Trade is always  vulnerable to politics. Today we see a US/China  trade dispute on a grand scale, as the US responds to the growing strategic and military challenge of the emerging superpower. Pakistan  and India are in bitter dispute over Kashmir with threats to the trade from both sides of their troubled border. Japan and Korea have dismantled their framework of mutual trade preference and are imposing barriers on some items. The row resumed over Korean claims for war reparations.  Many developing countries charge high tariffs on imports with special dispensations from WTO rules to allow this. The US has  imposed sanctions on Iran which the EU has in effect to go along with. The UK refuses to sell various countries weapons and security machinery on strategic and moral grounds. Most advanced countries place security restrictions on the sale of certain technology products and services.

The main trend worldwide is for neighbouring countries to impose trade restrictions on each other for  wider political reasons. In the Middle East trade is disrupted as part of the wider Sunni Shia conflicts. Mr Trump threatened tariffs against Mexico to get better border policing on the Mexican side of the border. He seeks to stop the illegal drugs trade from South America and looks for  trade remedies. Japan have  difficult relations with its neighbour China. China, Pakistan and India have disrupted trade around their common borders in Kashmir. These common rows and anti trade policies are always with us, but the strength of the WTO trading framework means world trade continues to grow and stays at high levels.

Despite these common problems the bulk of our trade in or out of the  EU will be tariff free with relatively easy passage across borders. There are no current difficulties from government restrictions on the UK importing a large number of components, food and pharmaceuticals from non EU countries. The WTO Facilitation of Trade Agreement coupled with the enthusiasm of exporters to sell to us will ensure plenty of  imports  to meet our needs after 31 October with or with an EU Agreement. The UK so far has announced a major reduction in tariffs once we are out making it cheaper and easier to import from non EU places, and no dearer to import from EU.

We need to remember as well that the overwhelming majority of our trade is domestic. There is more  scope for growing UK businesses and farms to supply our domestic market more, and this may  well happen once we leave  the EU and can settle our own affairs. Our time in the EU has seen loss of home market share in a number of crucial areas thanks to EU regulations and EU economic  policies. Our early years in the EEC were  particularly  damaging with substantial de industrialisation. The ERM debacle hit our growth rate badly. Our growth rate has been slower in the single market than before we joined.

Mrs May rushed out social care proposals in her 2017 General Election Manifesto, only to have to drop them during the course of the Election campaign as they were unpopular. The new government has also promised to produce proposals which will benefit from study of what went wrong with the May ideas.

It is first important to understand the tri partisan settlement we have lived under for many years over social care. The political parties have all agreed that healthcare must be free at the point of need for all, including elderly people requiring a lot of expensive care towards the end of their lives. They have also agreed that living costs are to be paid where possible by the people concerned. In particular, if an elderly person needs to be looked after in a care home then the hotel costs of providing a room with meals and service  falls to them if they have an income to cover it or if they have capital they can draw on.

The most contentious part of the current settlement for some is the fact that an elderly person needs to sell their home when they move into the care home and spend the capital from their home sale on the hotel costs of the care home. If someone does not have any capital then the state provides the care home place as well as the healthcare at taxpayer expense. Some say this is a tax on the thrifty and prudent. Others say the  elderly person no longer needs their former  home , so why shouldn’t its value be treated like all their other capital? Should taxpayers pay the care home costs of millionaires, for example? If not, at what level of capital should the state take over and pay for the provision? If only one person from an elderly couple needs to move into a care home then of course the couple’s home remains untaxed and available for the other person living there.

My elderly parents reached the point where they needed to move into a care home to be looked after, and wanted to do so. I helped them sell their two bedroom flat so they could afford a good quality care home. I did not think I had any right to inherit their flat and did not disagree with the policy that said that  money from the sale of their home had to be used for their living costs in the care home.

Do you think there should be a new deal on this matter? What is a fair solution over the costs of living for elderly people, when some elderly people have saved and have capital and others did not?

This week the government made more announcements about dealing with crime.  They tell us that the Prime Minister has ordered an urgent review into the prison sentences of violent and sexual offenders to ensure the public are properly protected from the most dangerous criminals. The review,beginning immediately, will focus on violent and sexual offenders, assessing if their sentences truly reflect the severity of their crimes. It will look at whether we need to change the law so they cannot be let out if they have not served their full time. Finally, it will examine how we can break the vicious cycle of prolific, repeat offenders.

This review is part of wider attack on crime, recruiting 20,000 new police officers, creating 10,000 new prison places and increasing stop and search powers. The aim is to keep  dangerous criminals  off the streets.

The  new prison places will come from   building new modern, efficient prisons which will provide better opportunities to reform criminals, meaning less re-offending and a lower burden on the taxpayer. Offering  strengthened stop and search powers will give  the police full support in combatting  serious violence and keeping people safe.

The government  will also publish draft guidance on measures in the Offensive Weapons Act , paving the way for new criminal offences that will help to stop knives and dangerous acids making their way into criminal use.

