The Bank of England is the only one of the three big western Central Banks  (EU/US/UK)  to be selling lots of bonds at  big losses and sending the bills to the taxpayers. The UK is the only one of the three to be reinforcing a major money squeeze with a fiscal squeeze at the same time.

The US has offset a lot of its big money squeeze with a major expansion of spending and borrowing in the year to September 2023. It would have been better to have achieved the same effect with lower taxes. Despite the increases in interest rates and bond sales with uncovered losses the US economy has been achieving a good rate of growth.

The European Central Bank refuses to sell bonds at big losses and has paused its rate rises at a lower level than the US or UK. The EU economy is performing poorly, and may well persuade the ECB to be the first of the 3 wayward Central Banks to start to lower rates again.

All 3 Central banks printed too much money and bought too many bonds well into the covid recovery period. This proved to be inflationary. The Swiss and Chinese who did not do the same did not have the rapid inflation as a result despite experiencing the high energy prices. It is a bad idea to compound the error of creating too much money and keeping rates too low by now creating too little and selling bonds at huge losses to be paid by the  Treasury.

The Bank needs to think again. It needs to speed its review of its past forecasts and its inflation model. It needs a new one urgently to avoid more errors.

The EU are locked in long and acrimonious talks over EU plans to take over more the tasks of running migration policy at EU level. The EU is wanting burden sharing arrangements. It wants member states receiving a large number of migrants and asylum seekers to be able to send some of them to other countries, or to receive payments from other member states in lieu if taking more migrants.

President  Biden meanwhile  has lost a vote in the Senate to send more money to Ukraine. The Republicans demand he spends more at home on border security to tackle the millions now coming annually over the Mexican frontier. The President who campaigned against Donald Trump’s extension of the border wall is now going ahead with 20 miles  of new wall himself.

The UK when it hit 745,000 extra people in one year coming  here  needed to build   three cities  the size of Southampton just to take that one year’s net arrivals.,You do not just need to build lots of homes for them but also  shops, power stations, water works, schools, surgeries, hospitals and roads. Many of these items require public money raised from taxpayers.

The government is battling the illegals but needs to concentrate more on the legals running at almost 20 times more than the small boat people. If it wants to control public spending, relieve pressures on housing and calm passions about migration cutting the numbers of legal migrants urgently and substantially is the way to go

 

Today a large number of Conservative MPs will be mulling over the legal advice and predictions for Mr Sunak’s Rwanda scheme.

Five of the Conservative groups who want to end illegal migration and think the UK Parliament should instruct  all courts accordingly will be told this draft bill does not do that. It undermines its endorsement for UK control with permitted appeals to an international court.MPs from the ironically named One Nation group want to embed rights of appeal to all courts including foreign ones more clearly. As always they do not trust our country, its people and Parliament and wish to constrain the government through international treaties and courts.

It is a great pity the PM put so much on this scheme  and then turned it into a constitutional struggle over whether we can govern ourselves or not. Having two senior Law Officer Ministers from the One Nation group  means legal advice that prevents Parliament instructing the courts to stop the boats in the area of international law where different lawyers take very different views of what is possible.

My advice to him is to concentrate on getting down legal  migration more rapidly and by more than his current plans. This would do more to relieve pressure  on housing and public spending. It is difficult to see how his compromise bill can get through the Lords as well as the Commons. Meanwhile  there are other obvious steps he could take to stop some more small boats.

The PM has to consider what to do with the draft Bill in the light of reactions to it and the Parliamentary arithmetic I set out yesterday.

There is no point in amending the bill in the way One Nation and the Opposition want. A weaker bill would lead to more court challenges and delays. Far from Rwanda being a deterrent to migrants they would see such a weaker bill left them more time to get here as the courts generated more uncertainty. Nor are there likely to be enough One Nation rebels to stop the current bill.

He could try to talk those who think the bill is too weak into  allowing  it a 2 nd reading and to spend more time with them to see if amendments can be agreed to meet legitimate worries. He would need sign off from enough rebels to make amendment worthwhile to give him a small majority. It would increase the  chances of the bill working.

He could try to push an unamended bill through. This would be possible if Labour abstain but very difficult if they do not. If the  bill then leads to more delays and court challenges he is worse off than not trying to legislate. If the bill works he triumphs.

He could conclude that thanks to the Opposition parties, The Lords  and some Conservative rebels he cannot legislate. He would need to develop more ideas to whittle  down the number of illegal migrants. These could include increased surveillance in France against illegal boats setting out, more police resource to follow the money, more mystery shopping for  the boat trips, exposing the gangs, intercepting  the boat purchases and breaking more  into the sales and support systems of the travel organisers.

