Author: johnredwood

The economic good news keeps flowing. The November CBI survey showed orders for manufacturing in the UK higher than any time since 1988 under Margaret Thatcher.  Retail sales continued to rise in real terms despite all the gloomy forecasts. Large sums have been invested in UK commercial property by overseas investors who believe in it more than UK valuers.

Yesterday we were told that the UK plans to maintain open access for EU businesses coming to the UK under current rules, whether we leave with or without a deal. It makes sense to stress we do not want to put up new barriers. Such a statement if one comes from official sources needs to complement a direct question to the EU negotiators. Given our wish to have no new barriers, will the EU agree to the same? Or if they do want barriers, will they get on  and specify what barriers they intend to place so business can progress  and adjust accordingly? Any such barriers will of course need to be compliant with World Trade rules and international commercial law.

If the EU does decide on barriers I trust the UK government will see that as good reason to spare us paying any so called divorce settlement. From here there should be upside for us, and downside for the Commission if they continue to be unhelpful.

Latest car sales figures in the UK continue the poor trend I forecast, which started in the spring with higher VED, a squeeze on car loans  and with the change of policy towards diesels. As a result diesel car sales are down 16% year to date compared to last year, whilst petrol car sales are only up 3%. However,  around 78% of cars made in the UK are exported and exports are doing well.  Engine production is up 4%.

 

I have been careful not to criticise Conservative MPs personally who voted for Amendment 7, and am not going to change  my stance in this article. I do wish, however, to explore why some MPs vote against the whip and ask is it reasonable to do so in certain circumstances? In the UK system an MP is there to exercise judgement and to hold the government to account, or to be part of the government. He or she should also be conscious that they were voted in because they belonged to a particular party, as well as for their own merits. It is important to look at the general Manifesto of their party when considering their later conduct.

It is true that Brexiteer MPs did often vote against new European laws, larger EU budgets and other increases in EU power under the Coalition. We did so because we took seriously the Conservative party Manifesto of 2010 which we had stood on. It said:

“There should be no further extension of the EU’s power over the UK without the British people’s consent… We will bring back key powers over legal rights, criminal justice and social and employment legislation to the UK”. “The steady and unacceptable intrusion of the EU into almost every aspect of our lives has gone too far”

We took this to mean that we should resist the extra powers which successive new EU inspired  laws and larger budgets brought to the EU. We understood the Lib Dems in government took a pro federalist line which was very different to the our party view in the Manifesto.

So what did the 2017 Manifesto say which might influence the conduct of Conservative MPs today?  It said

“We are leaving the EU. In leaving the EU we have chosen a truly global role for Britain….No deal is better than a bad deal….We will no longer be members of the single market or customs union….the days of Britain making vast annual contributions to the EU will end”

Any individual MP may have stood on a personal Manifesto that modified some part of the national Manifesto. Ken Clarke, for example, has always made clear his opposition to the Referendum and its result. The rest of us did not disagree with the views I have quoted above. In 2010 I included in my personal platform a pledge to work for a referendum on the issue of membership of the EU, which we secured as a policy promise before 2015.

Those Labour Opposition MPs who are seeking to use Parliamentary tactics to delay or derail Brexit are opposing both the decision of UK voters in the referendum and the terms of their own Manifesto in 2017. To defy one expression of the public will is foolish To defy two may prove very damaging to them in a future election.

There has been some confusion created by this slim document that came from the EU after the recent Council meeting. Some seem to think it was an agreed document with the UK, and that we should therefore take its positions as the likely outcome of the negotiations between the UK and the EU. It is, of course, just a statement of a bargaining position by the EU preparatory to the talks on transition  and a future relationship. The UK’s opening position will I assume be rather different!

That became clear in the Prime Minister’s response to questions on her Statement yesterday following the EU Council meeting. She confirmed that

1. Nothing is agreed until everything is agreed

2. The UK will not make a formal offer of money unless and until there is an Agreement on everything else which the UK  Parliament approves

3. There will need to be UK legislation to provide the powers to pay the money and to implement any Agreement

4. The UK is seeking a wide ranging partnership based on good access to the EU single market.

The EU document wants the UK to convert the draft partial Agreement so far into legally  binding promises. It says if there is to be a 2 year transition the UK will have to obey all legal and financial commitments of a member of the EU.  It is coy over what it might offer on trade and access to the single market over and above the access we will have anyway as a WTO partner. It suggests no deal on trade before we have left. It imagines we will spend two years accepting all EU law and decisions, without the benefit any more of a veto over some items and a vote in Council on others.

There would clearly need to be changes to this approach if there is to be any deal the UK could expect Parliament to accept. It remains the case that a zero for zero tariff deal on goods is greatly in the EU’s interest, as is continued similar service access.