Are there other features you would like to see in an effective counter crime strategy? Clearly strong policing of our borders to keep out international criminals would be welcome. I also favour more work on rehabilitation and non custodial sentences for lesser crimes where there is no violence involved and where there is good chance of avoiding re offending.

In response to my ideas on spending there were various  other suggestions from readers. The most popular with readers were :

1. Costs of government. There was strong support for fewer peers and fewer expenses and allowances for peers. Some wanted fewer MPs and less generous expenses for MPs. There was widespread enthusiasm for a cull of quangos, especially those supporting politically correct causes.
2. Cut public money to charities and arts where  this can be raised by voluntary donation and from admission charges
3. Remove subsidies  for alternative energy
4. Charge all overseas visitors who use the NHS
5. Reduce numbers of migrants needing financial support
6. Make the BBC a subscription service

I asked the Business Secretary what plans there are to issue commemorative coins and stamps to mark the UK departure from the EU. I have at last received this answer:

“Matters relating to postage stamps, including commemorative stamps, are the responsibility of Royal Mail. The commemorative 50p to mark the UK leaving the European Union will be made available following the UK’s departure”

This is a curious reply as the Business Department is responsible for postal policy but not responsible for the Royal Mint.

One of the strange features of the much discussed age of austerity has been the barrage of demands for lower public spending that have gone unheeded by Ministers claiming they want to reduce public spending.

Foremost has  been the £10 to £15 bn a year sent to the EU. A majority of the public voted to end this in 2016, only to find three years later some Ministers and MPs are insisting on still giving it away, with many wanting to lock us into more of the same for years to come.

Then there is the case of the world’s dearest new railway, HS2. Many have made proposals for much cheaper and quicker ways of increasing north south train capacity. Many of us want more spent on northern commuter rail improvements into the main cities as a priority. This could be done much more quickly than HS2 and at a fraction of the total cost of the large project.  Latest estimates of a total cost in excess of £70bn imply more than £5bn a year could be saved by cancellation, prior to allocating decent capital sums to faster introduction  of digital signals and by pass sections of track on existing main lines to boost capacity , and similar improvements on commuter routes into the main  northern cities.

There is the pledge to spend 0.7% of GDP on overseas aid. This Parliament is unlikely to want to cut that, but we should spend more wisely within that budget. The set up costs for the first year of a refugee or an economic migrant  from a poor country are allowable expenses to qualify. Given the continuing large numbers entering the UK, we should allocate substantial sums to the housing budget from the overseas aid budget to cover more of the costs of provision of additional homes for new arrivals. There should also be larger transfers to the education budget to allow for the extra school places needed and the additional language skills to teach new pupils who have little or no English on arrival. This would increase  those budgets whilst reducing total spending.

The new government should implement the agreed policy that any visitor to the UK needing non emergency treatment should have to pay the NHS. Visitors should be advised to come with health insurance or the cash. Migrant workers coming to the UK should not qualify for all the  benefits for a specified period, as Mr Cameron wished to do but was unable to get EU agreement.

I am glad there will be an urgent review of what went wrong with the power system.

It appears from the records that there was a 740 MW drop in gas generated power supply (Little Barford) and a 1000 MW fall in wind supply (Hornsea) in quick succession. This was followed five minutes later by a 1000 MW increase in pumped storage supply,  presumably the quickest acting power that could be brought on.  This all took place against the background of relatively low summer demand for electric power which meant there was plenty of potential capacity available. It is also interesting that though we are using well below domestic capacity levels of electricity we are tending to import power from France, Belgium and the Netherlands anyway.

Questions for the review should include

1. Now the system is running on high percentages of renewables when the weather permits, does it have enough quick acting stand by plant for when the wind drops or sun goes in? If not can we rapidly remedy this defect?
2. Why do we continue to import when we are well  below capacity? What account is taken of the different fuel mixes and subsidy patterns for continental power which includes fossil fuel power in its mix?
3. Given the use of pump storage, how long did the outages last and why did they last as long as they did?
4. Why did the wind power fail, given the current size and the planned large expansion of this new  plant?

The government also needs to ask the railway industry why it was unable to quickly adjust services  and get trains running as soon as the power was restored.

Labour is currently on a little over 20% in the opinion polls. Were there to be an early election the party would have no clear answer to the question would you take us out of the EU. In Parliament Labour voted to send in our Article 50 notice letter. It then opposed the EU’s Withdrawal Treaty and now opposes the alternative of leaving without signing that Treaty. Why on earth would they want an election in such circumstances? So far they have been unable  to clarify how they would negotiate a better Brexit , what it would look like and why the EU would consent. It leaves them refusing to accept departure with the WA or without it, and refusing to admit they want to revoke Article 50 altogether.

