Author: johnredwood

The Conservative Manifesto for the 2017 election made pledges on the matter of the EU, and has never officially been renounced or amended by the Leader. I and many others stood for election on it and supported the Brexit pledges in it. I did not support the elderly care proposals in the same Manifesto as I made clear before the election. The PM subsequently dumped these.

It might be helpful to remind the PM and others of what the Manifesto said:

“We continue to believe no deal is better than a bad deal”. The Manifesto proposed a Future Partnership Agreement but accepted it was only worth signing if it was a good one. This remains the PM’s stated view.
It also said
“As we leave the EU we will no longer be members of the single market or customs union” This too remains her view, though there is now unwelcome discussion of staying in the Customs Union for longer.
The Manifesto also saw the need for linkage between the EU wish for us to sign a Withdrawal Agreement and the PM’s wish to have a Future Partnership Agreement. “We believe it is necessary to agree the terms of our future partnership alongside the withdrawal, reaching agreement on both within the two years allowed by Article 50”. Here the PM has proceeded to negotiate mainly on the Withdrawal Agreement, making it impossible to agree a Future Partnership Agreement before we leave in March 2019. This surely means we cannot sign the Withdrawal Agreement they propose.

Those who most want us to stay in the EU think the EU is a dreadful organisation. They wrongly say the continent will mount an economic blockade of the UK, stopping us importing medicines and food, to starve us back into membership.

There are many reasons why they cannot do this. It would mean breaking international contracts to supply. It would mean overturning World Trade rules. It would mean contradicting the EU Treaties which require the EU to have friendly relations with neighbouring states and to promote free trade with them. It would mean the EU acquiring new powers to prevent private companies and individuals doing business with UK customers and suppliers.

Let’s take the case of food imports. Food coming through a UK port will be checked and charged customs by UK authorities. They can do so away from the border, and can ensure smooth passage through our ports. Why would they want to suddenly hold up goods that we are importing just fine today through those same ports the day after we leave? Why wouldn’t they levy customs as they levy VAT and Excise today, electronically.

Or let’s take the case of medicines. A continental drug supplier will have the same contract to supply the same drugs on March 30 2019 as on March 29th 2019. The NHS has tested and approved the drugs for us. The company has factory based test facilities with inspection systems that satisfy the NHS today. They will still satisfy the NHS on March 30th 2019.

So why would the supplying company wish to withhold supplies and face a legal challenge from the NHS? Why would a continental port wish to hold up the export of goods for further checks, when these goods have all been produced to EU standards and checked in situ?

Some say the port of Calais will delay our exports going to the continent, demanding more checks at the frontier. If they do then the ports of Rotterdam, Antwerp, Zeebrugge, Ostend and Amsterdam would love to take the business and will not wish to hold them up. Many of the lorries going back to Calais are continental lorries running empty and wanting to pick up a new revenue earning load as soon as possible. Why would the continental port wish to get in their way?

The EU has many powers, but it does not have the power to impose an economic blockade on a friendly European state that happens not to be a member of the EU. The private companies involved all want to keep the business.

I see others are now writing that Stamp Duty revenues have been adversely hit by the imposition of much higher rates, as predicted here. Official figures show Q2 2018 housing Stamp duty revenues down on a year ago, with sharp falls in transaction volumes for dearer homes following the higher tax rates. So why doesn’t the Treasury set rates that increase the revenues instead of hitting them?

Many commentators wrongly assume the EU will impose some kind of economic blockade on the UK once we leave the EU. They are not making any legal provision so to do, and it is difficult to see how they would do it. They cannot break the many outstanding contracts to supply or to import. Were Calais to work a go slow the Belgian and Dutch ports would willingly divert the business and gain market share. The planes will fly on March 30th, and Airbus will still be buying UK made wings in order to meet its customer contracts. The EU has many powers over the UK government, but it has limited powers over importers, exporters and multinational companies when it comes to stopping them doing business. National governments employ the border and customs staffs.

What most commentators then ignore is the big gains we will be able to achieve from repatriating our money. The balance of payments will immediately improve by £12 bn a year as we stop sending net contributions to the EU. We will be able to spend more money on our essential public services, and have some tax cuts. If we spent the full £39bn they are proposing to spend on so called transition on the UK economy over a two year period, that would provide an immediate 2% boost to incomes and output over that time period, all other things being equal.

There is also the question of how much stimulus to the economy we could achieve by setting a different tariff schedule from the EU one that met our own needs. Imposing some tariffs on EU exports to us where we have capacity to make at home could provide a boost on a net basis, given that we import more than we export. Cutting tariffs on products from outside the EU that we cannot make or grow for ourselves would boost our real spending power. I am not going to put a number on this, as it would not be nearly as great as the impact of spending our own money, but it could also be a positive figure.

I am still awaiting a formal reply to my letter proposing the government now publish our tariff schedule for next March. They have told me informally they agree, so will they get on and do it.