Any potential Agreement will be subject to ratification by  both sides. This rightly includes the UK Parliament, as well as the Council and the EU Parliament. The EU will need to understand that a Deal does indeed have to be better than No Deal. No Deal gives us freedom to make our own laws, settle our own borders,sign our own trade deals and spend our own money. A wide ranging partnership could add to that, but only if the price of it does not damage the changes No Deal offers too much.

 

 

The Cabinet this week  debates what kind of a country we wish to be, and how we should be governed once we leave the EU.

The vision of Leave was uplifting. We want to belong to an independent democratic country.

We want to take back control of our laws, our borders and our money.

The people reasserted their sovereignty. They now wish their Parliament to act in their interests. They want the UK Parliament to spend the taxes raised on our priorities. They want the UK Parliament to pass wise and humane laws. They want the UK government to have a confident global vision, acting in the best interests of our country and acting for the wider good.

We did not vote to be some minor state following meekly the EU’s laws and policies. We voted for our country to regain its vote and voice in global bodies. We voted to be friends and trading partners with the EU, but not to be part of its legal system and budgets.

This vision means, as the PM says, leaving the EU and its single market and customs union on 29 March 2019 in accordance with the Treaty.

It means from that date  being able to pursue our own agenda in world councils, and to negotiate our own trade deals and partnerships.

It means seeking the best possible access to the EU’s single market, knowing we can have general access through our membership  of the World Trade Organisation, where the EU also is a member and accepts its rules .

It means being able to amend and improve our laws whether the EU is doing so or not.

It means welcoming EU students, tourists, investors, people coming to jobs with permits, people wishing to live here on their own resources.

It means having our own fair policy for the whole world on access to benefits and work.

It means having our own fishing and farming policies, seeking to rebuild home  output for the home market.

It means spending our money on priorities at home, and on helping those most in  need elsewhere in the world.

It means being a force for the good in the world, using our soft power and military capability to promote peace, free trade, democracy and greater prosperity.

 

I am pleased to see the government does intend to put the departure date into the Withdrawal Bill. It needs to be there to ensure continuity of law on the day we leave, which will be 29 March 2019 according to the Treaty procedure. I accept the addition of the proviso that were the UK to request to stay in for longer and were all 27 to agree Parliament would need to change the date. Parliament could do that anyway. That seems very unlikely.

The next issue is so called Transition, or Implementation. The Prime Minister has always been very clear. She has said we will need an Implementation period, assuming we have an Agreement to implement. She rightly says it would not make a lot of sense of exit on 29 March 2019 going over the WTO arrangements for trade and making other arrangements for issues not covered elsewhere, only to switch systems again a year or two later when the new Agreement with the EU comes into effect.  She has also rightly said this Implementation period should not be longer than needed, and could be of variable time depending on the issues concerned and the complexity of completing the arrangements for the new Agreement.

Were there against her aim and wish to  be no deal because the EU was unreasonable in its approach, there would be  no need for an Implementation period. It  would be best to pass straight to the new arrangements for out without a special partnership on 29 March 2019. The government assures us they are planning for just such a contingency, whilst stressing it is not what they want to happen.

During transition it would be best if the UK were not subject to the ECJ, the freedom of movement provisions and the restrictions on negotiating trade deals. Because we are assured we are leaving on 29 March 2019 none of these will apply unless the UK enacts them into UK law for a period in furtherance of an Agreement with the EU.

The opponents of the government include numerous opposition  MPs and lobbyists who want to slow down or delay Brexit. They see Transition as effectively another two years in the EU, paying our contributions and accepting all old and new laws as if we were still full members, without any voice or vote over what the EU does. This they see as a period for further negotiations over what might happen next. Some of the government’s opponents want to use the next year and the Transition to effectively mirror everything the EU currently requires of us into UK law and into an Agreement which is membership in all but name. This is clearly not the Prime Minister’s view. She repeatedly argues we are leaving the EU, the customs union and the single market. We will take back control of our laws, our borders and our money. Leave voters knew exactly what they were voting for and expect no less.

The issue is now one of timing. Many Leave voters feel they have waited too long already. They can accept waiting until March 2019, but do not want another two years in the EU thereafter. As the government sits down to talk about Implementation it needs to stress three things. One, the issues that do need settling even without a  wider deal can be settled  prior to March 2019. We have unilateral fixes, but agreements would be better. Two, the UK does need to be free to negotiate its own trade deals with others, to put in its own migration policy, and to get on with reforms of fishing, agriculture and the rest from March 2019.  Three, nothing is agreed until everything is agreed. The UK cannot legislate for the draft Agreement so far without having agreement on the wider partnership. The public are not in favour of making large payments to the EU without good reason, or even at all in many cases. The government will need to show a good wide ranging Agreement to persuade people to accept  a generous settlement.

