Author: johnredwood

I have no more liking for governments that kill their own voters than most who write about the Ukraine. Nor do I like corrupt governments, or Presidents who imprison their opponents. These ways of behaving are incompatible with a modern democracy.

Equally incompatible with democracy is taking to the streets with Molotov cocktails, pulling up the cobbles and paving stones to throw at the police, or taking over the main buildings of a government in paramilitary uniforms, with weapons in hand. The dreadful scenes from the Ukraine, and the tragic loss of life, shows that country has a long way to go to create a stable democracy.

In a democracy those who disagree with the government campaign noisily but peacefully for change, in the knowledge that a bad government will be thrown out at the next election anyway with a peaceful transition to something new. Opposition enjoys immunity for what it says, short of libel. In a democracy the government moves willingly towards its critics when they have good points to prevent its popularity plunging too far. Both sides accept the rule of law, and the police are neutral. The government does not shoot or imprison political opponents, and political opponents do not take to arms themselves.

So far I trust all are in agreement with me. We then have to ask what is the role of the EU in these fast changing events in the Ukraine? Does it make sense to be on one side and to encourage revolution, when the west if it has an interest should be helping a fractured country build a more stable democracy? Did the negotiations the EU undertook to force change on the government help, when the revolutionaries saw the compromise as a sign of weakness that they need not accept. The EU compromise did not last for a single day.

The events in the Ukraine revealed the weakness of EU intervention, given the fact that the EU was never going to intervene on the ground to reassert law and order and decide who governs. The main issue concerning the EU is how is its intervention perceived by others outside the Ukraine? What will it do to Russia, who has interests in the region? Does it make a split in the Ukraine between the Russian influenced East and the EU influenced west more likely? Isn’t the EU just playing dangerous big power politics over the heads of a troubled country, without the troops and the political will to intervene directly? I hasten to add that the last thing I want is an armed EU that does intervene.

The west generally has to understand that Russia has legitimate interests in the region, as well as being a force to reckon with. Whilst I am no lover of Russian policy here either, I do think the west needs to distinguish between Mr Putin’s legitimate needs and aims, and where he pushes too far in an anti democratic direction.

If the EU were serious about challenging Mr Putin they should first gain energy independence by going for cheap locally produced energy instead of relying on Russian gas. One of the main reasons I want my country to be able to run its own affairs again is I think pushing for energy self sufficiency for the UK is a realistic goal, if only we did not have to follow EU policies. A country or group of countries that is dependent on too much imported energy will always have to compromise in ways it may not like.

London is in a class of its own when it comes to job creation, income levels and economic dynamism. The gap between London and the rest of the country grew substantially under Labour and has continued to grow under the Coalition. Instead of trying to think up new ways to tax London or to discourage it, maybe we should study its success a little more and see how other great cities in the UK could do the same. We should want to narrow the gap by the rest improving, not by seeking to damage London’s success in financial services, banking and property.

A recent study by the Centre for cities shows that London increased private sector jobs by 5.7% between 2010 and 2012. Birmingham at 2.2% and Manchester at 2% were also positive, whilst jobs were declining in Glasgow, Sheffield ands Bristol. Edinburgh, Liverpool and Brighton were also successes with higher rates of job creation.

London excelled at business formation. There were 76 business starts up per 10,000 people in London in 2012 compared to a UK average of 42. Sheffield at 29, Nottingham at 30 and Newcastle at 30 were particularly low. 47% of London’s population have high level qualifications compared to a national average of 34% and just 23% in Liverpool. London has 463 businesses per 10,000 people com-pared to just 175 in Sunderland and 203 in Plymouth.

These differences resulted in London enjoying average workplace earnings of £684 a week compared to a UK average of £502.Sheffield at £444 and Nottingham at £452 were much lower.

The message from the figures is clear. If you want people to earn more and for the community to be more prosperous, then it has to be open to talent, keen on encouraging higher educational attainment, and above all has to be friendly and open to enterprise. London’s success owes something to inviting talent and money from abroad, but it also provides an environment for many talented and well educated UK people to set up businesses and earn good money.

