Author: johnredwood

I would like to relaunch today a couple of  ideas I have talked about before to  improve the service and assist with efficiency.

The NHS issues large number of items to help people with their injuries and to assist their mobility. Many of these items like walking frames, crutches, wheelchairs, and various supports could be reused after a deep clean and checking, but are often left with the patient or the patient’s family. The  NHS could appoint contractors who would pick these items up from the patient or from the hospital after use, carry out the checks, and return them to the NHS for another patient. This should be cheaper than buying new every time, removes the costs of dumping them as waste, and would be a visible contribution to recycling.

The NHS also uses a large quantity of other supplies every day. There are two issues about this that might be amenable to improved handling. The first is to make more use of suppliers willingness these days to supply just in time, delivering to  the ward or surgery that needs the item. Parts of the NHS still have a tendency to double and treble bank stocks, with a central stock, a hospital stock and a ward stock. The more you stock the more chance there is of damage or of things going out of date. It also takes up  valuable space. Some pharma  products need fridge storage.

The second is to have good dispensing of the product where it is needed, with guidance to busy medical staff as to which they need. Modern stock control and access systems allow precision delivery of the items needed related to a specific task. These systems also keep check of supplies and can ensure re-ordering in good time so there is also back up. Making supplies available to people discharged from hospital could also benefit from better control of stock, so people get what they need in a timely way, but are not burdened with large deliveries which turn out to be in excess of their needs.

If you look at the ONS figures for UK growth you discover that the UK grew by around two thirds in the two decades before we  joined the EEC, but grew by only around  a half in the two decades that followed.  The growth rate then declined a little more for the two decades from 1992 when they “completed” the single market.

Those who seem to think leaving the single market will cause growth to slow need to explain why there was no visible boost to growth when we joined. Indeed, the completion of the single market included the worst period of the Exchange Rate Mechanism, a crucial part then of their construction of a single market, which pushed us into a nasty recession.

The latest leaked reports about slower future growth have all the reliability of those Treasury forecasts of a recession in the winter of 2016-17 which proved to be so wrong.

I am neither a US voter nor a Trump supporter, as I adhere to the view that it is best to stay out of other democratic country’s elections. His visit to Davos was a surprise to many, given his previous views about such gatherings. His visit transformed the event into a highly newsworthy occasion. We read that the many members of the global elite and the media meeting there, mainly people who regularly express anti Trump views, were reduced to following him, seeking audience with him, trying to listen to  him, and above all reporting him. So how did he do?

The President took the gathering seriously and led a large US delegation. He stuck to his mission, to make America great again. He stuck to his definition of that mission, which is to boost output, jobs and prosperity in the USA. He told the world the USA is open for business, and turned it into a global message by saying America first does not mean America alone.

Mr Trump made this trip  now he has something to show for his first year in office. His economic policy has achieved a major simplification and reduction of taxes in the USA. Already a number of large companies have announced they will step up investments in the USA and pay their employees there more as a result.

His relaxation of some banking rules will help extend more credit to those wanting to invest or to bring forward major purchases which they can afford with a loan. His energy policy is boosting US output of oil and gas. The USA should overtake Saudi Arabia soon as the largest producer in the world. It looks as if US growth will accelerate this year to above 3%.

He repeated that he wants fair as well as free trade. The USA under Obama used to impose penal tariffs on imports that they thought undercut through subsidy or cheating. Mr Trump announced similar action against solar panels and some washing machines. He is not about to wreck world trade or to seek to tear up unilaterally and illegally the  trade treaties the USA  has entered. He showed a continuing willingness to talk about a Free Trade Agreement with the UK. The UK government should press on with the detailed work to bring that about.

I saw this film on Saturday. It was a moving reminder of how dire the UK position was in 1940, and how brave were the people and their new Prime Minister in deciding to fight on against the odds.

The film portrayed a very human Churchill. They saw him as a man who drank too much, was often tough and thoughtless towards his staff, and who was capable of bad misjudgements. They also captured the strength of mind and character which grasped both how bad the position was, and how despite that knew ultimate victory was possible. He had consistently warned of the dangers from Germany during the 1930’s and understood instinctively that you could not reach a friendly agreement with an evil dictator.

The UK establishment had once again let the country down. It had plunged it into a war with a small and insufficiently equipped army which they put at risk on the continent, just as they had done in 1914. As Churchill assumed office they told him the whole army was likely to be killed or forced to surrender. Having accomplished this dreadful feat, they switched to thinking  facing defeat would be a good time to sue for peace. They thought Hitler might offer an enfeebled UK with no army a good deal, when the history  of the previous few years showed you could not trust his word and should expect him to continue  conquering and occupying countries including our own.

Churchill agonised over the pressures on him to seek a negotiated peace, before he realised that the  public would back his  belief  that the only course was to fight for our freedom. Many of us are so grateful that Churchill and our parents and grandparents decided to sacrifice six years of their lives and to risk untimely death  to driving the hatred and violence out of the world by defeating its  authors.The film got across so well the common sense and determination of the people, in contrast to the rash stupidity of some of the  establishment. It used Churchill s own wonderful words to show he spoke for the majority in a way which defeated or disarmed his many critics amongst the senior politicians and officials.

I am amazed at how many people want to talk about trade and little else. Many of them have never sold an export in their lives, have never managed complex supply chains, and clearly have not read how the WTO works.

