Author: johnredwood

           The amendment tabled by Mr Nigel Mills MP is growing in popularity in Parliament. It aims to extend the current transitional controls on Bulgarian and Romanian immigration for another five years.

             Some dismiss it as impossible, claiming it would be illegal under EU law. It is true Mr Mills has not tabled it to include an amendment to the 1972 European Communities Act 1972, which would make it legal in the UK. That is something the government could do as it improves and completes the  Bill if it wanted to. Mr Mills has highlighted an important issue, where he  has a lot of public support. It will be interesting to see how many MPs end up supporting it.

             Many support this measure because of the impact too rapid a migration could have on public services, benefits and the jobs market in the UK. I think we should also ask ourselves about the impact it can all have on the countries losing people to the migration.

            Many of the people who have taken advantage of EU freedom of movement laws from other lower income countries  are the amongst the ablest and most highly motivated. Many of them have degrees, learn English as their second language and work very hard when they get here. These are exactly the kind of people the poorer states of the EU need to keep to offer the enterprise and leadership they need so their national living standards can catch up with the richer countries of the Union.

           Mr Cameron and Mrs May have now asked the EU to look  at how appropriate free movement of people  is when benefit levels for those in and out of work are so much higher in the rich countries than in the poorer countries. It would be a pity if the need to equalise across the EU before income levels have averaged out more simply led to an exodus of talent from the countries that most need to build and grow their talent at home.

          As an MP I have not welcomed the strong strand of  thinking on government and politics in the last two decades  that more and more things need to be put beyond the reach of Parliament. Independence has been much in fashion. Monetary policy has to be under the control of experts at the Bank of England. Competition policy has to be under professional control. Environmental policy has to be given to an independent  Agency. Financial regulation should no longer be under Ministerial surveillance. Much of this has also helped conceal a huge transfer of power to the EU at the same time, which also means unelected officials with greater sway.  MPs pay and conditions must be settled by independent IPSA.

          The arguments are deployed that in all these cases- and many others- that we need the experts to be in charge. Politicians, we are told  are not up to the task of deciding these matters because they are so technical, or they should not  be allowed to because politics could get in the way of honest or sensible judgement. A lot of my Parliamentary colleagues subscribe to that view.  If you believe both those arguments then you should campaign for the abolition of Parliament. Juntas of professionally qualified people would surely be better at all important things.  MPs are unlikely to have the skills and training – other than by chance – that running any great service or making any set of  judgements needs.

   I hold the opposite view. I think it is right that a group of non specialists, chosen by the people, should take the best advice the experts can provide, but should decide on commonsense grounds what to do and how to proceed. The MPs and Ministers can of course appoint the best talent to run public services, to hold tribunals and the rest, but the elected Parliament needs to responsible for how they get on, for the policy framework they work within, and for the most sensitive judgements. The advantage of elected officials is they can be thrown out if they get it wrong, and they can be held to account because they want to keep their jobs. There is no-one as accountable as a  Minister or MP , always facing the reality that their tenure can come to an abrupt end if they cease to please.

        The problem with collections of experts is they may act as monopolists. They may keep out dissenters and  radicals from their profession. They can behave like the scientific establishment telling Galileo he was wrong that the earth went round the sun. They said then that  the science was settled and all the other scientists agreed that the sun went round the earth.  They can behave like the Bank of England on the eve of the bankruptcy of Northern Rock or RBS, telling us that it was better these banks went down than the Bank eased liquidity in the market creating moral hazard. There the elected official, the non expert, Mr Darling had to override the bank in 2008 and get them to loosen policy by cutting rates along with other countries before  more damage was done.

 So what will happen now, or in 2015, when IPSA intends to use its independence to put through an unpopular MP pay rise?  The leaders of the three main parties rushed to establish an independent body to settle MPs pay in 2009. If you believe in independent experts then it should be left to them.If the leaders  now think they are responsible still, and have a better understanding of the public mood, then they need to bring to the Commons proposals to end IPSA’s independence.

