Author: johnredwood

One of the reasons so many voters are unimpressed by Mr Cameron’s renegotiation is he did not stand up to Mrs Merkel.

It looks as if he asked her advice and was told to ask for very little. His demands fell far short of the requirements set out in the Bloomberg speech, and did not include gaining control of border policy with the rest of the EU. She then gave him even less than the modest demands he made.

Much of it was presented as the UK negotiating with Germany, just as the Greek crisis is usually presented as Greece negotiating with Germany, and just as the Turkish Agreement and migration arguments are usually led by Germany. Whilst some of this is media simplification, much of it is true. Germany is the lead country by a long way. It is German policy which dominates the economic policies of the Euro area, and German policy which has dominated the border issues. It will be thus, because Germany runs a massive surplus not just with us but with most other countries in the EU and has become the paymaster of the Eurozone.

The problem is German policy is proving damaging and destabilising to much of Europe. Germany’s insistence on austerity policies for the southern and western countries of the Eurozone left them deep in recession for much of the last eight years, and with high unemployment in most places.

It has destroyed the life chances of many young people, leaving as many as half of all young people of working age without a job in the troubled parts of the zone. Germany will not accept the need for larger transfers of money around the zone that are normal in mature single country currency unions, whilst Greece, Portugal, Spain and Italy are unable to make themselves as competitive as Germany and sell enough back to Germany to right the imbalances. They cannot devalue as they used to, and wage cuts so far have not succeeded in removing their deficits as Germany suggests should happen.

German migration policy has sent conflicting signals. First Germany offered a welcome which brought many more migrants into the EU, then Germany bowed to political pressures and proposed a less welcoming policy. Various countries decided to ignore the Schengen rules and impose new fences and walls at their borders, inviting migrants to find new and more dangerous or longer routes into the EU.

It is important to understand Germany’s view of the evolution of the EU. She sees the Euro and the common borders as central features and thinks all countries should join them in due course.She sees these main policies as part of the so called single market, which is much more than a trade arrangement as far as Germany is concerned. Germany believes that if more power over weaker countries is exercised from Brussels they will become stronger and will not need more transfers from German taxpayers.

In the meantime Germany is apprehensive about the Euro 600 bn of accumulated surplus she holds at the ECB matched by the accumulated deficits of Greece, Spain, Italy and Portugal. The Greek part of that is unlikely to be repaid in full and on time, and that could set a bad precedent.

Whilst in more recent months there has been some recovery in Spain, the Eurozone still struggles. None of this is stable. The UK leaving will help, as the last thing the EU needs at the moment is a semi detached member taking attention away from the big issues that the main EU centred on the Euro and Schengen need to tackle. The UK will be a good European if we leave and let them sort it out without the complication of a large non member of parts of the scheme always wanting something different.

I can’t see why we would want to stay in a German led Europe where there have to be bigger transfers to the poorer areas.

Last night at Eurovision I read we were not quite alone – we managed 24th out of 26th with a small points tally.
I noted, however, there were no points from France, Germany, Spain and Italy for the UK. The EU don’t seem to appreciate us, as usual.
Thank heavens Australia now qualifies as a European Song Contest competitor, as they seemed to like our offering to put some points for the UK on the board.

The Remainians love being negative about what might happen in the future. They should be asked more about all the damage their beloved EU has done to us, our jobs, industries and economy so far.

Let us take the case of the European exchange Rate mechanism. I wrote in 1989 why we should not go into it. I stated that the actions required under the scheme were “intrinsically destabilising”. I set out in detail how it would lead to higher inflation, more debt and more interest charges, which it did. I explained that the systematic undervaluation of the DM in the scheme would boost German exports at the expense of the rest of us. It did. I went on to subsequently forecast the recession that it finally induced.

The IMF, UK Treasury. Bank of England and World Bank supported this scheme and did not forecast the recession it generated.

