Author: johnredwood

I spoke in the Commons debate on Monday on the subject of EU migration:

John Redwood (Wokingham) (Con): I support the Government’s decision to exercise the opt-out. I am pleased that the Government and the official Opposition agree that the United Kingdom should not be part of the Schengen system and that they both wanted to exercise the opt-out.

As an island nation with a neighbour in the Republic of Ireland and with the three countries on our principal island entirely surrounded by water with no land frontier, it clearly makes sense for the United Kingdom to have her own border arrangements. Indeed, it is fundamental to a sovereign people and a sovereign Parliament that one of the decisions that we should be able to make for ourselves is who we invite in and on what terms we invite them in to become citizens of our country. It is a great privilege to be a citizen of our country. It brings all sorts of benefits, as well as responsibilities. Surely that is a decision that this Parliament should wish to make, with the Government offering guidance and leadership, to show that we are in control on this fundamental point.

As the Minister indicated in response to interventions, even though we have opted out of this proposal for allocating refugees and other recent arrivals in the European Union under a quota system, what the Schengen countries do at their common external frontier still matters to the United Kingdom. While we remain under the current European Union treaties, we have to accept the freedom of movement rules. That means that if any other country or part of the European Union accepts people in, they may well be eligible, in due course, to move to the United Kingdom. We are therefore interested directly in how those countries conduct themselves and what they wish to do by way of inviting people into the general European Union area.

We are also interested in the policy of the Schengen countries, which we have opted out of, because the British Government have none the less agreed to spend money and offer resource to police the common external frontier of the Schengen area. In particular, we have committed resources to tackling some part of the desperate problems that the EU migration policy has caused in the Mediterranean, where all too many people commit themselves to hazardous and expensive journeys and then need to be rescued by the Royal Navy and other naval contingents.

Sir William Cash (Stone) (Con): Does my right hon. Friend have any idea of the extent of our share of the costs to which he has just referred? Perhaps he might ask the Minister to consider that. As I understand it, it could be as much as £150 million, but, because the cost of providing for Schengen relocations will, by its nature, be ever-increasing, presumably that amount will go up.

John Redwood: That is an important issue and the Chairman of the European Scrutiny Committee is right to raise it.

I have some sympathy for what the SNP has said. It is a disgrace that our rich and relatively successful continent is facing this huge crisis, with many refugees and economic migrants arriving, and the system is unable to cope with them. We have to ask why that is. Given that we do not wish to see people undertaking such hazardous journeys and that we do not feel that the way in which European Union policy is impacting on those people is decent, we need to influence our partners in the European Union to do something better.

Again, I find myself in complete agreement with the Government. They are right that the correct thing to do for refugees is to work with the United Nations and our other partners to make sure that there is a safe place of refuge near to the place they fled from, and be there to talk to them and to consider who would like to come to countries in Europe and elsewhere and decide on what basis we will admit people from those camps. That is surely the humane way to approach the issue, and it obviates the need for people to undertake extremely hazardous, and often very expensive, journeys.

Only the richest and fittest among those groups can undertake such journeys, only then to discover that the hazards are too great and that they may lose their lives or need rescuing from the Mediterranean. Surely the money that we are spending on picking people out of the Mediterranean could be better spent on an orderly system closer to the place from which people are fleeing, and on helping them to get legal transport to come to the country of their choice once they have been offered that facility.
Such a system would also mean that we could make clearer and better distinctions between economic migrants and genuine refugees. There are, of course, a lot of genuine refugees from a country such as Syria, but different considerations should apply in the way that we respond to a lot of economic migrants who come along at the same time from a range of countries in the middle east and Africa.

Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP): Does the right hon. Gentleman have anything further to add about the unaccompanied children who are arriving in Europe and who appear to be extremely vulnerable and in need of assistance?

John Redwood: Of course our hearts—mine as well as the hon. Lady’s—go out to those children, and such things should not be happening. It is only happening because adults have allowed it to, or made it happen, because children do not normally have their own money or wherewithal to do such things.

Somewhere in the process adults have persuaded or set up those children to make those journeys, and placed them in the hands of people traffickers who may be very destructive towards their interests and their lives. The remit of the United Kingdom is quite large, but we cannot get into the homes and minds of all the parents, aunts and uncles who commit those children to such hazardous journeys, or into the minds of other adults who should be offering care if a child’s parents have been tragically taken from them by violence in the country in which they were living.

