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11 am All Souls High Street Oxford  Friday 21 February

 

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I warned before the last Bank of England rate cut that inflation was going up this yea. The Bank should take its anti inflation duty more seriously. The CPI is up 3%, 50% over target. It will get close to 4% later this year.

The government is causing a lot of the inflation. Bus fares up from cancelling a subsidy. Rail fares to go up to help pay for a big inflation busting pay award by a nationalised industry. Managed energy prices up. Services going up thanks to big increase in employment costs from the jobs tax. Regulated  Water bills up massively. VAT on school fees. Housing costs up 8% thanks to attacks on landlords and restricted supply. Food costs up as family farm businesses threatened with business killing tax rises.

Stagflation is well set in. Around  Zero growth for the last half year and 3% inflation. Last summer we had topped the G 7 growth league for the first half of the year and inflation was 2%

 

In the last century the UK twice was dragged into world wars. The small armies of peacetime were soon retreating and subject to huge loss, with the need to recruit, train and equip much larger armies after the war began.In each war innovation and greatly expanded industrial output transformed our force, with new tanks, planes, and types of munition.

To fight those wars we still had capacity to make steel, explosives and other essentials  and intellectual property to make competitive planes, ships and weapons. By 1943 we were making 26,000 planes a year despite bombing of factories and sinking of imports . Today we have run down our steel, chemicals and other essential raw materials for defence. We buy planes and weapon systems that need components and sometimes permissions from overseas. In the two world wars our enemy sought to blockage us, sinking many of the ships bringing imports. An island nation needs to be able to make and grow things for ourselves to make it easier to survive a war.

The National Security Council needs to do more work on ensuring our defence spending buys domestic capacity and the rights to make the weapon systems here. The MOD needs to overhaul its procurement. There have been too many budget overruns and delays, too many one offs and variations after the programme has started. We need to able to make more standard guns and ammunition, more drones and good value missiles.

 

When I studied history I was made to read a lot of European history, with UK syllabuses largely or wholly ignoring the histories of the USA and Asia. It was a depressing study to read of a continent rent between Catholics and Protestants for four centuries and between communists and fascists for a fifth. The history was disfigured by the successive imperial ambitions with planned invasions of Britain by Italy, the Norsemen, Spain, the Holy Roman Empire, France and  Germany , as successive efforts were made to create a Europe united by conquest and suppression.

I came away with the realisation that England, later the UK, had suffered badly from its interventions in Europe. We had been invaded and put into slavery by the Italians when they were called Romans. We had been pillaged and occupied by Scandinavians called Vikings or Norsemen. We had been subjugated with lands and businesses stolen by the French after the Norman invasion as they enforced feudal serfdom. We had in the sixteenth century to  defeat the mighty Spanish empire as they launched a major invasion. In the eighteenth and early nineteenth centuries we needed to defeat another big French attempt to subjugate us. Twice in the twentieth century we had to defeat German efforts at conquest.

Part of the reason I opposed our membership of the EEC, later the EU, was my knowledge that attempts at European Union had always turned out badly in the past. Introducing a European army was unlikely to make a more peaceful or secure Europe. The Holy Roman Empire superimposed above the German states had not brought stability,  but did become a fighting unit in its own interests. The EU has more now calling for an EU army. The EU has made moves  to common weapons systems and procurement, undertakes common actions militarily and wishes to extend its defence competencies.

The UK has always been generous to the continent. Our predecessors spilt much blood and treasure stopping the spanish conquest of the Netherlands and other Protestant states. They did much to prevent Napoleon dominating most of Europe. The UK stood alone against Germany in 1940 before the US entered the war. In the EU we made a large financial contribution and opened up our market to their exports, running a huge deficit, as their market opening was one sided.They would not open their services markets to help us.

Today the US has rightly challenged European members of NATO and the EU to do more for our own defence. The UK should be no part of a common defence of the EU and  its borders. As they expand eastwards they must provide the forces for their own security.  We should meet our NATO obligations to fellow NATO members just as we need their support and guarantee. It is feasible to keep the USA in NATO as long as we and other members do a bit more to provide both military and industrial capacity to resist and deter invasion. It is not feasible to expect the US to provide defence cover for an expanding EU as they add non NATO members.

The EU was busily influencing Ukrainian opinion and politics  , encouraging a pro Western line working towards EU membership. The 2014 revolution and  change of Ukrainian leadership forced out a more pro Russian President and brought in a pro EU President. Putin seized  the Crimea , claiming it was a very pro Russian region that should never have left Russia.

