John Redwood's Diary
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The errors of the High Court judgement about Article 50

This was a most unfortunate case. It is curious that it was considered at all in the High Court of Justice in England. The matter before the Court was clearly a UK wide matter, yet it was considered by an English Court. If ever an issue was designed to be handled by the High Court of Parliament rather than by some lesser court, this was that issue.

In the past Courts have been rightly wary of presuming to tell Parliament what it should and should not do. Of course courts need to be vigilant and active over possible abuses of power by government. It is not, however, their job to tell Parliament what it should debate and what it should vote on . It would not be practical each week to agree our agenda with what the Judges wanted us to do.

As the judges wished to trespass into this territory they should have acquainted themselves better with Parliamentary procedure and the recent Parliamentary timetable. They would have discovered that Parliament has had plenty of allotted time for debate and questions on Article 50 and general Brexit in both government and Opposition time. They would have realised that if the Commons wanted a vote on Article 50 the Opposition could at any time table a motion to require one in Opposition time. It could formally ask the government to table one, though the government might reply they should table one themselves. The fact it has not done so implies that the Commons accepts an Article 50 letter will be sent. Indeed, many Labour MPs have confirmed they agree with sending a letter, as does the government side.

It would also have been wise if the judges had read the leaflet sent to every household by government at taxpayers expense with Parliament’s approval stating clearly the people were making the decision to leave or remain. They could also have read the many Hansard references stating the people will make the decision in the referendum. This was not an advisory referendum in any normal sense of that word. They could also have consulted the official literature of the two referendum campaigns and seen that one of the few things they agreed on was the people were to make the decision. The reason Remain rhetoric was so hyped about the dangers of leaving was their recognition that the people might make the wrong choice in their view. The vote of the people should be more powerful than the views of three judges.

The other main argument the judges used was the bizarre idea that prerogative powers of Ministers can never be used to change UK law. What do they think has been happening for the 44 years of our membership of the EU? Time after time Ministers have consented to an EU law under prerogative powers which directly changes UK law. Why did they approve and encourage this process, and then turn round when we wish to use the same method to restore UK Parliamentary control and say it cannot be done? Given that this is to implement a decision by the people, surely that puts in much better order than all those times neither people nor Parliament were asked to decide on changes of their laws thanks to Brussels.

In sum, the Commons agrees to an Article 50 letter, so let’s get on with it. I just hope the Supreme Court has wiser views than the High Court of England.

Why we respect the law in a democracy

A foundation of a stable democratic society is the willingness of all apart from a criminal minority to accept the rule of law and to seek to uphold it. All MPs and Ministers are beneath the law, as are all other citizens. If allegations are made and taken to the courts any accused citizen has to attend and defend themselves. The courts have the power to enforce the law and impose punishments on those who have offended. MPs have no special rights under the law. We collectively have one special power, which is to change the law for the future if the old law has ceased to please or is producing unreasonable results. Parliament also holds the power to change the powers of the courts and to amend the way judges are appointed or removed. In that sense the UK’s Supreme court is Parliament.

Respecting the law does not mean, however, that we have to respect all lawyers and judges all the time, or refrain from commenting on what they do. Just as in a free society a constant stream of criticism, comment and advice to government is an important part of democracy, so there have to be occasions when individual judges and judgements can be criticised or debated for what has been said and done. There have been worrying miscarriages of justice in the past. Those who support the wrongfully convicted have every right to try to revive their case, to petition for a retrial, to go through appeal processes, to seek a reversal of a bad judgement. There can be the occasional incompetent or corrupt judge who needs to be dealt with, starting with public exposure of what they have done wrong.

When judges decide to step into highly political territory as they have done with the recent judgement of the High Court on how to proceed over our relationship with the EU, they must expect to become involved in a heated public debate. A free press is also an important part of democracy. I do not need to agree with the tenor of much press comment on this issue – on either side of the debate – to say I think each newspaper has every right to say what it wishes on the results of the judges deliberations. It is also reasonable in a free society to explore the backgrounds and motivations of judges making highly political decisions, as we regularly explore the motives and backgrounds of Ministers who make similar decisions on our behalf.

I tend to the view that moderate language is better for a sensible public debate, but I don’t want to live in a society where censors decide what is moderate enough. There will always be differences of opinion on what is an appropriate way of stating a case. Sometimes colourful or powerful language is essential to get across the breadth and depth of feeling in the community about an issue.

I will consider tomorrow the powers and opinions of the High Court on the issue of an Article 50 letter, where I think they have made bad mistakes in law, in defining their powers, and in politics.

Take off the Brexit glasses

All too many commentators, reporters, market watchers and politicians are seeing everything through Brexit spectacles. The pound went up and down before Brexit, the economy grew and slowed before the vote, the Stock market rose and fell without a referendum. All the forces which moved markets and changed economies before still apply.

