Author: johnredwood

Dr Vince Cable as Business Secretary in the Coalition government set up and financed two new banks using taxpayers money. The Green Investment Bank rushed to invest in the green bonanza, using heavily subsidised taxpayer cash to invest in taxpayer and energy customer subsidised green businesses. The British business bank is available for more general finance for business.

So far the Green Bank has been given £975 million of taxpayers money as capital, and the British business bank £664 million. If taxpayers had just used that to repay some debt, we would have saved around £50 m of interest a year. So how much did these two banks between them earn in profits in their last reported years?

Unfortunately, instead of making us more than the £50 m we could have saved they managed to lose £20 million between them! They paid the taxpayer no interest or dividends on the capital put up. They paid for lots of salaries, some expensive property to trade from, made various loans.  The Green Investment Bank formed a joint venture with the Department for Climate Change to spend some money on green investments abroad, helping competitors overseas.

Neither bank is regulated by the PRA or the FCA in the way all private sector banks are. So now we know the answer to what do you do with £1.6bn to make sure you don’t make any money on it? You give it to a couple of government banks set up by Dr Cable.

I accept the advice of the Electoral Commission. The EU referendum deserves a neutral and clear question. Remain or leave is quite straightforward and meets with general approval as fair. I will vote for that and trust the government will recommend it as an amendment to their Bill.

I read that Mr Farage does not wish to co-operate with other Eurosceptics in running a Leave campaign. He wants to run his own campaign, with one topic, that of immigration. Fine. I now hear that Mr Farage has wisely said he does wish to co-operated with the official campaign but not to run it.

I do not think it would be wise to run the Leave campaign on just one issue, however topical it currently is and however central it clearly is to an important group of voters. The reason we need to leave is wider than current migration problems. We need to leave so we can regain control over our future. We need to leave to be a free and prosperous people. We need to leave to restore our democracy. We need to leave because the EU is increasingly becoming the political union for the Euro area. We need a new relationship with the rest of the EU so we can trade, be friends and co-operate with them outside the current centralising treaties.

We do want to make our own decisions about who to invite into our country. But we also want to make our own decisions about what welfare benefits to give out, about how to regulate our banks, about how to generate our power, what price to charge for electricity, about how we can best look after our environment and who we can deport and extradite. Most of the rest of Europe is embarked on a project to create a United States of Europe. The EU is on a wild ride to political union. UK voters can keep us out of that by voting to leave the current treaties, or by accepting the new relationship Mr Cameron negotiates if he succeeds with this wider vision of fundamental change. The rest of the EU will want to trade with us and do deals with us, and many will be relieved there is no longer worry over the difficult question how does the UK have a relationship which works from inside the centralising EU, now dominated by its single currency.

I hear the government also plans to amend the Bill over the issue of purdah, or the rules over what government can do during the referendum period. As an MP who voted against their original proposal I look forward to seeing their second thoughts.

If you look at the self assessment income tax receipts which include much of the top rate tax collected, you see that over the four years of 50% top rate self assessment income tax came in around £20.5bn a year. This was £2bn or 10% lower than the levels of 2007-8 and 2008-9 when the top rate was 40%

Last year was the first year that self assessment income tax has gone to higher levels, reaching £23.6bn at the 45p top rate. This July saw further  strong upwards movement in self assessment income tax, with growth of 17% over July the previous year.

Success in getting more tax revenue in means that so far this financial year the government is making decent progress in getting the deficit down. The public accounts showed a surplus for July, a good month for collecting tax. The amount of borrowing needed so far this financial year is down by £7.3 bn to £24 bn.

The EU has increased the deficit, not just by its own demands on UK finances, but also by requiring a change of accounting to increase the amount of depreciation the government has to charge itself. This has raised the deficit by a further £1.1 billion this year.

Public spending is forecast to go up a little in cash terms next year and the year after, following the increases proposed in the July budget. As there is currently no CPI inflation and low wage rises in the public sector this means overall a real increase. Total spending is forecast to rise by £12 billion in 2016-17 and by £14 billion in 2017-18. This year it goes up by £6.8bn.

With substantial increases in health, welfare, and EU contributions, and real increases in defence and overseas aid in line with growth in the economy as a whole, this will mean some reductions in other programmes and departments. It is that time of year when the Treasury is looking for ways to get more for less or get the same for less, and when departments are meant to come forward with sensible ideas for being more efficient and cutting out less necessary or wasteful spending.

I have made some suggestion recently on this site and elsewhere. Network Rail’s budget is very wasteful and inefficiencies are large. It should be easy for the new management to save money and achieve more. The area of housing sees large double subsidies, to both homes and people. It should be possible to build, sell and rent out more homes without needing so much subsidy to the housing providers. The budget of the Climate Change department was increased substantially under its Lib Dem Ministers under the Coalition and should be able to manage with less.

The Business department has a large budget. Now Corporation tax is down and growth has resumed, it should be possible to reduce the amount of business subsidy being paid. An energy policy based on exploiting cheaper energy would also help. The two state banks run by the Business department should be expected to make some profits instead of requiring cash.