Urban centres like Reading, Oxford and Cambridge are doing something similar. We need to kindle the same enthusiasms in those cities which are struggling. Success comes from a high rate of new business formation, not just from a few major investors from abroad. London has the highest incomes, the highest value added, but relatively low public spending per head. It is the success of the private sector that marks London out from most of the rest.

Cities which do best usually have a central focus to their activities. Oxford and Cambridge do well based on the importance of their universities. They are now spinning off knowledge and technology based companies from their universities. The civic leaders of the great Northern cities have to work with the private sector investors and companies they have on what else they need to do to make their environments more attractive to entrepreneurs and larger inward investors. I am interested in your thoughts of how other cities can develop specialities as London has in finance and business services, to power their growth.

It is fashionable to say that PMQ s has become an over the top shouting match which the nation no longer likes.

I would believe that entirely if my constituents when they asked to come to see the Commons asked for any debate or question time other than PMQs, but they still often prefer PMQs to anything else. I would also believe it more if PMQs received less media attention, and some of the other better debates and question times we hold were reported more widely.

Prime Minister’s Questions used to be held twice a week on Tuesdays and Thursdays for 15 minutes each. That gave the Leader of the Opposition the chance to lead the news twice a week, though he was much more limited in the number of questions than today. It also meant the PM was more engaged with the Commons on a regular basis, and kept Parliament more topical as you can ask the PM about anything whereas at Departmental questions on the other days you have to stick to that department’s subject.

Mr Blair changed all that. He thought he was too busy to go twice a week. Or maybe he did not want the Leader of the Opposition having a platform twice a week. He did allow 30 minutes instead of two lots of 15 minutes and allowed more questions to the Leader of the Opposition. The media, however, do not normally give the Opposition two stories out of the one PMQs.

In the age of Blair/Brown media management certain bad practice which had been around in the past was taken to new lengths. The PM liked MPs on his own side to share with him before PMQs what they were going to ask, or would through his friends and staff let it be known what the PM would like to be asked. The government wanted to hone the show, control the soundbites and help arrange the news.

Much of the exchange became scripted. Mr Blair would have pre arranged soundbites and killer facts. The Leader of the Opposition would script his questions with advisers, with someone acting out how the PM might answer or behave so the supplementaries could be written in advance.

The issue today is what if anything should be done to improve PMQs? Is it too noisy? Is it too scripted? If so, how could you change that? Does it at least let the nation see the emotions of the exchanges over the big issues of the day, or is it a kind of political theatre that does not satisfy the voters?

This week another group of clergy have told us we need to give more money to the poor. To do so will require that we take more money from others in tax. So today I have a question for the clergy. Would they like their Churches to pay more tax?

Churches legally avoid large amounts of tax. They receive substantial donations from some of their richer members on death. These gifts are free of Inheritance Tax.

They receive substantial donations from their living members. Much of this money is gift aided, so the Churches receive large sums from the state as repayment of the Income Tax which the donors had paid before their gift.

The Churches, led by the Church of England, have tax free Endowment funds which generate income and capital gains that are untaxed. Some of this money is used for current spending. The Church Commissioners manage a fund worth around £5,500 million.

I personally am quite relaxed about the Churches enjoying large tax privileges. However, I do not think we need to raise taxes generally in order to boost the £220 billion benefit and state pension budget. I think we need to spend it wisely and ensure the help does reach those most in need. Those who do think we need to tax and spend more might like to answer the question who they wish to tax more. The Churches might like to answer the question, why do they pay so little tax, if they think taxes are generally too low?

On Monday I went to the annual City debate at the Mansion House. I was asked to debate the motion that “normalising” interest rates will cause the next financial crash. I spoke against the motion. A copy of my slides are available here: Returning to normal.14.02.14.

When a vote was taken before the debate 52% agreed with me in opposing the motion. By the end of the debate that had risen to 63%. Why did the pessimists lose?

I made two central claims. The first is the new “normal” on interest rates in the UK, US and the Euro area is not going to be very high rates like the 1970s and 1980s, nor even 5% rates like the last decade. As the Central Banks have made clear, their aim is to live with ultra low rates for a year or more from today. They plan to follow this with rates at around 2-3% thereafter, if the economies have continued to recover and are looking better. If not they will continue with abnormal monetary measures.

