Author: johnredwood

Last week Nissan made a most welcome announcement. They said the new Juke car will be made in the UK, with a £100 million investment in their Sunderland factory assuring its jobs and success through into the next decade. When asked by the BBC, their Chairman confirmed that this decision was not dependent on any particular outcome to the referendum on UK’s membership of the EU. The decision is a recognition of the efficiency and quality of work in the UK and the growing market for cars here.

Tata Motors have come to a similar decision, with their announcement of a £400 million expansion, including a new engine plant in the UK. They too have been impressed by the quality, efficiency and technology the UK is capable of delivering, and like the UK domestic market for their products.

I welcome this for its own sake. I too have been impressed by what has been achieved in recent years. The UK now has world beating factories achieving great results.

I also welcome what this means for the EU referendum debate. Some years ago three leading car producers with factories in the UK made clear they wished the UK to enter the Euro, and went on to say they would not carry on investing here if the UK stayed out. I will not repeat the quotes and name the companies, as I am pleased to report they all changed their minds, and all went on to invest more. It appears that this time round the pro EU politicians will not be able to rely on quotes from overseas car producers to justify their threatening and wrong forecasts that we will watch our car industry shrink if we leave the EU, as the main players are committed to long term expansion plans regardless of the decision.

As I have long argued, there is no way we wish to end up with tariffs against German or French car imports into the UK, even though they sell more to us than we sell to them. There is no likelihood of new higher tariffs on cars made here. Germany has told us she does not want higher tariffs on the car trade with the UK. The worldwide industry will go on investing in the UK all the time management and workforce do a great job on quality, efficiency and cost. If we vote to leave the EU we will still trade with them, be friends with them, and have many agreements and contacts with them.

The EU’s border and migration administration reveals a dithering, divided policy. In recent days we have seen Hungary try to keep migrants out of the EU altogether, but have to accept thousands without legal documents. We have seen Hungary tell migrants under EU rules they must stay in Hungary and claim asylum there or leave the EU, only to see Austria and Germany welcome them without Hungary doing its stated job. We have seen Hungary refuse to allow migrants to use trains and buses to cross their country, and then to offer free buses to some migrants who decided on a dangerous walk on a motorway. We still do not know if Germany really means she is only accepting Syrian refugees, or whether she will accept anyone from anywhere that has made the difficult journey to her border, refugee or economic migrant. The BBC said there were people from many countries crossing Hungary, and many were likely to be economic migrants. Will Germany send back those who are not fleeing violence against themselves in Syria?

We have seen Germany change the rules over how to assess and receive migrants unilaterally, and say there must be a quota system to take more. Germany has not explained how you make migrants go to countries within the EU that they do not favour, or how you stop them going to countries already above quota once the migrants have gained legal documents allowing them to live and work in the EU.

This muddled policy can also be dangerous. I am sure they do not intend it to be so, but holding out the hope of an EU welcome and citizenship to any who use people smugglers to make the hazardous journey from Africa, the Middle East and elsewhere and who eventually arrive tired and troubled at an EU border is in danger of putting more at risk. It could simply fuel the people smugglers cruel bonanza. As we have seen, even when they arrive in the EU there are still travel dangers if the migrants walk with children on railway lines and motorways rather than have permission and tickets to travel safely.

I think the UK is right to say the best way to help Syrian refugees is to provide support and assistance close to the homeland they have left on a far bigger scale than the EU is thinking of doing for individual refugees coming to the EU by hazardous means. I also think the rich Arab states adjacent to Syria could offer more help and support. In the UK when our children in London and other at risk locations were threatened nightly in the Second World War bombing raids they were taken out of danger as evacuees to safer parts of the country. Shouldn’t the Middle east safer countries and areas be offering something similar to children at risk in the most troubled fighting zones, whilst the regional governments and politicians work out how to find a longer term solution to the wars?
There are so many tragic deaths of children in these conflicts, and many of them passed unnoticed as children are bombed or shelled in their beds at home in war zones or die away from western cameras on their long journeys seeking a better life.

Some of you write in protest any day I chose to write about something other than migration. There is plenty about migration in the main media at the moment. I have run three recent pieces on this topic, including a statement from the Minister about the policy they are following. I will return to it from time to time when I have something to add or when the government has taken further action.

One of the main things I do on this site is to release stories and commentaries that are different from those running from the main spin machines in the main media. Sometimes these different issues and stories do get picked up by the main media and/or the main political parties. This happened to some of my work on justice for England, stamp duty reform and home ownership last year. Today the Sunday Express featured the story about Network Rail’s losses on financial derivatives which I highlighted here last month.

I fully understand the importance of the migration issue but do not intend to turn this into a migration only website.

In 1973-4, the last year of a Conservative government, public spending was £33.4bn or 42.1% of GDP.

The Labour government that followed put it up to 48.9% of GDP, only to be forced into cuts by the IMF. By the time they left office annual spending was ££79.7bn, or 44.1% of GDP.

Mrs Thatcher’s government  left office in 1990. Total spending was then £216.8bn or  37.5% of GDP.

Mr Major left office in 1997, with spending at £324 bn or 38.2% of GDP.

Mr Blair and Mr Brown boosted spending to £686.5bn, or 45.7% of GDP by 2009-10.

The Coalition increased spending to £ 735.5bn, or 40.7% of GDP.

