The last stage of the EU negotiations

The PM’s critics say she does not know what she wants from the EU. Those who say this should read what she has written and spoken.

The following things are crystal clear in her statements:

The UK is leaving the EU on 29 March 2019
The UK is leaving the single market and the customs union – and this has been confirmed by two important votes in the Commons. She put Conservatives on a three line whip to vote down proposals to stay in the single market and customs union. It was also the clear statement of both campaigns in the referendum, and the position of the EU that you cannot stay in them without accepting all the other obligations of EU membership
The UK would like a comprehensive free trade agreement and trade partnership and is proposing no new barriers to our trade after we have left

She has also made clear – as she needs to do if we are to have a bargaining position – that no deal is better than a bad deal, and the UK will be ready to leave without a deal if necessary, though she strongly wants a deal.

I do not see how we can decide on a so called Transition period without knowing if there is something to transit to that both sides want. The March Council needs to be told we only accept transition if there is an Agreement and if it needs extra time to implement. The government should say to the EU we are offering no new barriers to trade – what barriers do they wish to impose on their trade with us? Were they to agree to no new barriers we could speedily translate that into a Free Trade Agreement and register it at the WTO.

I think the EU also needs to be told that the provisional generous agreement on money and other matters only comes into play if there is a comprehensive free trade deal which the Uk likes. As someone who does not want to pay the EU anything extra, I would need persuading that any Agreement was value for money for what is an ex gratia payment.

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Where will the new jobs come from?

It is fashionable to be gloomy amongst leading commentators and economists. One of the things many of them are now worrying about is what new jobs will emerge to provide alternative employment, as the robot and artificial intelligence revolution gets into full swing?  My message is they should relax and study a little history. Past tidal waves of innovation have destroyed many jobs, only to create many others. Most  people tending horses and running horse drawn services lost their jobs, but it didn’t end the need for transport workers. Many of the jobs in factories moving parts to the line, assembling parts and testing the products have been replaced by robots already, but replacement activities have mushroomed as the society gets richer from automation.

Sometimes a new method does not extinguish all the old  competition. The advent of the Channel tunnel did not end the ferry companies who fought back well. Whilst robots can make cars, the rich often want a different product that is much more hand made. Robots could cook and serve a meal in a fast food outlet, but that will not end the demand for silver service restaurants.

Today some worry that we are near the time when professional drivers are replaced by automatic vehicles. This is a strange worry for now, as the opposite is happening. There is more demand for commercial drivers, as internet retailing surges in importance. This requires many more delivery vans and drivers to take goods to people’s homes that they would have taken  there for themselves on the old model. If we do get to automatic vehicles in the ascendency then there will be all sorts of jobs controlling, maintaining and instructing those vehicles, and doubtless plenty of jobs in regulating and policing them.

One of the features of a higher income economy that is growing is the shift in consumption towards more items requiring higher levels of service. When people have enough goods for their home and a decent wardrobe of clothes, they have money to spend on events, leisure, eating out. They might want to buy an expensive coffee in a shop instead of making an instant at home. They may want a Sunday lunch for the family in a restaurant rather than round the kitchen table. They want better haircuts or beauty treatments. All these things have a higher employment content than buying more goods made in robot controlled factories.

I see technology as generally positive. The internet is extending our options, keeping prices down and changing the way business works. It need not herald an unemployment problem. The way you get unemployment is from governments and Central Banks that destroy credit, push up rates too high  and impose damaging taxes, as we saw in 2008-10 in the west. Or you can get it like Venezuela from a government that does too much and taxes too much, killing off enterprise and private sector investment and innovation.

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My speech during the debate on the Restoration and Renewal of the Palace of Westminster, 31 January

John Redwood (Wokingham) (Con): There is good news in this debate, which is that there seems to be universal agreement, from Members in all parts of the House, that where urgent work needs doing to guarantee the future safety of those who work in this place and those who visit, we should press on with it. Indeed, there is a strong feeling that there is a need for greater urgency in such work. From most things that I have read and heard, it seems that rewiring is a very urgent priority, as that is where the worst fire risk seems to come from. Substantial pipe work may also need doing, where pipes need replacing or re-routing as part of a safety plan. These things can all be done through compartmentalising—taking things in stages and linking up as appropriate.

