Author: johnredwood

 One of the worst examples of large scale spending of questionable effiicacy is the big UK railway budget.

I am going to take up again the whole issue of the unaccountability of Network Rail. An independent review has found that it could be much more efficiently run, with large cash savings. Its strange structure designed by the last government tries to hide the fact that it is in effect a nationalised monopoly.

Ministers need to examine how and why members of the company are appointed and reappointed or dropped. They need to find out whether these members – who are meant to work on the taxpayers behalf – ask the right questions and create the right atmosphere to encourage more efficient operation at Network Rail.

The members should ask why Network Rail has a reputation for holding up development projects adjacent to the railway, and why they often demand ransom payments for anyone wishing to bridge the railway or develop adjacent to it.

They should ask why Network Rail has taken on foreign currency and index linked debts, and how it plans to repay the massive £30bn debt built up so far.

The argument about what kind of a relationship the UK wants and needs with the emerging centralised Eurozone should not be monopolised by arguments over our trade.

Those who say we need to stay in on current terms, or stay in on similar terms often tell us we need to do so to protect our trade. This is not true. Many countries trade successfully with the rest of the EU without being members. The rest of the EU would be as keen as the UK to ensure continuity in trade when the UK renegotiates its relationship.

Those who wrongly see the EU as just a trade and business club we need to belong to should understand that the EU is not a free trade area. They often imply it is and say that is what we want. Belonging to a free trade area with the rest of the EU would be a welcome improvement on what we have now, removing remaining tariff and subsidy barriers, expecially in areas where the EU has restrictive policies.

There are customs areas, free trade areas, and common government areas. The EU is both a customs union and a common government area. The danger of the latter is it entails the erection of substantial barriers and costs to doing business through a large legislative and regulatory programme. Worse still, all these extra costs are imposed on UK exporters to non EU destinations as well as to EU ones.

The UK could have full access to the single market on current terms, it could just belong to the customs union, or it could negotiate a free trade area with the EU. To those who think the current single market is better than relying on the international trade framework, it should be possible for the UK to belong to the single market from outside the federalist Treaties. Better still would be a new arrangement which leaves both the UK and the continental trading partners free to do as we wish, whilst preserving the trade which is in our mutual interest.

The motor industry is rightly against facing a higher tariff wall from outside the single market than they face from inside. The German industry, I am sure, will want access to the UK market on at least as good terms as it enjoys today, so there should be no great worry about this issue. There needs to be more debate explaining the crucial differences between free trade areas, customs unions and the single market. You do not need hundreds of common laws in order to trade with each other.

The Foreign Office was keen to get the views of a range of states and people likely to praise the current state of the UK’s relationship with the EU. In doing so they seem to have overlooked the views some of us were putting to them regularly in the Commons and elsewhere explaining why the current relationship is unacceptable to most UK voters and is not in the UK’s national interest. The Foreign Office also seem to have ignored the Prime Minister’s own Bloomberg speech, which made clear it is now government policy to negotiate a new relationship with the rest of the EU. Surely one would only do that if you had already agreed that the current relationship is not working.

I wish to explore how this new relationship can be defined and brought about. Let me begin today by reminding the Foreign Office what they should have picked up from the debates in Parliament in recent years.

The Conservative party in opposition opposed the Nice, Amsterdam and Lisbon Treaties. We did so willingly, as a united Parliamentary force. We did so because we thought these Treaties transferred far too much power from UK democracy to EU decision taking. We did not accept the loss of 68 vetoes over important policy areas at Lisbon, the loss of 46 vetoes at Nice and the loss of 24 vetoes over key areas at Amsterdam.

The arrival of Conservative Ministers in office has not changed the Conservative party’s view on the unacceptability of these Treaties. The need for Conservative Ministers to reach an accommodation with Lib Dem enthusiasts for the EU does not mean the Conservative party has now given up its principled and fundamental opposition to the mass transfer of power recorded under the previous government in these three large Treaties.

There is also a strong feeling amongst many Conservatives that vetoes sacrificed on a lesser scale under previous Treaties in the name of promoting freer trade have not lived up to billing or should no longer go unchallenged. Far from fostering more trade, these qualified majority votes are all too often used to impose more regulation, backdoor taxation and charges on business activity. There has been a continuous erosion of our right to settle decisions democratically at home, and put the results to the British people in elections.

