How to put some strength into the UK negotiation of Brexit

Some contributors here and many in the Remain parts of the media seem to think every day should be Groundhog Day. Each day they warm up some old Project Fear myth from the Referendum campaign, or parody themselves by inventing a new one. In doing so they damage their own position, bore much of the nation rigid, and try to undermine the UK’s negotiating position. I wish to tackle a variety of issues that matter to my constituents and the wider nation on this site, and many of them have nothing to do with Brexit. Those that do have something to do with Brexit are public services which need more cash, which should come as soon as possible from cancelling our contributions to the EU. Getting all our money back remains one of the biggest wins from leaving the EU.

In the run up to the June 28 Council the government needs to assert the UK position. They should tell our EU partners that we are ready to leave without a deal on March 29 2019, and ask them if they want a Free Trade deal with no tariffs or not. If they do then we sit down and agree it. If they don’t then we leave without a deal.

Meanwhile I am amazed at the crazy stories that some take seriously as Project Fear moves into its more extreme versions. How about Airbus will be selling planes without wings on? Don’t they realise there are binding contracts to supply, and Airbus needs the current wings made by the current supplier in order to carry on selling the planes? Some say without a deal the port of Calais will seek to destroy the port of Dover by blocking exports from the continent. Doing so would of course damage Calais not Dover, as many other continental ports would rush to take the Calais business. I read that we would be unable to levy customs dues on EU trade or handle it coming into our ports, yet I see we handle the majority of our trade that comes in from outside the EU and levy customs without delays or problems. I hear they think there will need to be border towers and detailed checks on every lorry at the Northern Ireland border. Have they not heard of electronic manifests, Authorised Economic Operators and the rest that ensures we do not need to stop each lorry at a port or point of entry and calculate the VAT , Excise and customs whilst the lorries queue?

This week some seemed to suggest the French would seek to starve us back into the EU by refusing to sell us any more Camembert and the EU would want to deny us medicines! Can it get more ludicrous? If they really think our continental neighbours hate us that much and would break the law and damage their own businesses in this way, why do they want to stay attached? Have they not realised there is plenty of supply from the rest of the world if the EU did want to cut up rough.

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Strategic highways

I met Highways England yesterday to talk about the state of the national network.

A successful modern economy needs sufficient motorway capacity to allow easy transport of goods and people. Motorways are our safest and fastest roads. Like railways they segregate traffic moving in opposite directions to avoid head on crashes, and like railways they prevent pedestrians, cyclists and other vulnerable users from using them. Their junctions can flow freely, with easy access and exit when capacity allows. Motorway travel should allow greater levels of fuel efficiency and improved journey times.

Highways England controls most of our motorways and our major trunk roads. Most of the roads it looks after are dual carriageway or better. Many have grade separated interchanges. The problem is we do not have enough principal route capacity. We have invited in many more people who need roads for their own travel and for the supply of the goods they need. As our economy and the individuals in it enjoy rising real incomes so they can afford to spend more and need more goods supply. We need to be realistic about the amount of capacity we need.

In my local area Highways England has just increased capacity on the eastern part of the M3 by 33% and plans to do the same for the eastern section of the M4. We also lack north-south capacity. There the A 34 trunk experiences congestion as lorries struggle with inclines, whilst we do not have a good sized bridge over the Thames to the east of Reading.

Nationally there are various routes that lack sufficient capacity. We need a better south coast highway, better links to the east coast ports, a completed dual carriageway to the south west on the A 303 and similar extra capacity in the North and Midlands.

Highways England pointed out that there is now more money for road improvement, and the government does understand the need for more capacity. I would be interested to hear your priorities for improvement.

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European Parliamentary Elections

The government has made clear no money should be spent on the next set of European elections by UK authorities by making the following statement:

In a recent answer to Parliament, they said:

“Following the EU Referendum and the European Union (Notification of Withdrawal) Act 2017, the UK will cease to be a member of the European Union on 29th March 2019. At that point, we will no longer sit at the European Council table or in the Council of Ministers and we will no longer have Members of the European Parliament. We will therefore not be taking part in the European Parliamentary elections in 2019 which are currently scheduled to be held from 23rd to 26th May 2019.

Given this, the Government does not consider it is necessary or a prudent use of taxpayers’ money for Returning Officers and electoral administrators to make the usual preparations for the conduct of a European Parliamentary poll in 2019. The Government does not intend to make an Order setting the date of the poll for the European Parliamentary elections in 2019.