We know we can work alongside builders and maintenance companies, because we are doing that all the time. I pay tribute to those who are working on the Elizabeth Tower at the moment. They are getting on with their work in a way that is not disruptive of our work at all. They must be working in confined and difficult circumstances, but they have so far done it in a way that is entirely compatible with the work of Parliament. So I hope that the Leader of the House would take away the sense that urgent work for the safety of people here in future and for the safety of the very fabric of the building might be accelerated, with options looked at so that we can press on with it in a timely and sensible way.

I find myself having more difficulties about the much bigger scheme being launched any time soon. As we have heard, quite big elements of it have not been properly thought through or costed, which makes taking a decision in principle a bit more difficult. I find myself in that interesting position where many parliamentarians find themselves; having been entirely of the leave faith on the referendum issue, now, showing flexibility and how I am always influenced by the facts, I find myself firmly in the remain camp on this parliamentary discussion.

Let us first address the issue of decanting to an alternative Chamber, which we would have to build. We hear there are problems with the site for one of the potential alternatives. I just do not think our constituents would understand our spending a very large sum on producing a temporary replica of this Chamber for a limited number of years—we are told it will be a short period, but some of us think it will be for rather longer—when there are so many other priorities. My constituents want us to spend more on health and social care, the military and so forth, and I agree with them.

Andrea Leadsom (The Leader of the House of Commons): For clarity, let me say that what is being talked about is a permanent business contingency in Richmond House that provides a real legacy gain to the parliamentary estate and is a secure gain for all parliamentarians for future generations.

John Redwood: I am grateful for that correction, and I did understand that, but the public are saying that this is really only going to be used for a few years because we will come back to use the main Chamber, and this is a very expensive investment in contingency, particularly as one hopes the contingency never occurs. We know from history that there are other ways of dealing with a disaster contingency, as unfortunately people had to do this during the second world war. We would cross that bridge in the awful event that we needed to do so, but investing a lot of money in such a protection would be a strange thing to do—I rest my case. I do not think my constituents would regard that as something they would want their taxpayers’ money spent on at the moment. I agree with them that we need to spend a bit more on health and social care. Those would clearly be the priorities if we had this extra money to spend.

Finally, let me say that I agree with those who think there is something very special about this place and something important about it for our democracy. This is the mother of Parliaments and this building does have great resonance around the world, being associated with the long history of freedom, and the development of the power of voice and vote for all adults in our country. It would be strange indeed to be turning our back on that for a period, particularly when we are going through a big constitutional and political change in order to implement the wishes of the British people as expressed in the referendum. Particularly during this period, it is important that our visitors can come to be reminded of our national story and why we are where we are. All those of us who seek to represent people should be daily reminded of that national story when we come here—

Mark Pawsey (Rugby) (Con): Will my right hon. Friend give way?

John Redwood: No, as I am conscious of time.

We need to be reminded of that story as we go past the memorial to suffragettes, as we go past the statues and paintings of those who made such a contribution to past political battles and debates, those who were part of the story of wrestling control from the monarch and establishing the right of many more people to vote and have their voice heard through Members of Parliament. That proud history makes this more than an iconic building, more than a world heritage site; it is a living part of our democracy. Our interaction with it and our presence on this grand political stage is the very essence of our democracy. I do not want us to move away for a few years at this critical moment in our national story.

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Silly figures about the UK economy

It’s been ground hog week in the Commons. Labour has tried to imply the government was suppressing bad news, when Ministers were merely refusing to publish forecasts that look widely inaccurate and are similar to the wildly inaccurate short term forecasts and probably wildly inaccurate long term forecasts the Treasury published for everyone to consider before the referendum vote.