Conservatives are not looking for some minor adjustment of powers, or the amendment of a few directives to settle a new relationship. Just as the name implies, most of us want a very different relationship to the present one. We want to preserve and foster trade with the continent, which is as much in their interest as well as ours. We did not wish to be locked into collective decision taking across most of the range of government activities before the Euro started to place greater pressures and tensions on the EU. Now the Euro members are seeking even more intense unification, seeking political as well as monetary and economic union, it should be obvious to all that the UK, a non Euro member, must have a new relationship with what emerges.

             The last couple of decades have been written off as lost decades for Japan. GDP has only risen by around 1% a year, and in several years has struggled to grow at all. Meanwhile, until 2008, the western advanced countries grew at more than 2% a year. Both Japan and the west grew in part as a result of a big build up of debt.

             The big difference between Japan on the one hand, and the US and the UK on the other was population change. The US and the UK were expanding their populations by inward migration and higher birth rates. Japan’s population was shrinking, with very little inward migration. The southern European countries are adding to their Euro anguish by also experiencing population decline.In the UK at the peak of Labour’s rapid migration you had to take 0.4% off the growth rate or up to one fifth of the growth, to get to the growth per head. Now migration is lower and so the adjustment is smaller.

           Recent UK figures have posed a couple of puzzles to economists. The first is the productivity puzzle which we have talked about before. It is not much of a puzzle. The numbers in jobs have been rising and productivity has been falling, because the two most productive sectors, finance and oil and gas have been contracting.

          The second is the retail puzzle. Retail sales over the last year have risen despite the obvious squeeze on average real incomes. This can be explained in part  by people saving less. We also need to recognise that continuing levels of inward migration, even allowing for the one third reduction achieved by this government so far, will serve to boost retail spending. There are also a large number of temporary visitors who indulge in retail therapy when here. Just visit Bicester Village or central London and see the large number of expensive purchases made by overseas visitors.

           We need to keep in mind when reading different country figures the population background. You would expect the US and UK to grow faster than Japan or Germany, because of the rising populations. Adjusted for population the Japanese performance is not very different from the west.

I look forward to the day when I can buy a car which allows me to programme my destination and let the car drive me there.

The big travel difference between the rich and the rest of us is the rich can afford chauffeurs to drive their cars where and when they wish, freeing them to work, talk or picnic as they travel around from appointment to appointment. If they want to have wine with a meal or beer in the pub, they can do so and be driven home safely. If  they want to crowd another appointment into the day, they can do so and take a  nap in the back of the car on the way. They have greater freedom from their extra cash.

We are close to the point where technology can create automatic chauffeurs for the many. If you go from the Business car park at Terminal 5 to the airport, you go in your own automatically controlled pod vehicle. That requires tracks. Soon the technology with sat navs and satellite controls will allow similar treatment for a vehicle using the normal highway.

It is difficult to see how last century train technology can compete with this likely development. The controlled vehicle can go door to door at times convenient to the user. Satellite technology can also find the least congested route, and keep the vehicle away from traffic hotspots. We could get better use out of our roads, as the vehicle could advise on likely times for the journey to minimise travel time.

Bring it on. This would be the kind of development the UK could back and get up and running first, just as we pioneered the railways, the jet engine and the hovercraft.

Many people think that theatre, the  visual arts and music are more than mere entertainment which people should pay for as they wish. Art and music are enveloped in a sense of the good, based on the view that they can stretch, uplift, challenge the mind and enrich the human condition. Such cultural activities are supported in whole or part by public money for the greater good.

Some think this limits the styles of art worthy of support to those deemed generally to be great art. Thus there could be public money to support Shakespeare’s plays or   Mozart’s music, but no public money for modern dance music. The establishment’s view of great art has in the past rested heavily on the view of established critics, but today is also to some extent  influenced by popular opinion when it comes to assessing modern works of the visual arts for display in public galleries.

The presence of public subsidy raises management and moral issues. Is it right, for example, that public subsidy supports the ballet and opera in London which tends to be the preserve of the better off, at least when it comes to most of the dearer seats? Does too much subsidy around the world artificially inflate the returns to a few successful painters, dancers and playwrites?

