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Today the Chancellor will remind us in a speech that some important taxes are being cut. This is the way to promote more jobs and rising prosperity. The aim is to get more people off welfare into work, and to create the conditions for more good jobs to be created for people to improve their living standard. I repeat beneath the recent summary sent out by the Conservative party of the main tax cuts of the last Budget:

 

“Tax changes coming into effect this week:

 

On Tuesday:

 

• Corporation tax will be cut by 1 per cent to 21 per cent. It has fallen from 28 per cent in 2010 and will fall further to 20 per cent in April 2015, making it the lowest corporation tax rate in the G7.

 

• Tax on business investment virtually abolished for most businesses. The annual investment allowance will be doubled to £500,000, and will be extended by a further year to December 2015. This means 99.8 per cent of businesses could pay no tax on investment.

 

• Business rates reformed so that:
  • The annual increase is capped at two per cent;
  • The small business rates relief is extended for a further year, so that over half a million of the smallest businesses pay reduced rates and over a third of a million pay no rates at all; and
  • Targeted help for the high street in the form of a £1,000 discount for retail properties takes effect, benefitting around 300,000 shops, pubs and restaurants

 

• Fuel duty is frozen again.

 

On Sunday:

 

• The income tax-free personal allowance increases to £10,000. 24.5 million taxpayers will benefit, with a further quarter of a million taken out of paying income tax altogether. From April, typical basic rate taxpayers will have gained by £705 from all increases announced by this Government. Three million people on low incomes will be taken out of income tax altogether.

 

• Employer National Insurance Contributions will be cut by up to £2,000. This new Employment Allowance will benefit over one and a quarter million employers, over 90 per cent of them small businesses. 400,000 small businesses will no longer pay employer National Insurance at all.”

This is in addition to the savers’ package of measures which we have already discussed on this site, increasing the ISA allowance, offering new Pensioner Bonds in the next financial year and freeing savers to  make their own decisions about their pension savings.

 

 

One of the myths of some  commentators is that politicians and parties should not  “bang on” about the EU because electors are not interested.  It is true that if you ask people if the EU is one of their main issues, or if they want to hear about the EU, the  large majority will say they have other matters which they think are more important. Those matters are often jobs, immigration and energy prices.

That is why, of course, political parties who want to meet the wishes of the people do have to “bang on” about the EU. The feature of migration which most worries people presently is the open border with the rest of the EU. Many want the government to stop benefit tourists coming here from elsewhere in the EU. Others want to stop workers moving here to undercut wage rates or take jobs from local people. There has to be an EU/UK  policy answer to the worries about jobs and migration.

The same is true of housing policy. As someone wisely said in a posting here, maybe the UK has a migration problem more than a housing problem. As we have been inviting in an additional 250,000 people a year during much of Labour’s time in office, that means we have to build a new city the size of Southampton every year to accommodate them. We have not been building anything like enough houses to keep up with the large numbers of new arrivals. This means they have to face poor quality housing,  living too many in the same property, whilst house prices generally are driven up by the extra demand.

People rightly want cheaper energy. They want to know the lights will stay on. Labour not only put through UK legislation that means dearer energy ahead, but also signed us up to EU directives and regulations which force us to close cheaper fossil fuel power stations and rely much more on expensive and unreliable wind energy. To solve the problem legally we need a new policy in the EU as well as at home.

The commentators also say that the Conservatives have to keep quiet about the EU because the party is split on it. This is no longer true. The Conservative party as a united whole voted against Nice, Amsterdam and Lisbon, and the associated large transfers of powers to the EU under those Treaties. The Conservatives have been long united in opposition to the UK joining the Euro, and are the one major party which says never to joining the Euro.

Being in government with the Lib Dems has not changed these views. We still think the Nice Amsterdam and Lisbon Treaties were wrong. We either want a new relationship which gets rid of the large powers the EU holds, or a vote to leave. Conservatives want to tackle people’s worries about jobs,  migration, homes and energy prices. All these now have a large made in Brussels element we have to change.  The commentators are wrong to churn out their silly soundbites that people are not interested in the EU and the Conservatives have to keep off the subject.