So taking percentage of GDP as many people’s preferred measure of public spending,  one Labour government boosted it by 2% and one by 7.5%. The Conservative government of 1979-97 reduced it by 5.9%  (Mrs Thatcher actually reduced it by 6.6%)and the Coalition cut it by 5% of GDP.

The fact that the high levels of public spending as a proportion of GDP led directly to an IMF crisis and forced cuts in the 1970s, and was part of a wider banking crash in the late 2000s should be a warning to all those who think the easy answer to economic success is to boost public spending. These periods of very high spending coincided with poor economic performance-  part cause and part effect. Each Conservative period in office has had to include getting public spending and borrowing back under control to avoid further interest rate and banking problems.

No Conservative government has cut cash spending. Over all the years of alleged cuts public spending has risen substantially in cash terms and has usually gone up in real terms as well.

Manchester grew prosperous on the cotton industry. At its peak there were 108 cotton mills in the city, and fortunes to be made in designing, spinning, weaving, garment making, selling and financing. Sheffield has long been famous for its cutlery. It pioneered new steel making techniques and sells Sheffield plate to the world. Leeds grew as a large woollen textile centre with a range of services for the Yorkshire industry. Liverpool grew rich and famous on its shipping and transatlantic trades.

The twentieth century was not so kind to many of these industries. Under governments of all persuasions we watched as the wool and cotton industries were challenged by new rivals abroad. The transatlantic liners were largely replaced by airplanes from Heathrow and much of the goods trade shifted to east coast ports. The steel industry also faced new cheaper competitors.

Most of the political debate about a Northern powerhouse is about what government can do for a city, and about who should govern a city. These are important issues. I don’t doubt that good transport links, strong universities, high levels of education and training for local young people, and good housing can help a great city grow and flourish. It may be that local politicians can do a better job than Whitehall at spending the large sums of public money that are on offer, but they will need to prove that by their actions.

There remains the larger question of how are these important cities going to develop and rebuild their private sectors? There are signs of progress, with Manchester’s airport related commercial expansion and with the Leeds financial services developments. To catch up with London all these cities are going to need much larger private sectors, with more modern business activities adding jobs and making profits.

Better rail and road links are needed to export more goods and services to the south, more than to encourage more long distance commuting into the capital. These cities need more higher -priced housing for sale as well as affordable housing to rent, to attract the investors and entrepreneurs. Whilst it is largely up to the private sector to make its own judgements about what it can make and do, the cities that succeed have to show a positive wish to recruit and nurture new business and sometimes need to kickstart sectors or themes for business clusters.

London has recently attracted more hi tec business to the Old Street area by theming Silicon roundabout. Cambridge has been successful at attracting medical and science based businesses to its campus style business parks. The Reading area in recent decades has been successful at attracting a cluster of computer based businesses to the Thames Valley. The Northern Powerhouse can also power ahead by such initiatives. Modern cities cluster excellence and enterprise, just as Manchester has been the foremost technical and financial centre in the world for cotton textiles, and Sheffield was the dominant world leader for steel innovation.

The European Central Bank has a good way of setting out its agenda whilst protecting its boss, Mr Draghi, from any flack. The talkative Central Banker, Benoit Coeure, is a senior member of the ECB Board. He regularly gives interesting lectures gazing into a more integrated European future. These lectures appear on the official ECB website and are given in his ECB capacity. So they are official bank statements, but Mr Draghi falls short of putting his own name to them which might make them more newsworthy.

In his latest, Mr Coeure explains the urgent need for a Euro Treasury, the very Euro Treasury which Mr Draghi did in outline support when he added his name to other 4 Presidents in their statement of common policy. He tells us “Our (EU) institutional framework is not yet sufficient to complete EMU when it comes to economic, fiscal and financial matters. The ECB does not currently have a strong political counterpart in these areas”. He recognises the huge economic and social damage being done by the current Euro scheme: “The crisis (Greece) showed that excessive imbalances and fragilities have been allowed to develop in a number of Euro area countries in the absence of sufficient safeguards… the consequences are not just economic, they are also political. Unemployment hits the young hardest, creating a lost generation.”

His remedy is a Euro Treasury. This would both be able to enforce budget discipline on each member state, but also able to route money from rich to poor. “We cannot advocate a Europe of solidarity (transfer payments ed) while believing that the economic policies of each Euro area country are the business of that country’s Parliament alone”. Exactly. He and his Euro friends wish to sell the Euro Treasury to the Germans as the way to stop excess spending and excess credit in places like Greece, Spain and Portugal, and wants to sell the Euro to the struggling countries as the means for them to gain access to solidarity payments from the richer areas.

He sees this raises issues of accountability. He helpfully suggests ” The joint implementation of a political project and an economic strategy also assumes that our political union will be strengthened… I have spoken out in favour of the creation of a finance ministry for the whole Euro area under the oversight of the European Parliament”

This has serious repercussions for the UK. We are rapidly moving to a world where the Euro drives major political changes with decisions shifting to the centre. Mr Coeure wishes to use the single market as part of the mechanism for his reforms where the UK is directly involved. The banking union too increasingly envelops UK banks in its fold. Are we going to have two categories of MEP, those from Euro participating countries and those from outside? Or do we get to debate and vote the spending of their currency union money?