Happy St George’s day

Today we celebrate England’s day.

We remember our greatest  dramatist and poet, William Shakespeare, who was  born and died  on or about this day.

I wish you all  a happy April 23rd.

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Deficit reduction and EU rules

In a recent debate in the Commons the UK government presented its report to the EU over the UK’s progress in meeting the debt and deficit rules of the EU Treaties.

Every year the Uk has to report to Brussels on how far it has got with getting its running budget deficit down below 3%, and its stock of national debt down to below 60% of GDP. These rigid requirements have been an integral part of EU policy ever since the ratification of the Maastricht Treaty. Most EU states have conformed with the budget deficit rules, but few have got anywhere near reaching the stock of debt requirements.

Euro area members are subject to possible financial penalties for failing to comply. The EU authorities seem to take a much stricter approach to supervising the annual budget deficit rule than the stock of debt rule. They seem to recognise that making states repay large quantities of debt would  be very deflationary, whereas curbing annual deficits they judge to be less so. The EU does not have the same power to fine non Euro members, but it still makes the UK go through the business of submitting its plan for deficit reduction, and can respond with a statement  on whether it approves or disapproves of the approach being taken.

The issue arises as to how much impact this requirement had on the previous Labour and Coalition governments? They said they took the exercise seriously, and they have always faithfully reported their position against the Maastricht obligations. The Coalition  always pursued a policy of trying to get the annual deficit down, as did Labour after the crash,  and have always looked forward to a time when they will also be reducing the stock of debt as a proportion of GDP.

During the debate I found it fascinating that the SNP and Labour, parties who dislike deficit reduction and the spending cuts that often accompany it, could not  bring themselves to condemn the Maastricht requirements and the policies they have clearly led to on the continent. Apparently plans to cut the growth in spending or to raise taxes on anyone other than the rich are not desirable if home grown, but are just fine if in pursuit of compliance with the Maastricht Treaty, You would have thought parties of the left especially would welcome freedom from these debt and deficit controls when we leave the EU.

Free of them I do not suggest we let rip with larger deficits and faster  build up of debt. I just want us to make rational decisions of how much to borrow and for what purpose, given the state of the economy and the ability to invest sensibly. It does not seem likely that most EU countries will get to below 60% any time soon, yet the requirement still sits there unamended.

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School money and class sizes

All UK parties have been keen to get class sizes down in state schools. Yesterday Labour decided to make an issue of this, forgetting that class sizes have risen quite a lot in Wales where they are in government. I was interested to hear one of their spokesmen defend this by pointing out satisfaction with schools in Wales had gone up at the same time as class sizes. He was then at a loss to answer the obvious sequel – if parents and pupils think things are getting better, why did class size worry him?

I am all in favour of decent funding for schools, and have been asking for more money for Wokingham and West Berkshire schools where  budgets are tight. I have been asking b0th for more in total to schools, and more as a proportion of the budget to areas like Wokingham that have traditionally been given much less than the best funded. I would, however, be interested in your thoughts on class size.

It seems to me there are obvious occasions when individual pupils need individual help. That requires a good staffing ratio., There are also occasions when a good teacher or outside speaker or lecturer has something interesting and important to say when you can open the lesson or lecture up to many more pupils, as many more can benefit from it. Class size is an average figure which can conceal as well as reveal. Some star teachers and star lessons are so good that they are recorded and used in a wide range of ways by many students. On line learning is both one to one and one to many.

The  best judge of how many teachers a school needs should be the School Bo0ard and management team led by the Head. There need to be sufficient teachers for those things that need teaching in small groups or require individual attention. There can also be other times of day and topics that can be covered in larger groups. In practice schools experiment with smaller and larger groups depending on subject and age range of pupils, and often have more than one adult in the classroom so individual pupils can have individual attention as well as more general group or whole class work proceeding. The number of teachers in a secondary school is also affected by how many subject options the school  wishes to offer. The number of subjects varies considerably between schools.

 

 

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Buying things from the EU

We are still waiting to learn if the rest of the EU wants to impose tariffs on all their many agricultural exports to us, and on the  cars they send us. Most of the things we export to them are tariff free under WTO rules or would be subject to very low tariffs. All services are tariff free, the things like aerospace parts and planes are tariff free.  The EU  sell us so much more of the limited number of items that do attract serious tariffs under WTO schedules.

I would like to reassure people who are worried about this. If by any chance the rest of the EU does turn down our offer of tariff free trade in an unlikely fit of self harm, we can find plenty of cheaper and better substitutes.