 

Visiting a school in my constituency on Friday reminded me that we have not talked much about education recently on this site.

Mr Gove is pressing on with his reforms to schools, largely unimpeded by the EU as this remains an area more under domestic control than most.

He has introduced free schools, where the early results are good. They offer parents an additional choice which is especially welcome in neighbourhoods with weaker schools. There are more than 170 of them up and running.

He has accelerated the Labour programme of Academies, giving schools more powers to make their own decisions.

He has continued the introduction and support for synthetic phonics as the best way to teach young children to read.

He has led revisions to what is taught, to seek to ensure that the best of English literature and the basics of our island’s story are taught in English and History.

Several teachers from my area have sent me an identical email saying they are having to work excessive hours, and spending too much time on unnecessary and bureaucratic tasks. I know this is not what the Secretary of State wants, as he has been keen to restore more school level decision taking and to campaign against a bureaucratic approach. I have written back to each offering to take up these worries with the Head of their school, but so far none of the teachers have taken up that offer.

 

 

 

Recently Mr Cameron set out more of the details of his proposed renegotiation with the rest of the EU, should the Conservatives win the General Election in 2015. He proposes negotiating over seven main areas:

 

• “Powers  flowing away from Brussels, not always to it
• National  parliaments able to work together to block unwanted European legislation
• Businesses  liberated from red tape and benefiting from the strength of the EU’s own  market
• Our  police forces and justice systems able to protect British citizens, unencumbered by unnecessary interference from the European institutions
• Free  movement to take up work, not free benefits
• Support  for the continued enlargement of the EU to new members but with new mechanisms in place to prevent vast migrations across the Continent
• And  dealing properly with the concept of “ever closer union”, enshrined in the  treaty, to which every EU country has to sign up. It may appeal to some countries. But it is not right for Britain, and we must ensure we are no  longer subject to it.”

This week the Chancellor has added to the task the need to protect UK interests from further centralisation of powers stemming from the Euro scheme and the need for its members to sign up to increased Brussels control over their economies and banking systems.

There is  now an opportunity to discuss this list. Some will wish to go further, others will see this as a substantial agenda to be getting on with following the election in 2015. What it should be easier to agree is the need for a referendum, so those who want out can vote for Out and those who think the new deal – however far it goes – is sufficient to warrant staying in can vote to stay in.

Many bloggers on this site repeatedly ask for full control over our borders again. The Conservative proposals seek to stop benefit tourists arriving and claiming, and would impose new restrictions on future migrations of workers. Some will want to go further. They will point out that during the Labour years we needed to build a new city the size of Southampton every year to cater for all the additional people arriving, many of whom came from the rest of the EU. This will be an important part of the debate over the renegotiation.

Previously  we looked at the main ways which cause us to lose jobs as a result of belonging to the EU on current membership terms. Today I  want to come up with a prudent estimate of just how many jobs being in the EU costs us.

The main cause of job loss is in manufacturing. Dear energy has led to the closure of petrochemical plants, aluminium smelting, steel and other heavy energy using capacity. It has meant we do not even produce all our own power, importing some from France via the interconnector.  If we had US levels of energy prices on the back of more domestic production of oil, gas and shale gas and German style coal fired power stations, we could have 15% more jobs in manufacturing or around 450,000 extra jobs.

We would also have more jobs in energy. That could be around 10% more or 50,000 extra jobs.

Agriculture and fishing has been constrained by quotas and the rules of the CAP and Common Fisheries Policy. Domestic policies could add 10% or 30,000 jobs in those sectors.

Adding it up produces a figure in excess of 500,000 more jobs if the UK had more sway over its own industry, energy production and business regulation. There could also be further gains in services, the biggest area in our labour market.

 

Coming quickly off the learning curve of their forecast of a drier than usual winter in the UK, the Met Office tell us to expect more hot summers over the next 25 years.

The Met Office Hadley Centre tells us  “by the 2040s we can expect events like 2003 ( a hot summer) to be normal….There is evidence that in the UK we are seeing more heavy rainfall events” (which they take as a sign of global warming though the weather often seems cold when it is raining).