We also do not intend to undertake the usual preparations for Information Exchange between the UK and the Member States in respect of EU citizens (including UK citizens) living in another Member State.

In due course, the intention is to repeal the underlying pieces of legislation providing for the holding of European Parliamentary elections in the UK under the European Union (Withdrawal) Bill. Once that Bill has Royal Assent, all associated legislation will be repealed through Parliament by means of a Statutory Instrument made under powers in the Bill. We estimate that not holding European Parliamentary elections will save British taxpayers at least £109 million next year; this is in addition to the cost of the British contribution to the EU budget” (Hansard, 14 May 2018, PQ 143730, link).

The Government has already written to every local authority Returning Officer to inform them of the cancellation of these elections. It is the Government’s position that it would go against our duties to taxpayers for any public body to spend money on such unnecessary administration.

The Electoral Commission is not accountable to the Government, but to Parliament, but I have written to the Electoral Commission to underline the Government’s clear advice to election administrators.”

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Time to take back control

The Commons when it votes on the EU Withdrawal Bill has a simple decision to make. Will it take back control, as the majority wish, or will it seek to perpetuate the Puppet Parliament we have lived with for many years?

Will it side with the people, or with the peers? Does it understand the democratic mandate of the Referendum and the last general election, or does it think the EU and its most fanatic supporters are  right to ignore such votes, to govern on with ears closed to the views of the voters?

The attitude of the Lords majority is sad to listen to. So many of them who allowed or encouraged the surrender of so much of our power of self government to Brussels have been fighting a rearguard action against reclaiming our right to democratic self government. These people do not even have the excuse that they sold our freedoms for a good price. They paid to give our freedoms away. They sought nothing of value for us in return. We sent the EU billions, all to enjoy a huge trade deficit with them which we can keep outside the EU for no price if we wish.

The endless debates in the  Lords and the Commons over the past two years have repeated the depressingly negative campaign of  Remain. They have not lined up to say the UK should enthusiastically plunge into full EU membership, joining the Euro which is the central part of the project, and welcoming full control of our borders and migration policy by the EU.  They have not painted a picture of a more successful and more prosperous UK within the EU, and been unwilling to accept that the journey to political union would mean the UK being an important province in an EU empire.

Instead they have concentrated on the short term, generating a set of fears about immediate prospects for exports and imports, and claiming that their beloved EU will deliberately spike their own trade with us to prove a point. What kind of people do they think we are? Why do they think we would believe such nonsense? Why do they think we should be scared by the few wild threats the EU occasionally makes to fuel Remain dreams?

It is extraordinary that so many of the people  given the great honour of sitting in the Lords and helping make our laws have such a low opinion of what we can do for ourselves, and such a high opinion of the governing capacity of the EU. The logic of their view should be their own abolition, as they clearly think most of our laws should come from Brussels, and think the EU is a better judge of policy, expenditure priorities and regulation than we can ever be. It is time for the Commons to tell them this is a great country with great future potential. It is high time we are self governing again. That is what the votes on June 12th will be about. The Lords do have an important role to play in a self governing UK, but not in a region of the EU.


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UK and EU growth

The most recent retail sales figures for the UK showed a welcome boost in April. The three month on three month was only up 0.1%, as March was a poor figure. In the Eurozone the latest three month on three month figure for retail sales shows no growth at all, after a disappointing April.

Retail remains very competitive, with a lot of pressure on older brands trading from too many High Street locations. On line shopping expanded by 17.3% in the UK over the last year, taking business away from more traditional outlets.

The UK’s PMI figure for services came in at 54 this month. This is similar to the Composite PMI for the Eurozone of 54.1.

There has been a slowdown in both the Eurozone and UK economies so far this year, with retail growth subdued. In the UK this is the result of the tighter money policy the Bank has been pursuing. The EU figures were compiled before the latest worries in markets about the situation in Italy.

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The EU Withdrawal Bill

We were told yesterday that the government invites Parliament  to consider the Lords Amendments to the Withdrawal Bill, starting on Tuesday June 12th. These need to be carefully considered by the Commons with a view to making final decisions as soon as possible.  Where the Commons decides to disagree with a Lords Amendment it will be because the amendment waters down the commitment to implement the wishes of the voters in the referendum. I trust that any Commons vote to reverse a Lords amendment will be end of the process.

The role of the Lords is to ask the Commons to think again. Traditionally the Lords does not oppose matters which form part of a governing party’s Manifesto commitments. You would have thought the Lords would be even more careful about a commitment that stems from a free vote of the electorate. We were all told in a government leaflet that we the people were making the decision, so Parliament should now facilitate it.

