Author: johnredwood

As soon as President Trump proposes and imposes some reciprocal  tariffs the UK and EU establishment explodes with rage. They are right that tariffs are taxes on consumers in the country that imposes the tax, with some  of the burden shifted to the exporters  where consumers cut back or succeed in getting some producer offset to the price hike. So knowing this why do they impose some high tariffs themselves?

They have also failed to confess that they impose plenty of non tariff barriers on trade making imports too dear or banning some of them altogether. The single  market is  a Customs Union, not a free trade area. It aims to stop foreign competitors by rules and tariffs.

Take beef. The UK still imposes a 12% tariff and £1.47 per kg on beef from outside Europe, but  we allow free access for Irish beef. No wonder they clean up on imports, avoiding US competition thanks to tariffs and EU/UK bans on some US production. In many cases our tariffs and regulations are a bigger barrier to imports than US restrictions on our exports to them.

Hitching ourselves to the EU more will be back to our EU experience. It meant dearer food and more imports from the EU. They took most of our fish, banned our beef for a long tine, kept us short of milk quota  and gave grants to rip out our orchards.

The UK is by history a Christian country. We have an established Christian Church. We also have a long embedded tradition of religious toleration and open access to opportunities for people of all faiths and none.

For this to work well all citizens need to practise that tolerance and fairness. All have to accept that there are national events which will be performed in Christian cathedrals that provide many of our great public buildings. The ceremonies will often be led by the government assisted by the Established Church.

In its turn the Established Church needs to have wise and sensitive leaders. The Church of England has done itself harm by its failure  to root out child abuse. It has made itself a left wing intruder into the  UK political debate, seeing higher taxes and more public spending as the answer to every problem and equating socialism with moral superiority. It has lost so many followers, with dwindling congregations. It is easier to sustain the case for an established church if it can show good levels of voluntary support.

The Church of England still has considerable inherited wealth. It demands charity tax exemption whilst urging that others with wealth should pay higher taxes. It urges the UK to accept more migrants and provide them  with subsidised homes, yet most clergy do not offer their spare rooms to ease the shortage.

This Easter Sunday it would be good to hear  the stand in Archbishop break out of the politics of Church decline, and put  the sins and hypocrisy of the past behind it. Easter is the Christian Church’s opportunity to put forward its own message as it has no national event to host. Many of us are listening, so what new does the Church have to say?

Let me wish  you all a Happy Easter. May you have a great day with family and friends, enjoying the eggs, Easter lunch and the stories of spring.

I read in the press that the  government may be planning a sell out to get a “ reset” to our  relationship with the EU.

The government must not  give our fish away at the end of transition next year.We need to take back full control of our waters, cut back the permitted catch to repair stocks, and mainly grant quota to UK vessels and to some foreign vessels willing to land ,process and sell the fish in the UK.

The government must not open our borders to any younger person  wishing to come here and call it a Youth Opportunities policy. It would be more mass migration of the kind a majority of voters oppose.

The government must not align our emissions trading with the EU scheme, meaning higher energy taxes we do not control. It should scrap the carbon taxes and end the idea of a big tariff hike called the carbon border mechanism.

The government must not align us more with EU rules and regulations . It should not out our farms back under CAP type rules  which undermined home market  share of temperate foods when we were in the EU.

The current government out VAT on school fees. It is a bad idea which I disagree with. It is also a rare example  of the government using a Brexit freedom to something it believes in. That’s how democracy should work, with Opposition parties needing to win an election to reverse a bad policy.

The current government also needed the exemption from EU rules on state aids to go rapidly to the support of the steel industry. Being dragged into the lengthy negotiations  when speed was essential could have been a disaster.

The Uk can get an early and better trade deal with the US than the EU if only Ministers would be bolder and more positive.

Our tinely exit from the Eu means we are not jointly liable for the massive Euro 800 bn of new debt the EU is borrowing. That would have been rash and unaffordable given our large national debt already incurred.

To Remain Brexit was mainly about trade. They wanted no dilution in our heavily managed trade with the EU and  wanted to keep all the barriers of the EU Customs Union up against the rest of the world. They justified this with a patently wrong theory that you could only trade easily with countries that were nearby, giving them a dodgy model and false forecasts of what would happen post Brexit.  They wrongly forecast less trade and lower GDP as a result, which did not happen. As it happened UK negotiators paid a high price to keep tariff free trade with the EU and tried to keep us closely aligned with the EU business and trading regulations.

In our later years in the EU our trade with the EU declined to under half our total trade. The relative decline and the amazing surge in trade in services with non EU since 2016 has continued this trend. The relative decline will continue in our EU exports as some of our leading exports to the EU, oil, gas, refined oil products and petrol cars are being banned and taxed into extinction. Doubtless what net zero achieves will be blamed on Brexit by Remain.

