I hear that the UK Supreme Court wants more clarification from Parliament over how to judge matters after we have left the EU.

The proposed guidance set out in the European Union Withdrawal Bill seems very clear to me. It says that after we have left UK judges no longer have to follow new judgements by the European Court of Justice, but may do so if they think they are sensible from the UK point of view.

This applies when a case comes before the UK Supreme Court that relates to a UK law which was until we left an EU law which we have now adopted as a national one. The Supreme Court can decide as it sees fit. If there has been a new case before the ECJ that changes the EU’s law the UK Supreme Court can if it wishes make the same change to UK law, or can decline to do so. These are experienced and senior judges who often like to change UK made law. It is a Court which is certainly not cowed by Parliament, as we saw when it told us how to go about leaving the EU and how to approve the sending of the Article 50 letter. It will be able to exercise similar independent judgement about what were EU laws once we have left.

Given the pro EU attitudes of many of our judges this means they would be free if they wish to follow ECJ judgements all the time we keep the unamended EU law as part of our UK law code. If they do so in ways which no longer suit the UK people then of course the UK Parliament will intervene and amend the law to override the Supreme Court judgement, as we can do today on UK made laws.

What is unclear about this? We will expect our Supreme court to be supreme when it comes to interpreting laws, which will mean former EU laws as well as nationally conceived laws. We will also expect Parliament to be sovereign. If the judges make a judgement that does not please Parliament can always change the law and issue new instructions.

At the moment both Parliament and our judges are impotent to change , amend or improve an EU law if the European Court of Justice has decided.
We do not at the moment expect our Supreme court to follow decisions of the US Supreme Court where they amend US laws where we may have a similar law.We trade a lot with the USA but keep our independent legal system. So why would the ECJ be any different when we are out of the EU?

You would have thought the rest of the EU would be delighted to learn that the UK, the most reluctant EU member of them all, was leaving. It means they are free to pursue economic, monetary and political union without the UK constantly trying to slow it down, impede or stop it, or demanding special treatment. Better still, that same UK is happy to make her market available tariff free to the rest of the EU who have been so successful at exploiting it.

Instead it appears that the EU is once again misjudging the mood of UK voters. The EU seems to think if it delays and creates difficulties the UK may think again or come creeping back for some version of its membership. The EU has invented the idea that the UK owes the EU a lot of money after we have left when there is no Treaty basis for this. They have proposed that the UK has to continue to accept rulings of the European Court of Justice in the way no other independent country that is an EU trading partner has to accept. They have suggested that EU citizens currently legally settled in the UK would continue to have EU rights policed by the EU instead of enjoying UK rights policed by the UK after exit. These are presumably provocative proposals designed to foment argument within the UK with a view to delaying Brexit.

The EU needs to learn from its recent experiences. It was this mentality which led the EU to turn down Mr Cameron’s modest requests for improvements in the UK/EU relationship and which led directly to the Leave vote. They underestimated the resolve of UK voters then, and are in danger of doing so again. Indeed, their current attitude reinforces the view of many UK voters that they made exactly the right choice. The process of exit is also serving to underline just how far our subservience to EU lawmaking and courts has gone, something hard line pro EU campaigners always denied prior to the decision.

As someone who has undertaken all too many debates on this topic, I was regularly accused of exaggerating the influence and power of Brussels, which was just a kind of large free trade arrangement according to many of its protagonists. Now they tell us it is all so complex and comprehensive it makes getting out all but impossible.

My advice to the EU is simple. The UK has voted decisively to leave, with a massive Parliamentary majority to carry out the wishes of the voters. The UK wishes to be friendly and generous in departure. Indeed, many of us think we will be a better partner and neighbour when we can make our own decisions, than when we were constantly having to fight against imposed collective decisions we did not like. The EU can do a good deal for itself if it wishes. It can secure free trade, defence collaboration, protected rights for EU citizens settled in the UK and much more. If it doesn’t want to do that we will be leaving anyway.

Some have made much of the slowing in UK growth to 0.2% in the first quarter of 2017. It picked up a bit thereafter.

In the Bank of England’s Inflation Report for August we find the following interesting quote:
Quarter 1 growth “slowed sharply to 0.2%. The GDP backcast, which takes into account the revision properties of the official data and information surveys, suggests that growth in Quarter 1 was higher, at 0.4%”.

The Inflation Report also reveals a worse balance of payments position in the first quarter than the Bank expected, with more imports than in their forecast. This meant international trade subtracted 0.4% from our GDP, given the continued high level of imports. This puts a different slant on the picture from the loss of confidence myths.