Let us remember the case of the Euro. The good sense of the UK voters prevented the UK elite following the advice of the IMF, World Bank and other leading institutions to join this currency. I wrote a couple of books explaining the damage it would do. I pointed out “If you cannot devalue your currency when your costs are too high, you have to sack people and close factories instead. ..History shows that rigged exchange rates do not work. The Gold standard, pegging currencies to gold,bankrupted many businesses and caused mass unemployment. The Exchange Rate Mechanism caused a bad recession, and then collapsed. The single currency is an Exchange Rate Mechanism you cannot easily get out of.” I went on to show how the poorer regions of the Euro area would be worse off with high unemployment in the single currency.

I pointed out that the Cecchini Report promised us 3% extra growth from the 1992 single market programme. Instead in the two years of the introduction of the 1992 programme the UK was in recession, thanks to EU policies.

In 2007 none of the IMF, World Bank, UK Treasury or Bank of England predicted the forthcoming great recession, brought on by their policies. I wrote early in 2007 the following:

“There is considerable uncertainty in world markets about how far the Federal Reserve Board, the ECB and the Bank of England will go in raising rates to squeeze inflation out of the system. They must know there are huge pyramids of debt throughout the system, and inflation will not be killed unless the appetite for more debt is blunted. They must also know that if they push interest rates too high for too long they will bring the debt structures crashing down, as we have seen with the sub prime mortgage collapse in the USA, leading to falling asset prices, rising unemployment and even recession”

Apparently the Central Banks did not after all understand these points, and chose to switch from being far too tolerant of debt build up, to bringing the whole edifice they had allowed or created to come crashing down with terrible effects on jobs and employment.

These same institutions now ask us to trust them in their judgements on UK membership of the EU.

They all ignore two obvious points. The first is the stimulus effect of spending our own money in the UK on jobs and services here, at a time when the world economy is slowing again. They also ignore the point that the rest of the EU will not wish to impose tariff and other barriers in the way of their trade with us.

Project Fear has become absurd. It just serves to remind us how wrong its authors have been in the past.

As spending our own money will add 0.6% to our GDP, my forecast is for a small improvement in UK incomes and output from Brexit . Any short term confidence and market response will not be sufficient to offset all the positive effects of the extra spending and the reduced balance of payments deficit. The authorities seem to want lower sterling to help exports, and are clearly determined to try to talk the pound down. They should put into their forecasts the upside on exports if they put in the negative assumptions. There is a general slowdown this year so far in the main advanced economies which they need to address.

Yesterday Sir John Major made a speech in Oxford which was reported without an opponent on the platform balancing his remarks. Also in Oxford, Dominic Grieve and I were debating the merits of Leave and Stay before a student and ex alumni audience with no BBC cameras or reporting. If they had come to our event they could have heard two MPs with votes in the Commons for the aftermath of the referendum setting out both sides of the argument. Instead they chose to report the wrong forecasts of the man who took the UK into the European Exchange Rate Mechanism which in turn plunged us into a deep and damaging recession, without asking him what he had learned about EU policies from that experience.

Mr Carney did not blush or look embarrassed when he told us the UK could enter a recession as a result of Brexit. It was an absurd forecast, but he was  careful to use the word “could” rather than the word “would” when making it.

Could the UK go into recession in the next two years? I can see no way it could do so if we leave the EU. I could  see it doing so if there was a general world recession, or if there was a sudden and serious flare up in the Euro crisis with the collapse of the Euro area economy, but not if we decide to repatriate our EU contributions, our fish and the other matters that make our position worse by being in the EU.

The Bank should set out the positive impact of spending our own money on our own priorities. Spending the £10 bn of net contribution we do not currently get back here at home would be a 0.6% boost to our economy. It would mean more jobs and more incomes earned here in the UK, so more growth. Where was that obvious fact in Mr Carney’s thinking?

Then there would be the improvement in the balance of payments for the same reason – we would no longer have to send all that money abroad. Wouldn’t that have a favourable impact on the value of the pound?

Mr Carney decided to kitchen sink the bad news forecast. He told us we could have a  recession. We could have output down, inflation up, and pound down all at the same time. How come? If the pound fell substantially that would boost exports and therefore boost UK output. As the Bank has already told us it would cut interest rates in such a scenario and would look through any temporary imported inflation from a lower pound, he should also be forecasting the positive output effects of the lower rates and extra money creation he has told us he has  in mind.