Whatever he does he would be well advised to turn more attention to the  easier but larger task of deflating legal  migration numbers which are so excessive. Many who want the small boats stopped  also want much lower overall migrant numbers. Meeting their  wishes on that would help a lot. To do this he and his Chancellor have to win a battle with the OBR and Treasury officials. They need to correct their wrong numbers, and understand just how much all the extra public sector and housing costs fpr migrants adds to spending and  the deficit.

 

It is one thing for the Prime Minister to want to stop the small boats. Who sensibly disagrees? It is another to voice the right way to do this, and to gather the votes needed to bring it about. The draft law he has proposed now has to find its way through both the Commons and the Lords.

In the Commons the government has a current majority of 56, meaning it can carry any legislation as long as fewer than 28 Conservative MPs vote with the Opposition, or fewer than 56 abstain.

This Parliament has been characterised by more MPs than usual losing their party whips for actual or alleged misconduct. There are currently 18 Independent MPs though none were elected as that. One  is an SNP MP who disagreed with his party whip and wants to be Independent. One is the former Leader of the Labour party, now in policy exile. There are 9 Labour MPs suspended from the whip and 7 Conservatives, with one from Plaid.  This may give the government a little more leeway on its majority.

The small boats Rwanda Bill will be difficult for the government to whip. One group of  Conservative MPs is annoyed that it does override some Human Rights legislation and gives stronger instructions to courts. Another group of Conservative MPs thinks the Bill needs to be tougher to rule out any legal challenge to the policy to ensure success. The attitude of Labour becomes an important consideration in working out what might happen. If 198 Labour MPs all oppose the Bill, with the other Opposition parties also likely to, then the government does need to reduce the number of rebels to under 28. If Labour abstain then the government can afford 126  rebels before losing.

There are 98 Commons Ministers who have to vote the government line. The last list of Parliamentary Private Secretaries to Ministers showed 41 in post. We are awaiting an updated list which may  be longer. They too have to vote with the government. So to win a vote the government needs to persuade just 84 backbench Conservatives to support if Labour abstains, but 181 if Labour opposes.

The One Nation Group that wants a weaker Bill puts out it has 103 supporters. This is greatly overstated. I do not believe anything like 103 Conservative MPs will vote against the Bill because it is too strong. The likely effective rebel voting strength of One Nation is below the 28 vote threshold to overturn the majority. It also is the case that a disproportionate number of the One Nation group are Ministers so they could not vote against even if they wanted to. Of course if they staged a number of resignations to vote against that could destabilise the government badly. That seems very unlikely as they have a strong position within the government and seem to like being Ministers .

There are considerably more Conservative MPs than 28 who want a stronger bill than the government version . Whether they will allow 2nd reading of this bill and seek amendments remains to be seen. Some  will think a quite strong bill worth a try. Others will think it futile to enact another bill that just gets bogged down in courts again.

 

The Lords has its majority of peers who always want to do down the UK and who support every international criticism and attack on us. There are plenty of peers who put the wishes of lawyers acting for illegal migrants above the wishes and needs of legally settled UK workers and taxpayers. Getting any bill that toughens our law against illegal small boat operators and their paying passengers through the Lords requires good majorities in the Commons and plenty of political will by the  government.

Tomorrow I will write about the PM’s  policy options.

 

The John Redwood Interview – Getting us back on track

Sir John summarises the economic benefits of Brexit and what can now be seized, given political will. 10 minutes of Brexit gold for those who love the idea of a fully independent, prosperous UK.

Facts4EU Report: https://facts4eu.org/news/2023_dec_the_redwood_interview

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CIBUK Report : https://cibuk.org/exclusive-the-john-redwood-interview-getting-us-back-on-track/

CIBUK Twitter : https://twitter.com/CibukOrg/status/1733022895486423366

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With thanks and credit to Facts4EU.

Now the government wants to control legal migration it needs to calculate the costs of new legal migrants into low paid jobs to taxpayers. The government now we are out of the EU can make legal migration any amount it likes, from the 750,000 it was at its peak to zero. Every legal migrant  needs a permit from government. Government allows large numbers of low paid workers and students to come.

The Treasury wrongly thinks this boosts our financial position. It is true it adds to GDP but it also adds substantially to public spending and may reduce GDP per  capita. The Treasury/OBR model once again is misleading and encourages bad policy.

As I have argued before every migrant needs housing, healthcare, utility capacity, roadspace and other public services. My forecast of £250,000 for the capital set up costs and early years free services still stands. Ministers should get an up to date government figure and feed it into OBR models.