Contrary to some comments on the current position, the Bank was relatively positive on business investment, though would like it to rise faster. They said ” Business investment is estimated to have risen by 0.6% in Quarter One…. Investment is projected to continue to grow at a steady pace in the near term”.

The UK economy could clearly benefit from more investment in capacity, both to replace imports and to meet export demand. The rising profitability of business in general and the availability of low cost credit should encourage more such investment.

The Prime Minister has wisely avoided the word Transition in her statements on Brexit. If you envisage a Transition Agreement and a period of Transition, you need first to have an overall Future Relationship Agreement so you know what you are in transition to. It is not inherently easier to negotiate a Transition Agreement than a full Agreement. The sooner you get to an Agreement on our Future Relationship the sooner you start implementation. There might need to be interim arrangements if parts of the Agreement we make on departure require a bit more time to bring in. We can judge that when we have an Agreement.

The technical matters that some worry about concerning customs systems, rules of origin, lorry inspection and the rest can all be solved by a UK/EU customs Agreement, which could be sorted out in the next 19 months before we leave if the EU wanted to. The EU has customs agreements with many non EU countries. Alternatively we will leave with no agreement, operate under World Trade rules, and both sides will presumably do what they need to do to make sure their respective borders work, as it is in their interests to do so. German car exporters, French farmers and winemakers, Dutch market gardeners and the rest would not take kindly to the EU deliberately messing up the borders to impede trade. The EU would find itself on the wrong end of political pressures and legal claims if it tried that. The UK obviously will wish to run her borders efficiently and effectively, allowing easy despatch of goods and free access for imports subject to the normal checks to limit smuggling, illicit goods and fraudulent or faked products. We already run efficient borders for tariff based trade with non EU countries so we know how to do it, and could add EU countries to that group if we have to.

Negotiators should concentrate on the simple basic question. Does the EU want to accept the UK’s generous offer of a free trade agreement based on our current tariff free trade with relatively few barriers, or not? If it does it should say Yes and get on with creating the registerable Free Trade Agreement with the WTO in time for our exit. If the answer is a perverse No, then we can get on with planning for the WTO option.

I am constantly told by EU lovers that the UK has to be punished to show it is not a good idea to leave the EU. I find this a bizarre attitude. If the EU is as good as they usually claim, leaving is not going to be popular with other countries. The EU has a Treaty requirement to get on well with neighbouring states and promote good trade and other relations. I have a higher opinion of the other countries than some for Remain, and think as intelligent people they will want to obey their Treaty and keep free trade. If my optimism is misplaced, trading with them under WTO rules will be fine. The EU does not have the power or the legal right to stop people on the continent buying and selling goods and services across the Channel. The EU does in my view have too much power over us, but it does not have the means to impose a stop on trade.

I agree with the government that UK gross state debt is on the high side. It makes a significant contribution to total UK debt.

There is a simple way to bring it down. The Bank of England should announce that from next month it is going to reduce the stock of government debt it owns by £7bn a month. Over a five year period this would eliminate the £435 bn of government debt the Bank of England owns on our behalf. It would reduce state debt by around one quarter and would reduce our total indebtedness as a nation by a little over one fifth of National Income.

There is a precedent for this. The USA has announced its plan to start to cut the US state debt the Fed owns.

How can this be done? At the moment every time a government bond owned by the Bank is repaid they go out and buy another bond to replace it. Basically they can stop doing this and accept the repayment, which cancels the debt. They would need to switch bonds of varying maturities from time to time to ensure a smooth pattern of debt reduction.

What is the downside? The danger is such action tightens money too much. As an offset the Bank should relax its some of its strictures against new mortgage and car loan borrowing, whilst still policing proper evaluation of individual credit worthiness. It should keep interest rates low whilst reducing the stock of debt in this way. It should be ready to abort the programme of debt reduction if money tightens too much.

If instead money grows too quickly for other reasons then of course it can take other action to avoid any inflationary threat.

What’s stopping them getting on with this? We should be taking strides towards a more normal monetary policy now.

Debt is a young person’s game. In most free enterprise societies older people own most of the wealth. Young people borrow to get started as homeowners and business people. This happens naturally, as it takes time to save, to accumulate assets, to buy a home and to benefit from it going up in value. Most of us start out with no assets, receive no inheritance, and have to save for our old age as we work and earn. Even those who can draw on the bank of Mum and Dad usually need to borrow commercially as well to fulfil their ambitions.

It is the job of the banking system to lend the money older people save and deposit to their collective children and grandchildren who need it to buy homes, cars and other expensive assets, and to businesses who need it to increase capacity and to supply new goods and services.