There are all too many times when the Commons does not scrutinise a Bill extensively enough, owing to a lack of interest by the current Opposition. Then the Lords have more justification in detailed examination. No-one can deny that the EU Withdrawal Bill has been one of the most scrutinised Bills in history in both Houses. We have not lacked debate, insights, counter proposals or arguments. What we now desperately need are some decisions. That is what the Commons must now do.

It is important the Bill has passed all stages by the time the Prime Minister goes to the June 28 Council. It will show our EU partners that we are getting on with all necessary preparations and are serious in our intent. There are some on the continent who seem to think if they help Remain influences in the UK delay the process they might force us to think again. Almost two years have passed since the decision. It is high time Parliament confirmed the decision one more time. In voting for the EU Withdrawal Bill in its unamended form the Commons will be reaffirming its careful consideration of this Bill the first time round, and reinforcing its overwhelming vote to send the Article 50 letter. That letter, after all, was the effective Parliamentary decision to leave the EU. The purpose of the Withdrawal Bill is to ensure there is legal continuity when we leave. Sensible Remain supporters accept that a decision was taken on June 24 2016, and want to see the legal continuity the EU Withdrawal Bill can bring us.

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More Project Fear leaked to the newspapers

I find it difficult to believe 2 years on the civil service are still writing and leaking absurdly pessimistic scenarios about Brexit. Ministers have offered clear directions that they should work up the best way of leaving without a deal. That is what they were charged to do. I am told by Ministers that is what they are doing. Ministers assure us all will be ready to leave in March 2019 and to carry on importing goods from the EU if we still want to buy them. The Germans are particularly keen that should be true, given the size of their trade surplus!  So why are some other civil servants  inventing nonsensical outcomes and leaking them when Ministers have asked them not to and told them these forecasts are just silly?

Apparently according to  the latest leak someone in the civil service thinks if we leave without a deal Calais will not co-operate and so create interruptions to the supply of imported food and pharmaceuticals to us. No sensible person could make that up. The people running Calais port want to earn fees for running a smooth business. They do not have legal powers to discriminate against particular cargoes going to particular places. If they did try any such thing Oostende, Zeebrugge, Antwerp, Rotterdam and other Belgian and Dutch ports would be delighted to lift the business from Calais, assuming the French competitors were also in an illegal sulk.

There is then the rest of the world. They are looking to see if the EU messes up its very lucrative food export business to the UK by imposing food tariffs and other barriers. If they do there will be plenty of suppliers from outside the EU selling us products, to say nothing of the response of UK farmers if the EU makes itself less competitive.

The leak is revealing. It shows that there is still a strand of thinking in the civil service that wishes to stop Brexit, and is  busy inventing difficulties that do not exist. They seem to want to help those on the continent that think they can reverse Brexit and keep our money flowing into their expensive organisation. What they are all succeeding in doing is creating an ever bigger volume of support for leaving with No Deal, as they keep on working to ensure any deal on offer will be a bad one for the UK.

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Trade wars

I agree with the consensus that trade wars are not helpful, and higher tariffs do impede growth and prosperity.

I do not agree with the view that the UK needs to be in an EU  tariff zone/Customs Union  in order to enjoy more of the benefits of free trade. That is an absurd contradiction of a view. The EU Customs Union imposes tariffs and barriers against the rest of the world that are  not helpful. If pro EU people agree, as they seem to do, that Trump’s new tariffs are harmful, they should also agree that the EU’s far bigger and more numerous old tariffs are also  harmful.

The irony of Mr Trump’s stance is lost on them. He is imposing tariffs to try to bash down the barriers and unfair trading practices others have imposed. His main two targets are China and Germany. There is an interpretation doing the rounds that his only target is China and some of his tariffs are therefore ill judged. Mr Trump starts with analysis of the largest trade surpluses around the world, which reside in China and Germany. Because Germany’s trade  stance is handled by the EU it leads the USA into conflict with the EU. It is true that his steel tariffs do hit the wrong people, as the USA imports little steel from China which is the main  cause of overcapacity and of subsidised or unrealistically low prices.

The US has written a report into how China has in the US view cheated with Intellectual Property and technology products. The US is currently reviewing the practises of the German car industry, to see why Germany sells so many more cars to the USA than the USA sells to Germany. Part of the reason is obvious. The EU levies a 10% tariff on US cars, but the US only levies a 2.5% tariff on German cars. I can see why the USA may wish to question that.

