Author: johnredwood

Dear Mrs Merkel,

You will be made most welcome in the UK today. Many of us wish you well in your battles to improve financial discipline within the Euro area, to sort out the problem debts and deficits in the zone, and the remaining substantial difficulties  in Eurozone banks.  We would like the rest of the Eurozone to enjoy similar growth and prosperity to Germany’s, based on hard work, enterprise and business success.

As you know, the UK did not join the Eurozone, for both economic and political reasons. Seeing the damage the European Exchange Rate Mechanism did to us and others on the continent, we showed ourselves to be good Europeans by staying out. Had the UK entered, with a banking system and economy that was not harmonised with the rest, we might well have brought the whole Euro crashing down in the crisis of 2008. Who would have stood behind the UK banks at risk when we no longer controlled our own money supply and money markets?

We also stayed out because the UK electorate and government have no wish to be part of a common government from Brussels. The UK entered the EEC  after the founder members, and did so to belong to a common market. It was such a concept that the voters approved by referendum in 1975. They did not consent to ever closer union, and more common government. They were reassured by the Labour government at the time that we would not lose sovereignty.

Today UK voters want reform in many areas. They want benefit reform, better control of our borders, cheaper energy, better flood protection, less interference with small companies and enterprise. In each of these areas the UK government is blocked or diverted by EU laws.  Increasingly we feel we suffer from having two governments for the price of three, with high taxes and high energy prices limiting our ability to compete with the USA and Asia.

The UK is of course willing to back Germany in any sensible moves to tackle the problems with dear energy, open borders and welfare reform on an EU wide basis. However, at the same time many in the UK want a new relationship with the EU. We have no wish to stand in your way as you go about your necessary task of leading the Eurozone to reform and greater economic policy control from the centre. As non Euro members we wish to go in the opposite direction, and need to protect our interests as an independent trading nation.

We of course have no wish to impose any new constraints on German exports to the UK. We appreciate the importance of the UK market to you , with many here enjoying  buying  German goods. Similarly we are sure Germany would not wish to impose any new barriers against UK exports to the continent.

I wish you a happy stay, and trust we can make progress both in general EU reform and in establishing  a new relationship for the UK as a non Euro member wishing to restore its national independent democratic government. Many of us who are English would also like our country to be recognised and to be proeprly considered in debates, instead of being pushed off the map of Europe altogether.

Yours etc

I was pleased to read this week that Mr Cameron plans to rule out another coalition with the Lib Dems after the next election, if Conservatives have not won a a majority. As a Conservative who did not want a coalition last time, the experience of the last few years has not changed my mind. The Lib Dem refusal to allow any renegotiation of our relationship with the EU, and above all their refusal to allow an In/Out referendum shows why coalition is a bad idea. In order to make the right decisions and choices for the UK we need to remove ourselves from EU government, whilst continuing to allow Germany and others to sell us all their exports in return for access to their markets.

Mr Cameron’s wish to rule out any future coalition underpins his promise of a negotiation and a referendum on the EU as urgent business in the next Parliament. If we want cheaper enegry we need to change the arrangements with the EU. If we want to control our own borders we need to change the relationship with the EU. If we wish to limit welfare payments to recently arrived people in the UK we need to change our relatiosnhip with the EU . There are many more areas where Ministers cannot do as they wish and as the public want owing to EU Treaty commitments, regulations and directives.

The current Commons has an inbuilt pro EU majority from Labour, Lib Dems and nationalist MPs. The one Eurosceptic party, the Conservatives, is prevented from dealing with the EU issue as it wishes by coalition. I am glad that will not be a problem next time. Now all that remains is the issue of whether the public will vote for a Eurosceptic party that can win the General Election or not in sufficient numbers to create a Conservative majority. Our chance of an In/Out referendum rides on that, as all the pro EU parties in the present Commons are united against a referendum.

I wish the different factions and forces well in the Ukraine. They need to settle down after the violence on both sides, to working through democratic and peaceful means of settling their disputes. That is not something the UK can or should try to do for them.

I hear they now want loans and grants from the IMF and EU to make up for the frozen Russian loan which they have disrupted by their recent change of government. We should be careful before allowing any of our money to go to the Ukraine. We have just witnessed scenes where the people of Ukraine have been demolishing street furniture, pulling up paving and parading in paramilitary uniforms instead of peacefully going about their business. Some say they had to do that, but before we advance any money we should seek sensible reassurance that in future the people of Ukraine will take care of their collective property. Loans require a government to be in place which is properly elected, peace loving, and in charge of the country. Any such government needs an economic plan which makes sense, and an ability to control its debt and deficits.

We should also ask what collateral there is for any loans they seek. How will any new  Ukrainian government go about boosting the economy, as Ukraine’s main economic problem is too little output and low incomes. Will their policy be more successful than the last? Will it be continued by whoever wins the next election?

How will the Ukraine sort out its energy dependence on Russia? Will this entail higher gas prices, and what will that do for an already weak economy?

My constituents will want evidence that lending money to the Ukraine would help them and that we will get it back, before the IMF  sends anything on our behalf. I sought assurances from Mr Hague on this yesterday in the Commons. He did confirm that the lending would not be without conditions.

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.