Today the Bank of England is arguing that there is too much mortgage and car loan debt in our country, and this needs to be controlled. They are instructing the commercial banks to lend less. It is difficult to understand why.

The commercial banks now have much more cash and capital by way of reserves than they had during the banking crisis of the last decade. They are also more profitable again. These buffers can take care of any bad debts they do incur. Employment is expanding. As people get jobs so they can afford to borrow to buy a car or a home. The banks should be allowed to meet their aspirations. The invention of the 3 year car loan/lease allowed many more people to have a new car. The banks would be able to foreclose on the vehicle if someone fails to make the payments, so there is reasonable security.

Of course banks need to examine each loan application. The individual has to demonstrate they have the income claimed and show they are likely to keep a job. The bank lending money does need to make a judgement that the person concerned will not behave irresponsibly. Most people do take their debt obligations seriously.

Current levels of mortgage and car loans would only be unsustainable if the Bank decided once again as it has in the past to withdraw liquidity from the markets too quickly and push up interest rates too far too fast. It assures us this time it does not wish to do that. There is already considerable protection against rate rises, as many have chosen to take out fixed rate loans. In that case it should allow more young people to borrow to buy a home or a car. More mortgage and car loan debt when the economy is growing and more people have jobs is not something to worry about. Tomorrow I will describe how the Bank and government could do something that would make a real difference to reduce total UK debt that does not require squeezing the young.

Free societies allow individuals to buy and own property. Communist and authoritarian societies claim all property for the state.

Making everyone a tenant of the state gives a state much more control over its citizens. It also usually leads to a crony system, where those who toe the line and are in with those in power, get favourable access to property. Corruption normally follows the concentration of power in the hands of the state, and often is practised surrounding state property or trading assets. The privileged regard state property and nationalised industries as personal fiefdoms, earning rent from them at the expense of everyone else.

Largely free societies do need to impose some restrictions on the freedom to own and use property as individuals and families wish. It is common to discourage anyone seeking on death seek to freeze a property which the dying person liked, to prevent a mausoleum community developing full of empty properties. It is usual to require permits to change the use or develop a site which someone owns, in the interests of protecting the neighbours and creating some order over infrastructure and service provision. It is very common to impose taxes on property ownership. Whilst this is mainly for the state to have more revenue, the taxes may be designed to influence use of the property.

The drift in free societies is to more and more state intervention in the buying, selling, use and enjoyment of property. Taxing property related activities can be easier than taxing income or spending, as the property has a fixed address and a registered owner. What begins as a legitimate interest in orderly development of a neighbourhood can become a large experiment in social engineering, with the state granting huge windfall gains to some who are allowed to build on their land, and denying others any scope for modest self improvement of their property.

In the UK today the argument about rich people owning homes they do not live in for much of the time has become an issue. It is difficult solving the problem without very intrusive regulation and policing. How many nights should a person stay in a given home to qualify as reasonable? What do you do about someone starting up a relationship with a new partner and then spending the nights with them rather than in their own home? How do you capture the complexity of family life with grown up children spending more time in their parents’ homes? You could have a law which discriminated against foreign owners, with suitable definitions of who is foreign. This would not be a very welcoming approach, and could have side effects like putting rich individuals off investing in the UK or considering moving more permanently here. It might cut total tax revenue considerably.

I am suspicious of the idea that the state should tell people how much property they need or are allowed. The state can and does affect the pricing of property which will of course influence the decisions of property buyers and users.

The Qatari owners of Paris St Germain think footballer Mr Neymar is worth £775,000 a week, according to media reports. They also think it worth paying a lump sum transfer fee of £198 m to secure his services for five years.

I suppose they might be right. He would need to stay at the top of his game and help his new club to win major trophies. He has already bought PSG a lot of publicity. Maybe more tickets will be sold at higher prices now for their games, and in due course maybe the value of their games to the media will go up. Or maybe this is not about making a profit, but is about making a statement. There is a long tradition of rich people and institutions spending large sums on football clubs and footballers. It can just be a way of recycling some of the money they have made from more successful ventures.

The downside of the spending are obvious. If Mr Neymar was injured, or if his form fell away, it will prove an expensive problem for the club. Top performance requires extraordinary levels of commitment, concentration, practise, fitness. Sustaining these for six years when you are paid so much anyway must require huge self discipline. Being a top sporting performer requires a person to regulate the whole of the rest of their lives. Too little sleep, too much alcohol, wrong diet, too many emotional distractions could throw the peak condition needed to perform well.