You do not have to buy German or French cars.   There is now a good choice of models, prices and specifications available from a range of UK car factories. If the EU wants tariffs on cars I would recommend the factory owners increase their UK capacity, as we will be wanting more home produced vehicles.

A visit to one of England’s vineyards  taught me that England makes some good white wines.  There are plenty of good  Australian and Californian reds as well as English.

There are many great English cheese, so you don’t need to buy French. There is such an abundance of choice.  Our dairy industry was held back and made smaller by EU policy, with a long period of restrictive quotas. It needs more domestic demand for higher value added products.

Our supermarkets do rely on a lot of continental fresh produce, but there are other possible sources at home and abroad outside the EU which would be more attractive if they go for the EU tariff option. The UK could remove tariffs on rest of the world food where they produce things we cannot produce here which would  bring those prices down.

In a world of oversupply, with low rates of world inflation, being the customer has its advantages. All the time we remain in the EU we have to impose high tariff barriers on food from the rest of the world. Out of the EU we can cut or remove tariffs, and can bargain for a better deal for our exporters at the same time. The EU would be silly to make it dearer and more difficult for us to buy their products, when there is plenty of choice elsewhere.

 

 

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The BBC wants to change the news, not report it

Yesterday I was phoned to be asked onto the BBC Radio 4 Today programme this morning. They said they wanted me to answer questions about how the election would change the UK’s ability to negotiate a good new relationship with the EU. I was happy to do so, and said I could make any time at their studio. It seemed like a good topic, and central to what the PM said about her reason for calling the election.

They then proceeded to ask me a series of questions all designed to get me to disagree with the UK negotiating position and Prime Minister. I explained that I supported the PM, agreed with her Brexit White Paper and stated aims, and suggested if all they wanted to do was to criticise her they should approach the Opposition parties. They continued to try to get me to disagree. They did not seem to have read the White Paper or the PM’s speech on the topic, so I had to tell them what was in them and why I agreed with them.

I explained again that their thesis that the Leave supporting MPs were in disagreement with the PM and were “rebels” was simply untrue. We are not in disagreement with the PM and we have been strongly supporting the government’s statements and legislation on Brexit. She said she would get back to me about the invitation to go on, with the details.

She did not of course bother to, as it was clear I was unwilling to feed their view of what the news should be.

I then found another Leave supporting Conservative MP had been given the same treatment, and he too had thought the BBC were trying to change the  news rather than reporting the position. When I came to do a live interview on some other BBC programme I was faced with the same stupid thesis and had to explain on air how wrong their idea  was.

I do not know who is feeding the BBC this nonsense, but it is frustrating that they do not accept the truth from those whose views they claim to be reporting, and do not bother to get back and openly say they do not want you on because you won’t say what they want you to say.

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Make the money central to the election

The Prime Minister rightly said we need to take back control of our money.

One of the important things the government can do in this election is to say Goodbye to the austerity economics of the EU budget rules and Mr Osborne’s tenure. One of the plessures of Brexit, a positive for voters of all persuasions, will be the ability to spend the net contributions we currently send to Brussels. Once we are out we can offer tax cuts and more spending with no rise in borrowing. Spending the money at home will help our economy and put  more of our people to work here, instead of having to send the money abroad  and run a larger balance of payments deficit.

We could remove VAT on domestic fuel, tampons and green products. We could spend more on the NHS, training more UK people as nurses and doctors. We coukd spend more in our schools and do more to promote better roads and public transport.

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June 8th General Election

The pound has risen against both the dollar and the Euro on news that Mrs May is seeking a new mandate to implement Brexit. The cost of government borrowing has also fallen, with bond prices rising.

She tells us “Britain is leaving the EU and there can be no turning back…..The country is coming together but Westminster is not”. She wants a mandate given the way the Opposition parties are behaving over the Brexit negotiations.

 

I look forward to the election, and assume Labour will also be running on a platform of wanting to make a success of Brexit.

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Why the EU now dislikes Turkey

The EU is not happy with the results of the Turkish referendum. Some EU politicians argue the campaign was not properly conducted, with irregularities in voting, undue pressures on some voters and one sided media coverage heavily influenced by the government line. Many in the EU believe the changes will be bad for Turkish democracy, giving the President substantial new powers to govern without proper checks from Parliament and the courts.

This response is likely to harden those attitudes in Turkey which think the EU has been playing them along for too many years without allowing them to join the EU as full members. The first EEC/Turkey Association Agreement was signed in 1963. In 1970 the Customs Union was developed with Turkey, and more progress was made with a fuller document in 1992.  The original aim was for Turkey to be a full member of the Customs Union, to be part of many common policies, and to reach freedom of movement with the EU.  In 2013 a worried EU signed a Readmission Agreement with Turkey to get Turkey to take back more people, and on March 18 2016 a wider ranging policy was signed to enlist Turkey’s help in controlling migration across the Med.