The government is in the process of seeking to control welfare bills. The two best ways to do so are to help more people into work and into better paid work, and to limit the numbers of new migrants coming to the country.

I look forward to your ideas for ways to bring the bills down.

I am all in favour of Mr Corbyn’s wish to debate political ideas and policies, and to look again at what we can do to improve the work and achievement of the public sector. One of his flagship policies is his stated wish to nationalise the railways. By this I presume he means he wants to take into public ownership the train management companies that are still in the private sector that have the leasehold right to run train services over the nationalised tracks.

These companies are already very heavily regulated by the state. The government lets contracts which specify services to be run, tells the operating companies the subsidies allowed and costs to be controlled. There are price controls on many of the tickets. In practice today we effectively have a nationalised railway, with the bulk of it directly state owned and controlled – all the property, tracks, signals, stations, are in public ownership and the train service management heavily regulated. Only train ownership is private sector under a system which is like an elaborate PFI arrangement.

So my questions to Mr Corbyn are these

1. What added powers would a fully nationalised railway enjoy which the nationalised railway does not already have by virtue of monopoly ownership of track and stations, and strong regulation of train services?

2. How would you use additional powers over train management to improve things, and why couldn’t this be done under existing regulatory powers?

3. Why is the performance of the completely nationalised Network Rail so poor? Why is it 25% less efficient than continental railways? Why does it often have to pay large performance penalties? Why does it need more subsidy when its valuable assets are on a balance sheet with so little net value?

4. Why was it unable to carry out a large agreed investment programme to expand and improve the track and signals in many parts of the country despite having access to large sums of taxpayer money?

5. Would you want buy up all the engines and rolling stock, and if so how would you pay for that? What would be the benefits of owning rather than leasing?

When asked in polls those people who  say they want a nationalised railway want a better railway and are often unaware of the huge extent of public ownership and control already present in UK rail.

The latest rail subsidy figures show Network Rail was given 7% more in 2014-15 as operating grant compared to the previous year. In addition it received £6.4 billion of Treasury guaranteed/subsidised loans for its capital spending programme. When Parliament returns I will want to ask more questions about value for money, progress with curbing inefficiency, and prospective returns on investment.

The main Train operating companies in England sent money to the Treasury as payments to run their franchises. Once again the train companies in receipt of the largest subsidies were Merseyrail, Scotrail and Arriva in Wales. Merseyrail’s subsidy ran at 19.8 p per mile, Scotrail at 13.8p, Wales at 13.6p and Northern at 7.8p. In contrast South West Trains paid in 9.6p a mile, East Coast 8.2p, Thames Link and First Capital each paid in 7.2p a mile to the Treasury. ( I have converted the published figures into pence per mile from pence per km as I thought we had agreed to keep miles for distance measures in our country)

There was an increase in private sector investment in new trains and total net payments by the train operating companies of £802 million to the government. This reflects the fact that the train companies required to pay in money sell more tickets to more passengers than the companies in need of subsidy.

Prior to Labour’s creation of a nationalised Network Rail total rail subsidies ran at around £2 billion a year (in today’s prices) compared with more than double that now. Total net rail grant of £4.8 billion and £6.4 billion more public borrowing means the railway alone now adds £11.2bn to annual public spending. There is considerable scope to improve on this performance.

I thought you might be interested in my submission to the BBC Review, dealing with their question of how well they serve national audiences.

BBC Charter Review Consultation
Department for Culture, Media & Sport
100 Parliament Street
London SW1A 2BQ

25 August 2015

Dear Sirs

I write to submit my views as part of the Public Consultation on the BBC Charter Review. Please accept this letter as a formal submission on the question of how well the BBC serves its national audiences.

The need for a BBC England

I met with BBC Radio Berkshire and BBC South on 18 August 2015 at their request following my submission that the review of the BBC considers BBC services to England.

I did not, of course, meet with BBC England. After much prodding there is now a webpage on England, but there is still no BBC England with England’s news and other programmes in the way there is a BBC Scotland or BBC Wales. The BBC still seeks to implement a regionalisation agenda for England, breaking us up into regions that encourage little loyalty or even recognition.

Why does the BBC insist on trying to balkanise England when it does not do the same for Scotland? The Highlands and islands are very different from the lowlands, the borders are different from the central belt, yet they allow Scotland to be a single entity. Why is my part of England called the South of England? Why is Wokingham lumped with Dorset and the Isle of Wight, but not with neighbouring Surrey or west London?

Why are the BBC so embarrassed by England? The answer appears on their short profile of England which they have now published on the BBC website. In a revealing passage the BBC states:

“Scottish and Welsh nationalist movements have long been part of the political mainstream, and are seen as champions of legitimate historical identities. English nationalism…has often been portrayed as a reaction to non-white immigration and is seen as largely the province of the far right. But there is a constitutional nationalist movement that focuses on the English Parliament issue”.

So England cannot have a BBC England because a few nasty people have pursued extreme nationalism, whereas in the case of other nationalist movements we look at the majority law abiding membership of those movements and not the criminal fringes. It is interesting that they seem to equate proper national coverage for the nations of the UK with nationalisms. Why can’t they just give sensible national coverage for England within the UK? Many English people want their country recognised and loved without wanting to break up the UK.

