Author: johnredwood

On Tuesday England took a step towards justice. In the Commons English MPs were asked to give consent to parts of the Housing and PLanning Bill, and English and Welsh MPs to other parts, in accordance with the new procedures. It means England does now have a veto over laws that only apply to us. It also means that Parliament has to acknowledge England’s interest and to mention England’s name. We are still well short of Scotland’s freedom to propose what she wants for herself.

The response of the two other main parties in the House was predictably disappointing. Few Labour MPs attended at all. Their front bench spokesman declined the offer to reply to the Minister, though was shamed into the debate later. The SNP complained bitterly that this modest step created two classes of MP, which is simply wrong. I asked the SNP spokesman why it was acceptable to deny MPs from English constituencies any voice or vote on Scotland’s health or education or local government, but unacceptable to give English MPs a veto on what the Union Parliament might wish to do on these matters for England? There was no sensible answer provided.

England expects some devolution for us to mirror the extensive devolution in other parts of the UK. There are two large outstanding issues.

The first is the money. As we move to a world where Scotland will retain her own Income Tax receipts as well as having other Scottish tax revenues, there needs to be a new deal on how much grant Scotland receives from the UK Treasury and how this is calculated. The principle is no detriment to either side. That is the easy bit. How you calculate it is altogether more difficult. Scotland should clearly benefit from raising more money or have to cut spending if it decides to raise less. To what extent should the Union underwrite a drop in income tax revenues because of job losses in the Scottish economy? We are currently living through a difficult period for the oil industry where well paid Scottish jobs will be lost. How do you attribute changes in revenue to tax rate changes and to economic changes?

The second is England’s powers to make her own decisions in areas devolved in Scotland. The devolution settlement will be fairer if England can make her own decisions on how to spend what is in effect our block grant, just as Scotland has full budgetary freedom over her revenues and grant.As we saw on tuesday, the Department for Communities and local government is a department for England. So are Health and Education. These big areas now need to be led in England’s interest with England’s consent.

I spoke yesterday during the first meeting of the Legislative Grand Committee (England) following the passing of the English votes for English laws standing orders:

John Redwood (Wokingham) (Con): I rise to thank Ministers for taking England on its first step on the journey to justice and fairness for our country. Having participated in recent Parliaments and seen very large powers transferred to Scotland for self-government in accordance with the wishes of many Scottish people and their now vocal representatives from the SNP, I would have thought that on this day of all days it was time for Scotland to say, “We welcome some justice for England to create a happier Union, just as we have fought so strongly for so long for more independence for Scotland.” I hope that SNP Members will reconsider and understand that just as in a happy Union, where there are substantial devolved powers of self-government for Scotland that they have chosen to exercise through an independent Parliament, so there needs to be some independent right of voice, vote and judgment for the people of England, which we choose to do through the United Kingdom Parliament because we think we can do both jobs and do not wish to burden people with more expense and more bureaucracy.

On this day of all days, when Labour has been reduced to a party of England and Wales, having been almost eliminated from Scotland in this Parliament, I would have thought that the Front-Bench—[Interruption.] Our party is speaking for England. The point I am making is that now that the Labour party represents parts of England and Wales but has so little representation in Scotland, it behoves Labour Members to listen to their English voters and to understand that although they might not want justice for England, their voters do want it and are fully behind what this Government are doing.

Graham Stuart (Beverley and Holderness) (Con): I congratulate my right hon. Friend on the work that he has done for many years in championing the need for EVEL to be introduced. Does he agree that, given that they completely failed to persuade the Scottish people to end the Union, the greatest hope of the nationalists was that such would be the grievance and resentment in England that Scotland could be pushed out? Does he agree that this modest step is a way of alleviating that grievance, and that that is why the hon. Member for Perth and North Perthshire (Pete Wishart) was quite so angry?

John Redwood: I entirely agree. We need fairness for England, in respect of the new financial settlement as well as our legislative procedures, but the way to preserve and develop the Union is to show that it is fair to all parts. I am sure that that will mean greater powers of independence for Scotland than we will gain for England, but we cannot ignore England. England deserves a voice, England deserves its votes, and England deserves, at the very least, the right to veto proposals that do not suit England but only affect England. I think that we shall need fair finances as well, because otherwise the English people will not be as happy with their Union as we should like them to be.

I hope that today is a day on which to advance the cause of the Union rather than to damage it. I hope that it is a day on which other Scots will welcome this small step on the road to justice for England, and will see that it helps them as well as us. What is wrong with England having a voice, its own political views, and some of its own political decision-making, in a Union in which Scotland took a great deal of that following the general election? In that election, all the main parties fought on the united proposition that there should be more rights to self-government for Scotland, but my party wisely said that that meant that there had to be some justice for England too. This is a small step towards that justice, and I hope the House will welcome it and not oppose it.

The  November trade figures repeated the picture of our long years of membership of the EU. We remain in heavy deficit, thanks to a large deficit with the EU. Our trade with the rest  of the world is in surplus.

