That Customs Union again

How many more times do we need to explain the Customs issues to the media and to some of the Remain peers and MPs?

The government’s debate about the New Customs Partnership or Max Fac (Maximum Facilitation) is we read inclusive. There does seem to be general agreement there is no worked out model of a New Customs Partnership that everyone thinks will work, and certainly no buy in to the original concept from the EU. No 10 has denied rumours that the government now wants to extend transition. That would be a very bad idea.

I suggest the government leaves the NCP  debate, and goes back to the basics of the negotiation. They tell us they have worked up a No Deal option and are prepared to leave without a deal next March, though they are very keen to have a deal. So the first requirement in any briefing of Ministers and in public statements should be to set out clearly how the system will work with No Deal as the base case. This is not difficult to do, as we know how we currently trade with the rest of the world under WTO rules and with the EU tariff schedule, and we know that works. Many so called complex supply chains need components from outside the EU and they come in just in time. We can then negotiate better terms with the rest of the world, reducing the tariff barriers that already exist. Any deal needs to be better than No Deal.

The government should then ask the EU if it wants a tariff free deal or not. Assuming it does we then do not need to put the extra customs line into electronic filings for EU goods in the way we currently do for non EU goods. The UK and EU can negotiate the exact terms quite quickly, as it can be based on Canada plus extra items that reflect our current arrangements for service access to each other’s markets.

If the EU does not want a free trade agreement with us then we end the idea of a Deal and ensure proper enforcement of the smooth border arrangements under the WTO Facilitation of Trade Agreement . We should agree a sensible way of dealing with detailed matters to ensure smooth flows of trade, which are much in the EU’s interest.


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The business of England

On Tuesday in the Commons we were asked to go into  English Grand Committee  to approve the Rating Bill that has been making its way through Parliament.

This is a modest measure, allowing higher rates to be charged on empty property, and allowing contiguous properties that can be  properly considered as one property to  be  charged tax as one. The measure only applies to England.

Under the partial reforms England gained in the last Parliament, any Bill relating just to England can be debated in an English Grand Committee comprising all the MPs representing English seats, and has to  be approved by a majority of English MPs on a vote. This procedure prevents the Union Parliament forcing a new law on England which England does not want.

This falls well short of the powers Scotland enjoys through its own Parliament. Not only can they prevent the UK Parliament passing a law on a devolved matter they do  not like, but they can also propose and enact measures which the rest of the UK does not like. In England’s case if we want a law but there is no majority in the UK Parliament for it we are prevented from passing it.

On Tuesday the SNP decided to make an issue out of this. They spoke with contradictory intention. They both argued that England should have its own Parliament to settle such matters, and objected strongly to English MPs having a veto over such legislation. They decided to force a debate on the Bill where English MPs saw no need to. The Bill met with general agreement – or lacked any English opponents.

The settlement of the English issue was only ever a partial and I trust temporary one. England should of course have the same right to propose as well as to block on devolved matters, as Scotland enjoys. The modest proposals so far incorporated in Standing Orders does something to address the unfairness in the lop sided devolution settlement Conservative governments inherited from Labour. The SNP did themselves harm by  mocking a modest improvement to our constitutional arrangements.

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The role of the House of Lords

The unelected Lords has two important tasks. It is there to provide detailed scrutiny of legislation to see if improvements can be made given the purpose and political context of the Bill provided by the government with its Commons majority. It is also there to ask the Commons to think again about its political judgements where it thinks the whole idea of a Bill or policy is misjudged. In this second role the Lords could  persuade  the government or  the Commons to cancel a measure or amend it substantially.

There is a long standing convention that the Lords does not ask the Commons to think again about a Bill or measure that was in the governing party’s Manifesto. That makes sense, as such an idea has been well tested by the exertions of election debate as well as in subsequent Commons exchanges. It has been directly voted for by  the electorate who voted in the case of a prominent pledge, or has gained the implied consent of the electorate for a lesser pledge which probably  avoided prolonged attention because it did meet with general approval.

Yesterday the Lords broke their Salisbury Convention again by pressing for a second reconsideration of the Conservative Manifesto pledge on press freedom. The Commons rejected the Lords revised amendment by 301 to 289, so I expect that will be the end of the matter. This vote also is of interest because it casts light on the progress of the EU Withdrawal Bill. I trust it will give the government the confidence to have an early debate and vote on the unhelpful amendments the Lords have put through to the EU Bill.