If you look at their official longer term forecast for the world, it is more nuanced. They predict warmer times over the northern land mass, but a cooler southern ocean. They draw attention to ” Some indication of continued cool conditions in the southern ocean and of developing cooling in the North Atlantic sub polar gyre”. Their coloured charts of current conditions shows quite large areas of the globe as cooler than average.

So what should we make of all this? Is the forecast of hotter summers likely to be true? If at the same time the southern ocean is having cooler summers, does that matter? A German forecast group has put out a specific forecast that we will have a hot summer this year. As April nears with frost on the ground, I look forward to seeing how that prognostication works out.

Meanwhile, Mr Cameron is now saying we must move rapidly to locate and exploit the gas beneath our feet, and is urging the EU to commit itself to a new energy policy which fosters greater energy self sufficiency. As I have often argued here, that is essential economically and politically.

I have just bought a copy of Rupert Darwall’s excellent book The Age of Global Warming. It is a must read for anyone interested in global warming theory. It combines substantial research in to the build up of the academic work and political conferences, with a delicious wry sense of humour.

 

                    Mr Clegg bombed badly in the debate last night. He majored on the lie that 3 million jobs would be  at risk if we left the EU, an argument often debunked on this website. Let’s hope after another airing of the main reasons why this is untrue we can put that canard to bed once and for all. Germany sell us more cars than we sell them, so why would they want to damage that trade? No sensible Eurosceptic wants to damage our trade, nor do our European partners who make so much money out of us. The German government has told us it would want good trade arrangements with us if we left the EU. It is only the Europhiles who have such a low view of our partners in  the EU that they think they would spite themselves to do us damage!

                     The public adjudged Mr Clegg the loser. They warmed to Mr Clegg when he said thanks to the EU we can get criminals back here to stand trial, despite the obvious counter that we would have extradition arrangements with the EU countries if we did not form part of the criminal justice measures of the current EU.

               A recent good piece of research from Business for Britain shows how the UK has opposed just 55 new EU laws since 1996. Labour lived through whole years (e.g. 2006,2008) without opposing a single EU measure, so worried were they about having a disagreement with the Commission. Despite this every one of those 55 measures are now good EU law and therefore apply to the country which opposed them. No sign then of the EU coming our way or the UK having lots of influence.

             The UK has just 3.6% of the EU Commission, 8.2% of the votes in the Council of Ministers and 9.5% of the MEPs, as Business for Britain has recently reminded us.  No wonder we rarely influence policy and rarely stop laws we do not like. The Pro EU case suffered a bad blow last night as it revealed its dependence on a falsehood about jobs. We were told we would lose lots of those jobs if we did not join the Euro, a prediction which turned out to be false. The pro EU forces  need to change the record if they are win back lost support in the country.

 

George Osborne has twice said or done something very popular which has changed the national mood.

His Conservative Manifesto promise to take most people out of paying Inheritance Tax was very popular when he first proposed a new £1m threshold before having to pay. Labour gave up any idea of an early election on the back of it. They then increased the tax free allowances for IHT to show they had understood the public mood, taking it up to £650,000 for a married couple. The Lib Dems did not allow the full increase in threshold the Conservatives had offered in 2010 when joining the Coalition.

Last week his decision to let people with defined contribution pension schemes enjoy the freedom to decide when to take their money out in retirement was another one of those opinion changing moments. Ever since the announcement the Conservatives have gone up in the polls, the Chancellor has become more popular and Labour after early misgivings have decided to back the policy.

We should ask why is it that these two things amidst the thousands of decisions that governemnts make should be the ones that attract so much attention and favourable comment?

The first point to grasp is it shows people are  not primarily motivated by jealousy. Few people will benefit from the pension changes – around 400,000 immediately out of an electorate of more than 40 million. Most people are in defined benefit schemes or do not have an employer pension fund.  A minority have significant sums in a defined contribution scheme which will ultimately  benefit.

Similarly, when Mr Osborne proposed a major increase in the Inheritance Tax threshold most people were not in the bracket where they were facing any IHT bill at all.

