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I have not changed my view on how we should leave and want us to get on with it. I am currently planning a letter to the Attorney General to explain again how the Withdrawal Agreement stops us taking back control to implement Brexit.
The Fed, the Bank of England and some other leading Central Banks set interest rates based on the idea that if unemployment falls too far there will be inflationary pressures on wages. This requires them to put up interest rates and deter more credit being advanced, to reduce the pressure of excess demand in the economy.
In the last century it was the case that the USA, UK and other leading economies were prone to wage inflation when potential demanded exceeded potential supply and when unemployment fell to a low level. The so called Phillips curve illustrated this trade off. Whilst there were monetarist economists who preferred a money based explanation of inflation, and other economists who pointed to the role of external shocks and commodity price trends in inflation, the mainstream view based on capacity and employment was bedded into the forecasts and intellectual framework for rate setting.
I have long queried the idea of national capacity linked only to employment in an increasingly global market. We have seen how economies capable of creating many jobs and expanding capacity invite in large amounts of migrant labour, as in the USA, UK and Germany, reducing the upwards pressures on wages. We have seen how the US and UK simply import a lot more goods and services when their domestic capacity is insufficient to meet demand, tapping into vast numbers of unemployed and underemployed people elsewhere in the world capable of doing the work. There is also the option of putting more capital to work with labour saving investment.
The Governor of the Bank of England has acknowledged this in a speech which said the Phillips curve is now very flat – in other words there is not much of an inflation threat from low official unemployment figures. The Fed has recently announced a major rethink of its approach, and has stated that in the USA now the curve is also fairly flat. In the USA employment rates are still low at a stated 60.6% of the working age population, and as the economy improves more people find work who were not registered as unemployed. There are also strong migrant flows into the country to take up new jobs. Low unemployment is not a good guide to wage growth.
So what is a better guide for a Central Bank seeking to set rates? I prefer them to consider money figures more, where the figures show too much tightness in the UK and a modest rate of expansion in the USA that should not lead to an unsustainable rise in inflation. Of course they need to listen to markets and watch the trends in output and prices generally as important guides as well. The markets saved us from too much tightening in the USA late last year. What will it take for the UK authorities to follow a more pro growth policy? Given the strict fiscal squeeze, there is an even better case for a looser money policy in the UK. The US is lightening up the money supply even though the government has embarked on a big fiscal relaxation as well.
The government is seeking to delay our exit until October 31 by a negative resolution Statutory Instrument. This is a law which they can make without needing Parliamentary approval first, subject only to a vote in Parliament after the event if Parliament insists on one. I have put my name to the list of those wanting this to be debated and voted on.
My Parliamentary office will be open today and next week as usual, closing for Good Friday and Bank holiday Monday only for Easter.
I will be mainly in the constituency for the two week-ends and next week, and will provide my usual 7 day a week response service to constituents with emails and urgent problems.
I have made my views clear on how the UK should now proceed to leave the EU, and will write at greater length about that next week again.
Thames Valley police budget will be £420 million in 2019-20, an increase of £28.3 m or 7.3% on 2018-19. Some of this increase is needed to pay for the increased costs of police pensions.
The new budget will allow increased spending to improve call handling and responses to public reports. More officers will be recruited to give more visible presence in our local communities. More resource will be put into tackling fraud and cyber crime. Data handling and intelligence processing and transfer will also attract more cash.
The Police and Crime Commissioner has developed victim support, and runs a Community Safety fund to offer more money to tackle priority problems.
The Thames Valley force has been graded “Outstanding” in the Police efficiency, effectiveness and legitimacy review
We are living through a world manufacturing recession. The Fed, Bank of England, Bank of China and the European Central Bank all tightened policy too much in the second half of last year. They spooked the markets and hit borrowing for investment. Several governments, led by the UK, hit their car markets hard with higher taxes, fewer car loans and an attack on diesels.
The Fed has now changed policy. It has ended its rate rises and slashed its Quantitative tightening programme. It has now announced a rethink of its whole approach to rate setting and balance sheet management.The ECB has been slow to respond, ending its Quantitative easing just in time for the industrial collapse. The Bank of China has set out new ways of getting credit into new sectors and ventures to offset the slowdown its balance sheet clean up of commercial banks has triggered. Only the Bank of England has failed to respond despite tightening substantially with its advice to reduce car loans and mortgages, and two rate rises from the low.