November saw new records for the level of our imports from Germany, Spain, Slovakia and the Czech Republic. Germany remains by far and away the largest exporter to the UK, selling us £5.3bn of imported goods  in the month. The USA remains our biggest trade partner for our exports, buying £3.8bn of our goods in November.

The reason I voted for Out of the EU in 1975 was I ran the numbers on the UK in the EU at the request of my then employer. It was quite clear that the EU was going for asymmetric trade freedom in ways which would help the manufacturers of Germany and France export to us whilst not helping the service providers of the UK export so much to them. I forecast a continuing run of large deficits, as happened. I also ran the numbers on UK contributions, which were large and rising, as that was prior to the Thatcher renegotiation which got the net contribution down usefully. Mr Blair then gave some of that away putting us back to almost as bad a position as the original bad deal.

The UK is made to pay far too much for the alleged privilege of importing from Germany and the others. We would trade quite easily with them without belonging to their expensive club. I am not out to transfer our deficit somewhere else, but stopping the club subs would cut the deficit substantially anyway.

The sharp falls  of the domestic Chinese Stock exchange and the oil price in the first full week of the new year have caused some to raise the alarm about world economic prospects. Some fear another banking crash, some fear a commodities led collapse, some think this time the worst of the crisis will  be amongst the emerging markets.

The economic establishment takes a different view. The main forecasters expect the world economy to continue growing at around 3% this year, led by India and China amongst the emerging economies, and by the USA and UK amongst the advanced economies, much as 2015 saw.  The consensus sees interest rates staying low in Japan and the Euro area, and edging up a little if at all in the USA and UK. Euro area and Japanese monetary policy will remain very accommodating, whilst credit will advance a bit in the USA and UK.

It is true that the establishment view is usually wrong when a crisis looms. They did not forecast the crash of 2008, though it was the erratic monetary policies of the USA, the Eurozone and UK which  brought it on in a very predictable way. I do not see the same mistakes being made this time by advanced country central banks, so I do not expect a western 2008 style crisis in 2016.

The three problem areas that do cause concern in 2016 are commodity based activities, some emerging market countries, and the continuing political and economic stresses in some Euro area countries.

We still have not reached bottom in commodity markets. We are awaiting the closures of mines and oil wells on a sufficient scale to remove the excess production. Then prices can rise and commodity backed companies and countries start to earn better money. Whilst we wait there will  be further harsh cuts in energy and commodity investment with knock on effects for manufacturing. The main advanced countries gain benefit from lower prices of raw materials and energy and from the disinflationary effects allowing continuing loose money policies.

The worst placed emerging market economies are in Latin America. Brazil, Venezuela and Argentina in their different ways are all struggling to run more prudent policies that will escape inflation and recession. They are not big enough to bring down the world economy, but are painful for their citizens and unhelpful to world business activity and banking credits.

There remain difficulties in getting governments in Greece, Portugal and Spain that will deliver the austerity policies of the Euro. Given the willingness of governments and citizens of a wide range of opinions to wish to stay in the Euro, I  do not expect a Euro break up this year, but there could be another phase to the rolling crisis.

And what of China? China with $3.3 trillion on the reserves has options. I expect the Chinese authorities to cut rates more, loosen credit, and seek to reflate the economy. The economy there may be past the worst, though the domestic stock market  remains unhappy with reluctant holders still owning  shares.

If you fly over England at the time of the morning peak you will see busy main roads into cities and towns with cars often bumper to bumper. You will also see near empty railway lines, with a couple of miles gap between trains. Hundreds of cars an hour pour into our urban areas, whilst just 27 trains an  hour make it over our main line tracks.

So why do we need such large gaps  between trains? After all, trains on the main lines are all going in the same direction on any track, so there is no danger of a head to head crash. They all have  drivers and brakes, so they should all be capable of closing the gaps without endangering passengers.

The main reason is Network Rail still uses an old fashioned signalling system based on fixed block. This means that signals keep a second train out of a section of track all the time the first train remains in it. Because there has been a history of train drivers passing red signals there are various automatic warnings and braking devices to try to stop trains ending up close to each other.

There are now new systems based on radio links, computers and satellite positioning that enables an individual train to know where it is and how far it is away from the  train in front. As these systems become  more commonly adopted it should be possible to run 30 or even 33 trains on the same piece of track, providing a 10-20% increase in capacity.

All of this is still far from ambitious. It should be possible with new computer aids to run up to 40 trains an hour safely over  the same track. It is clearly easier to do that  if all the trains have good braking systems and similar speeds. As soon as you introduce slower trains into the system you need by pass track and better controls.

These new systems offer us the best way to a safer railway with more capacity.

Let us assume the PM secures all his negotiating objectives. There will be huffing and puffing over the fourth, the 4 year ban in welfare payments to EU migrants, but doubtless there will be some bridge, some fudge that claims symmetry between UK benefit recipients and those from the rest of the EU around a four year delay.  The trouble is, without Treaty change there are  no guarantees, no change to the underlying UK/EU relationship, no protection against future penalties and policies that the UK does not like.