This Bill is a central Manifesto Bill of the Conservatives and the DUP. Those peers who say the Salisbury convention no longer applies because the Conservatives fell just short of a Commons majority have to acknowledge that the Coalition does have a majority and the Bill featured in the manifesto of both parties. On that basis Salisbury should apply.  For that matter it also was in the Labour Manifesto, so an overwhelming majority of MPs were elected on the pledge to carry through the necessary legislation for our exit. There is also the point that a well supported nationwide referendum should also be an override against the Lords seeking a different outcome.

Some peers try to argue that their amendments to the EU Bill were “improvements” not designed to prevent Brexit. It is difficult to interpret some of them in this favourable light. Removing the date of exit means their Bill would leave us plunged into legal uncertainty on the day we leave the EU under international law in accordance with the Article 50 letter. It is most important the parallel UK Bill comes into effect at the same time.  Wanting us to stay in the Customs Union or single market is a denial of what was clearly voted for in the referendum, when both sides agreed leaving the EU meant leaving both the single market and the Customs Union. Some of those peers who have urged these amendments on the Lords have made no secret of their opposition to the whole policy of Brexit which was freely chosen by voters in the referendum and then again in the results of the General Election.

I trust just as the Commons has twice now voted to uphold a Manifesto promise of the governing party against Lords amendment over press issues, so we will do the same to the amendments to the EU Withdrawal Bill that seek to slow down, water down or prevent Brexit.


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Technology and transport

I was pleased to see the government announce major steps forward in introducing digital signalling systems to the English railways. It is a classic example of how the digital revolution can solve major problems we currently have on our congested and inadequate railway network.

I have long argued we have enough track in most places,  but need to use it more intensively. Network Rail tell me they can only run 20 trains an hour on a piece of track, despite the trains all going in the same direction on it and despite usually good visibility along lines that are mainly straight. As a result the rail track we see around is empty most of the time. The old fashioned signals we have often fail, leading to extra delays as safety rules understandably make it difficult to override signals even where the driver can see the track is clear.

Digital technology will allow each train to have full visibility of the track ahead and know in detail its own position and the speed it can travel forwards. The early adoption will allow safe passage of 24 trains an hour, an increase of 20% in track capacity, with the possibility of going higher than this as the technology and its use matures. It could mean both more trains on  track  and safer trains if applied well.

We need the similar adoption of better technology for traffic lights. Junctions with a clear main road and side roads or a lesser road intersecting should revert to main road green at all times when the feeder roads have  no traffic, with sensors informing the system. For more complex junctions with two or more busy roads, sensors could do a better job equalising the misery of waiting times by offering green light phases proportionate to  the flows.

I have recently written about how technology could also eliminate the stack of aircraft waiting to land at a busy airport for much of the time. Predictably there were the usual pessimists here telling me it cannot work. I take heart from the fact that the last meeting I held on it with the government was positive, with systems now in development.

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Should migrant workers pay a bit more for the NHS?

I read there is a debate about the way the UK asks recently arrived workers to pay a charge for use of the NHS.  Some say as they have recently arrived it is sensible to ask them to pay some extra money for all the established facilities and staff on payroll they get access to. Others say they are paying taxes like the rest of us, so maybe that covers it.

This issue is a small part of a much wider question – how much does it cost the host country to accommodate and support new migrant workers? In most of the analyses undertaken people just look at the revenue costs and tax coming in. We need to look at the capital costs as well.

The EU once seemed to give us an answer. When they were looking at the way a few countries in the EU seemed to end up with a large share of the total economic migrants into the area, they suggested that countries not taking their share should have to pay Euro 250,000 for each one going somewhere else up to an appropriate quota for them. This apparently large sum was a capital cost, and presumably reflects the fact that each new  migrant needs a home, and capacity in public services.

When a country has pretty full employment and a housing shortage, each new arrival means the need to build a new home, to provide additional classroom capacity in schools, extra surgery and hospital space for health provision, more roadspace and train capacity and so on. In the case of the UK accepting around 250,000 extra people every year it is not possible to squeeze them all in to the homes, schools and surgeries already built, so there is a capital cost in provision.

The argument about the NHS annual charge is a smaller number than this question of the set up costs for new migrants. It is perhaps this bigger issue which needs more of our attention, especially given the difficult politics of speeding up housebuilding and expanding schools.