We should avoid a global advanced country general recession. Inflation remains very subdued with plenty of spare capacity and competitive forces. The Bank of England should be more attentive to the state of the real economy and get more into line with action being taken to avoid a downturn. The UK needs to end its attack on the car industry.
The government has rightly signed a special covenant with armed forces personnel to look after their interests. They have no right to strike, and can be put in harms way by their government employer, so they deserve special attention and consideration. There is widespread cross party support for this approach.
I have been talking to MP colleagues this week about what more the government could do to improve the reality of the Covenant. There are various issues affecting service personnel lives where improvements can and should be made.
The first is housing. There is a home purchase scheme, but it does not work for many Ministry of Defence employees. There are cases of individuals ending up homeless on departing the armed forces. They have not saved for a deposit or amassed some equity during their time in the forces. Quite often local Councils give them little priority for rented accommodation as they have been mobile during their service careers, not establishing entitlement in any particular location.
Part of the answer to this is to go over to a home base approach for all service personnel, so there is a place they return to regularly between tours of duty. More imaginative and helpful schemes to encourage home purchase, or to provide surrogates for home purchase would ensure on leaving the forces the individual either owned a home or had money for deposit on a home of their own. My proposals include acquiring the room or flat on the base that the MOD owns for the duration of their service or use, and agreeing to sell it back at an indexed price to the MOD on departure. This in normal market conditions would give the individual a deposit sum from the price gains.
The second is employment for the spouse or partner of the uniformed employee. Where there is no home base and frequent moves to undertake new assignments, the spouse or partner can have their careers disrupted or destroyed by the changes.The home base idea would help with this problem, allowing more stability for the family.
The third is the impact on the education of the children. Frequent changes of school can be disruptive to someone’s learning, as they have to adapt to different approaches and curricula. It also breaks friendships and creates more unsettled feelings. Again settling on a home base approach could be of considerable benefit.
I have put ideas into the current review on these issues, and would be happy to add other points if constituents want to join in these conversations.
The decision to delay Brexit is a bad one. The Withdrawal Agreement is not Brexit and is not acceptable to most UK voters. The WA is a long and expensive delay leaving the UK in a very weak position.
I have taken up the issue of how many GPs we have in the area and whether we need more to cope with demand for surgery appointments.
The local NHS tells me that “recruitment of GPs is difficult nationally with high retirement rates, less GPs willing to take on partnership roles and many GPs now choosing to work part time.” They assure me they can fill vacancies though it sometimes takes time to do so. They also stress that they are recruiting more nurse practitioners, pharmacists, paramedics and physicians’ assistants. There is more money for these roles under the new GP contract.
The Clinical Commissioning Group for our area has now commissioned evening and week-end provision in accordance with the new national policy to be more flexible for patients.
We have needs to cater for growth in patient numbers and to provide a flexible service for people in employment or with family responsibilities which limit the times of appointment they can accept. I wish this to be fully taken into account. The government is providing substantial new money for the NHS, so I wish to see local service improvements from the extra cash.
Last night just 133 Conservative MPs supported a motion to delay our exit beyond this week. 98 of us voted against and another 77 abstained. Those unwilling to vote for the delay included 4 Cabinet Ministers and senior whips! They were given permission to miss the vote, presumably because they had no wish to vote for it. Many of those abstaining were clearly in and around the Commons chamber, so they could have voted if they wished. When we had a free vote on delay 188 Conservative MPs voted against and 12 abstained, despite the Prime Minister leading the forces for delay in the division lobbies. In the country opposition to delay within the party is even greater.
The Prime Minister has not made a good case for delay. She has enjoyed almost three years in office to reach an Agreement with the EU that the Conservative party with its allies the DUP can support, or to leave without a Withdrawal Agreement. She always promised us No deal was better than a bad deal. The only sensible answer now is for her to lead us out with no Withdrawal Agreement this week. Why should the EU believe she can get agreement to their Withdrawal Agreement in the next few weeks when she has failed to do so ever since the Chequers policy? That policy about turn led to so much anger and so many resignations from the government and Conservative party senior posts and should lead her to drop it and get on with leaving.