Author: johnredwood

Earlier today I gave a Lecture at All Souls College, Oxford on the subject of Single currencies and political unions. I argued that a successful currency needs to be backed by a political union, which includes transfers between different regions or countries within the currency area.

I enclose a copy my presentation slides, which may be of interest to readers.

Slide 1: Can you have a successful currency union without political union

I then went on to debate leave or stay,mat a following seminar,  and drew on the material in these slides

Slide 2: Better Off Out

Is that it? asked Bernard Jenkin of the hapless Minister sent to explain the government’s renegotiation to the Commons. In that simple phrase he summed up the disappointment of many who had hoped for fundamental reform of the UK’s relationship with the rest of the EU. The many admirers of the Prime Minister’s Bloomberg speech wondered how it could come to this, the letter to Mr Tusk that did not seem to seek much change.

The government’s case is they will settle four of the main issues they see causing stress in our current relationship. They will seek a stronger role for national parliaments. They will try to protect the UK’s position as the Euro area moves towards political union and may caucus against us within the wider EU. They seek reductions in our welfare payments to workers coming here under the free movement rules of the EU. They want promises that the EU will both press on more rapidly with market integration in some areas, whilst cutting the burden of business regulation at the same time.

So what’s not to like?

The problems with this list are twofold. There are all the things that it leaves out that are unsatisfactory in our current relationship. Then there is the lack of any convincing mechanism to give authority back to the UK in the chosen areas, to lock in any success in negotiating them.

There is nothing in the proposals to allow us to repatriate our much ravaged fishing grounds, nothing to restore sanity to our farm subsidies under rules that help UK farmers rather than small scale continental farms, nothing to tackle high cost energy under EU energy policies, nothing to stop free movement of people and put all under common migration controls alongside our controls on the rest of the world.

Asking for a stronger role for our national Parliament should be fundamental. At the heart of the Bloomberg speech was a statement that said democracy resides in national parliaments. Fundamental to UK liberties and democracy is the notion that UK voters can influence and lobby their government to do as voters wish. If governments refuse to listen or disappoint, they can be changed by the voters to a government that does as electors want. EU laws and executive programmes are not accountable in this way. If UK voters want to change an EU law they need not only to influence the UK government to want to, but have to help the government influence 26 other governments to push change through which never happens. Uk voters want the UK government to meet its pledge to cut inward migration to less than 100,000 net. That means the UK government and Parliament settling welfare and border policies that can bring this about. Asking for groups of member states to be able through the wishes of their Parliaments to stop a future EU proposal does not tackle the underlying lack of accountability and democratic control over the huge body of EU law and executive action we already have.

It is difficult to see what means there can be to stop Euro area member states outvoting the UK and the other Euro outs anytime they like. We have already faced a big bill to lend money to Greece after a political agreement we would not be involved in any Euro bail out. Without clear Treaty guarantees there can be no solution. Even with Treaty guarantees, we will still find the Euro area is on a wild ride to political union, and we will often lose votes as they sweep along.

The EU may grant us much of what has been asked for on welfare benefits, after much huffing and puffing against it. We were told when past treaties were signed that welfare and tax remained “red line” issues, under our continuing control. The reforms of welfare do not go far enough, and do not last beyond the immediate specifics. We need to restore our own control over our own substantial welfare spending.

The EU regularly promises deregulation, but every year which passes sees more regulation, longer and more comprehensive regulations. Regulating and passing laws is what the EU does. It will carry on doing it. The UK does not suffer from a shortage of law. The Minister put it very well when he said many people see the EU as something that happens to them. That is exactly how it feels. Many of us do not buy into the EU because it does not do what we want, and does not give us a working democratic way of controlling it.

The modern EU has as its centre piece and main driver the Euro. It is on a wild ride to political union. That is not a journey the UK wishes to embark on. We do not need an emergency brake. We need to be on a train to a different destination.

Yesterday’s news that unemployment is down to 5.3% and employment up to 73.7% of those of working age was good. There are now 2.1 million more people in work than in 2010. The employment rate is up 3.5% from 70.2%. 760,000 people have moved from unemployment to employment over the same time period.

Wages are up by 3% over the last year, at a time of no overall inflation. Three quarters of the growth in employment has come in full time jobs. Some people are better off because they have found a job, some are better off because they have found a full time or better paid job, and some are better off thanks to pay rises. Now it is important that the government builds on this success, and comes back with revised proposals on tax credits.