Home defence requires the UK to have sufficient mastery of the Channel and neighbouring seas, and of our airspace, to make invasion impossible or unacceptably costly to any potential enemy. We would normally expect NATO support, but having our own forces in place for any sudden initial attack remains vital.

The UK successfully prevented invasion by the Spanish in 1588, and by the French in the Napoleonic wars. These were achieved by sea power. The resistance to German invasion in the last century required air power and sea power, which were deployed successfully. We nonetheless experienced some shelling and bombing at home in the first world war, and major bomb attacks in the Second World War. The airforce had to deal with fighter and bomber incursions on a grand scale, and to combat the development of missile technology with German flying bombs and rockets at the end of the conflict.

Today we therefore need sufficient sea and air power to act as a deterrent to any potential aggressor. We also need the industrial capability to scale up weapons and ship production were we to find ourselves in a larger conflict. In 1939 the UK was ill prepared for what it had to do, but did manage an impressive scale up of its ships and aircraft production to replace heavy losses and expand the fleets and squadrons. Training enough pilots was a bigger issue than building enough aircraft during the height of the battle of Britain.

Offering assistance to NATO requires the ability to project force away from our home base. This in turn necessitates taskforce capabilities, with air heavy lift and sea delivery to transfer personnel and weapons to the battlefield. The UK in 1914 and in 1939 on both occasions got a small professional army exposed on the continent against superior forces. The death rate in 1914 was very high and led to the need to recruit a massively larger citizens army. In 1940 the retreat from Dunkirk rescued most of our stranded army in uncomfortable surroundings with the loss of large quantities of equipment. The lesson from this is to commit in conjunction with allies in ways which improve the odds of success and reduce the likelihood of disaster from exposing too few people to too large an opposing force.

Being able to help our associated territories and countries needs that same ability to project force at a distance and to marshal sufficient force to resist an invasion or to evict an invader as we did in the Falklands. There is a similar requirement to help the UN.

As an island nation the UK will tend to have more continuous need of maritime and airpower. This can be well used in support of others when we need to intervene overseas. The UK has not tended to have a large army in peacetime, but does have a very professional and effective smaller army. We need a credible professional army for all the roles identified.  This has been massively expanded during global conflicts, especially to intervene on the continent where opposing armies were large and well equipped. Now European countries are democracies and part of NATO the world has  changed for the better

The government has won all but one of the votes on the Bill. The most important vote, the one to approve Clause 1 which repeals the 1972 European Communities Act, passed by 318 to 68, as Labour accepted they needed to allow the repeal to permit Brexit.

On Wednesday Amendment 7 passed against the government’s wishes. The argument was one of detail, not of principle. Both government and its critics accepted that Parliament is back in charge over Brexit. Both accepted that any UK/EU Agreement which might be reached should be voted on in Parliament. If Parliament is content with such an Agreement it will then need primary legislation to bring it into effect.

So why was there a disagreement at all? The opposition did not accept Ministerial assurances, and wanted to write their own text into the Bill to reflect the common understanding. The government offered to produce a compromise at Report stage, but Parliament wanted to get on with it.

Underlying this fairly technical debate was a series of other agendas. The Liberal Democrats openly seek to delay and disrupt Brexit as they wish to reverse the public decision. Many Remain supporting Labour MPs want to slow down and water down Brexit because they do not really accept the judgement of the people. Practically every Labour MP would like to defeat the government, as that is a usual wish of Oppositions. Conservative MPs who voted similarly can best make their own case as to why they did so.

There is now discussion of the government amendment to place the date of exit in the Bill. I hope the government do continue with this amendment, and work to ensure its passage. I recommend it for a reason which ought to appeal to most MPs, whether Remain or Leave voters. We need the date in the Bill to ensure legal continuity. Parliament passed legislation to notify the EU of our withdrawal under Article 50. That Article makes clear we will leave automatically on 29 March 2019, two years from the letter. It is therefore vital that we have in place a proper legal framework for that event.

Labour MPs now say that we might instead request the permission of the other 27 to stay in the EU for longer, to assist the negotiations. It is difficult to see why we would be able to negotiate a good deal on April 1st 2019 that we had not negotiated in the 2 years since we sent the letter. It is important not to hold out the idea of delay to slow down the talks. Nor should we assume that the other 27 would all individually consent to the UK staying in on current terms for a further period to try to get a better deal.

This would be a more difficult vote for Labour MPs to oppose, given that it is central to ensuring legal certainty and confirming EU employment law for example in UK law. Given also the enthusiasm of the government’s critics for Parliamentary democracy, surely our leaving date is worthy of primary legislation.

I have just had to delete a number of these as I do not have time to check them all out.