Author: johnredwood

I heard a passionate debate on Any Questions and Any Answers this week on the latest proposal from some private schools that they could provide free places to lower income pupils if the state paid them the average sum the state pays public sector schools for their places.

Those against argued that the fee paying schools do well out of their charitable status, and should not be given additional state cash. They saw the fee paying schools as seeking talent and money from the state sector to improve their own budgets and talent pools. They argued that everyone needing state support should use the comprehensive places that can be made available, though most fell short of demanding the closure of all fee charging schools for the rich.

Those who favoured the move thought it was a win win. Able pupils from low income backgrounds could receive excellent academic educations in the fee paying sector alongside children from rich parents. The school would subsidise the place, and the state would be spared any above average cost and additional capital cost of providing more places by putting pupils into private sector settings that already have their buildings and equipment. This could represent a decent saving in parts of the country needing to expand provision.

I myself won a scholarship providing a free place at a Direct Grant school. I also had the offer of a grammar school place, so either way would have received an academic education capable of helping me to university. It worked for me, and I saw no harm in it at the time. I would be interested in your thoughts on this suggestion from some fee charging schools.

Some businesses claim they cannot operate unless they can invite in a large number of people from abroad to do jobs for low pay. This can be a dear option for the country as a whole. It also can get in the way of our general aims, to get real pay up, and to get more people into work who are already legally settled here.

When I have been involved with businesses I have usually found it best to pay people well and to give them any training and assistance they need to work smarter. Good executives and directors work to help the company strive for higher quality, better productivity and higher levels of customer satisfaction. That way the company can grow its revenues and afford to pay employees decent pay. A good company values its brand as a good employer as well as its brand as a good supplier. Letting people work smarter means you can achieve what you need to do with without having to recruit so many extra people as you grow. It means you can employ on better pay levels, with all sharing the benefits of higher productivity. Working smarter means putting the right machine and computer power behind the team of people working in the business, seeking to make their jobs both easier and more satisfying whilst increasing output and raising quality. Getting things right first time, proofing systems against error and accident wherever possible, and striving for continuous improvement are well known in modern industry and can be adapted to modern services.

Some say areas like fruit picking will always need plenty of cheap labour to ensure sensibly priced fruit in our shops. Technology is now well advanced with vacuum pickers and other methods to allow machines to pick fruit. There are also better techniques for growing and shaping trees, fruit bushes and strawberry plants to make picking much easier or to allow machine picking. Agriculture has mechanised corn and wheat production and will not set about mechanising fruit and market gardening activity more.

The problem with more cheap labour carrying out tasks with insufficient training and investment to back up the staff is it also places many extra costs on taxpayers. Every time we invite in additional people to take low paid jobs we place an aggregate larger burden on the taxpayers. The studies which show new low paid migrants adding to national income ignore the need to provide GP surgeries, hospital capacity, school places for children, extra social housing or rent subsidy, more road space and train capacity. We want those we welcome here to live to decent standards, so we need to make substantial investments in extra public service provision. If we invite in a reasonable number each year some can be absorbed without building whole new schools, hospitals surgeries and roads. If we carry on inviting in 335,000 additional people every year the investment we need to make in public capital is great. Each new arrival who needs a school place for a child will need around £5000 a year for the running costs of the school place anyway, but if you need to build a new school then the extra capital cost is on top and substantial, at around £20,000.

This year the government will spend £11,763 per person, or £40,958 for every family in the UK. The Taxpayers Alliance have been going through the government figures and bringing out some of the highlights. Amidst all the debate about rates of change in financial provision, arguments about whether a cash increase is still a real cut, and an overlay of debate about austerity, we often lose sight of just how much money and resource the public sector commands.

Each one of us has an average state debt of £24,444 and a share of £22,754 in the public sector pension liabilities. This does not of course include future state pension payments, which will fall to be paid for from future tax revenues. Total spending this year does include this year’s pension payments as they are met on a pay as you go basis.