In the budget debate I offered the following advice:

“I welcome the emphasis on prosperity in the Budget. I want a party and a Government who drive more prosperity for everyone in our country, and I want that to benefit people on all income levels. I especially want to see more people get into work and find other routes out of low incomes and poverty. The Chancellor is right to say that Britain deserves a pay rise and that we need to reinforce that pay rise as people get it, or reinforce their success in getting into a job and getting a pay packet, with tax cuts. I want tax cuts for all, and I am glad that my right hon. Friend has made a start on the promises made in our Conservative manifesto.

It is crucial that, as the Chancellor goes about the task of getting rid of unemployment and poverty through supportive policies, people are better off. What I want to do when we get to the detail of the welfare cuts is to see what the impact is, because we need to look at the overall impact. If people are going from unemployment to work, staying in work, getting a pay rise or getting a tax cut, those are all positive things that will make them better off, and we need to make sure that they are not completely offset or badly damaged by the welfare changes he is making. I look forward to those more detailed debates.

…………………… People need to work smarter to be paid better. We need a pay rise but we have to earn it, and that is the purpose behind many of the measures.

………….
The economic background to the official forecasts shows that the growth figures are still pretty good and we have had a welcome upward revision to figures for the immediate past. We also see a welcome upward revision to the number of people in employment, which is fundamental to the whole strategy. There has been a modest deterioration in the balance of payments, which shows that there is more work to be done.

The productivity work will link into that to make us more competitive. We have to earn our living, so we need more competitive products. All that growth and improved revenue is taking place despite higher interest rates—the forecast assumes a modest increase in interest rates compared with past forecasts.

On productivity—working smarter and working better —I welcome the scheme that the Chancellor outlined today. It will mean better roads and spending money on railways more wisely to get extra capacity in the parts of the system where we need it and increased efficiency. There will have to be a lot of work on energy, because we will need cheaper and more energy: as the march of the makers begins and the northern powerhouse cranks up, more electricity and more gas will be required. I hope that we will find cheaper ways to produce them than we have under the policies followed in recent years. It is important that we price people back into energy-intensive markets, rather than export all our energy-intensive business to other countries. It is no great win for those who want to cut carbon dioxide emissions if it is poured out of a factory in China rather than one in the United Kingdom. We need to be conscious of the need to be competitive in our energy generation.

We will need more on broadband, and clearly much more on housing, as many people have mentioned recently. I look forward to an investment-led recovery, with much more private sector investment coming in. We need to pay special attention to cheaper energy and to fix the railways, where we are spending too much and getting too little. It is not just a question of big investment programmes; it is a question of managing them better. Above all, we need to make sure that, as we implement the welfare reforms, everyone is better off and gets the benefits of tax cuts and higher wages.”

Therein lies the challenge. When reforming welfare it is often better to cut entitlements for future recipients, but to allow those already in receipt of benefits and relying on them to continue drawing them until their circumstances change.

A few constituents have written to me expressing concern about the introduction on Individual Voter Registration. Let me try and reassure them.

The aim is to complete the transition to Individual electoral registration by the end of this year. As the Association of Electoral Administrators has said, this is the best way to create an accurate register.

As the Minister has stated, under the old system the “head of the household” could register anybody living in a property with no identification needed. Most heads of households did so diligently and honestly, but it was possible for heads of households to provide false information, either by mistake as they were not fully aware of the future living arrangements or eligibility of people staying with them, or because they made a fraudulent declaration.

Under Individual Registration each person is responsible for their own registration, at the address where they are living. They need to supply a date of birth and an NI number which is used to check the applicant. During the transition from the old system to the new one, some 96 out of every hundred voters on the old register have transferred successfully. The remaining four out of 100 have not responded. They may be real voters, or former voters who have died, or voters who have moved and registered elsewhere, or they could be fraudulent registrations. Councils are actively seeking to contact them to clarify and make sure that all genuine voters are registered.

The Minister assures us that by the end of the process there will be at least nine attempts to contact each voter who has not qualified under the new system, including two personal visits. The chances by the end of the process of any genuine voter being off the register are “vanishingly” small. If anyone is concerned that they or a neighbour or friend has been left off they should get them to contact voter registration as soon as possible.

It must be right to have a more accurate register. It is surely high time individuals made their own arrangements for their vote, as they are the best judges of their eligibility and best placed to establish their own entitlement.

The very deed of having to write a letter to Donald Tusk about how we chose to govern the UK should alert UK voters to the profound change in our democracy and constitution put through by stealth in various EU Treaties. Each voter should learn of the plans for political union in the 5 Presidents Report on the future of the EU and the Euro, and ask how can the UK fit into such a far reaching constitution? Each voter should remember that the German government does think that in due course the UK should join the Euro and be in the whole scheme. Germany sees the Euro as a necessary part of the discipline of the single market.