These people who write these silly forecasts never apologise for being wrong in the past, and never explain how on earth the UK economy could be damaged by trading with the EU on WTO terms rather than through the customs union. They are probably the same people or use the same warped analysis as those who told us the Exchange Rate Mechanism would be good for us, and who told us we would suffer badly if we did not join the Euro. Look at the colossal balance of payments deficit we run with the EU on trade in goods, fish and farm products, and how that built up early in our membership of the EU. It is quite obvious we did not benefit on trade account from joining. On the contrary, lifting tariffs and other barriers on things they were good at, whilst keeping barriers on things we were good at, led to a large and persistent balance of payments deficit with them. We have done much better trading with the rest of the world where we have a surplus.

Too many take EU laws and requirements without questioning them or refusing them when they are wrong. There are clearly still many members of the UK establishment who want to pretend we did not vote to leave, and who wish to make us continue to follow the Brussels way because that is what they have been making us do for years. Before trying any more Project Fear forecasts they should try explaining why the UK growth rate fell after we joined the EU, why we have had a persistent deficit with them, and why even the EU study shows there was practically no benefit from joining the single market.

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Contributions to this blog

I have made five speeches in the last two days and had a very busy schedule, so I have not been able to keep up with all these postings. Some bloggers are posting ten times a day, and some are writing very long essays. If you want to be moderated promptly keep down the volume and length.

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The state of the Union – Mr Trump’s address

Mr Trump rose to the occasion and delivered a powerful address, seeking to bring more people into his vision of a faster growing USA with more jobs and more take home pay

He was full of the American dream, though not so full of the American dreamers that the Democrats champion. The President hopes he has done a deal on migration. He gets an end to wider family members having an automatic right to entry, and more wall across the Mexican border, in return for offering full legal citizenship to the Dreamers, the young people born of illegal migrants and brought up in the USA. Republicans are presenting the extra border wall as an extension of the Democrats 700 mile border fence. Democrats including Mrs Clinton legislated for that in 2006. The Democrats see it differently.

Mr Trump pointed out that companies are offering to pay higher wages or special bonuses to their employees following the corporate tax cuts. He reminded the nation that these pay increases  are worth more with lower taxes. He told them that a family of 4 with an income of $75,000 would be $2000 a year better off. A married couple on $24000 will pay no income tax. He took credit for the decision of a number of car makers to expend or establish new factories in the USA. He announced the end of “the war on American energy” as he takes measures to produce more oil and gas at home. It looks as if his tax cuts will provide a welcome boost to jobs, earnings and US investment.

He was full of praise for the USA and for Americans, as he sought to get more buy in to his idea of making “America great again for all Americans”. He concluded with some history from the founding of the Republic, saying the USA is:

“home to an incredible people with the revolutionary idea that they could rule themselves. That they could chart their own destiny. And that, together, they could light up the world.”


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Improving the NHS

I would like to relaunch today a couple of  ideas I have talked about before to  improve the service and assist with efficiency.

The NHS issues large number of items to help people with their injuries and to assist their mobility. Many of these items like walking frames, crutches, wheelchairs, and various supports could be reused after a deep clean and checking, but are often left with the patient or the patient’s family. The  NHS could appoint contractors who would pick these items up from the patient or from the hospital after use, carry out the checks, and return them to the NHS for another patient. This should be cheaper than buying new every time, removes the costs of dumping them as waste, and would be a visible contribution to recycling.

The NHS also uses a large quantity of other supplies every day. There are two issues about this that might be amenable to improved handling. The first is to make more use of suppliers willingness these days to supply just in time, delivering to  the ward or surgery that needs the item. Parts of the NHS still have a tendency to double and treble bank stocks, with a central stock, a hospital stock and a ward stock. The more you stock the more chance there is of damage or of things going out of date. It also takes up  valuable space. Some pharma  products need fridge storage.

The second is to have good dispensing of the product where it is needed, with guidance to busy medical staff as to which they need. Modern stock control and access systems allow precision delivery of the items needed related to a specific task. These systems also keep check of supplies and can ensure re-ordering in good time so there is also back up. Making supplies available to people discharged from hospital could also benefit from better control of stock, so people get what they need in a timely way, but are not burdened with large deliveries which turn out to be in excess of their needs.

