Tax rises are the last thing the UK needs this year

Government actions designed to limit the spread of the virus and reduce the burden on the NHS have done great damage to jobs, business and output. Knowing they would the government rightly made generous provision to subsidise employment, offer grants and loans to businesses, and increased benefits to people to sustain demand. This naturally led to colossal borrowing by the state and to the effective nationalisation of large parts of the economy from private hospitals to the railways.

The Treasury now rightly says we cannot go on with the excessive borrowing and very high levels of state spending needed during lock down. They should add that state borrowing will fall rapidly as soon as lock down is removed and a decent economic recovery is allowed and encouraged. A large number of people who have kept their better paid  jobs and been on full pay throughout the last year have money to spend as soon as they are allowed to buy services that entail face to face encounters. Many businesses will soon be back with revenue in the tills and staff on overtime again. As this happens so the amount the state spends on benefits, grants, loans and cushioning of the lockdown diminishes. So also tax revenue soars as people pay VAT on services again, income tax on earnings and transaction taxes.

The last thing we need is new taxes or rises in tax rates. In  order to promote recovery the Treasury should be thinking about lower rates and fewer taxes. We need a big expansion of business capacity. The danger is we lose a generation of entrepreneurs, of people working for themselves or running small businesses, as a result of the lockdowns. The  most energetic will of course flourish again, but we need to create conditions where the average, the not so highly motivated, those worried about risk taking are persuaded enterprise is for them and the odds are favourable to setting up and running a successful business.

The only way to get the deficit down to sensible levels and to slash additional borrowing is to promote a strong and rapid recovery. We need to be doing that from early in the new financial year, so that we just put behind us one year of huge state borrowings. Tax rises will delay and impede recovery, and will put off that new generation of businesses and self employed we will badly need to lead us out of additional debt.

The U.K. needs to earn its living

The answers I have been  getting from DEFRA are worrying. They show no sense of urgency to use our new freedoms to promote more growing and rearing home grown food. They are not standing up for U.K. interests in interpreting the Trade Agreement with the EU. They are not bringing forward early plans to raise our fishing capacity or to expand our market gardening areas.

The thrust of policy seems to be to wilding our landscape instead of farming it better.There are too many proposed grants for so called environmental gains and not enough for food production. Many of us want  to slash the food miles, employ more U.K. people and enjoy more good U.K. produced food.That  means extending the season for vegetables and soft fruit with more glasshouses and polytunnels. It means working  with the food manufacturing industry to put more U.K. produce into imaginative meals and good recipes for ready meals. It means strong U.K. branding.

I see some of the supermarkets understand U.K. consumer wishes. Many fresh food items have the Union flag on. None carry the EU, Spanish or Dutch flags. Let’s go one  step further and have  a farming policy which delivers us more great British food. The world does not owe us a living and it is not  good to be so dependent on overseas supply of things we can grow for ourselves.

Uniting the USA? Strong democracy needs good opposition and belief in the system

The President has boldly set as his main aim uniting a fractured and divided USA. He wisely accepts this will not be easy. Too many of his followers seem to think if they just insist more strongly on their  views of the world and claim the electoral right to enforce them  the country will come together behind a new left wing Democrat settlement. If they reinforce this with tough action against any who disagree, through court cases against certain types of  speech and protests, and censorship on media and social media, they will impose a more disciplined conformity on an unruly country.

They need to understand some things about how normally healthy democracies like the USA  work. They provide in the constitution for strong opposition to government or Presidential plans. There should always be a good democratic alternative government on offer, that has an alternative view of the more contentious or questionable policies pursued by the incumbents. A great democracy does not have 95% support for what the majority government does. It debates choices and options and exposes the chosen course of government to criticisms. Exercising majority governing power is a constant exercise in persuasion, listening, seeking improvement, compromising with the Opposition when they have a good point. A good Opposition know when to disagree and when to campaign hard against a policy or law. A good government gives ground when it is  wrong but does not compromise its main aims, pledges and beliefs.