I look forward to the day when the UK can negotiate her own trade terms around the world. The danger of the current situation is we get dragged into an unhelpful trade war between the EU and the USA which is primarily about the huge German surplus, not about our own global trade deficit.

The UK will regain her vote and voice at the WTO. The sooner the better. This is exactly the time when an independent UK could act as a strong voice and influence for freer trade worldwide, assisting the USA where she has a good case to bring the barriers down that others have imposed, and working with those who oppose unilateral US tariffs that do not tackle the underlying problems.

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Populist challenges to the Euro

There are waves of voters on the continent wanting substantial change to the Euro scheme which lies at the heart of Project EU. The endless austerity policies designed by Germany to avoid the need for substantial transfer payments from the richer parts of the zone to the poorer parts are universally unpopular in the south and west of the EU. Voters swept aside the two traditional main parties in Greece, only to see their chosen champions Syriza blown away by a resolute EU defence of austerity. In Italy now a populist government has been formed, as 5 Star and Lega have almost destroyed the two traditional centre left and centre right parties of that country. In Spain Cuidadanos and Podemos are on the march again and poised to do well from any early election. Even in fortress Germany herself, the home of Euro orthodoxy, a growing impatience with just how much Germany is nonetheless committed to has led to the worst ever result for the two traditional parties in the last general election.

All of these pressures go back to the Maastricht rules and criteria. These rules still have some sway in the UK, a non Euro member. The UK Treasury has used the budget discipline rules to require progressive reduction of our deficit, with the aim of starting to reduce the debt as a proportion of our national income. I often support the policy of controlling public spending and debt, and agree it should not be allowed to get out of control. I do  not support our subservience to an inflexible EU rule that pays little attention to the state of the cycle, the level of unemployment and none to the tightness of monetary policy. Today tight fiscal policy in the UK is reinforcing tight monetary policy with the inevitable slowing of the economy we saw in Quarter 1.  I think we need to look at all of these  things together to get the right policy trade offs between inflation, output and future debt levels. A lot of Maastricht thinking is based on the pre crisis European economies. Today with mass migrations affecting wage inflation, and the liberal global supply of goods and services keeping down prices, the old identities that full capacity automatically led to high inflation do not work.

Much  more serious than our position is the impact these disciplines have had on the south and west of the Euro area. Far from creating stability, the Euro scheme  gave Ireland and Spain a wild ride. First it led to a massive boom, with asset inflation on a big scale, over development of property and over extension of bank credit. Then it gave them a big bust, where all of that reversed. In Italy’s case it has given them more than a decade of pitifully low growth and high unemployment. In Greece it has led to a major slump with large falls in living standards. In Cyprus a banking crash led to people not being able to withdraw their Euros from some banks, and suffering losses on larger deposits.

Today the voters of Italy and Spain are saying they want reform of the Euro. They want more latitude to spend more, tax less and borrow more to try to accelerate growth and job creation. It is important how the EU responds. If they seek to do to Italy what they did to Greece, we are all in for a very bumpy ride. What they need to do is to move more rapidly to complete their political union, and to put into it a system of transfers of cash from rich to poor and from surplus to deficit areas. In the UK large sums are moved to the areas that need it via the nationwide benefits system and the Council revenue support grants. That is why the sterling single currency area does not  have these periodic crises we see in the Eurozone. If they are not prepared to do this then they need an orderly break up of the zone so deficit countries can devalue against Germany and price themselves back into markets. When they broke up the rouble zone the countries that got out and established their own currencies soon did well out of that reform.

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The government does need to allow change on the High Street

When I last wrote about shop closures some of you said the government should not intervene to help retailers. The market will sort it out. The problem is local and national government does intervene mightily with taxes, regulations, planning controls and town centre management in ways which can impede change or make things worse.

The first priority many agreed about on this site is allowing easy access to town centres. For many that means less congested roads and plenty of free parking. The out of town centre offers both these features, whilst the internet competitor does not require you to stir from your chair at home.

Where the Council owns the car park it should provide 2hours free parking for shoppers.Where there is insufficient parking or parking on road that creates congestion the Council should secure the provision of more parking.

Councils should review junctions and roadspace on main routes to shopping centres to make it easier to get there.

The government should review the Uses class orders, to make it easier to switch from one use to another in a town centre.

There are too many traditional shops in many urban areas. There needs to be flexible and easy ways to convert them to be premises for services, restaurants, coffee shops, resudential or commercial uses.

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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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