Any election before the UK has left the EU would push many Remain supporting former Labour voters to vote Green or Lib Dem as they offer a second referendum and oppose Brexit. Leave voting former Labour voters would be tempted to vote for the Brexit party or the Conservatives  to get the Brexit they voted for in the referendum which Labour promised to support in the last General election. As in the recent European election Labour would be likely to be badly squeezed. The Conservatives are recovering in the polls now the new PM says we will definitely leave on 31 October, after the crash under Mrs May with her disastrous delay.

Labour now complains that if they could get a majority in the Commons to defeat the government twice on a motion of no confidence within 14 days to trigger an election, Brexit would happen anyway during the election. Of course it would, as the law they helped pass to send our withdrawal letter ensures that we leave. The irony is Labour has much better prospects in an election once we have left and Brexit is behind us. The intense muddle of their current Brexit approach is losing them support from both sides of the argument, and driving people to a clear Remain party or a clear Leave party.

Were Labour to table and win a confidence vote in September they would need to do it twice to conform with the Fixed Term Parliament Act. It is difficult for them to do this in time for an election prior to the 31 October. The honest way to stop us leaving would be to propose that Parliament revokes Article 50, which we know the EU would accept. They will not do that as they know there is no majority in the Commons to reverse the Withdrawal legislation and to tear up the Manifesto promises of both Labour and Conservative from the 2017 election.

As forecast here, the car industry accelerated  a sharp decline in manufacturing in the second quarter. The overall manufacturing fall of 2.3% in the second quarter compared to the first was led by a 20% decline in car output, which was part of a 5.2% decline in transport equipment generally. The squeeze on car sales from higher VED, tougher conditions on car loans and above all the regulatory  uncertainty created over the future of diesels that I have highlighted have taken their toll. Various manufacturers compounded this by closing their factories for the annual shut down early this year in the second quarter, after building stocks in the first quarter. It is also part of a wider world pattern, with poor figures from China, Germany and other leading manufacturing nations.

Household spending continued to rise, up 0.5% quarter on quarter, and services managed a weak expansion. The economy as a whole grew by 1.2% over the last year, with a 0.2% quarter on quarter fall  after a decent quarter to start 2019.  Gross Domestic Capital formation was weak in the second quarter, as businesses sought to destock after their big stock build at the start of the year in preparation for the March Brexit which the government cancelled late.

The overall performance of the UK economy is good by EU standards, especially considering the combined fiscal and monetary squeeze which the outgoing government  undertook. Germany’s economy is growing at an annualised 0.7% , 0.5% lower than the UK’s latest, and Italy is not growing at all after a recession in  the second half of 2018.  The UK economy can do better  and needs some monetary and fiscal relaxation. Money growth is under one quarter of the rate in the USA and half the rate in the Euro area. The fiscal stance is now going to be loosened a bit, which is important. The US tax cuts drove accelerated growth there in contrast to the European performances. The US has been growing well over 2% with its more pro growth approach, with the President wanting growth above 3%.

The Fed, the ECB, the Indian, Australian, New Zealand, Turkish  and Russian Central Banks are all loosening policy to offset the general global manufacturing downturn. The UK has not yet taken such action.

The global picture for manufacturing remains poor, with Germany experiencing a 1.5% fall in industrial output in June with more poor orders for the second half of the year.

(I have posted this  post  for tomorrow early given the topicality of the item)

The UN report into land use and climate change makes interesting reading. According to the media it is about persuading more people to eat less meat, though they concede it fell short of requiring everyone to become vegans or vegetarians. It claims that the global surface temperature has risen by 0.87 degrees C comparing 2015 with the flat temperature average of 1850-1900, the so called pre industrial period. No-one told the Victorians to remain pre industrial. It argues that further rises in temperature could be damaging. It points out that in recent years there has been more greening  than  browning of the planet overall, though some areas have been dried to the point of  becoming deserts whilst more  places have become  greener and more productive. It rightly states the importance of water and soil management to wellbeing and food production.

The detailed summary for policy makers is wide ranging and suggests various ways to lower the warming gases output of agriculture. It tells us food  production accounts for 23% of the greenhouse gases released by human intervention. Most importantly it reads as a plea to limit population growth. It sets out how the 150% growth in  population from 1961 to 2017 is the single biggest cause of more agricultural emissions. It also points to the 80% increase in obesity as a strain on the system  and argues that livestock account for half of the CO2 from agriculture. It asserts that there are 2bn overweight or obese adults worldwide.

The Report highlights the way that around 30% of food output goes to waste, and states that if this could be brought down it could make as useful a contribution to controlling gases as change of diet might make. It also urges more forests, and the retention of the forests we already enjoy, as good carbon sinks.

It sketches various scenarios for the future. The best is one where the population is stabilised at around 9bn, gets richer and better at managing soils, farming and diets. The worst is where the world population continues climbing to 13bn  with continuing wide contrasts between rich and poor, some persistent poor diets and very varied farming including methods destructive of the environment.

It would be good if this Report triggered a proper debate about population growth, soil and water management as its authors probably wish. Instead the issue of should we eat meat is more eye  catching and invites heated debate in the countries rich enough for meat eating to be a regular option.