The second is there is no evidence of bubble type conditions in the US, UK or Euroland today.

When the Japanese bubble burst at the end of the 1980s, real estate values had reached higher than £40,000 a square foot in Tokyo and shares were selling on 100 times their earnings per share. Shares fell by three quarters, and property values fell by 90% when the bubble exploded.

When the banking systems of Ireland, Greece and Cyprus imploded debt levels and bank gearing were much higher than today. RBS has more than doubled its capital relative to its loans since the crisis.

Today in the UK property is a few hundred pounds a square foot rising to a maximum of £5000 a square foot in a few prestigious parts of central London where foreign buyers in the main pay large sums in cash for the privilege of owning. Shares are selling below their long term average, around 13 times earnings per share. Average house prices have risen 3% over the last year and real house prices are still below the peak of 2007-8.

In order to have a traditional boom/bust cycle like the UK 2000-2009 or the UK 1970-77 you would need much more extended bank debt and asset prices in the boom phase, followed by much tougher future monetary action than the current Bank has in mind. The Central banks seem to have learned from the mess they created in 2005-9. The new normal will be lower rates than before, whilst the current weak state of money growth means most asset prices are far from the bubble levels of Tokyo in 1989 or New York in 2000.

Archbishop Nichols has recently claimed that “the basic safety net” of welfare has been “torn apart”. Has the Archbishop read any of the statements from DWP, or studied the figures from the Treasury?

If he did so he would find that welfare spending has gone up under this governemnt, despite the substantial rise in the number of people in work, the best kind of welfare. Total welfare and state pensions spending is up by more than £26 billion a year. Welfare spending excluding penions and Jobseekers is up in real terms 2010-2014. The total spend is over £220 billion, and the welfare spend on people of working age is £94 billion. How does this amount to the end of the safety net?

It is disappointing that people in positions of authority who have benefitted from a good education should be so sloppy with their words and so remiss not to read the numbers. If the Archbishop has some better way to spend the £220 billion then that could be a useful contribution to the debate. If he really believes that spending a few million more than the £220 billion could make a lot of difference he should tell us how and why.

What is so frustrating about his type of comment is it gets a lot of airtime for a complete misrepresentation of what the government is trying to do and what it is actually doing. The government – like Labour before it – wants people in a relatively rich country to be able to live to a decent standard. It wants to help those with state money who cannot help themselves. It wants to encourage and assist more people into work so they can enjoy a better living standard without claiming on their neighbours, the taxpayers.

It is both false to imply the government wants people to suffer, and false to assume there is a further large pot of money which the state mysteriously can posses which it could spend to better effect than the £220 billion a year it is already spending.

It would be helpful if clergy gave better and clearer moral guidance to us and to their Churches on the big moral issues that come up in Parliament. If they have good ideas on welfare reform then they should state them with the detail to back them up. It would also be interesting to hear how much of the wealth of the Church, accumulated over the centuries, the Archbishop thinks they should share with the poor. They might also like to comment on their view of equal opportunities for women and the role of women in the workplace.

Mr Miliband’s latest purple prose has suggested that global warming, now called climate change, is the cause of the recent floods. He deduces from this that the UK needs to do much more to arrest the output of CO2 to the atmosphere.

Let me annoy many of you and suppose that Mr Miliband is right – that CO2 does warm the climate, that man made CO2 is the key part of that process, and that this has directly caused the recent floods. Many of you disagree with one or more of these steps in the argument, I know.

He should still ask himself if the UK cutting its CO2 output more is going to stop such floods in the future? I cannot for one moment see how that can be true. The UK’s role in total world CO2 is small. If we take yet more action to make energy dearer and scarcer here, we will simply import more energy intensive goods from elsewhere. The amount of fossil fuel energy burned worldwide will not be reduced, even if the UK stopped burning all fossil fuels over say the next twenty years.

This weekend a climate scientist made clear that the recent bad weather in the UK has been caused by the position of the jet stream. He has stated that “there is no evidence that global warming can cause the jet stream to get stuck in the way it has this winter”. Others have reminded us that this wet winter is no wetter than some other winters over the last 250 years, and is not the wettest on record.