England receives less spending per head than the other three devolved countries and provinces in the Union. (2014-15 figures, two years earlier than the other figures). The lowest spending is in South East England at £7756 per person. That is 69.8% of the Northern Ireland figure, 74.7% of the Scottish figure and 78.3% of the Welsh figure. No English region gets as much as Wales, which in turn gets less than Scotland.

The largest individual budgets within the totals are welfare and the NHS, which between them make up half the total spend.

It reminds us, as the TPA wishes to do, that a great deal of progress can be made by spending the money more wisely and by lifting productivity in the public sector as part of the campaign to improve productivity generally in the economy. It also reminds us that more can and will be done to get more people into work and into better paid jobs, to whittle away the need for welfare reliance.

So many critics of Brexit in the UK have dominated the debate, that it has been mainly about the UK’s position. More interesting and more useful for us as a country is to explore what is and should be the EU’s position? How easy will it be for the 27 to agree one? How quickly will tensions emerge between the member states who need goodwill and trade with the UK, and some in the Commission who want to make a political point that no country should be allowed to leave?

The aim of the EU is pretty clear. In their make believe world they want to try to make the terms of exit difficult so the Uk suffers on exit. There is of course no way they can do that. All they can do is damage the member states who remain. Their problem is the UK gets such a poor deal out of the EU that leaving even without an agreement is much better than staying in. On leaving we save our big net contributions, we get back control of our own laws, and will be the winners from the modest tariffs on our exports against the much bigger tariffs on their sales to the Uk under WTO rules. We will be free to lower tariffs with the rest of the world, to buy cheaper food from emerging market countries helping them and us, and be free to regulate and promote business as we see fit.

The EU of course talks in a contradictory way about Brexit. It both argues it is better to stay in, and argues if we leave more might want to leave! So which is it EU? Is it so good in the EU that any other country would be mad to leave? Or is it so bad that once we have dug the escape tunnel others will want to use it? One of these propositions must be wrong, or possibly both. Their cruel and unpleasant rhetoric about punishment, like their many threats to us all the time we were in the EU, makes it less easy for them to strike a good deal for their member states.

The member states are altogether friendlier and more circumspect. No member state government has said it wishes to impose WTO levels of tariff on our exports to them, because they know it will be more damaging to their exporters. They not only sell us more in total than we sell them, but the rest of the EU sells much more of the agricultural goods and cars that can attract higher tariffs, whilst we sell many goods and services that remain tariff free under WTO rules. Most of them understand that their many exporters to the UK do not want the EU and their government getting in the way of an important trade.

Of course the EU would like us to make contributions into the budget, but no other country outside the EU and EEA does and there is no need to do so to trade with them. If they want us to contribute to export to them why not they pay to export to us? Of course they would like us to continue to generate lots of jobs for their unemployed workers. That is something we wish to limit. Of course they would rather we accepted all the same laws and rules as them. There is no need for us to do so for all the trade we do at home and with the rest of the world.

I want us to be friendly and generous in our offer for after exit. We should tell them we want to stay friends, to maximise our mutual trade, and carry on without tariffs and new barriers. They also need to know there is no way we can or should offer to let them control our migration policy, or to carry on placing levies on our budget. I suspect the member states will welcome our friendly and helpful approach, but if they don’t it will still be good news for us.

As I have explained before, Parliament could always debate and vote on leaving the EU any time it liked. Yesterday the Opposition got round to tabling a motion on Article 50 and we had another all day debate on the EU as we have several times since the referendum in government time.

The Commons voted by a majority of 373 to send a letter before the end of March, as I assumed it would. Only the SNP and LIb Dems voted in any numbers against.

I trust the Supreme Court will now understand two things. One is Parliament can and does debate and vote on what it wishes. Two, there is a very large majority for carrying out the wishes of the UK voters and sending the notification of our departure
The Supreme Court case is even more of an irrelevance after yesterday.

Mrs Merkel over the last year let in around 1 million economic migrants and refugees. Many Germans disagreed, and social and political tensions followed.

This week Mrs Merkel says that was a mistake, and wishes to ban the burka if the law allows. So she has shifted from a very liberal position to picking on a group of people and forcing them to change their clothes.