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Technology at the border

I cannot believe that Remain and their media friends are still going on about how goods move across  borders. The Uk government last year set out how technology can ensure smooth passage of goods. Now we are being told this would all take time to develop and set up. I have good news for them. It is all old hat, and is up and running for non EU trade already. Firms running just in time supply chains for components into the UK have no problems with components entering from outside the EU at the moment, despite the alleged tariff and non tariff barriers to trade that exist for non EU trade today. If all our trade becomes non EU trade after March, what is the problem? We know how to handle it.

I have more good news for firms worried about this. Inbound goods for their factories in the UK have to clear UK customs, not EU customs to enter the UK. There is no need and no plan I know of to impose new barriers at our borders when we leave the EU that will detain lorries and cause unacceptable delays. It is in our own hands.

Let me try again, as one who has imported and exported from a UK industrial base. There are already electronic manifests for each consignment, allowing fast passage across a border as the authorities know what is in the truck or  container. There is a trusted trader scheme allowing electronic filing to replace manual document inspection. Any VAT, Excise or tariff due can be deducted electronically away from the frontier to settle the bills. This also happens today for our EU trade, as our frontier with the rest of the EU is already a VAT, Excise and currency border.

The so called Irish border problem is a put up job by the EU trying to make life difficult. The government should tell them we will use current methods to deal with border issues after we have left. These include today anti smuggling police and revenue activities on  both sides of the Irish border, and police co-operation over criminals seeking to move from one country to another. If the EU continues to make heavy weather of this the government should say we will not be paying them any extra money after March 2019 when we leave.

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The future of grammar schools

Two Reading based grammars provide places for pupils from my constituency. These are popular with parents. The comprehensives also attract talented pupils, so the sixth forms of the local comprehensives can  also provide a good A level education and offer a platform for gaining places at top universities for those who are academically inclined. As a result I have not encountered jealousy of the grammars on the doorsteps from those whose children just missed out on a grammar place. There are clearly too few grammar school places for all the able children who might like to attend.

The government has now said it will make some additional money available to expand grammar places at those schools who would like to do so. This seems to me unremarkable, as around Wokingham we need to expand the number of schools places in general to keep up with demands from all the new housing with many more  people moving into the area. If we are going to carry on with grammars amongst the choices open to parents and pupils, we should allow them to expand if they wish.

I would be interested to hear your views on this latest development. Selection still seems to evoke strong criticism in some quarters, though most seem to accept the need for selection when it comes to university places. It is also easier to teach well if pupils are streamed or grouped  in schools, as different ability and effort levels require  different instruction. In the adult world there is a lot of selection, with professional qualifications and competitions for top jobs being a feature of business life.

The good news is it is often the individuals who did  not compete strongly for academic laurels who go on to be the most successful entrepreneurs and  sports personalities . Life is full of challenges and competitions, so there are prizes for all sorts of exertion and skill. Getting into a grammar does not guarantee long term success. Not getting into a grammar does not stop success and a good career.

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Mr Willetts wants to penalise savings and home ownership

The Resolution Foundation has come up with a cruel blockbuster this time in its efforts to create an intergenerational war in the UK. They argue that older people have too much of the country’s wealth, and recommend taxing pensions and homes much more to pass the money on to younger people.

They ignore the obvious point that in all past generations older people have more of the wealth than younger people. Most of us  start out with  no assets. You work up to buying a home of your own on a mortgage, and start to put savings away for rainy days, and gradually build up a pension pot. As people now live longer they may spend many years in retirement, so they need a substantial level of savings to see them through their remaining years.

Most bizarre is the Foundation’s idea that many older people have done well out of house price rises. Most people just own the home they live in. As most wish to carry on living in it, they cannot use the gains they have made for some other purpose. The people who ultimately gain are the younger people or the charities who inherit the money on death.

Worse still is the Foundation’s prescription to deal with this misinterpreted problem. They want to charge people more for living in their own home if it has gone up in value – £2.3bn more for the country as a whole. They want to charge people extra tax on their pensions in payment, placing an NI charge on top of their Income tax on the pension receipt! They want to impose more NI on any earnings people add to their pension.

You do not make the young rich by making the older poor. Tackling some poverty in old age has been a success story, so why now go back on it and try to impoverish the prudent?  I agree with them that we can and should do more to help young people with home purchase and with university fees.