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There is no evidence joining the single market boosted UK growth

If you look at the ONS figures for UK growth you discover that the UK grew by around two thirds in the two decades before we  joined the EEC, but grew by only around  a half in the two decades that followed.  The growth rate then declined a little more for the two decades from 1992 when they “completed” the single market.

Those who seem to think leaving the single market will cause growth to slow need to explain why there was no visible boost to growth when we joined. Indeed, the completion of the single market included the worst period of the Exchange Rate Mechanism, a crucial part then of their construction of a single market, which pushed us into a nasty recession.

The latest leaked reports about slower future growth have all the reliability of those Treasury forecasts of a recession in the winter of 2016-17 which proved to be so wrong.

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Mr Trump’s economics

I am neither a US voter nor a Trump supporter, as I adhere to the view that it is best to stay out of other democratic country’s elections. His visit to Davos was a surprise to many, given his previous views about such gatherings. His visit transformed the event into a highly newsworthy occasion. We read that the many members of the global elite and the media meeting there, mainly people who regularly express anti Trump views, were reduced to following him, seeking audience with him, trying to listen to  him, and above all reporting him. So how did he do?

The President took the gathering seriously and led a large US delegation. He stuck to his mission, to make America great again. He stuck to his definition of that mission, which is to boost output, jobs and prosperity in the USA. He told the world the USA is open for business, and turned it into a global message by saying America first does not mean America alone.

Mr Trump made this trip  now he has something to show for his first year in office. His economic policy has achieved a major simplification and reduction of taxes in the USA. Already a number of large companies have announced they will step up investments in the USA and pay their employees there more as a result.

His relaxation of some banking rules will help extend more credit to those wanting to invest or to bring forward major purchases which they can afford with a loan. His energy policy is boosting US output of oil and gas. The USA should overtake Saudi Arabia soon as the largest producer in the world. It looks as if US growth will accelerate this year to above 3%.

He repeated that he wants fair as well as free trade. The USA under Obama used to impose penal tariffs on imports that they thought undercut through subsidy or cheating. Mr Trump announced similar action against solar panels and some washing machines. He is not about to wreck world trade or to seek to tear up unilaterally and illegally the  trade treaties the USA  has entered. He showed a continuing willingness to talk about a Free Trade Agreement with the UK. The UK government should press on with the detailed work to bring that about.

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The Darkest hour

I saw this film on Saturday. It was a moving reminder of how dire the UK position was in 1940, and how brave were the people and their new Prime Minister in deciding to fight on against the odds.

The film portrayed a very human Churchill. They saw him as a man who drank too much, was often tough and thoughtless towards his staff, and who was capable of bad misjudgements. They also captured the strength of mind and character which grasped both how bad the position was, and how despite that knew ultimate victory was possible. He had consistently warned of the dangers from Germany during the 1930’s and understood instinctively that you could not reach a friendly agreement with an evil dictator.

The UK establishment had once again let the country down. It had plunged it into a war with a small and insufficiently equipped army which they put at risk on the continent, just as they had done in 1914. As Churchill assumed office they told him the whole army was likely to be killed or forced to surrender. Having accomplished this dreadful feat, they switched to thinking  facing defeat would be a good time to sue for peace. They thought Hitler might offer an enfeebled UK with no army a good deal, when the history  of the previous few years showed you could not trust his word and should expect him to continue  conquering and occupying countries including our own.

Churchill agonised over the pressures on him to seek a negotiated peace, before he realised that the  public would back his  belief  that the only course was to fight for our freedom. Many of us are so grateful that Churchill and our parents and grandparents decided to sacrifice six years of their lives and to risk untimely death  to driving the hatred and violence out of the world by defeating its  authors.The film got across so well the common sense and determination of the people, in contrast to the rash stupidity of some of the  establishment. It used Churchill s own wonderful words to show he spoke for the majority in a way which defeated or disarmed his many critics amongst the senior politicians and officials.

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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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