Mrs Merkel, the architect of much of the EU’s troubles over open borders, and of the EU/Turkey Agreement, now wants to look like the anti immigrant parties which she normally condemns. I doubt many will believe her or warm to this new policy. Her liberal supporters will be appalled by what she has said. Those who want proper control of borders will see this gesture politics is no substitute for proper controls of numbers of economic migrants. They will also doubt she will ban the burka, given the caveat. It looks like a desperate move.

Let me quote something I agree with:

Since the crash of 2008-9 “The proportion of people in work moved to its highest level on record, nominal wages are up 17%, real GDP is up 15% and the UK has consistently been one of the strongest economies in the G7. All major income groups have seen their income and wealth rise”.

That was the Governor of the Bank of England.

Here’s something else he said that I also agree with: “Growth appears to have been materially better than we had expected in the summer. Households appear to be looking through the Brexit-related uncertainties at present. For them, signs of an economic slowdown are notable by their absence. Perceptions of job security remain strong. Wages are growing at around the same modest pace as at the start of the year. Credit is available and competitive. Confidence is solid”.

In other words, the Bank now agrees that growth in 2016 is good and unaffected by the referendum.
There is a residual of the Bank’s pessimism of the summer in the lecture. He now says that he still expects inflation to come through and cut real incomes, which could turn off what so far is a consumer led growth rate and recovery. He bases this on the fall in the pound, which he did predict. He acknowledged in the lecture that the pound is up 6% since early November, so the pressure is abating. The Bank needs to research why retail prices were down 0.7% in the year to October, when much of the fall in the pound occurred in 2015 and early 2016. it looks as if highly competitive world markets for goods and highly competitive retailers with too much shop space in the UK are keeping prices down despite the long term fall in the pound over the last eighteen months. It looks as if some price rises may come through in the new year, but it is also the case there is a strong competitive headwind against bad ones.

The Roscoe lecture was clearly the Governor’s wish to be in line with present government policy and with the run of good figures about the economy in recent months. He praised the decision to relax the fiscal constraints a bit. He agrees that a range of measures is needed to boost productivity as the Chancellor has advocated, which is the way to higher real wages. The most notable omission from the lecture was any mention of high levels of migration, which must be having an impact on wages and the labour market, and is having an impact on public attitudes.

In the very week that the Supreme Court solemnly considers a case about whether Parliament should debate and vote on an Article 5o letter or not, Parliament holds a debate and a vote on just that topic.

I have explained endlessly to those interested that Parliament can any time debate and discuss Brexit. Indeed, it has chosen to do so on many occasions since the vote, despite the lack of any news as the government awaits the moment to start the process and to announce its negotiating aims. It has not yet had a vote on the procedure for the reason the Opposition did not want one and did not table a suitable motion to hold one.

Treaty issues have long been left to Ministerial prerogative by Parliament for the simple reason that you cannot handle a negotiation successfully with 650 different voices all setting out a position. As this week’s Opposition motion states, it does not help for Parliament to demand that government reveal its bargaining and fall back positions. When Ministers are negotiating Treaties Parliament debates and votes as it sees fit, but leaves all the work and the detail to Ministers. Parliament does not usually want to undermine the national interest by demanding information helpful to those we are negotiating with.

Throughout our time in the EEC/EU Ministers have regularly used prerogative powers to bind us into EU decisions, regulations and judgements which Parliament has been unable to vote on or prevent. Many of these have adversely affected our right to be a sovereign and free people. It was curious that the High Court of England thought that was acceptable yet using the same prerogative powers to bring the right to self government back was not.

I hope the Judges understand three basic points. The first is the referendum was the decision. Government made that clear in Parliament and in a leaflet to all voting households. The second is Parliament can debate Brexit any time it likes, and has done so extensively already. The third is Parliament needs to make up its own mind on what it wants to vote on, and is free to do so.There can be plenty of votes on the Repeal Bill.

The main method of taking the UK out of the EU is the repeal of the European Communities Act 1972. This will be a thorough Parliamentary process, ensuring MPs are fully engaged.