The UK government is seeking changes in five areas. Those who have criticised them for not setting out before their negotiating aims are being unfair. The Prime Minister called for fundamental change in his Bloomberg speech, and identified the need to bring powers back. He grasped the need to restore UK democracy by restoring the power of the British people to make the changes they want through their own Westminster Parliament. I gave the aim of fundamental reform to restore our democracy in that speech my support.

Today’s letter will fall well short of the noble aim to restore democratic accountability through national Parliaments. It will doubtless say he seeks a greater role for national Parliaments, but this will be interpreted as meaning some limited power for national Parliaments to hold up or avoid future legal and policy changes. That will not restore to the UK the right to settle her own borders or determine her own welfare policies. That means that we will need to vote to leave the EU to get back control of our own affairs.

It will say they need to end the message that we are embarked on a journey to ever closer union. They may well remove the message, but that is not the same as removing the reality. The move to ever closer union is built into the current treaties we have signed, and drives the verdicts of the European Court and the decisions of the Commission. We are on a wild ride to political union, though the UK has never wanted that or consented.

It will ask for limits to the amount of welfare we have to pay to recently arrived migrants from within the EU. There may be concessions made to help us. They are unlikely to concede the principle that the UK and the UK alone should be free to decide who will receive in work and out of work benefits.

It will ask for more progress in constructing the single market, and in promoting trade deals at the EU level. The rest of the EU will willingly consent to this, as it strengthens the role of the EU over more of our lives. They will also probably genuflect to the UK wish for some deregulation, but overall this year and next year, as last year, the volume and impact of EU regulation will increase.

The government also seeks safeguards for non Euro members to avoid us having to pay the bills and accept the extra controls the Euro will require. As the Chancellor recently pointed out, the UK thought it had a watertight agreement that we would not have to play any part in future bail outs of Euro countries, only to be told the UK did have to participate in the recent bridging loan for Greece. This demonstrates that anything we want needs to be put into the Treaties themselves to guarantee it.

Proponents of staying in just have one set of scares to push, related to trade. They begin by telling us more than half our trade is with the rest of the EU.This is not so.

They commit two statistical errors in saying this that are reasonably well known. The first is they are only talking about trade in goods, not trade in services as well where the EU share is lower. Second, they do not adjust the EU figures for the Rotterdam and Amsterdam effects, where we export goods there which are shipped on to export markets outside the EU.

There is a third error. They amalgamate imports with exports, but talk about the consequences as if the figure was our export figure. As we import so much more than we export, it gives a very misleading result.

According to Bank of England figures the EU accounts for 44% of our exports of goods (unadjusted for re export) but 53% of our imports of goods.
If you turn to the definitive figures in the Pink Book published annually by ONS that shows in 2014 the EU accounted for 42% of all the credits to our current account, and 51% of all the debits. It meant the EU accounted for more than 100% of the deficit.

The figure the trade worriers should concentrate on is the 42%, not the more than half which is more imports than exports. If you adjust for re-exports it is under 40%. My recent discussions with the representatives of the German government have confirmed again that Germany has no wish to face new tariffs and barriers to her trade with us should we vote the leave the EU, and would be very keen to find alternative arrangements that allowed her to carry on exporting so much on favourable terms. I reassured them that Vote Leave is not seeking to impose new restrictions on UK/EU trade, nor would we be paying any contribution to the EU which we had just left as some kind of payment to keep the imports flowing!

I was pleased to see over the week-end that the CBI is toning down its position and beginning to recognise that it undermines its own wish to see a successful renegotiation to say they want to stay in come what may. What we need to know now is what renegotiation does the CBI wish to see? What reforms do they want, as they usually say they wish to stay in a reformed EU.

Today we remember.

We remember the bravery and endurance of the many who fought two long wars in the twentieth century.
We are grateful for their success, in ensuring our peace and freedom.
We mourn the loss of so many young lives.
We grieve at the injuries sustained and the hopes ruined in so many personal tragedies.

Out of the ashes of a burning Europe has emerged a number of peace loving democracies.
Out of the destruction of war has arisen a much more prosperous group of nations.

We owe it to them, to ourselves and to our children to see that by our current words and deeds we work for peace.
War is what happens when politics fails and diplomacy breaks down.
War is the result of nations intruding too far on other nations in disagreement and antagonism.
War may be the product of fear as well as of greed and hatred.

When wars end diplomacy and politics have to resume.
When wars end victors do sit down with vanquished.
When wars end both victors and vanquished need to rediscover the toleration and mutual respect of peace.

As I lay wreaths at War Memorials in my constituency I will remember.
I will remember the stories of how my family members fought and survived in those dangerous times.
I will think of all those families that might have been, dashed by the death of young men who never became fathers.
I will think of how in future we can learn from the tragic ways so many conflicts between nations, peoples and religions became bitter wars.