A successful democracy as  the USA usually  is has top level agreement  between all the democratic parties over two crucial things – the system by which governments make  and sell their decisions to elected bodies and the wider public, and  the results of free and fair elections. There has to be a belief by the main elected officials that an election produced a fair and accurate result. In opposition  parties  need to believe they have sensible opportunity to make their case and to seek change peacefully. When the Commons has a government with  a decent majority the Opposition accepts that government  has a mandate to get through the main business from its Manifesto and from its statements of aim and principle. A good Opposition also makes it difficult every time government stumbles, wanders too far from its promises or principles, or offers incompetence instead of good administration. In the Commons an Opposition can only win a vote by working with governing party MPs who also think on that occasion  the government is wrong, which can happen quite often. Opposition is there to question, to ask for second thoughts, to offer alternatives but not to stop government governing. Only the electorate can do that when they come in an election to judge the result, short of a major governing party split and collapse.

The tragedy of the USA in the last few weeks is the breakdown in trust or belief in  the system by the main Opposition party. A large number of Trump voters think the results in a handful of key swing states were fiddled, but their side has been unable to persuade the courts or the Senate of that allegation. As those institutions  hold the reserve powers to order a re run or insist on a different electoral College result President Biden can fairly claim he won and passed all the checks and balances in  the system. It leaves Trump voters arguing that the whole system is corrupt and out to get their man. This impression is not going to be stilled or calmed by the Democrat decision to impeach President Trump after he has left office. It will build the sense of grievance amongst many Trump supporters. If President Biden is to heal his country he cannot avoid tackling and talking about  the issues around voting systems that perturb Trump supporters.

The Republican leaders have an important role to play. They need to show that they can now offer strong but sensible opposition to this new President. Going through his back history to try and find a way to impeach him as has become  all too common in US politics would not be helpful. Setting out a positive alternative vision to the left’s, and making it difficult in a 50/50 Senate to get through anything the Conservative half of the country disagrees with makes perfect sense. The Senate and House elections produced no landslide or big majority for a Democrat solution to US problems. Republican legislators need to show Trump voters they can use the power of opposition afforded to them to resist hated Democrat policies for their followers. For his part the President needs to show which parts of the Republican offer he thinks has some merit if he wants to build bridges. He needs to see just how divisive to Trump followers  the Democrat position is on  gun control, relaxation of abortion, bans on carbon fuels and completely open borders to name but four highly charged US issues .

My Question to the Leader of the House

Sir John Redwood (Wokingham) (Con): People voted to take back control so that the Government would use the new powers to make their lives better, so will the Government urgently make time available for the VAT cuts, the new enterprise zones, the freeports, the policies to increase our fishing fleet, the policies to boost our domestic food production and the so many other good ideas that Ministers should be queuing up to put through our House now we are an independent country?

The Leader of the House (Mr Jacob Rees Mogg): My right hon. Friend is not only right but he reads my mind.

There are great opportunities: the new financial services regulation, which will encourage innovation and competition; the faster and more agile clinical and regulatory regime that is going through with the Medicines and Medical Devices Bill; a revolutionary approach to gene editing, on which the Department for Environment, Food and Rural Affairs is consulting; freeports, on which the Treasury is consulting; and looking at public procurement differently.

We are really taking back control and seeking the advantages, but I hope that my right hon. Friend will join in this enterprise and send a list of all his good ideas to every Minister so that we know there are more ideas bubbling away.

My contribution to the debate on High Speed Rail (West Midlands – Crewe) Bill

The case for HS2 before the pandemic hit was made on the basis of the need to expand capacity. I always argued that there was a quicker and cheaper solution for capacity, and that was to digitalise signalling, introduce more short sections of bypass track and improve engineering around the main stations. By those means, we could have got a 25% or so increase in capacity much more quickly at a fraction of the cost, leaving over money to improve local services and the use of the existing railway, and for other purposes.

Now that we have had the pandemic, as we move to the recovery phase, which we hope will be quite soon, we have to accept, as the right hon. Member for Warley

(John Spellar) and others have mentioned, that the nature of work and the use of the office will change. We may well find that the intense pressure during the Monday-to-Friday morning and evening peak, as a result of people tending to start work at 9 and tending to leave for home at 5 or half-past 5, will diminish. We may well find that people will want much more flexible use of their railway—that they will not travel every day, and will not necessarily be going at peak hours. One of the big problems that the railways face—capacity on journeys to main towns and cities at peak—will be changed or relieved by that.

We are due, from the Government and the industry representatives that advise them, their interim thoughts on what the shape of the railway and railway demand might look like in two or three years’ time, assuming that all has gone well with vaccination, and that there is a pretty good, robust recovery. We should not assume that it will be recovery to the same work and railway travel patterns that we had before.