          It is a good test case of how many people really believe important issues should  be settled by unelected people. The case of IPSA has great symbolic importance, but the case of a host of other super powerful quangos rests on the same arguments as those for not meddling with IPSA’s verdicts.  What will most MPs do? They will accept a pay rise if IPSA retains its independence and pays it in 2015. They will vote to end IPSA’s independence if their leaders decide that is necessary in the light of public disquiet. The debate seems to be now, th0ugh the decision will probably  not be taken until after the next election, so it properly rests with the next Parliament or with an independent IPSA.

 Not content with forcing the closure of eight working power stations producing relatively cheap power, the EU now wants to wreck or hold up the contract to build a new nuclear station for the UK.

  The older plants the UK has been forced to close would have produced cheaper power for longer if EU rules had not forced them out of business. That is bad enough. But surely the EU should let the UK get on with finding replacements, before the lights go out?

The EU may have a good case that the level of implied subsidy in the agreed nuclear power price is high. But what do they expect to happen, if they rule out generating power from the cheaper fuels? How can we generate CO2 free power, without massive subsidies and ramped up prices? How does the treatment of nuclear differ from windfarms, which they allow despite providing very expensive electricity with huge producer subsidies?

We used to show people the absurdities of the common agricultural and fisheries policy to show them just how expensive and unhelpful EU policies could be. Dear food in our time, and dumping fish back in the sea as they were the wrong type of fish to catch, were the hallmarks of EU policy for years. Now they control so much more.

Our energy policy is no longer our UK policy, but an imported EU one. It is driving  industry out of the UK as power is so dear, and it now threaten s us with insufficient power to get us through the next few winters. Give us a break EU. Try to understand that if you make us close down cheap power, we will have to generate some dear power and subsidise it.

I would myself rather have a dash for gas, as the US has done. The irony of this is that the US has cut its CO2 by more than the EU and helped its industry at the same time by its pursuit of shale gas. The EU is negative about most ways of generating power, and is now placing the UK in an impossible position.  Role on renegotiation and an In/Out vote.

I love the new. I have been an early adopter of better technology. I had one of the first mobile phones when they came out and I was running a major company where the mobile came in handy. I bought an early home computer. Some of the new technology on cars is great. The internet is a radical and liberalising force which is transforming the way we live.

What I do not like so much is a monopoly or regulator telling me I have to adopt technology which I would not bother to buy for myself. The great digital switch over forced me to throw away two tvs that were still working fine, and landed me with a bill for a new tv which for months gave a worse picture than the ones I had thrown out. Now I am told I have to scrap my cheap but effective radios which I run on FM, in  order to go over to dearer digital radios. I have listened to digital radios at other people’s homes and have not been persuaded that they offer something better that I want to pay for.

If it’s not broken don’t fix it. If there is an advantage for the BBC to switch then why don’t they give me a rebate on my tv licence to help me buy a replacement radio? It’s just another time consuming regulatory burden on us, to have to scrap good radios and go to the trouble of buying new ones we would not otherwise buy. Doubtless it will also swell the import bill, as most of the new radios are made abroad. It’s good news for China.

The BBBC is running a Digital Radio campaign on its website, and is pushing digital radios as Christmas presents for people.

Leave us alone.

As one who has urged Ministers to be careful about sending supplies to the very diverse opposition forces in Syria, in case they should get into hostile hands, I welcome the government’s decision to suspend shipments.

According to the Office of Budget Responsibility, real wages will be rising from 2013-14 onwards. For the current financial year they forecast a 3.9% increase in wages and salaries, compared to a 2.7% rise in the CPI inflation measure and a 3.2% RPI increase. In the next few years they also anticipate a useful positive gap between wage growth and price rises.

As Alastair Heath has recently pointed out, there has been no transfer of income from wages to company profits. The squeeze has come from higher taxes on employment, so government has been the “winner” and people on wages and salaries the losers.

Maybe the Labour party does not believe these forecasts. Or maybe they just  needed to say something  different when the economy started to grow, disproving their pessimistic past forecasts about the impossibility of recovery. They lighted on the continuing squeeze on living standards that had been at its most intense during the Great recession in 2007-9. It may just be a short term campaign, which they will end as wages rise and real incomes go up.  The problem for them is that once again their forecasts of gloom will look poor if the OBR is correct and real wages do now start to rise.