It was an extraordinary muddled forecast. Most commentators and forecasters do not expect a world recession or a major Euro crisis or a Chinese crisis anytime soon. Without one or more of those the UK will not enter a recession. Out of the EU we will keep our trade. Out of the EU the main car makers have already told us they will carry on investing here. Out of the EU there will be a small fiscal boost to the UK’s output and balance of payments as we spend our own money on our own priorities.

John Redwood (Wokingham) (Con): To ask the Home Secretary to make a statement on the number of national insurance numbers issued to EU migrants.

The Minister for Immigration (James Brokenshire): For years, UK migration figures have been measured independently according to agreed United Nations definitions. Today’s report by the independent Office for National Statistics is a clear endorsement of the validity of those figures. I welcome the clarity that the ONS has provided on this important issue, and am glad to have the opportunity to clear up some of the misconceptions about the figures for national insurance numbers and what those may mean for EU migration.

On 7 March this year, the Office for National Statistics published a note explaining why long-term international immigration figures could differ from the number of national insurance number registrations, concluding that the two series are likely to differ. At the same time, the ONS undertook to conduct further analysis of the issue. It has published its conclusions this morning; I stress that that is independent work carried out by an independent statistics authority. Its conclusions are clear. The ONS has now stated that the difference between the number of long-term EU migrants and the number of national insurance registrations by EU nationals can largely be accounted for by short-term EU migration to the UK, and that the independent international passenger survey remains “the best source of information for measuring” net migration. The ONS also says that national insurance figures are “not a good measure” of levels of migration, even if they are helpful for understanding patterns of migration.

A national insurance number can be obtained by anyone working in the UK for just a few weeks, and the ONS explains clearly that the number of national insurance registrations should not be compared with migration figures because they measure entirely different things. Short-term migrants have never been included in the long-term migration statistics, which are governed by UN definitions. There have always been short-term migrants who are not picked up in those statistics, but short-term migration will not have an impact on population growth and population pressures, as by definition short-term migrants leave the UK within 12 months of arriving.
The Government look forward to the ONS’s follow-up note later in the year, which will set out its analysis in greater detail. We must now be careful not to distort the figures following the ONS’s clear statement. I welcome its conclusions, which I hope provide reassurance to those concerned that national insurance data could suggest that the published migration statistics were inaccurate.

The Government take very seriously the need to reduce net migration to long-term sustainable levels, from the hundreds of thousands to the tens of thousands. We have taken a number of steps to achieve that, of which the Immigration Bill, which completed its parliamentary passage this week, is just the latest. Clear and accurate statistics are integral to what we are seeking to achieve. I am pleased that today the ONS has, with its normal impartiality, confirmed that the statistics based on the international passenger survey that we use have the necessary integrity and remain the best measure for understanding net migration.

John Redwood: I am grateful to the Minister for his statement, but does he not accept that the very popular programme of making a substantial reduction in net migration that he, I and other Conservative MPs stood on at the general election is quite impossible to honour as a promise given the Government’s own figures for migration, never mind the figures for national insurance? Migration has been running well above the maximum total that we suggested to the electorate. Does that not show that all the time we stay in the European Union we cannot control EU migration in the way we promised at the general election? Does the big difference between the national insurance numbers and the migration figures have implications that will worry Members across the House, given the impact on public services?

Over five years, 1.2 million additional people came to the UK, got a job and a national insurance number, and lived here for a considerable time, even if some of them have now departed. Those people needed doctors surgeries, school places for their children, and so on. In the past two years, an additional 1.1 million people have registered for GP services. That implies that national insurance numbers are closer to the truth, and that we need to consider those figures as well as the formal migration numbers when planning public provision.

Does the Minister share my concern that we are not offering a sufficiently good welcome in terms of GP places, health facilities and school places, and that that is putting a lot of pressure on settled communities and not offering something good to the newcomers? Does he share my wish to get a grip on that, so that we can properly plan our public services? The note that was slipped out—fortunately Mr Speaker allowed this urgent question—does not explain that discrepancy or deal with the fundamental point that if someone comes here, works and gets a national insurance number, we must provide public facilities for them.