This left the south eastern provinces where there was also a larger pro Russian population. Civil war broke out with Russians encouraging secessionists. The pattern of behaviour was similar to Russia’s action in Georgia  to detach South Ossetia and Abkhazia . In Moldova Russia seeks to control Transnistria. Belorus is governed by allies of Putin. To the west this is a war of  Russian expansion, as Putin seeks to reunite old parts of the USSR. He claims he is supporting and assisting populations  who wish to be independent of Georgia or Ukraine or Moldova as they look towards the EU but uses force to back up his claims. The West sees Putin as an aggressor seeking to gain territory by violent conquest. Whilst they wish to stop him they have understandably not wanted to go to war themselves with Russia. Ukraine has been fighting the war whilst trying to get more help from the US  and EU.

To Russia the Russian speaking areas of Ukraine should belong to Moscow. They claim there are people in those parts of Ukraine especially in Crimea that want to be governed by Russia. They see it as a war against EU expansion  with the EU offering membership to Ukraine, Moldova, Georgia, to push its borders closer to Russia. Russia does not distinguish between expanding borders by military action and expanding  them by government decisions in the way the West does.

It is most important if there is a peace Treaty or ceasefire in Ukraine with  the current front lines as a new border that the UK leave the task of policing that border to the EU.It becomes an EU  border as soon as Ukraine membership of the Union is confirmed.

I will be giving a lecture at 11 am at All Souls  College, High Street Oxford on Friday 21 February. It will set out how to reduce waste and bad spending in UK budgets. It will not propose any cuts to benefits or to main public services.  There will be an on line facility to see it live as well. See www.asc.ox.ac.uk/events     for details

I have long thought it wrong of the EU and Biden’s USA to tell Ukraine to fight on against Russia but to fail to supply enough weapons and ammunition to give them a better chance of winning.  The UK did proportionately more to lead the West into giving more powerful and modern weapons in greater quantities, but  has nothing like the scale of arms manufacture in peacetime required for such a war. The West as a whole by its weakness and thanks to Biden’s mis speaking  led Putin to take a chance, and then to double  down when his plan for an easy win was thwarted by Ukrainian bravery . The West has been reminded if it wishes to fight a war by proxy it still needs to put its own industry on a war footing.

Today after 3 long years and all too many deaths the two sides are at a violent standstill. Russia edges forward in the south east  of Ukraine but is unable to evict Ukrainian forces from its own soil. Many Ukrainians have battle fatigue and want to end the bombardment of their towns and cities. Russia is suffering large losses of personnel and some economic privations from sanctions.

Biden, Scholz and Macron were united in saying to Ukraine they should fight on, but no NATO troops would be committed. The EU failed to meet its promises for ammunition, leaving Ukrainian forces out gunned. President Trump is making the allies face uncomfortable truths. They want Ukraine to sacrifice more without giving them the means to win. He says do a deal with Russia now, then fortify the new border  with EU forces. The USA seeking to cut its huge deficit and concentrating on western defence against China wants out of European security matters. The EU has to grasp that it needs to spend a lot more on defence, as Ukraine is an EU problem.

A series of cases in the Uk have seen judges twist human rights law to allow more people to remain who entered as illegal. migrants. The latest case allowing Gazans to qualify under a Ukraine scheme was sufficient to even  draw the PM ‘s criticism.

The UK has often in the past been careful not to put itself at risk of foreign judgements making it do things we disagree with. The International Court of Justice cannot judge matters between us and the Commonwealth, making a Chagos judgement out of order. The UN Law of the Sea does not apply to  us in any defence matter.

In more recent years we casually gave away too many powers to the European Court of Justice. These have now been reclaimed by Brexit. Time was when if the ECHR found against us Parliament would overturn the judgement, as with votes for prisoners.

Keir Starmer advised by Attorney General   Hermer seems keen to side with foreign complainants and courts wherever possible. He needs to grasp that the public want to stop the flow of migrants and expect Parliament to legislate a fix. He should see we must keep the Chagos  as there is no legal power to find against us.

Many in government say they are prevented from acting owing to Hermer telling them of dangers of judicial review. As they are the government they must legislate to deal with over activist judges.

 

When Labour lost office in 2010

Unemployment 7.8%

Inflation 3%

Real pay -1%

 

When Conservatives  lost office in 2024

Unemployment 3.6% ( under half 2010)

Inflation.  2% ( one third lower)

Real pay 2.2% (3.2% higher)

Today

Unemployment 4.4% ( more than a fifth higher)

Inflation. 2.5% ( up one quarter)

Real Pay 2.2% ( unchanged)

 

Growth in 2024

Q1   +0.7%

Q2   +0.4%

Election

Q3  no growth

Q4  +0.1%