Now we are out we can bring down barriers with the rest of the world. We have signed the large  TPP Free Trade Agreement which the EU would not do. We have added services chapters to some of the old EU trade deals we adopted as UK trade deals. We proved Remain wrong by renewing all EU deals as Uk ones.

In a later piece I will look at what Brexit was really all about – taking back control. We have  used some of  the opportunities this brings but there are so many more to take up. Intervening to save blast furnaces would have needed EU consent to subsidies which could have caused delays and might have been refused.

Compare my two experiences with bills this April. Westminster Council sent me a Council tax bill for my small flat that imposes a 110% increase on me because I only stay there occasionally when I work a long day and evening in London. It means the only services I use are the local roads and the refuse service. I take my small quantity of rubbish to a large communal container on the ground floor for all the flats which Westminster can easily access. My small amount makes no difference to their collection. I cannot switch Council provider . I have to pay their rip off bill as it would be strongly  enforced,unlike the UK border and laws on migration.

One of the supermarkets I use near home sent me a voucher offering me £9 or 15% off my next shop if I spent £60. I went along and saw they were also offering good extra product discounts to me as a loyalty card holder. I bought  £69.98 of goods, qualifying for £9.35 off selected products as well as the £9 off. So I gained a discount of £18.35 or 26%.

What  a difference. The  shop gave me a big discount to buy things I needed and wanted. The Council mugged me to spend money on many things I do not want and many others I think are a  dreadful waste as well as some necessary public services for others where I am happy to contribute. They sent no warning of their rip off and had  no thought for what I would have to cut out to afford their over the top bill. They like putting out enforcement notices telling you what you have to comply with.

With badly performing branches of government like the taxpayer owned Bank of England it is important to watch what they do more than what they say. Significantly this month they are not selling any medium and long dated bonds, interrupting their disgraceful loss making sales programme. I guess they took this  decision because a volatile  bond  market unhappy about the UK growth wrecking budget and Trump tariffs could tumble on the back of official selling.

Maybe they have now worked out that their announcement of a major sales programme of bonds on the eve of the  2022 autumn budget did help drive the market lower, leading to the predictable LDI plunge caused  by poor regulation of pension investments.

The Bank bought far too many bonds at excessive prices well into post lockdown recovery. It has wrongly been selling off some of the long bonds which have the largest losses instead of just running down the bond portfolio as they mature. In 2024-5 they sent an astonishing bill for £38 bn of losses to taxpayers, swollen by unnecessary sales.

Thank goodness we have been spared at least one month of these excesses. Long bonds are often trading at under half the Bank’s purchase cost given the big hikes in rates the Bank has put through.

HS2 our fully nationalised railway has cost a fortune and will never reach  the North as planned. The Post Office sends  taxpayers large bills for its losses and put key employees in prison  based on false charges and a botched computerisation programme.

Today Mr Reynolds, Business Secretary, has total powers to run British Steel, a company owned by the Chinese. So far he has co operated with the steel workers to exclude the Chinese management. Mr Reynolds has no experience of running an industrial business. He has presented no business plan to Parliament and has no announced  budget to pay the huge losses reported for the current business.

I have been responsible in the past as a company chairman for a steel rolling mill and other industrial plants. My advice to Mr Reynolds is

1. Make employee safety and employee engagement your first task.

2. Understand you need more orders for british steel than the Network Rail order. Construction and defence orders need increasing with ways of offering high quality and better value for money. Customers need persuading. They do not owe you a living

3. Understand  you cannot make this work without much cheaper energy. This business has been pulled down by the needless closure of UK coal mines and by the mad pursuit of dear energy. The current nonsense that gas prices are the problem overlooks the painful fact that electricity in the UK is four times the price of gas per  unit of energy. Net zero ideologues think closing steel furnaces, coalmines and fossil  fuel power stations is good news. They deliver us into the hands of China as we need to shift to imports.

So Where is your business plan?How  much will it cost? How  do you avoid spending money now which could go to the Chinese owners? How can you run it against the wishes of the owners? Are you going to force the owners out? What legal liabilities will rest with UK taxpayers?  Why was there nothing in the new Act about the split of the money once you start paying bills?

The  Act is a botched  mess. The draconian powers against the owners are coupled with complete muddle on who will in future be responsible. You cannot be in charge on odd days when you fancy it or see a need to intervene. You need to sort out who is in charge and what the plan is urgently with the owners.

So the government has failed to negotiate a settlement with the Chinese owners of Scunthorpe blast furnaces and the nearby rolling mill. The UK does need to keep a steel industry.

The government should buy the whole works and land for a token £1, sparing the current owner closure and redundancy costs.There might  need to be recourse to them if a new operator did need to make redundancies.The Chinese company would remain responsible for its debts and past losses. The assets would be unencumbered.

It should put out to tender a contract to operate and manage the works, accepting the least cost/ best bid.

It should encourage the nationalised Network Rail to carry on buying track from there. It should encourage the use of steel for its  construction  projects to use steel from there. It should use UK steel for all main defence purposes.