James Brokenshire: I am grateful to my right hon. Friend for allowing me to clarify those points, and today’s statement from the ONS is clear. As Glen Watson, the deputy national statistician for population and public policy, said: “We are confident the International Passenger Survey remains the best available way of measuring long-term migration to the UK.”

My right hon. Friend correctly highlighted the pressure on public services, and the Government remain committed to reducing net migration to the long-term sustainable levels that existed before the previous Labour Government. We remain focused on achieving that, which is why we have taken steps to reform the visa system and to confront illegal migration. Measures in the Immigration Bill, which the House approved earlier this week, are pivotal to that.

The ONS is clear that we should not be looking at national insurance numbers for an assessment of the pressures of migration. Some have suggested that leaving the EU will in some way deal with the migration issue, but we need only consider the examples of other countries that have decided to be outside the EU yet have free movement and pay into the EU budget. There is an idea that things would be better outside the EU, but I find it inconceivable that we would have access to the single market and not have those issues of free movement.

We must also stress the important achievements of the Prime Minister in his renegotiation, and in putting the welfare brake into effect and dealing with some of those pull factors, as well as important steps on deregulation. He secured important elements in that renegotiation for the benefit not just of the UK, but of the EU as a whole. We must grow that economy and see other European nations succeeding and creating jobs and employment in the way that this country has done. I recognise the concerns that my right hon. Friend has rightly highlighted about public services. Those issues remain a concern of this Government, but we have taken, are taking and will continue to take action to see net migration figures reduce to sustainable levels, and to address concerns about public services and the pressures on our communities.

Yesterday I raised in the Commons the issue of the government figures for EU migrants. In recent years the government has issued many more National Insurance numbers to EU migrants than it has counted as  migrants in its official migration figures. Over the last five years to June 2015 1.2m more NI numbers were issued than identified inward migrants.

The government says this can be explained by the fact that many people come in for short term jobs and then go home again. A migrants is defined as someone who stays for more than one year. My point is the government needs more accurate figures than its passenger surveys to capture how many people need GPs, school places and other public services. The passenger survey clearly understates numbers by a large margin, and leaves us short of public service provision. The ONS report admitted short term stayers were not the only reason the two figures diverge so much, and have promised a further report, presumably after the Referendum. The government also needs to grasp that if someone comes, gets a job and an NI number and stays for most of the year they may well need a home,  school places for their children and a GP.

Asking a random selection of people at the ports why they have entered the UK leads to a large underestimate of how many people come to live here, and an  large underestimate of our needs of public services. People may tell the official on arrival they intend to stay for a short time but change their minds once here. The officials may not sample correctly, as of course the migrants are a small proportion of all those entering at a  busy port.

I will post the Hansard report of the exchange this morning.

If I had to name one industry that had been worst hit by EU membership it would be the UK fishing industry. Placed under a Common Fishing Policy from the early days, the EU has done grave damage to what was one of our most impressive ventures. The UK has been driven from self sufficiency and good exports of fish to import dependence. We have had to watch as non UK boats have come into our waters under EU licence and taken the majority of the catch.

 

In the early days of the Common Fishery Policy too much fish was taken, doing further damage to the fishery. When the EU awoke to the damage being done, tougher quotas were imposed which favoured non UK fishing fleets, especially the French. If we look at the 2015 quota allocations for the main areas for cod and haddock they show (VIIbc,VIIe-k,VIII,IX,X, CECAF 34.1.1):

 

Cod   France 70-84% of Total Allowable catch

UK 7.6-9.2%

 

Haddock   France 55-66.7% of Total Allowable catch

UK 10-29%

Sole         France   14.3% to 54%

UK 0-19%

The great fishing fleets of Grimsby, Hull, Lowestoft have been slashed by the decline of the fishery and unfair distribution of the quota. Out of the EU the UK can reassert control out to 200 miles or to the median line with a neighbouring state. We can negotiate shared access with neighbours without being outvoted by 27 other member states under the majority voting system of the EU.

Freed of EU control we could have a policy which helps restore our fishery and allocates more catch to UK vessels.

 

(Figures taken from ec.Europa.eu/fisheries/documentation/publications/poster tac2015 en.pdf)