It is absurd to argue that sterlig rallied owing to extra uncertainty created by the recent legal judgement. Far more important was the Banks decision to back off from further rate cuts and more QE, real things which have a direct bearing on the value of the currency. It also helped that the Bank now sees that the economy will grow strongly this year, and will do better next year than it thought.

The recent fall in the Stock market has been put down to the possibility of a Trump win in the US election. Its the first time for months that a non Brexit reason has been given for a major change, Lets hope its a sign of better things to come in trying to explain why markets move.

Meanwhile as a few commentators have also noted, money growth continues at a rapid pace in the UK. This points to further strong growth next year, not to the EUro area style lower growth rate the Bank and others are now predicting.

The government has a plan. Why do Labour claim Parliament is not allowed to debate Brexit?

Most days in the Commons since the referendum the issue of Brexit has come up. There have been several government statements. There has been an Opposition day debate. There have been Questions to each of the 3 leading Brexit Ministers. There have been Questions to the PM. On Monday there will be another all day debate when MPs can range widely, expressing their views on how leaving should be handled and what should be in the negotiations. If the Opposition wanted a vote on sending an Article 50 letter they can have one on any Opposition day they like.

The fact that the Opposition have chosen not to hold a vote on Article 50 implies they accept it and realise the government has to send one. We don’t need lawyers to give MPs the right to talk about or vote on anything they like! It’s up to the Opposition to say what they are going to do.

Labour and other political parties hostile to Brexit also claim the government is refusing to set out its high level aims. They all claim to agree that in a negotiation it is not wise to set out in advance what you will give ground on, what your red lines are and the all the rest. Nor does it make any sense to offer any concessions before the proper negotiation begins. Within this constraint the government has been very forthcoming about what it intends to do to implement the wishes of the voters.

Ministers have said

There will be no re run of the referendum. It was fair vote with a good turnout.
There will be no second referendum on the terms. There is no point, because the other side will not suddenly improve them if we vote No
We will leave the EU in accordance with the decision of the UK voters.
We will repeal the 1972 Act
We will transfer into law all EU laws and rules for the time being to ensure legal continuity.
Amendments will be made thereafter where needed, as with fishing and borders.
This government will keep all employment protections currently in EU law by transferring them into UK law
We will re establish the supremacy of UK law and the UK courts
We will re establish the sole right of Parliament to pass laws for the UK, subject to the wishes of the electors in our democracy.
We will have a UK migration policy which meets our needs
We will spend our own tax revenues in ways we see fit
We will seek the best possible access to the EU’s internal market, offering free trade as we currently have
We will assure all legally settled EU citizens here in the UK that they can stay, assuming no evictions of UK people from the continent
The UK will not be a member of the single market as that comes with freedom of movement and budget contributions attached
The UK will not belong to a customs union which prevents us from negotiating our own free trade deals with countries around the world
The UK will explore free trade deals with a range of countries, in order to reach early agreement and signature once we are out of the EU.

I have heard all of this many times in Parliament and elsewhere from the government. Why doesn’t Labour listen? What part of this do they not understand?

We need to reduce uncertainty for business. These set of policy decisions does just that. We now need to move on and do it.

Pound rises in relief at change of Bank of England stance

The Remain media were ever willing to report the falling pound, but have gone silent in the last couple of days as the pound has risen against the dollar and Euro. All it needed was the Bank to say it would not cur rates again and not print yet more money, and the pound bounced. If the Bank would restore rates to where they were pre the vote it would rise further. It reached $1.2485 today compared to a low below $1.20.

Let Parliament vote for an Article 50 letter

The court case made for convoluted and anti democratic reading. The vote of the people was only mentioned at the end, and dismissed for no good reason as advisory. Did they not read the Hansards where the PM and other Ministers stressed the people were to decide? Did they not read the leaflets sent by the government to each household with Parliament’s approval and using public money voted by Parliament to pay for them? These leaflets all said we, the people, were making the decision.

Did the Judges not understand that Parliament can anytime if it wishes debate and vote on the Article 50 letter? It has been the choice of the Opposition not to do so.

I hope the government will now table a motion saying

“This House approves the sending of an Article 50 letter in accordance with the wishes of the people as expressed in the referendum, any judgement of the courts notwithstanding”

The government should then send the letter.

I would expect the motion to pass easily, as I cannot believe Labour will impose a 3 line whip to expressly go against the results of the referendum. If they did the government should still win the vote, given Labour rebels, some Northern Ireland MPs and most Conservatives voting for.