Surely the European Union, with all its powerful and rich countries, could do a better job in coming up with an orderly and sensible way of handing help and assistance to genuine refugees who are being forced out of war-torn areas or countries by civil wars and violence. We must also send a clear message to economic migrants that there is an orderly system, and that they are not welcome if they turn up as illegal migrants. People should go through a proper process in the country from which they are coming, or in a place adjacent to that country if they have already started their journey. That would be a better way of doing things.

When Angela Merkel—perhaps for the best of reasons, both because Germany would like a bigger workforce and because she felt very sorry for these people—suggested that many more migrants should turn up, I fear that that compounded the problem. Far from being a caring solution, it meant that many thousands more people committed themselves to hazardous journeys, only to find when they arrived that other countries in the European Union did not have the same view as Angela Merkel, that the policy was not clear, and that certain borders were shut in a rather unpleasant way with razor wire and high fences, because the numbers were simply too great and people could not be handled.

I support the motion and urge the Government to do far more to try to persuade our partners that EU policy is letting down refugees and economic migrants, as well as the member states and inhabitants of the European Union. This issue is of vital interest to us because we want the EU to have a more caring policy, and because decisions taken in any other EU country can have a direct impact on our own migration policy, owing to our current status as a member of that body and as part of the freedom of movement provisions.

Many people watching these awful tragedies unfold on television, or when reading newspapers or even listening to some of our debates in this place, will conclude that as an island nation we can—and should—control our own borders. We could do a rather more humane job than the European Union is currently doing, and perhaps for Britain, that is the best answer.

Who you let into your country is a fundamental power of a sovereign people and government. Making decisions about who can come and who can work is best done fairly, with the same criteria for people from anywhere in the world. Membership of the EU prevents a country exercising that right, or being fair to applicants.

Deciding how much money to raise in taxes and how much to give out in welfare benefits is also a fundamental power of a sovereign people and Parliament. When Mr Blair pushed us into the Nice and Amsterdam Treaties, and Mr Brown finished the job with the Lisbon Treaty, they assured us that tax and welfare were “red line” issues. The Uk would still be free to make its own decisions about how much to tax, and how much to give to whom in welfare. They misled us.

As a result of the centralising Treaties we are signed up to, the UK now has to accept any migrant from the rest of the EU and has to accept substantial intervention in our tax and welfare policies. The government understands the unpopularity of the EU controls on these matters, and has said it wishes to renegotiate our relationship.

In the letter to Donald Tusk they sought to tackle the welfare issue, and argued that if they stopped benefits to people arriving from the rest of the EU for a four year period after their arrival they would also tackle the questions of the numbers of migrants. These two problems are different. There is some overlap, but a sovereign country needs both to control its own borders,and settle its own welfare. The proposal in the letter to Mr Tusk does not give us control back over our borders. Nor would it even necessarily give us control back over welfare. Unless we have a Treaty change which explicitly says the UK can choose any welfare system it likes, a future EU or ECJ decision could damage or get round any agreement to let us stop benefits to EU arrivals for the first four years.

Mr Johnson says maybe the UK could get an opt out from the freedom of movement requirements. That seems very unlikely, given the strength of feeling on the continent about the importance of freedom of movement. Nor does it tackle the welfare issue. It would be an opt out worth having, but it would not allow us to settle our own welfare criteria.

The lack of power the UK now has over both borders and welfare is at the heart of the EU membership debate. To restore our sovereignty we need clear changes to our Treaty commitments. This does not seem likely. The simplest way to take back control is to leave the treaties altogether. Then we would have the right to set our own immigration policy and our own welfare policy, as we were told we still could when a previous government signed away our democratic powers.

The October figures for our balance of payments published last week were disappointing. Once again we ran a large deficit. Such deficits have to paid for by either selling UK assets to foreigners, or by borrowing from abroad. There are limits to how much of this a country can and should do.

I know advocates of staying in the EU want to keep us running a very large balance of payments deficit. They always say we need to run high levels of inward investment = which means we need to keep selling assets to foreigners. They want us to stay in on current terms to keep the trade at current levels, which of course means keeping our imports far higher than our exports to the rest of the EU. When it comes to EU/UK trade the UK is the customer and the rest of the EU is the supplier. That’s why some of us think we can get a better deal, and need a better deal.