The government should not be complacent. People want a recovery. They are more inclined to trust the government than the opposition on the big arguments about debt and deficits. They agree with the Coalition approach that reform is needed to make work pay, and action has to be taken to stop debt spiralling out of control.  They also understandably want the squeeze on individuals and families to come to an end. If work is to be worthwhile, it is easier to accept the work discipline if there is a good prospect of earning more  and being able to spend more next year than this.

Quantitative easing and ultra low interest rates have favoured borrowers at the expense of savers. They have helped the highly leveraged company, not the strongly  financed group. They have tended to help the young where they borrow and hit the old where they have deposits, help the spender and hinder the saver. The government needs to show how it is going to balance things a bit more. The savers deserve some reward as prudence should not be a crime. The hard working families the governemnt likes to talk about want a vision of how they can participate fully in the wealth of the nation and the growth of the economy.

Ministers should dust down ideas for wider ownership. As the economy grows so more profit will be made and more assets will go up in value. This needs to be a process which enriches the many, not just the few. I will look at more ideas in future blogs on how this can come to pass.

             The Office of Budget responsibility now endorses what I have been saying for the last three years. Public spending is rising in real terms as well as cash terms. Here is the latest OBR Report on the subject:

“Real government consumption remains strong…The latest ONS data indicate that government consumption grew by 1.7% in 2012 in real terms.  It continued to hold up 0ver the first half of this year (2013)…real spending grew by a cumulative 0.8% in the first three quarters…”

They also argue that employment declines in the public sector will be more than offset by rising private sector employment, and will increase public sector productivity:

“Relative to its level at the start of 2011…. we expect general government employment to fall by round 1.1 million by the start of 2019, with around 0.5 million having already taken place.”

Some of you have pointed out that EU spending apparently rises by £10 bn between 2013-14 and  2017-18.  Any rise is unwelcome. As the OBR report makes clear, half of this revised forecast is the result of a change of accounting practice, which strikes the EU spending out elsewhere in the figures and puts it in in the EU contribution line.  The underlying rises in forecast net of the accounting change  are £1.3bn 2013-14, £ £0.6bn 2014-15,  followed by £1.5bn, £1.2bn and £0.5bn, a total of  £5.1bn.

The profile of EU contributions is erratic, falling to £7.3bn in 2014-15  from £8.7bn in 2013-14, rising  to a lower figure than 2013-14 in the next two years before falling again to £7.3bn in 2017-18. The downward pressure on the Eu budget has helped, but the overall figures are still too high at a time when cutting spending in less desirable areas should be a priority.

          At the height of the controversy over MPs expense claims in the last Parliament, it became fashionable amongst MPs to want to create an independent body which would settle MPs pay, expenses and office support without any interference or votes by MPs.

          At the time I argued against in the many private  discussions and debates we had about how to proceed. I pointed out there had been past attempts to take MPs’  pay out of politics by linking MPs’  pay to a civil service grade or a basket of “comparators” for the job. Each of these attempts had been adandoned when the comparator pay advanced too quickly, leading to demands from the public that MPs did not take the rise the automatic system would award. MPs usually agreed, avoided the unpopular rise, and looked around for another way to determine  pay at a more acceptable rate.

          So it came as no surprise to me that this time an independent body proposes an 11% pay rise for MPs in 2015, just after a period of substantial public sector pay restraint which so far MPs have rightly shared.  The public who express a view are strongly against any such rise. Party leaders are aghast, understanding the impact any suggestion they support such a rise could have on their own and their party’s standing.

         The  party leaders are urging IPSA to think again. Yet it was the party leaders who were keenest on the idea of an independent IPSA in the first place.  IPSA has until 2015 to consider. It will fall to the new government elected in 2015 to decide what to do. If that government does nothing, and IPSA presses on, MPs will receive an unpopular rise, balanced in  part by meaner terms on pensions and expenses. If  the government wishes to stop this, it either has to abolish IPSA, or override their pay decision by amending the law in some way that would allow this.

         I think we are rediscovering an old truth. The  pay of MPs is a highly charged political matter. In the end MPs are forced  to settle the matter themselves, and explain to people how and why. The independent regulator does not seem to have prevented continuing controversy. If the MPs ride out the storm by stressing IPSA’s independence, that will still be seen by some as the MPs themselves wanting and getting a pay rise.