UK Services PMI shoots up in October

I am always cautious about relying on PMI surveys, as they can give misleading readings, as we saw immediately after the EU vote. However, many other forecasters like them and use them. It will be interesting to see if they follow their logic through. Those who revised forecasts down sharply after the vote because the initial PMI figures were weak should presumably be revising them up substantially now they are strong. Today’s Services PMI came out at 54.5 for October compared to 52.6 for September. The overall whole economy PMI hit 54.6, up from 53.8 in September. These figures have to be below 50 to forecast a downturn.

I am sticking with my forecast of 2% growth this year, in line with the Treasury forecast in March. It is also difficult to see why many forecasters are still so pessimistic about 2017.

Shop prices

The Bank of England will doubtless want to put out a gloomy forecast for inflation for next year based on a lower pound.

They need to remember that October showed a further 1.7% fall in shop prices, including a 1.2% fall in food prices. This is from the BRC Index. This 1.7% decline figure is identical to the declines of 1.7% recorded in April and May this year before the vote.

It is true that imports will get a bit dearer from here, but important to remember we start from negative inflation on shop prices.

More good news from the UK economy

I trust the Treasury and Bank are revisiting their forecasts for 2017 as we speak.

Yesterday the UK’s largest housebuilder, Persimmon, announced another good set of figures. New home sales were up 19% year on year. They have pre sold their homes for 2016, and are ahead of last yea’s performance in sales for the following year. House prices have stayed up, despite Bank and Treasury forecasts to the contrary. Even better news came with Persimmon telling us they are putting in a new brick factory in Doncaster, and aim to be making bricks there next summer. That is exactly the kind of import saving investment we need, to cater for rising domestic demand. Persimmon also pre fabricate parts of their homes from a Midlands factory to speed site construction and improve precision.

A new potash mine investment is going ahead in Yorkshire with a £2.5bn investment. Output of automotive engines was up 6.7% so far this year at end September. Car manufacturing output is up 10.5% over the last year.

Various retailers have confirmed that sales of luxury brands to visitors to the UK have risen sharply following the decline in sterling. Burberrys, for example, said UK retail sales were up 30% when worldwide sales were pretty flat. Meanwhile retail prices fell again last month in sterling terms, despite the fall in the pound. Overall retail sales have been strong since June 23rd and real incomes have continued to rise.

The Bank’s pessimism centres on fears that major companies will postpone or even cancel investment projects. It is difficult to see why, when money, credit and demand are all growing so well. The Nissan news reflects the need for highly productive investors in the UK to reinforce their success for what is an important growing domestic market. UK manufacturing has just become 15% more competitive, underwriting the success of Uk factories for foreign investors. I want to see the government promote UK purchasing. The government itself is a mighty buyer of products. Once free of the EU controls, you would expect exciting new approaches.

Money and credit are growing faster than before the vote. This implies continuing good growth next year. The average forecaster has now revised up their 2016 forecast to the levels last seen before the vote. isn’t it time they did the same for 2017?

The OBR/Treasury forecast matters because it will inform the Autumn Statement. If they persist with a downbeat and inaccurate estimate for next year they will claim tax revenues are lower than the March forecast and spending higher. It is important markets look through this and understand that in practice things are likely to turn out as forecast in March, with a lower deficit as a result.

Self employed work and working for an employer

I agree that people should not end up working for one employer for less than the living wage, under duress to say they are self employed. Uber made clear this is not what they do. I am also in favour of people being able to suit themselves when they work by opting for self employment, and having other jobs at the same time if they wish and if they can manage them. Many of the drivers like the flexibility they gain from their work, and they do other things as well.

I mainly get around central London by walking or by tube. Sometimes I am given a lift in a hired vehicle if I am going to a studio to provide a tv or radio interview. More of the production companies now offer their guests who take no fees a drive there and back, and may use a hired car. When this happens I often ask the driver to tell me what he thinks of the remuneration system and how it affects his life.

The drivers I have talked to so far are either very positive about the system, or neutral. I have not yet been driven by a strong critic of the scheme. One driver told me he had come to the UK as a migrant. He earned good money because he drove long hours. He had recently managed in his spare time to qualify as a technical computer specialist of some sort. He was now setting up his own computer service company and would flex his driving hours down as his business developed. I asked him why he had not left driving to work for a computer company with his new qualification. He said because that would be a pay cut, and because he wanted the flexibility to set up his own business whilst still having sufficient income.

Another older driver had a different approach. Instead of working long hours to make good money, he set himself a target each day of how much money he wanted to earn. On a good day he got home early, offering and needing less than a day’s work. On a bad day it took all day to hit target. I was with him on a bad day, largely because there was unusually high congestion stopping drivers completing enough jobs.

This issue needs some commonsense to resolve it. Of course no-one should be made to be self employed yet work for just one firm and end up below the living wage. But shouldn’t people who want to be self employed, want to do more than one thing, and want to be flexible about how many hours they work and how much they earn also have the right to do just that?