 

Students pay more to the universities which makes sense for their costs. It does not necessarily work for the state if they bring dependants who qualify for free public services and subsidised housing.

Government also needs to take account of associated costs and problems. 750,000 extra  people need a lot of housing. Even where they can afford their own it places considerable upwards pressure on rents which in turn increases general housing benefit costs. It makes it more difficult for those already legally settled here to obtain and afford a home of their own. More pressure on the NHS makes it difficult to get waiting lists down. Inviting in more staff for  the  NHS also creates more demand for NHS staff.

UK communities are full of people who warmly welcome refugees, invited Ukrainians into their homes after the invasion and accept the need for  some economic migrants. Many people also think 650,000 a year  is far too many, creating strains on public services, housing. infrastructure and community abilities to welcome and adapt.

 

President Biden expelled more than 1 million illegal migrants from the Mexican border last year. France is sending illegals back to Italy. Various EU countries are considering ways of cutting migration. The EU is working on a system of quotas and requirements for member states to take their share of the many entering the EU. The UK now we are out the EU can cut our very large legal migration figures and will not have to take migrants arriving elsewhere in the EU. So government should get on with cutting legal migration as promised in 2019.

 

 

 

Robert Jenrick did not come to his conclusions on immigration through ideology. Asked to be Immigration Minister he approached it cautiously. He formed his view that we needed to be a lot tougher from his day by day experiences . He saw at first hand how young fit men came in large numbers on dodgy unlicensed boat trips. He wanted to end these dangerous journeys, deter more illegals and break the businesses of those who charge them to undertake the trip.

He was persuaded it would take new law. To avoid another defeat in the courts  it would take stronger legal powers.In Suella Braverman he had a boss who knows migration law inside out. He recognised the wisdom of her views like his own.

Yesterday when we at last saw the Bill we heard from Suella that the bill would not be lawyer proof. There could be more challenges in international courts.

I cannot see the point of putting through legislation which does not work. The Home Secretary is going to have to reassure people this  time they will stop the boats.

John Redwood (Wokingham) (Con):

We eased the driver shortage by training more people at home and paying them more. Is that not the right model for the scarcity occupations?

James Cleverly (Secretary of State for the Home Office):

My right hon. Friend is right. What we want is a high-skilled, high-productivity, high-wage economy. These proposals and the work that my right hon. Friend the Chancellor announced support that. Labour would do the opposite.

The UK government made the following statement yesterday

 

” Home Secretary James Cleverly has signed a joint Treaty with his counterpart, Foreign Minister, Dr Vincent Biruta, strengthening the UK and Rwanda’s Migration and Economic Development Partnership and directly addressing the concerns of the Supreme Court.

The agreement is part of the government’s plan to ensure that illegal migrants can be lawfully relocated to Rwanda under the Government’s ambition to stop the boats – ensuring that people know that if they come to the UK illegally, they cannot stay here.

Following further positive discussions between the two countries after the Supreme Court judgment, and building on months of work between the two countries, the Treaty responds directly to the conclusions of the Supreme Court and presents a new long-term solution.

The landmark Treaty is binding in international law and ensures that people relocated to Rwanda under the Partnership are not at risk of being returned to a country where their life or freedom would be threatened – an act known as refoulement.

It also enhances the functions of the independent Monitoring Committee to ensure compliance with the obligations in the Treaty, such as reception conditions, processing of asylum claims, and treatment and support for individuals including up to 5 years after they have received final determination of their status. The Committee is made up of 8 independent members.

The Monitoring Committee will also develop a system which will enable relocated individuals and legal representatives to lodge confidential complaints directly to them. It will have the power to set its own priority areas for monitoring, and have unfettered access for the purposes of completing assessments and reports. It may publish reports as it sees fit on its findings.

To further bolster assurances that relocated individuals will not be returned, under the Treaty, Rwanda’s asylum system will be strengthened through a new Appeal Body. The Appeal Body will consist of a Rwandan and other Commonwealth national Co-President, and be composed of judges from a mixture of nationalities with asylum and humanitarian protection expertise (appointed by the Co-Presidents) to hear individual appeals.”

 

I and my friends will be looking  carefully at the text of the Treaty and at the draft legislation which will be needed to ensure the Rwanda policy can proceed without further interruption by UK Courts. The government believes that if it can send some migrants to Rwanda the numbers wishing to come to the UK illegally will drop substantially. To achieve this the government will need to assert the supremacy of the law established by Parliament over other legal interventions.