I raise all this not because I am concerned about the financial health and sporting performance of PSG but because it is an extreme case in the debate we are having about high pay. Some argue that it is never justified to pay individuals so many times the Minimum wage of those who help sustain their activities. What do the cleaners, caterers and security personnel at football grounds where Mr Neymar plays think of the differentials? Clearly Mr Neymar does not need that much money to live to a very high standard of comfort. He can also earn huge sums in addition to his wages through sponsorship deals and activities based on his fame.

Others argue that sporting or cultural stars are different to senior executives in large companies who negotiate large pay packets. It is true that sporting stars do have to perform to get their large money, whereas some business executives get large salaries or guaranteed bonuses without needing to perform in an exceptional way. In some ways sports people are more like entrepreneurs, who can earn huge sums by selling what the public wants at a price the public can afford and is willing to pay. All the time people pay their sporting tv subscriptions and the ticket prices, the stars can claim they are “worth it”.

Yesterday’s news that FTSE top pay had fallen does reflect the feeling of many that the pay of corporate executives in large quoted companies needs to be more strongly policed by shareholders, taking more interest in ensuring performance is required to justify multi million sums. That is something which shareholders need to do in a free society, on a case by case basis.

Last year the Bank slashed its forecasts for growth for the year after the Brexit vote and then had to push them up again. Growth accelerated in the six months after the vote against their expectations of a sharp fall. Today the Bank has decided to cut its growth forecasts a little from the upward revisions it made to 2017 at the same time.

The Bank made an important policy statement. What it has decided to do is to tighten monetary conditions despite its own view of sluggish growth. Indeed, it maybe because it is tightening money that it has to cut its forecasts. The tightening occurs in two stated ways. The Financial Policy Committee is reining in both mortgage loans and car loans, whilst issuing general warnings against more consumer debt. This reinforces the contractionary policies being pursued by the Treasury with its big tax hit to Buy to let and dearer properties through higher Stamp Duties made in the April 2016 budget, and its decision to cut back the number of dearer cars sold on the new car market through much higher VED on dearer vehicles. The Bank has also confirmed the end to its Term Lending Facility for commercial banks in February which will soon start to affect their behaviour, reining in credit.

The Bank has confirmed that “much of the weakness in housing market activity over the last eighteen months reflects a fall in the number of buy to let property transactions following introduction of the Stamp Duty change” and confirms that new housing for sale has been growing strongly, with starts up 26% on the year to Q1 2017. Capital investment has disappointed the Bank, though the shortfall is more noticeable in the public sector.

The Bank makes a great deal of the impact of Brexit, blaming Brexit for the fall in the exchange rate. Understanding that it needs to be consistent it has to explain why the Stock market has taken such a positive view since June 24 2016. It decides to say the market has risen because earnings and profits have been good. It then tries to suggest that this is down to sterling, whereas the FTSE 250 Index with more domestic companies and activity has also done well. The FTSE 100 is up 22% since June 24th, whilst the FTSE 250 is up 24%.

The Bank takes the fall in the pound from the pre vote high. The pound reached a 5 year high of $1.71 on 11 July 2014. It fell fairly consistently for 2 years to a low of $1.42 on 16 June, rallied briefly, and then fell away to today’s $1.32. Today’s level is 10% higher than the post vote low which the Bank does not mention. It is difficult to see why the Bank thinks all the fall since the vote is down to Brexit, but none of the rally is down to Brexit. It also leaves them having to explain what moved the pound down so much prior to the vote and why this influence ceased on the day of the vote. Remember quite a bit of the fall occurred long before we decide to have a vote, and then during a long period when markets were sure Remain would win. Much of the fall was about interest rate differentials at a time of rumoured or actual rate rises in the USA.

The Bank regards the rise in inflation as resulting from sterling, ignoring similar rises in inflation earlier this year in the USA, Germany and others owing to the higher oil price. UK shop prices were 0.3% lower in June 2017 than a year earlier, showing how lower sterling has been absorbed by importers and retailers.

The UK economy generated 324,000 extra jobs over the last year and now has 32 million people in work, with unemployment at 4.5%. the Bank accepts that there will be more good news on employment over the rest of the year. The Bank is being too gloomy again, but this time is tightening money so the economy may well be a bit slower as a result.

Announcing good results for their financial service business in the UK, Aviva confirmed their wish to develop and invest in the UK. At the same time they said “In line with our “Not everywhere” strategy we have continued to reallocate capital….we completed the sale of Antarius in France and recently announced the disposals of the majority of our Spanish business as well as Friends Provident International…meanwhile we have invested in Viet Nam” and announced a new joint venture in the UK.

When interviewed by the BBC Today programme the interviewer moved rapidly on when told about their positive approach to the UK! No questions about Brexit – they switched to executive pay instead.