Any deal depends on the view of the European Court of Justice anyway. They could overturn the apparent success in a future case. Any part of our welfare system, reformed by the deal, can be found to be against EU rules, or can be altered by future EU rule changes that we might not be able to block.

Were the UK to vote to stay in the rest of the EU will claim we have been given very special treatment and will then wish to reverse as many of  the concessions and special deals we enjoy as they can. There is continuous pressure to get us to drop what remains of our cash rebate. The UK government regularly gives into pressure to transfer more criminal justice powers to the EU. Part of Mr Cameron’s deal is to increase EU powers in business regulation and services. The Germans always make clear that they see the Euro as a necessary part of the single market. Most EU countries want the UK to be fully part of the common borders policy.

If the UK is foolish enough to vote stay it needs to understand what it is staying in. It is an emerging state called the EU, with the full range of state powers. It is a wild ride to political Union.

Mr Caneron’s renegotiation also shows how it is impossible to combine national democracy with EU sovereignty. If after every election in a member state that state needs treaty or policy change then the EU becomes  unworkable. If instead every country accepts it cannot change any law or policy from the EU by a General election it us no longer a national democracy.

Network Rail is a costly, inefficient public sector body now being put under new management. I have been making some proposals for better financial, operating and engineering performance .  I will share some with you today and others in a later posting.

I am pleased that Network Rail is  now rightly categorised as an arm of the state. All its debts now count as part of the state’s indebtedness, and all new borrowings will be state borrowing. This also means that in future management will need to clear its spending and borrowing plans with Transport and Treasury Ministers, which is only right as they are spending taxpayers money and pledging the nation’s credit. I  lobbied for this change.

The  positive results of this change include no further borrowing by Network Rail in foreign currencies. This is a potentially expensive and risky way of borrowing, as we saw towards the end of the last decade when sterling devalued substantially. It also means that Network Rail will not take out additional derivative exposures, which have proved expensive in recent years. There remains the outstanding issue of what should Network Rail do with its current open derivative positions on foreign currency and interest rate exposure. The sooner they wind all this up the better. The government does not have a policy of paying investment banks to  hedge its own interest rate or currency risks.

The new management is also rightly being charged with doing a better job at managing the large property estate. The government should expect to see more sales proceeds from selling surplus or development property, and to see a more enterprising approach to the use and improvement of its extensive land holdings. In the past Network Rail has often been reluctant to work with developers to improve important real estate holdings, or even to allow the development of adjacent private sector land by making access or bridging the railway expensive or impossible.

Network Rail owns land in many town and city centres which could  be helpful in mixed use developments close to the railway. The business can get free or subsidised station rebuilds, additional car parking and bridges to replace level crossings out of suitable development projects. It needs to be more positive and friendly in its approach to such improvements.

Network Rail needs to clean up and tidy the railway estate. As I travel around on the railway I see all too many abandoned piles of old rails and sleepers, weed throttled sidings, piles of building materials and other waste just left by the side of the tracks. Some of this has scrap value. Some can be used. Some of the sidings could become useful track for mainline by pass, or useful sidings to park working trains. Some of the land may be surplus to railway needs.

On many provincial stations there is all too little retail and service offer.  On some stations at night there is not even a working toilet, let alone a  café or newspaper and magazine shop to help while away the hours of waiting and travelling. Commuter stations often lack shops to buy a ready meal or pick up  breakfast in the morning. There are business opportunities to  be seized by franchises.

The Environment Agency has issued a topical paper. Entitled “River maintenance pilots. Findings Report” the EA this January tells us how and why the pilots to dredge, weed and cleanse 9 pilot areas have not worked well. This was something initiated by Ministers in the wake of the Somerset levels disaster, when Ministers required the Agency to do more to increase the capacity of rivers in areas prone to flooding.

The Report tells us these pilots have told farmers and landowners more of what the EA does do, and told them how to carry out work “in an environmentally sensitive way”. They say that some 61 km of river maintenance work has been done or is planned as a result.

However, they also report that in 2 areas no work was carried out. There were objections from landowners and farmers in pilot areas  because they were restricted to working on only 20% of the river on their land. Several reported that because there had been no dredging for so long there was too much silt to remove in a normal private sector maintenance  operation. Rules on methods of clearing and disposal of silt are worrying, complex  and expensive for landowners.

The Report demonstrates that the EA remains opposed to much dredging. The pilot areas were areas where they had discontinued dredging themselves, and where they did not plan to reinstate their dredging programmes. They then impeded the private sector’s wish to see these areas dredged by offering no cash and help, and or by issuing strict guidelines about how to do the work, and or by limiting the work to only one fifth of the affected river. As a result many farmers and other landowners concluded they could not do sufficient work to improve the position, were under some duress over how to do the work, and had a large inherited expensive and difficult task thanks to the EA’s abandoning dredging some time ago.

This was a masterly performance of Yes Minister. Elizabeth Truss should call them in and ask them to do better in future.