The supporters of President Erdogan claim the referendum was fairly fought and conducted with plenty of outside vigilance and interest. They remind the many critics that the 18 changes to the Turkish constitution passed through Parliament with substantial majorities, typically around 340 votes in favour and 140 votes against on an Article by Article basis in a 550 seat Parliament. The changes include an extra 50 MPs, 5 yearly Parliamentary and Presidential elections, and a requirement for impartiality by judges. Parliament can pass a law to  overrule a Presidential decree and can institute a Parliamentary review of the government. Judicial review is also introduced for government actions. The military courts are abolished.

His critics think he will have too much power through appointing and influencing judges, using the powers to rule by decree, and acting as the Leader of his political party. They seem to think he will be able to win a couple of elections easily to stay in government for the next decade. They do not rate the Parliament as an effective check on the new government.

The EU is making a mess of handling its relations with its neighbours to the East. Ukraine is badly split and damaged by civil war. Now Turkey is moving away from the EU’s model of Association. What should the EU now do to make the situation better? What type of relationship is now realistic and desirable?

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Parliament will be sovereign

Parliament can make mountains out of any molehill in the UK, once we have left the EU. It is curious that those most hostile to our departure from the EU now claim to  be the most protective of the very Parliamentary sovereignty they so wantonly gave away. They need not worry.  Out of the EU,  Parliament can debate and vote on anything it wishes. It can hold government to account and change the law any day it likes.

The synthetic anger over the so called Henry VIII clauses in the Great Repeal Bill are just such a phoney war and a false tenderness towards the UK Parliament. The government has made clear that all substantive changes to EU laws, ranging from a new immigration policy to a  new fishing policy, will of course need primary legislation. Parliament can shape and influence that to its heart content, in a way it could never do when the rules were laid down by the EU.

The so called Henry VIII powers, often used to drive through EU matters, will only be used for government to make technical changes to existing EU law to make sure it does still work as UK law! That surely is something the Remain people should like, as presumably they welcome the continuity of much EU law as UK law.

It is a curious feature of the modern debate that the Remain supporters in Parliament want us to talk about nothing but Brexit the whole time, and then complain that we do not debate and vote on it enough. As one who welcomes Parliamentary scrutiny and debate on the use of power  I have no problem with Parliament doing this. Parliament does, however, need to have some sense of balance and proportion. We need to complement the many hours of debate and scrutiny of the UK’s position on Brexit with proper use of our powers in many other areas, and more debate of the needs and tactics of the rest of the EU.

It is fine for the Opposition to criticise or demand more of the government. It should also be the loyal Opposition, recognising the impact its words may have on the UK’s position in the EU talks.

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More worries about diesels

Some good points have been made about diesels and air quality, and I am receiving constituents emails arguing against new penalties on owners of modern diesel cars.

One of the best points made is we need to take into account the amount of use made of various categories of dirtier vehicle. A typical privately owned passenger car spends most of its time parked. A motorist who averages 8000 miles a year, and averages 25 mph through a mixture of open road and congested town driving uses the vehicle for just 13 24 hour days or 26 12 hour days equivalent. A public service vehicle like a bus may well operate for more than ten times that amount of time, over 260 12 hour days a year. That means we will get a far bigger saving of dirty exhaust if we replace the old bus than the old car. The same is also true for many diesel trains that operate long hours, and for diesel delivery vans and lorries.

It is also important to recognise that congestion and delay cause far more pollution than allowing vehicles to make optimal progress at decent cruising speeds when the engine is not labouring, is in an economical gear, and not having to stop and start. This argues for the adoption of more policies that can reduce congestion, as have often been discussed here. Improving  junctions is central to this. Parking more of the cars that are  not in use off the highway is also an important aim, as often parked vehicles cause congestion and delay through straddling the highway.

Someone pointed out that vehicles often do not achieve the test specifications on emissions. This is because actual drive cycles are often different from test cycles. The more the vehicles have to slow down and speed up, and sit in traffic, the worse the emissions performance is likely to be. Older vehicles do not have cut outs at traffic light and other stops. Trains often keep their diesel engines running whilst waiting for considerable periods of time at terminus stations and to adjust service times. These are matters which newer vehicles and engines can help address.

 

A  clumsy new tax is not the answer. Cutting emissions requires much detailed work on driving needs and conditions, road space and junctions, and ages of different types of vehicle. It is certainly important for the state to start by tackling public service vehicles, as they do so many more miles than the private car.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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