I will agree with Mr Miliband on one important thing. We do need a new consensus about doing more in the UK to give ourselves resilience against wet weather. It would be a good idea to build into that more resilience against hot weather as well, in case we break out of the recent run of cool wet summers and have a hot dry one for a change. We need to store more of the water when it does fall as rain, and direct more of the water away from homes and farms into reservoirs, aquifers, and into rivers and the sea in manageable ways. Surely we could all agree on that, whatever our views on the global question of warming and CO2?

Mr Salmond’s idea of independence is less brave heart, more weak knees. He wants to go cap in hand to the EU and the Bank of England to seek dependence. It always struck me as an odd vision. If you want independence, why not have your own currency and be your own boss? It was amusing to see the EU in the person of Mr Barroso upset the Scottish nationalists, after the EU has done so much to help “regional identities” like Scotland through their active promotion of a Europe of the regions.

Mr Barroso in a way was just stating the obvious. If Scotland becomes “independent” in the very dependent way Mr Salmond has in mind, they will need to apply to the EU to regain their continued dependence on the EU. Of course Scotland would cease to be a member of the EU by virtue of being part of the UK. Of course it will require the consent of all the other member states to Scotland’s admission in her own right.

Mr Barroso may be wrong in thinking other member states would want to block Scotland. The rest of the UK would have no wish to stop Scotland joining. Mr Barroso thinks Spain might wish to do so. It would be best to ask Spain that question so we can all know the definitive answer.

But what we do all know is that any Scottish membership will require negotiating. Scotland will have no automatic right to the special terms the UK currently has. Why should Scotland be let off joining the Euro, a requirement on other new members? Would Scotland have different arrangements on borders and Home affairs as the UK currently does? Why should Scotland enjoy any contributions rebate in the way the UK does? Scotland will have to negotiate how many votes she would enjoy in Council meetings, what her budget contribution would have to be, and how many seats she would retain in the European Parliament. This would all take time and may not give Scotland the deal she wants.

The rest of the UK would also need to negotiate a new membership, unless we have already voted to leave. Whilst the rest of the UK “inherits” the UK membership I presume the EU would want to use the excuse to seek to renegotiate our membership from their point of view. The number of MEPs would have to be reduced. The number of votes in Council would presumably be subject to a reduction. The rest of the UK would want a lower financial contribution, and would need to see off moves to reduce the rebate further. Eurosceptics want a new relationship anyway, so Scotland leaving might just be an added complication to a negotiation that is underway or going to happen.

PS I disagree with the notion that if Scotland votes for Out of the UK they might not be able to negotiate out. I think we should very clearly honour the intention of the Scottish people in their referendum. We should respect and implement the result either way, however narrow the margin.

Labour did well in the by election. The top line score is a convincing Labour win on an 11% swing from the Conservatives. The Lib Dems suffered the biggest drop in their vote, followed by the Conservatives. UKIP picked up votes but ended a very poor second to Labour who were 37.4% of the votes cast clear of them, and who won an overall majority of the votes cast.

The losing parties can point out that turnout was well down on the General Election at just 28,17%. They can also compliment Labour on having a much better organised postal votes campaign than the other parties. Labour won the seat on being able to get its core vote to send in a postal ballot, just as the Lib Dems did in Eastleigh where the margin over UKIP was much narrower. They can remind people that governing parties often lose by elections on big swings, but also can go on to win the succeeding General Election.

So can we deduce anything about a future General Election from this? Not a lot. It reminds us that Labour are polling much better than in 2010. It underlines how the Eurosceptic side of the argument remains very split.

This message is reinforced by the latest poll for the European elections. That shows Labour top at just 35%, the Conservatives in second at 25% and UKIP third on 20%. This illustrates that there are quite enough Eurosceptic votes to win an election, but not all the time they remain split between two contenders. To those UKIP supporters who will now write in to deny that the Conservatives are Eurosceptic I would remind you I disagree. I would also point out if the Conservatives are not Eurosceptic then you have a lost cause, with only 20% of the voters wanting a Eurosceptic option.

For the General election the polls continue to show Labour ahead, with the Conservatives as the challengers. As we approach the election people will have to make a simple choice. Would they rather have Mr Miliband or Mr Cameron leading the country. Those who say neither can vote as they choose, but it does not look as if they will get their way.