Using the 2014 annual figures, if we left the EU we would immediately be £10 billion a year better off. In 2014 our transactions with the EU institutions required by our membership cost us a net £10 billion. That was money we had to send to them. That was money that cost us a loss of £ 10 billion on our balance of payments. All that contribution had to be funded by borrowing from abroad or selling more of our assets.

In 2014 the UK ran a current balance of payments deficit with the rest of the EU at the whopping level of £107 billion. Fortunately our trade with the rest of the world was in surplus, so that cut back the overall deficit a bit. £30 billion of that was our trade deficit in goods with Germany, who sells us twice as many goods by value as we sell her. We also run large goods deficits with Italy, Spain and Belgium amongst others.

I will in future posts look at how an independent UK could narrow its balance of payments deficit. But first we need to get people to understand that far from helping the UK, the EU relationship itself is a major cause of the big balance of payments deficit we run. Coming out would immediately make a very positive contribution to correcting it. We have run a large balance of payments deficit with the rest of the EU for most of the time we have been in it, as the EEC/EU liberalised trade in the things Germany is good at more than the things we are good at.

Phew! What a relief. They have agreed to limit the temperature in 2100 to only 1.5 degrees Celsius higher than the level before industrialisation began. The elite tell us that is great news. We can all sleep easier in our beds. I admire their certainty and the precision of their forecasts.

So now that is sorted, can we get on and tackle the problems of people in 2015? Let’s start with the shortage of affordable energy, and go on to deal with the lack of clean drinking water and piped supplies in many places. Let’s tackle the poverty of the poorest countries of the world with programmes based on trade, investment and free enterprise. Lets tackle low incomes at home with policies to promote better paid jobs, wider ownership, and access to more affordable energy, water, broadband and services.

If we wish to tackle world poverty, as I do, it helps to start with more efforts to end wars and heal civil conflicts. One of the main drivers of poverty in African countries is endemic lawlessness and wanton violence which prevent normal commercial activity and the quiet ways of peace. The efforts 196 countries and the UN put into the climate change agreement needs to be more than matched with political initiatives to teach the arts of peace and orderly government to places that lack them.Where people think they are forced to live together in the wrong country there needs to be referenda and a political process to determine better borders. Where there are corrupt and tyrannical governments that damage freedom and prosperity there needs to be support for a national conversation which can gradually change those societies from within, as the great democracies achieved many years ago through their own internal stirrings and opposition forces.

The wars now raging in parts of the Middle East are visibly destroying buildings and commercial assets, as well as impeding commerce and killing and mutilating local residents. Whilst the deaths are the worst feature of the madness of war, the way it prevents civilian business and advancement can become a self reinforcing mechanism to prosper only the thugs and the military commanders. Where is there hope when so many young men are either out of work or in a violent gang? Where is the better future when a young man thinks his best hope of advancement is to show skill in visiting violence on his neighbours? How does a society survive when warring bands fight to plunder the diminishing assets of the territory fought over?

I am no pacifist. Sometimes violence requires superior force to deal with it so others can live in peace. That is why the victor nations from the last world war set up the UN, to authorise and help guide state force against evil governments and out of control insurgencies. We also need to recognise that after the violence, or to end the violence, there does always need to be a political process. War is a means of shifting the balance of forces to change the politics decisively, and can sometimes do that for the better. It is no permanent substitute for politics or for a peace process. It is in itself always destructive, always imposes a high price in lives and lost economic activity, and always has to be replaced by stable government and economic repair for anyone to claim it has had a worthwhile outcome. Will the UN today show some decisive concern about these weighty current matters now it has fixed the weather in 2100?

The world’s governments, large environmental quangos and companies have been locked in talks to save the planet.

Let us make a couple of assumptions that will be unpopular on this site. Let us assume the world is warming. Let us assume that the main driver of this warming is the production of extra carbon dioxide from man made sources. I know that many of you are not persuaded the world is simply warming in a predictable way. Many of you think sunspots and other solar activity, volcanoes, natural carbon dioxide, water vapour and patterns of cloud cover will all have effects on the long run climate. Global warming theorists assure us they have taken this all into account and that these other factors are unimportant compared to man made carbon dioxide.

If we accept the conventional wisdom we can see why there is currently a row between the rich and poor nations, and an argument over whether to spend money on prevention or on adaptation. The poor countries say to the rich, you have created much of the carbon dioxide which causes the problem, so you should pay us to adapt to the results. The rich say it is now the poorer countries which are adding most to the world output of carbon dioxide, so they have to take expensive action to limit their contribution to the problem. The result will be an agreement which entails the rich paying more to help the poor, and results in more emphasis on adaptation. There is much haggling over surprisingly small possible changes in temperature, arguing over 0.5% of a degree, as if the experts can be that accurate.