I hope that we will make more intelligent use of the railway for freight, because there is still plenty of scope for that if we can get better at single-wagon marshalling, and can make better use of the railway for the relatively longer distances that freight often has to travel to get from ports to all parts of the United Kingdom. That would be a possible use of the capacity that we already have. I dare say that there will also be plenty of promotional schemes for leisure and tourist travel. The fact remains, however, that the use of the railway for work will change very dramatically. I do think this whole project needs appraising in the light of that, and that we are owed a proper plan with the latest forecasts, which must be very different from the forecasts that the Government were using when they first put this proposal to the country and to the House.

Aiming to cut the food miles ands boost UK production

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps he is taking to protect marine conservation areas from illegal fishing by large trawlers. (136424)

Tabled on: 12 January 2021

Answer:
Victoria Prentis:

As an independent coastal state, the UK has full responsibility over how it manages all of our fisheries. All vessels fishing in our waters have to be licensed by a UK Fisheries Administration, and abide by the licence conditions and relevant legislation. We are also committed to ensuring an effective and robust enforcement system. To ensure appropriate arrangements to enforce fisheries regulations are in place to protect our waters, including marine protected areas, the Government has put in place a significant increase in the number of personnel and surveillance assets dedicated to fisheries protection, which includes offshore patrol vessels supported by aerial and radar surveillance. This strong presence will deter against any fisheries infringements.

The answer was submitted on 20 Jan 2021 at 16:39.

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, what Government (a) grant and (b) loan assistance is available to people wishing to expand capacity of vegetable and fruit growing under suitable cover to extend the growing season and protect from weather damage. (136427)

Tabled on: 12 January 2021

Answer:
Victoria Prentis:

The Government has provided some limited grant support for indoor horticultural growers through the Rural Development Programme for England (RDPE) for the purchase of innovative lighting, heating and irrigation technology. Funding continues to be available to producer organisations who implement operational programmes in the Fruit and Vegetable Aid Scheme.

From autumn 2021 my department will launch the new Farming Investment Fund, providing grants to farmers, foresters and growers to enable them to invest in the equipment, technology and infrastructure that will help their businesses to prosper, while improving their productivity and enhancing the environment. My officials are working with stakeholders and others on the detailed design of the scheme.

The answer was submitted on 20

The Department for Environment, Food and Rural Affairs has provided the following answer to your written parliamentary question (136425):

Question:
To ask the Secretary of State for Environment, Food and Rural Affairs, if he will ban supertrawlers from fishing in UK waters to help protect fish stocks and the marine environment. (136425)

Tabled on: 12 January 2021

Answer:
Victoria Prentis:

We are reviewing our policies for these vessels operating in UK waters including marine conservation areas. Any action needs to be evidence-based and in line with the UK/EU Trade and Cooperation Agreement.

The answer was submitted on 20 Jan 2021 at 16:41.

 

Jan 2021 at 16:45.

 

Fishing for wins

      

As the government battles the virus we need more wins and optimism elsewhere. We need to get on with the great Brexit wins now we are free to set our own laws and taxes.

This is now crucial for our fishing industry who feel let down. There is   scope for major  growth in investment and  jobs. The immediate task is to protect our fish stocks from plunder by  aggressive foreign  industrial trawlers, and to help the UK build capacity to fish the grounds in a sustainable way landing much more fish here in the UK. This requires

  1. A ban on super large industrial trawlers. The Agriculture Department says there is no definition of a supertrawler . There can be. You could ban all boats of over 100 metres in length, or all boats of over 5000 deadweight tonnes. This would remove the huge Russian and Dutch vessels which dominate and leave more fish for our smaller boats. This would be very popular, and supported by Green groups.
  2. Cheap loan and grant schemes to build new under 100m boats for our expanded fishery in UK yards, and a scheme to allow purchase of second hand vessels from abroad which can also increase capacity. With interest rates so low for the government it would be easy to offer soft loans with long repayment dates to get new fishing people involved.
  3. Use available regional and development grant regimes to encourage harbour expansion around our coasts at suitable fishing locations.
  4. Speed up Freeports and Enterprise Zones, allotting enough to fishing areas and use them to attract new and additional fish and food processing.
  5. Help the UK fishing industry establish new markets for UK fish by adding value, using the fish in ready meals and frozen products, sending much more to fish hungry Asia.
  6. For shipping generally, reverse the Factortame ECJ judgement, restoring a minimum UK ownership requirement for UK flagged vessels.
  7. Draw up with our shipping industry improvements to requirements for the UK shipping Register to encourage expansion without diluting labour or safety standards.