The government says it wants a deal. It means by this it wants an all embracing agreement on the future relationship including a free trade deal within it. The Opposition says the government must have an agreement, whilst making it clear it will seek to vote down the kinds of agreement the PM has in mind. All this is an irrelevance. The EU has been clear and consistent throughout. All it is offering is a one sided surrender Agreement or Withdrawal Treaty. Its main aim is to sign the UK up to this to take £39bn off us which they are not entitled to unless the UK is foolish enough to sign such an Agreement. Only if the UK signs up to such a damaging idea will they then discuss the details of a Future Partnership Agreement.

There are several good reasons why the UK must not sign any Withdrawal Agreement before we leave on March 29th 2019. We will leave in accordance with the two laws Parliament has passed to do so, unless Parliament repeals or amends those laws which this government assures us it will not do.

First, the UK will have no bargaining clout at all once we have signed the Withdrawal Agreement. The main thing they want is the money. If we also throw in accepting all their rules and regulations for another 21 months or longer, they have no incentive to move on or to make a decent offer.

Second, we need to spend that money at home on our priorities. That was one of the main reasons many of us voted for Brexit. A government which promised in its Manifesto to implement Brexit and take back control must not give the money away again.

Third, the UK needs to get on with implementing a fishing and farming policy that is good for home production and for our environment. We cannot stay another 21 months or longer in the CAP and CFP, as they are very damaging to us.

Fourth, the UK needs to put in place its own migration and benefits policies, as promised by the government following the Referendum

Fifth, we need to respond positively to the many offers of Free Trade Agreements from other countries, which we could not do if stay locked in the Customs Union.

Those who think there is an Agreement to be had need to come clean and accept that as far as the EU is concerned the only thing on offer before we leave is a penal Withdrawal Agreement. There is nothing in the drat of that Agreement that guarantees something better in a possible Future Partnership Agreement.

As the government has failed to table a free trade agreement during the 2 years 4 months they have so far been negotiating, accepting the EU false sequencing of the talks, there will not be one on offer before March 2019. We must therefore just leave, and then table one the day we leave and see what happens. The reality of us leaving without signing a Withdrawal Agreement is the best way to a Free Trade Agreement in reasonable time. Otherwise the EU will continue delaying and they will be laughing all the way to the bank to pay our large contributions in. There is no cliff edge, and trade will continue after March 29th. It’s more imports than exports, and the UK will not stop the food and medicines coming in to our ports which will by then be completely under our control.

As the EU does not want to do a deal on our future relationship anytime soon the UK must leave in March 2019 without signing the one sided and damaging Withdrawal Agreement they propose. We can then proceed to negotiate a free trade agreement with them if they want to. Many Conservative MPs are making it clear to the government that we will not support legislation seeking to prolong transition, nor will we support 21 months transition and large payments for no good reason. So far there is no sign of any deal better than just leaving. Extending our period under their control would take us into another 7 year spending period where the EU would not doubt want even more money from us.

I am still getting complaints about late and cancelled trains. I was sorry to see how many people were left stranded by a failure of the overhead power system on Great Western yesterday. Network Rail has decided to spend a lot of money on changing over to overhead electrical current to power the trains, but this leaves the system more vulnerable to accidents and to adverse weather doing damage to the power supply, with knock on effects to many trains.

My own recent experiences reinforces the view that there are problems.

I went to Yorkshire to speak two weeks ago, and to Cornwall last week. All four trains were around half an hour late. Most of the delays seemed to come from Network Rail issues, the fully nationalised part of the railway.

The train to Yorkshire was delayed by half an hour at Kings Cross owing to an unexplained incident to the north of London which delayed all Kings Cross departures. The train from Reading to Cornwall was delayed by a tree on the line. The train back to London from Yorkshire was delayed by slow trains ahead, with Network Rail unable to provide track capacity for a faster train. The train from Cornwall to Reading also fell foul of slower trains as well as service delays owing to quite high winds.

Why can’t Network put in more passing places? Why can’t they accelerate digital signalling to provide more train paths and instant re routing where possible and necessary?

It  is true some of the train companies also have problems. GWR have recently  acquired expensive new Hitachi trains to adapt to an expensive and partial electrification by Network Rail. My recent journey had no reservations on seats. I was told by two staff members that the GWR and Hitachi seat systems don’t work together. The new trains have to have several heavy diesel engines to generate power to run on the lines that are not electrified. This entails a double energy loss, once on power generation and once from the electric motors. This loss is presumably bigger than the double loss on using power station power from electric overheads where available, as the on board generators are likely to be less efficient than a large power station. The need for two forms of energy to turn the electric motors is an added burden on the train operating companies from the actions of Network Rail. As much of the power station power comes from fossil fuels and all the diesel generator power comes from fossil fuel it is difficult to see the environmental win from this development.

GWR also often runs two five car train sets joined together which makes an odd train with no ability to walk from the front five to the back five whilst staying on the train. Passengers complain that the seats are less comfortable than the 125 diesels they are replacing.