Trying to pit one generation against another is unpleasant politics. In many families there is a spirit of mutual help between the generations. Where parents and grandparents have surplus savings they do often help young people to pay their way through education or to acquire their first home.

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Flying high and intelligently to cut noise

I am urging the government and aviation industry to use modern technology to save fuel, cut costs, reduce noise and improve the passenger experience.

The central point of the idea is to eliminate the stacks around busy airports, especially Heathrow near my constituency.

Today when the airport gets busy planes are asked to circulate above the London area, flying around in circles, gradually dropping height until a runway is available.  This increases the amount of  noise on the ground  substantially, increases the time when an accident or failure to the plane risks damage and death on the ground below in heavily developed and congested areas, and subjects passengers to variable delays they were not expecting.

The way to eliminate the stack is to use modern GPS, communications to inbound aircraft and computer runway planning to ensure one plane at a time arrives ready to land without joining a stack. Incoming planes can be given single accurate timings to land, and vary their speed at height over the Atlantic or the continent accordingly so they arrive on time.  Sometimes long haul flights will  be told to slowdown. They can give their passengers a precise flight landing time, and can save fuel as they make slower progress to the airport.  For shorter haul this might be done by keeping the plane on the ground at departure until its flight time coincides with runway availability, or might entail letting it take off with a lower average speed to destination.

Where an unforeseen event requires a landing by a plane without an approved slot this should usually be accommodated at a less busy airport. Obviously life threatening disasters would lead to an override of the system if it is thought using a busy runway could offer the chance of saving lives.

Removing the stack means

Greater certainty about arrival times for passengers

Less fuel use for the planes that are asked to fly slower rather than stacking

Less risk to the populations around busy airports

Less noise from the skies

I am told work is underway to give pilots more warning of landing slots and to slow planes that otherwise would have to join a stack. Lets hope they speed this work up.


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How to negotiate with the EU

As someone who negotiated at 21 Councils of Ministers in the EU, I learned that a country needs to be firm and clear about its intentions, and must decline to accept an unhappy compromise.

As we have seen from the former senior civil servants in the Lords, they have a  very different approach. Their  view is that  because the EU is larger than the UK we just have to ask them what they intend to do and then claim it as our own. I fully accept that Prime Ministers and Ministers are responsible for the way the UK sought to renegotiate its relationship under David Cameron, and again they are responsible under Mrs May and Mr Davis for the current negotiations. It does however look as if the general thrust of civil service advice now as then has similarities to the attitudes the former senior officials express in the House of Lords. Now they are legislators they  have to accept that their views will  be subject to refutation and rejection by those who disagree.

I have never understood why so many senior officials think we need to give in each time to the EU. At every Council I attended there was remorseless pressure to reach an agreement about some new law – always an extension of EU power – when there was no need for a new law and when many interested parties were against it or wanted it changed or watered down. We can see the dangers of the approach in the failed renegotiation conducted by David Cameron. Let us adopt the convention that the PM himself chose this route. We do not need to claim he simply followed civil service advice. What is clear is no-one senior in the civil service warned him that his negotiating stance would not work, or sought to get him to ask for more or to dig in more. If they had I am sure leaks would have told us about it. What he did he did with civil service agreement.

So what did he do wrong? He asked for too little and settled for even less. The method appeared to  be to tour the main capitals of the EU and ask what they might offer us. The answer was a uniform  not much. He then asked for  not much, and was promptly told that was too much! Legitimate requests to control numbers of migrants and to decide who was entitled to UK benefits were turned down. He thought Germany would help him, but Germany saw little need to and felt the UK with an opt out from the Euro and Schengen already had enough special treatment. As a result he was greeted with universal disapproval by the Brexit majority in the country who decided the deal was simply not good enough.

It is  very important that Ministers and the civil service understand why this went wrong and do not do the same again if they want a sensible deal from the EU. We have been told the EU wants money we do not owe them, wants us to continue to obey laws we might wish to amend, and thinks we should “compromise” over freedom of movement. Many Brexit voters see no need to do any of those things. If the EU stays so unhelpful and offers nothing decent for the future relationship the government will find many voters think No Deal preferable to the deal the EU has in  mind. Are there any voices in the civil service close to the PM telling her that I wonder?



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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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