Is great art bound to be disliked in it own time and in need of state support? Or is great art popular enough to support itself?  Can’t patrons, including the state, provide the money for works of art that are needed and appreciated by those who commission them?

In the UK the premise of public subsidy for the arts is less questioned than the targets for state support. Some think more of the money should be spread widely around the country, helping more facilities outside the big centres and assisting the up and coming. Others think public subsidy does need  to reinforce excellence in the big cities, as part of the tourist attraction and part of the national heritage. Over to you!

            British people are generous by nature. Whenever there is a natural disaster or an o0verseas tragedy, volunteers pour in to help, and money is pledged rapidly for immediate relief of the crisis.

              Large companies usually have a charity of the year to support, and often work with local charities in communities where they have a presence.  MPs, sports and media celebrities and others are encouraged to assist charities raise money and do good works.

                       Government does its bit by granting tax relief on all money routed through a recognised charity. People who avoid taxes in order to make larger charitable contributions are usually exempted from the general criticism of tax avoidance.

                   The big issue which bedevils public policy is what qualifies as a charity?  Time was when all educational institutions qualified, as education is said to be a charitable purpose. More recently the Charity Commissioners want proof of wider access to the wealth of successful public schools to justify the tax relief.

                Religion was also a general category which gave charitable status. Should charity cover all religious groupings, and all their activities?

                One of the big issues which requires judgement is where a charity overlaps with a political campaign to insist on a particular view of a problem being dominant in the formation of public policy. Political parties have never qualified as charities, yet single issue campaign groups can have charitable arms. What controls or limits should be placed on this? Generally, how much of a charities revenue should be available to spend on the charity itself, on self promotion, fund raising and the like?

            If you are under 16 and going to an English or Welsh school, games are compulsory. State educational theory says that physical exercise and sport, over and above the physical exercise we all take by walking and performing our daily chores, is an important part of a healthy life and young development.

                Once over 16 some people give up sports and PE for the rest of their life. Others enthusiastically carry on with their football club or their pilates class. In the euphoric post Olympic mood the state thinks more people should carry on with games as adults. We have a Minister of Sport, whose task is to spread the word, provide some money and encourage more to join in.

          Does having state involvement like this help? Does it make much difference to how many people join in and enjoy sports? Doesn’t seeing a great sport on the tv, with a winning UK competitor, have a much bigger impact than a Ministerial statement or even a Lottery Grant to a local project?

                The other day I was phoned by a research company on behalf of Sport England. They wanted to know all sorts of things about my walking, gardening and sporting habits. The drift of the questions seemed to be towards the provision of more public finance for sports facilities. I explained that in Wokingham the local community had just organised a great new Cricket Club with two pitches and changing rooms out of private sector transactions and voluntary effort. The survey did not seem to be good at picking up private sector, charitable and voluntary activity in sports.

                 How much do we want the government involved in whether we play team games, and where they should be played? Is PE or the adult equivalent necessary, or can you get the exercise you need by walking to the shops, digging the garden  or running for bus?

Eating too much or too much of the wrong things is bad for your health. Is that your business, or is it also the government’s business? Does the NHS have a right to lecture, advise and influence our diets, on the grounds that medics can help us stay healthier if we eat sensibly? Does the state have to pick up all the costs for people who ignore good dietary advice and end up unable to work, needing benefits and medical help?

In particular, does the government have a role in the nutrition of children? After all, argue the interveners, the state should help take care of children in low income families. Children from low income families qualify for free school lunches. Children eat lunch at school under the supervision of teachers. Badly fed children from  whatever backgrounds may not have enough energy for classes, or may be too fat to perform well in PE and sports.

Freedom lovers argue it is no business of the state to tell us what to eat. Children should be allowed to take packed lunches to school if they do not like the school dinner. Families are still free to buy what they wish at the supermarket, and should not be impeded from doing just that. Nutritional theories from the experts change over time. Could there be a danger in too many people backing a particular theory at a particular time?

The benefit system is blind to the causes of people’s inability to work and disability, with no main party  suggesting any change to that. The NHS treats anyone, however they have come by their problem. Treating someone for obesity is no different morally from treating someone with a sports injury incurred by foolish disregard for safety.

How far should the state go in telling us what to eat  and regulating what we eat?