global rules you can harm us, as well as seeing that the more you try to damage us the more you would damage yourselves.

The irony of the referendum and of the current position is we Eurosceptics take a positive view of other member states, whereas the pro EU people  take a negative one. Pro EU people in the UK are always warning us how the nasty EU will hurt us if we leave, whilst Eurosceptics reckon most of the peoples and governments of the EU will want to be friends and trade with us after exit. The good news for the UK is it is difficult to know how  the rest of the EU can damage us. If they want tariffs on their exports to us we can always buy elsewhere, whilst the impact on our trade to them is far less.

The IFS claimed this will be the worst decade for real incomes. They did not stress what their figures showed, that there was a big hit to real incomes and living standards thanks to the banking collapse and the Great recession, which extended into the first couple of years of this decade, to be followed by some recovery. Nor did it go along with the OBR and stress that on their figures, which are pretty gloomy still, real incomes are estimated to rise every year from here for the full forecast period.

There was no reminder to the public that the October retail figures showed stonking growth at 7.1% more volume than in October the previous year. Nor did they pause to ask why retail prices were still lower this October than last October, given the substantial decline in the pound that has occurred over that time period, with much of it taking place well before the referendum. The current fashionable pessimistic forecasts say that family incomes will be squeezed by rising prices next year and the year after. This will lead to a drop in consumer spending, presumably to lower retail sales, and to a decline in economic activity. The lesser version expects a squeeze which slows the economy but which still allows some growth overall and in retail activity.

These forecasts usually come from  people who confidently forecast a recession this winter on the back of any vote to leave. Now they say what matters is the sending of the letter to leave, rather than the decision itself. Doubtless if and when the economy does not shrink when the letter is sent, they will shift their ground to saying it will shrink when we do actually leave.

There were two surprises in the OBR figures which suggests a few second thoughts about the alleged damage of Brexit. First, they now expect a stronger performance from the UK economy in 2016 than before the vote. Second, they expect 2.1% growth in the year they think we will leave, 2019, which is the same gr0wth rate as they forecast well before the referendum. I agree with those two forecasts.

The government is pledged to raise living standards, especially for the lower paid. To do so it will take more people out of Income Tax altogether, introduce universal credit which makes it more worthwhile working than the system it replaces, and boost the living wage.

So many commentators and broadcasters, and most Opposition politicians,  keep on and on about what are the UK’s negotiating aims. Often they misrepresent the UK’s position, both seeking to weaken it by false report and by pretending our aims are unclear or unstated. If they wanted to be helpful and do something useful they should turn their attention to the rest of the EU and their aims and positions.

The UK’s position is very easy to grasp for anyone who read the referendum ballot paper or has listened to the Prime Minister. The UK is going to leave the EU. There is no such thing as a single market we can remain in on leaving, and no-one on the Vote Leave campaign suggested there was. As the Uk wishes outside the EU to negotiate trade agreements with non EU countries we clearly will not be in the Customs union. The PM has ruled out EEA membership. This means there is not a lot to negotiate. We will not negotiate our independence with the rest of the EU – that is an absurd contradiction. We will offer them no new barriers to their trade with us, and I expect after a lot of huffing and puffing they will want to accept that offer. If they don’t we will trade with them as most favoured nation under WTO rules, and they will be the big losers on tariffs as a result.

So what do they want? They haven’t yet even confirmed that all UK residents legally living in the rest of the EU can carry on doing so, though the UK has made clear we are happy for all EU legally resident people in the UK to stay if they wish assuming there are no forced evictions from the continent. Isn’t it time the rest of the EU moved to reassure all those citizens? Surely civilised countries who accept international law could bring themselves to reassure people living in their counties?  Why are they so unpleasant to their residents?

Some of them have said they want the UK to continue with freedom of movement. The answer to that is clearly No. They cannot make us do that. Some have then said they wish to damage their trade with us, so they can damage our trade with them, as a punishment for daring to leave. What a ghastly club if it needs to punish members who want their freedom!  The bad joke is of course on those who make these threats. It will be their trade that suffers more, as it is their trade which will attract more of  the tariffs that can be placed on agriculture, wine, and cars whilst most of our trade will be tariff free or very low tariffs under WTO rules.

I don’ t  think in the end, with such high unemployment in the Euro area, they will want to hurt their trade. If they do, it will certainly confirm how wise we were to leave. Why would you want to stay in a club with other members who so want to harm you that they will harm themselves more to do so? Why would you wish to stay with former partners who say such disobliging things and cannot even tell their residents they are of course free to stay where they are living. Time for our journalists to ask some  questions of the 27.