Universal credit

Yesterday I accepted the Prime Minister’s advice and abstained on the Opposition day motion. I was in two minds about it and gave the government the benefit of the doubt.

On the one hand it is a perfectly fair tactic for the Opposition to table a motion to smoke out a government view on a contentious issue. I prefer it when the government has a view and then defends it with arguments and votes. It would be popular with many if the government just agreed to continue the new higher rate of benefit. On the other hand, I could see that the government wishes to make up its mind on  whether to continue the extra £1000 a year Universal Credit to all recipients nearer the budget when it should have new forecasts of how likely it is people can get jobs to boost their incomes, and how the spending figures generally are placed.

The central idea of Universal credit is to ensure people are always better off working. Higher minimum wages, control of low wage migration, taking lower pay out of income tax are all part of a suite of policies to make it true that it is better to work, whilst ensuring all can afford to live from benefit payments  if they are out of work. I was a strong supporter of the increase in UC when the pandemic hit with policies to control it that drove many lower paid out of work altogether, and slashed the overtime and performance related pay of others.

I fear we will need further support for families and small businesses before the pandemic is over and more normal life resumes. I will press for suitable measures in the run up to the budget. I am against the ideas I see in some parts of the media that from March the government needs to rein in spending and borrowing and push up taxes. That would be quite the wrong response when the economy is still limping along way below its levels of income and work of 2019.

Why are we waiting?

I read that the Chancellor has been charged with chairing a Committee to take advantage of the freedoms we gain from leaving the EU. I wish him well, as there are many obvious easy wins which the government should have ready after four and half years delay in our exit. Why are we still waiting for them?

The Chancellor in particular should get on with a Brexit bonus budget. He should set out the large savings on our contributions to the EU and how they are being used. He should explain how the sums we will still be paying to farmers in lieu of the CAP payments will be better directed. I want to see more of that money promoting domestic food production. The EU often paid us grants to stop us producing things.

He should explain how he will police any residual bills from the EU under the Withdrawal Agreement and what action he will take to get our money back from the EIB and other joint assets we held with them.

I want him to overhaul VAT, an EU tax. He could begin by removing it from all green products, and from domestic fuel. That would promote higher standards of insulation, fuel efficiency and more modern controls, and reduce fuel poverty.

He should examine tax levels and grants for small business with a view to producing a better package. He needs to promote small business and self employment as we need them to power the recovery from the deep anti CV 19 recession we have been living through.

This is not the time time to be increasing tax on the self employed through IR35, nor to be putting VAT onto foreign visitors who used to come here for duty free shopping amongst other reasons. We need a UK open for business and welcoming to visitors with money to spend.

Improving this site

On Monday night the web expert who runs the technical side of this site will make improvements to the layout. The work will be done after 9pm. I have asked him to make it clearer that people can ask to receive a free email of each day’s blog posting, to improve the layout of the text so people can read it more easily on small mobile devices and update the appearance. I have sketched some changes.

I intend to continue with a daily main story which I write. I will continue to turn down the various offers of guest writers, adverts and sponsorship, as I wish it to be independent, and will continue to pay for the service myself. It will continue to be the John Redwood site. It will include items relevant to my job as MP for Wokingham, with a separate local pages section on Wokingham and West Berkshire issues. It is not an MP website site paid for by taxpayers. None of its content is cleared with Conservative Central Office.

Moderating the site is taking up too much of my time owing to the refusal of a limited number of people to accept my guidance. I will repeat

Please limit the number of proposed postings each day

Avoid long postings – unless you have something novel and well researched to say, in which case I might publish them

Avoid links to other sources, unless they are helpful links to easily identified government/Central Bank/global quango free public websites supplying useful data and backup

If you want to highlight something good you have read elsewhere then mention the source and give a small summary of what excites you about it in your submission.

Avoid allegations against individuals or companies as I do not have time to check them out for libel. I afford the same protection from allegations to Opposition MPs as to Conservative ones.

I will from now on be deleting many more incoming comments from a few individuals who are repetitious , who constantly ignore this guidance and whose opinions are now well known to regular readers. They need to find something new to say and to say it better if they want to be posted.

This site does not seek to censor people who disagree with me or the government or the Conservative party, and is willing to explore alternative explanations and policy options in a sensible way.