I have led large industrial companies in the past and never experienced difficulties with importing materials and components from non EU as well as from EU countries. I found it easier to sell the final products into non EU countries than into France and Germany. I was always using a mixed complex supply chain from non EU as well as EU sources.

I  also handled  Minister of Trade matters  in the Commons when the Minister of State for Trade was in the Lords and I was a DTI Minister. I worked closely with Peter Lilley for a bit, who was the last UK Secretary of State to help negotiate a trade round before the EU took it fully over from us.

So let me just clarify a few points.

The first is the only worthwhile discussions to  be had on trade with the EU will be those the UK holds with the EU itself. It would of course be easy if both sides were willing to design a trade system for UK/EU trade which was better than WTO most favoured nation status which is what we will have without agreement. Most of this debate about trade is a negotiation with ourselves, which gets us nowhere. The EU has deliberately wasted a year and a half since the vote by refusing to discuss trade.

The second is we know exactly how to trade under mfn status at WTO because it is what we do today in a number of cases. You do not need a bespoke trade agreement with another country before you can trade!

The third is whatever happens trade will continue . There are strict limits to how much damage government including the EU government can do when there are willing buyers and sellers of each other’s goods. As a WTO member the EU has to obey their rules against tariffs and barriers other than those permitted. International law and the law of contract are also there to protect buyers and sellers to provide a framework that stops governments as well as others from impeding trade.

Most now accept that outside agriculture where we have a massive deficit with the EU most products have low or no tariffs and services are tariff free under the WTO scheme. Cars at 10% are relatively high but again we have a huge deficit in cars. Non tariff barriers are also limited by law and rules. We will benefit from the Facilitation of Trade Agreement which the WTO brought in last year , and from the important WTO rule that the EU cannot impose something against UK trade that it does not also impose against US and  Chinese trade as well. In certain cases like aviation you also need other agreements – e.g. reciprocal landing rights. The good news is France and Germany, and of course Spain that owns our national airline , have no wish to get their planes banned from London.

One of the advantages of leaving the EU in March 2019 is the ability it should bring to change policies we do not like. Many of us wish to see a new borders policy, a new fishing policy, a new agriculture policy, and the reduction of taxes the EU insists on where we do not agree. Because we wish to get on with improving these areas we do not want a two year so called Transitional period  if that means we cannot take control of our laws, borders and money.

I will look again at these areas in turn to see what the opportunities are, and to stress how undesirable it would be to agree to any transition which stopped us getting on with making these changes soon.

Let us take borders for starters. I wish to see a White Paper soon setting out the options and expressing a government preference on how we should control our borders and who we should invite in after March 29 2019.

I want a policy which is fair and even handed between people coming from the EU and from the rest of the world. We should move away from a priority system for EU citizens. I wish to see a policy which allows free movement of tourists, short term visitors, investors and  people with the means to support themselves. I want to allow in people with skills and qualifications we need, using a visa permit system. I want our approved universities and Colleges to recruit as many overseas students as they wish.

The policy should be enforced by a combination of work permits and qualifications for benefit eligibility.  That way we can have an open border as at present, whilst reducing the numbers of people coming here to claim benefits and to take lower paid jobs.

Instead of asking for a transition period prior to any Agreement the UK should ask the EU do they want a comprehensive free trade Agreement with us or not. If no, we should just get on and leave in March 2019 under the WTO option. We would pay them nothing and be able to put in our own border, fishing and other policies immediately.

If the answer is yes then set a deadline to sort it out this year and see what else we might agree to in return. Nothing is agreed until everything is agreed. There is no point in paying them lots of money for a worse deal than the WTO option. Nor should they stop us getting on with negotiating free trade agreements with others over the next year to be ready for April 2019.

The pound fell from $1.71 in July 2014 to a low of $1.46 in April 2015, well before a referendum was planned or thought at all likely. There was not a lot of fuss or comment about that.

The pound fell from around $1.45 before the vote in June 2016, to $1.29 after the vote. It fell again to a low of $1.21 in response to the Bank of England’s decision to cut interest rates and have additional Quantitative easing in the Autumn of 2016. Many commentators and many parts of the media made a lot of this fall, and claimed that it would lead to a rapid and damaging inflation. The entire decline of the pound was attributed to Brexit, though as the numbers show much of the decline of the pound had occurred before Brexit was in contemplation and  before the City thought Brexit would win.

Since the low, the pound has now risen to $1.43, more or less back to where it was before the Brexit vote, assisted by the restoration of the interest rate cut by the Bank of England, and to the ending again of Quantitative easing. There has been little media fuss about this, and no commentary saying that inflation should now collapse as the pound has risen by 19% from the low against the dollar. It has also risen against the yen and on the trade weighted.

Isn’t it about time the media invited back all those commentators who got it so wrong again? They were given plenty of airtime to talk the pound down and tell us it would fall further. Instead it went back up.  They went on to argue that a falling pound meant higher inflation as price rises came through. At the time I said they were exaggerating the impact of the pound on shop prices, that the pound could go up as well as down, and that apart from the immediate aftermath of the vote the pound would usually be moved by forces other than the Brexit vote. So it has proved.

Do I think inflation will now fall sharply from the strong rise  in the pound? No, but then I didn’t claim inflation would soar when the pound went the other way. Those who said the pound was the main force on UK inflation have some explaining to do. Or alternatively why don’t they come back on the media and tell us how wonderful it is going to be as prices sink on the back of a stronger currency?

UK Inflation has been more affected by energy prices which have been rising, and by taxes and public sector charges than by movements in import prices.