What both reactions have in common is the view that the state does not have a right to confiscate your money after a lifetime of hard work and prudence, nor does it have the right to tell you how and when you might spend it. Many people who do not stand to inherit a decent sum from their parents do not want to stand in the way of those who do. Others think that given time maybe they will stand to inherit, and do not fancy the idea of a large tax charge on their parents’ effots. Similarly people may not have much or any pension savings yet, but do not rule out one day having some and then wish to be free to use them as they see fit.

It has been good to see the instant reaction against the nanny state when some dared to argue that people should not be free to draw down their savings in retirement when they wish. The public mood thinks government interferes too much and charges us too much for what it does and what it can offer. The two popular statements by Mr Osborne show there are lots of people in our country who want the state to know that many of us wish to be responsible with our money and want the state to interfere less.

 

In 1866 the annexation of Venice by Italy was endorsed by a referendum of the Venetian people. A remarkable result was achieved, with just 0.01% voting against. Subsequent historians have suggested the referendum was conducted under the watchful presence of the Italian military. They argue it was just a formal endorsement of an occupation that had already taken place and was arranged by the annexing power. The annexation was possible following  the victory of Prussia over Austria, as Prussia was the newly united  Italy’s powerful ally. Others say that swapping Austrian rule for Italian rule may have been the lesser of the evils  at the time, but Italian rule turned out to be no more enjoyable for Venetian nationalists than Austrian control.

So why isn’t the EU welcoming the decision by many in  Venice to hold its own recent  referendum  to see if people would like an independent Venice instead of staying with Italy? Why are they ignoring the substantial majority that has voted for an independent Venice in the unofficial referendum that has just been conducted, owing to the refusal of the Italian state to allow a legal referendum under Italian law? What will they and the Italian state do if Venice now follows the results of this v0te up by not forwarding tax revenues in future to the Italian state or takes other action to flex its muscles?

It appears once again that the EU picks and chooses which referenda to allow, and as we know is also often quite choosy about the results of any popular vote. Clearly independence for the Veneto is no more permitted than for the Crimea, though it is apparently allowed for Scotland where the existing mother country is more democratic and broad minded about these matters and has agreed to a vote. Even here the EU has intervened in the referendum campaign to make it clear it wants a No vote to independence.  Many countries in the EU have been allowed referenda on EU matters, though they are usually asked to vote again if the EU does not agree with the result.

 

If current energy prices are not high enough to shock people into wanting us to find more home based gas to use, the weak position of European countries  vis a vis Russia should be sufficient spur to find and extract UK gas.

Some in the government are keen – the Chancellor and the Minister of State for Energy. How keen is the Secretary of State for Energy and Climate Change?

It is true he is working  towards a large new Licensing round to prospect for onshore oil and gas. The 14th Round is due soon, and will grant licenses in many parts of the country to those willing to spend to find. However, the whole process is currently out to consultation. The consultation, which closes on 28th March, is mainly preoccupied with ensuring compliance with the EU’s Strategic Environmental Assessment Directive 2001 and the EU Habitat regulations.

The DECC website reminds us just how highly regulated all this is going to be. Now I entirely agree the interests of landowners and local communities need to be fully protected. Of course they need assurances that drilling will be safe and controlled and  will not take place close to residential areas. Of course if gas is found communities and individuals should participate in the good news, and should be protected against damage to their properties or their water supply. If any gas is found in my area I will want to help the local community get the sensible guarantees and a participation  they will expect, but I will not want to block the development in suitable locations.

Anyone wanting to look for gas will have to obtain landowner consent, DECC permission, planning permission from the local Council, Environment Agency consent, and Health and Safety approval. It might be a good idea if the government also offered some encouragement to this process. The oilfield at Poole in Dorset shows that it is possible to extract oil close to a beautiful landscape and a prosperous town without it being intrusive or a constant cause of conflict with the neighbours.  The drilling for that occurred years ago before all this latest regulation.  If we are to tackle fuel poverty and fuel a decent industrial revival we need to get on with finding and using the gas that probably lies beneath our feet.