Author: johnredwood

I go to London  today in the knowledge that we face a period of constitutional upheaval. The new Parliament has to complete the settlement for Scotland, offered by all three main parties of the 2010 Parliament. It has to deal with the growing powers of the European Union, as the Euro area seeks to complete its political union on top of its currency union. Above all the new Parliament needs to tackle the problem of England.

The General election was mainly fought around the issues of the UK economy and England’s health service. The Labour campaign largely missed the main points that the new Parliament has to settle. The English NHS was not under threat of privatisation and cuts in the way Labour claimed. Labour’s popular offer of a freeze on energy bills was overtaken by tumbling oil and gas prices, and recommended a solution which is likely to make the energy position worse.

The Conservative campaign concentrated on the economy, with a popular offer of tax cuts. Conservatives also mentioned the question of England and the need for a renegotiation and referendum on the EU, though this did not become the main issue of the election.

Today the reality needs to set in. The UK’s union has been badly damaged by Labour’s lop sided devolution policies of the last 18 years, with Labour once again providing a lead in offering a more lop sided devolution in the Scottish referendum campaign which was cross party.  Conservatives have proposed English votes for English needs. The official party position offers England a veto over all English matters. I wish to see a positive power for England MPs to propose and decide budgetary, tax and legal matters that apply only to England ( with Wales and Northern Ireland where the matter is only devolved to Scotland).

Labour and Lib Dem wishes to delay justice for England by a constitutional convention should not be allowed to hold up English votes at Westminster. Nor should England accept just devolution to cities and counties. England herself needs to settle the distribution of the England block grant, to fix her own taxes where they are devolved elsewhere in the Union, and pass her own laws.

As pressing is the need to engage the Euro area in discussion, to ensure the UK is not dragged into their political union, and to extricate ourselves from many powers which have already been given away without referendum endorsement under Nice, Amsterdam and Lisbon. As these Treaties are no longer separate documents, we need to review the full consolidated Treaty and seek exit from its federal controls, or negotiate trade arrangements and other co-operation agreements  in place of the Treaty.

The Greek crisis is revealing that of course the richer parts of the Euro area have to come to aid of the poorer parts. The rich parts have to stand behind the banks of the whole. The UK did the Euro a great service by staying out. Had we been in during the 2007-8 UK banking crash, I suspect we would have brought the Euro down, just as surely as we brought down the Exchange Rate Mechanism. It is now time the Euro area showed its appreciation of that wisdom, by agreeing we should not be part of the many controls and financial arrangements that a single currency area needs.

On the other side of the world China is emerging as a major economic force. The administration in charge is progressively liberalising the Chinese economy, and bringing it more into the world marketplace. The new Connector between Hong Kong and the mainland permits more foreigners to buy Chinese shares and more Chinese to buy Hong Kong quoted shares.  China is working towards her currency being one of the big five in the IMF’s SDRs, and is out to establish the renminbi as the world’s second largest trading currency after the dollar. The Silk Road projects will spread China’s economic relations into the Middle East, Africa and Eastern Europe.

China under her previous administration showed she could become the world’s largest manufacturer. Her make it and sell it abroad model powered growth and allowed the country to build up large foreign exchange reserves. The  current ten year plan wishes to do the same with services, expanding them greatly. The money China has in reserves will help her build large financial and banking services businesses with global reach.

The west has to respond intelligently to these important developments.  The USA is seeking to construct a trade club built around Japan, her leading ally in Asia. The US will discover that China’s networks will also attract considerable support, as China’s advance is backed by substantial investment cash and a willingness to think big and take the long term view.

Today is the day for the voters to speak through their votes. I will not be posting about the UK today, until after the polls have closed.

Labour should know all about austerity. They plunged the UK private sector into the most severe austerity by their large mistakes in 2007-9. Not content with fuelling an irresponsible boom in credit in 2003-7, they decided to make the worse error of stopping it all so abruptly that they brought down several banks. They threw the UK economy into the worst recession since the 1930s. Many people lost their jobs. Incomes were squeezed. Businesses failed or became unprofitable. That’s austerity.

The Coalition have made a start to reversing Labour’s cruel austerity. Many more people are now in jobs, with unemployment down. UK output and incomes overall are now back above the 2007 level before the crash. Living standards are rising again after the sharp fall in 2007-9 and the squeeze thereafter.

Many commentators think austerity is a new word for public expenditure cuts. They need to realise that the bulk of jobs in the UK are in the private sector. 26 million people work for employers other than the state. It was this large majority that felt the full pain of the cuts. Public expenditure in real terms carried on rising in the Labour years, and rose again by a small amount in real terms under the Coalition. There were individual cuts in particular departments and programmes, but no overall reduction.

I am a strong critic of austerity. I opposed Labour’s credit binge and mega bank mergers on the way up before the crash, and I opposed Labour’s clumsy bank regulation and nationalisation which made the crash more intense and cast a long shadow over the recovery.

I want the current economic recovery to continue. To speed it we need tax cuts, not higher taxes. To fuel it we need policies that are positive for business and enterprise, not hostile to success. It was ill judged regulation from the state that brought the banks to their knees and damaged the private sector. It will be allowing people more freedom to set up and grow companies which will power the recovery.

The UK is close to the point now where the commercial banks can finance a recovery without further artificial public sector stimulus. Pursuing more anti bank rhetoric would not be a good idea. Whilst many people may  not like banks, if you damage the banks you damage the rest of the economy. What Labour does not seem to have learnt from its bitter experiences of 2007-9 is if you get the banks wrong, it is other people in many other sectors and businesses that lose their jobs or struggle to maintain their commercial activities. Sometimes politicians have to stand up for the unpopular, and explain to people why the politics of jealousy or revenge may make things worse, not better.

On this main part of the site anyone wishing to name individual seats or candidates has to supply a full list of candidates in that seat and comply with election rules. I am deleting all posts that do not conform.

Energy policy is Cinderella who should come to the election ball. A combination of EU policy and UK policy first established by Mr Miliband’s legislation leaves the UK with dear energy, and with greater uncertainty over supply. They have encouraged undue dependence on wind energy, and have closed too many power stations that burned fossil fuels. The next government needs to accelerate the new build of power stations. A wise government will cut our dependence on wind energy.

Conservatives have pledged to build no more onshore wind farms with subsidies. Labour, the Lib Dems and Greens wish to press on with more subsidised wind farms. To do so will just make our energy dearer, and less reliable. We will need to build more back up power for the days when the wind does not blow. That backup power will need to be very heavily subsidised, as no-one will build a modern efficient gas or coal station if they are not allowed to run it when the wind blows.

Green enthusiasts reckoned fossil fuel prices would go up, making the extra cost of wind energy less oppressive over time. Instead, fossil fuel prices have just halved, making wind energy so much dearer relatively. This problem means less jobs, less industry and poorer families. It means exporting activities to countries with cheaper energy, not burning less for the world as a whole. It is a foolish policy. I want the election to discuss it, and for voters to vote against all candidates who are pledged to dear energy, more de-industrialisation, and  more fuel poverty.