They are also hung up on devolution. Apparently you cannot have national feelings without a government. Their dismissive attitude to England is unpleasant. “The kingdom of England had a distinct identity until it was subsumed into the UK in 1707″ – not you note 1603 and the union of crowns. “The establishment of devolved parliaments in Northern Ireland, Scotland and Wales after 1997 gave those constituent parts of the UK their own political identity, leaving England the only part directly run by the British government”.

England is a country with no England government. It has officially recognised symbols including its flag which is flown from Churches, sports stadia, and official buildings as appropriate. You are allowed to have the English flag on your number plates. Yet the BBC claims that “Markers of specific identity such as the flag of St George tend to be unofficial, while similar signs of Scottish and Welsh nationhood are sanctioned by the separate institutions of those countries.”

I would like the BBC to stop denying England’s flag and national feelings, stop trying to break England up, and stop judging England by the minority tendency of its criminal extremists.

As England gains her own voice and votes over English laws, Statutory Instruments, tax rates and spending patterns paralleling the work of the Scottish Parliament in Edinburgh, the BBC will need to offer England only coverage of the English political nation. It also needs a better forum for English culture, sport and leisure activities.

The best way forward would be to use the committee of heads of regional broadcasting in England to construct an all-England news, culture and sport offer which is screened at times when Scotland and Wales screen their own equivalents in their BBC franchise areas. This could be compiled by teams from within the regional structures and be from time which would otherwise have regional programming. The website on England should be rewritten in a less dismissive and offensive way, with more historical accuracy.

I trust the Charter Review will take seriously the question of England. Who speaks for England? How will the BBC offer a mirror to the English nation? When will England gain parity with Scotland at the BBC?

Yours sincerely

The Rt Hon John Redwood MP
Member of Parliament for Wokingham

On Tuesday I had a conversation with Mr Brokenshire following his letter to me. He came over as a someone seriously trying to grapple with a genuinely difficult set of problems. I have no doubt he wants to deliver the Prime Minister’s promise of getting net migration down to tens of thousands, and is pushing his officials to come up with ways of limiting the numbers of people coming in under various regulations. He answered my points intelligently and explained the legal constraints that affect it.  I am also quite sure that Mr Cameron himself knows the importance of the promise he made and wants the Home Office to deliver for the government.

I reject the views of those who have written in suggesting there is a tri partisan conspiracy between Labour, Lib Dems and Conservatives to ensure migration levels remain high. Labour did change the rules and did allow and want higher inward migration. Conservatives are trying to change the rules to reverse that policy and get back to nearer the levels of migration that we experienced prior to 1997 under a Conservative policy, when a net 50,000 a year was more normal. Labour multiplied the rate by five.

We do need to ask why is it proving so difficult, and what else does the government have to do to achieve its objective. Of course I understand the frustrations of some that the promise has not been delivered. Ministers are not all powerful, and live under the law like everyone else. At the root of this problem is just how far can Ministers exercise their unique power (with Parliament) to change the law? How many European constraints are there and can they be changed?

The first thing is to defend the current arrangement of having our main  border with France in Calais.  It would make no sense to bring all those would be economic migrants and asylum seekers to the UK, offering them false hope by so doing. Ministers have been right to work with the French government to strengthen that arrangement.

The second thing is to send people back promptly who do arrive here as economic migrants but who do not qualify under our schemes to let in students and suitably qualified workers. The Minister agrees, but says the UK courts and legal system often intervenes to delay sending people back. It should be easiest to ask people to leave at the port of arrival, but the legal requirements  seem to get in the way of making a quick decision there and then. This needs to be tackled in UK legislation to the extent that we have the power to do so.

The third thing is to become better at tracking down and removing illegal stayers in the UK. That will be the point of the stronger legislation the Minister is proposing. All of us have to help enforce the law, by not letting illegal migrants get jobs, school places, rent homes, drive cars and have bank accounts. The idea behind the new checks on access to these facilities is to give the authorities more chance of discovering an illegal migrant and arranging for them to leave.

There are three major problems with enforcing a clear and simple UK law on these matters. The first is the European Court of human rights. The second is freedom of movement within the EU. The third is the workings of the UN Convention.

The government has pledged to tackle the human rights requirements. If the UK Parliament debates and votes to amend the law, that should be sufficient legal and moral guarantee of reasonable law without it being judged again in the ECHR. The original  ECHR was designed to stop military dictatorships or other authoritarian regimes from abusing people, not to stop democratic societies deciding who they welcome to their table.

The government is currently engaged in negotiating a new relationship with the EU. They would be wise to make gaining control over our borders a leading priority, as they need to show the UK voters that after renegotiation they will be able to deliver their migration promise. Leaving the EU would certainly make controlling our borders much easier. The worry today is that any country in the EU can welcome in migrants of various  kinds and then grant them the right to come to the UK under free movement.

The UN Convention on refugees should allow sensible rules, as it did before 1997. The UK should do its bit and take some refugees, but should have the Parliamentary power to decide how many and how their safe passage here can best be handled. Parliament needs to send clear directions to our judges, without foreign laws and courts changing the policy.