One of the strange features of the debate is the absence of much talk about population growth. If you believe the world cannot take much more carbon dioxide, surely you want to limit the numbers of people joining the world population. The best strategy for a single country like the UK to cut its carbon dioxide output would be to limit immigration much more successfully, as this would reduce the need for carbon intensive new investments in additional capacity of all kinds to cater for the extra people. China, the world’s most populous country, has had a policy of limiting population growth for many years. It is now changing this as it can have difficult consequences for mothers and babies. The best policy to limit population growth is a policy which promotes higher incomes for all. Family size usually falls through voluntary action as income rises.

The problems with conventional policy responses based on trying to prevent more carbon dioxide include their adverse impact on income levels and therefore on population numbers. The danger of anti global warming policies in a single country like the UK is they may through dear energy simply send our energy intensive businesses to another country, so we lose the jobs but the carbon dioxide is still created elsewhere to meet out demands. Some responses to this problem as defined by the governments will make it worse, not better.

What do Central Banks do when interest rates are around zero or even negative, and Quantitative easing does not seem to be offering much stimulus?

Some say the next thing is helicopter money. By this they mean the Central Bank creates new electronic money in an account (the modern version of printing notes or clipping coins) and gives it to people. The idea is they would then go out and spend. The sages think that if the economy is working below full capacity then the extra money spent will be more demand, and will bring more of the unused raw materials and labour into use. Clearly the conditions would have to be very unusual. Normally if a Central Bank prints more and gives it away or spends the cash it leads to more inflation. Those countries that have tried it to excess end up with hyperinflation, like Germany after the First World War or Zimbabwe more recently.

There are disguised or more elegant variants of helicopter money that are on the agendas of some with power in our modern world. Finland, a poster boy of Euro financial rectitude, is struggling with no growth and lower living standards as a result of the cruel Euro policies being followed. There the government is asking should it move to a system of basic income, where every adult, rich or poor, in work or out of work, is given a tax free basic income by the state. Most other benefits would be removed to partially offset the huge costs, but there would still be a big increase in total public spending from giving money to people not currently on benefits. The idea is work incentives would be bolstered, as there would be no benefit withdrawal as people took on paid employment. If the basic income is enough to get by on, the incentive effects may not be as sharp as some hope. If the basic income is not high enough to live on, then the state will have to carry on with an additional range of means tested benefits for those in poverty.

Some think this is a variant of helicopter money, but under the Euro scheme it is not. Finland cannot print the money to pay for the basic income. Only the ECB can print money, and it shows no signs of wanting to send newly created money to an individual state to pay for more spending, which remains against its rules. So if Finland wished to stick within the tough budget deficit controls of the Euro it would need to raise other taxes to pay the bills. If it was prepared to break the rules on deficits then it would borrow more to pay the bills, making this a normal fiscal stimulus akin to a tax cut.

Another variant is Mr Corbyn’s People’s Quantitative Easing. Under this model the Bank of England would create new money to buy the UK more infrastructure, or it would buy the bonds the state needed to issue to pay for infrastructure in the more normal way. It amounts to the same thing if the state in due course cancels the bonds it has bought up from the market in pursuit of its QE programme. If the extra borrowings have later to be repaid to the private sector, then it is simply a higher borrowing policy of the familiar kind.

I trust the Bank of England will not need to play around with such measures. Nor should the USA need them. Bond and property markets have been pushed quite high enough already by the large Quantitative Easing programmes already undertaken by the four leading monetary authorities of the world. In the Euro area they need to break up the zone so currencies can find their own levels against each other again, and individual Central Banks can follow money policies and set interest rates appropriate for their country. Far from needing more radical and possibly dangerous monetary policies, the Euro needs to go back to more reliable basics. Monetary authorities need to work with sovereign governments who have control over taxing and spending in the area of the monetary union. Together national Central Banks and governments in each country could fix the slow growth and no growth of parts of the current Eurozone. If the Eurozone is going to develop more it needs to get on quickly with its ideas of political union, a Euro Treasury, a common European budget, and much larger transfers from rich to poor. That is what we have in the sterling currency union, and the USA has in its dollar union.