Author: johnredwood

There are some in the media who treat the Labour leadership campaign as some strange alternative story from the main drama of government and people. They did the same to the Conservatives during much of our period in opposition.

Who is Leader of the Opposition always matters. The Country will need a choice at the next election, and when  the election draws nearer the Leader of the main challenger party naturally gets more attention and becomes more interesting.

The Leader of the Opposition with the Shadow Cabinet also determines some of the business of the Commons through Opposition day debates, and can always set the main political conversation point through having 6 questions each week at Prime Minister’s Questions, which in turn feeds the media.

The next Leader of the Opposition has an additional  relevance  as well as being a future possible PM whose importance  only rises if he or she gets the Labour Party high enough in the polls to be a possible winner. As soon as the new Leader is elected he or she will have to decide whether our country bombs Syria or not. The PM has no majority to do it if Labour opposes the government, but is likely to do it and can do it if Labour is on a three line whip to abstain or to support the bombing.

Then there is the pressing  question of what does Labour want by way of change in our EU relationship? Again the Leader’s view will have an immediate influence  on what the government asks for and recommends. The decision of Labour to support or  oppose continued membership will have influence on a crucial referendum.

There is the question of welfare reform. Whilst the government can probably get its way on what it wants despite a small majority, the task is much easier if Labour abstain or support the main thrust of the proposals to make it more worthwhile for people to work.

Mr Corbyn as Leader would presumably vote against military intervention in Syria. He seems to have diluted his sceptical views about current EU policy and may now wish to support continued membership whatever the outcome of the negotiations. If so it means all 4 Labour leadership contenders will be passive on the EU issue, declining to demand sensible improvements and indicating before the negotiations are settled that they will vote to stay in. In so doing they make a successful negotiation less likely and continue their long tradition of denying the significance of EU matters. Mr Corbyn will doubtless oppose most welfare reforms, and will seek to drag the political debate to the left.

Our democracy needs a strong and sensible Leader of the Opposition. Labour still is out to lunch on the main issue of our day, our relationship to the emerging political union on the continent.

The major currencies of the world are backed by single states. These states usually arrange a banking union, a benefits or transfer union and a common economic policy as well as a monetary union. Behind every good currency lies a unified nation of taxpayers who accept the legitimacy of their government and Central Bank.

Currency unions break up when these conditions cease to exist. The collapse of the rouble bloc followed quickly after the dissolution of the forced political union of the USSR. The countries which emerged from the Soviet empire wanted to control their own money. The Republic of Ireland kept the pound when it first separated from the UK, but later adopted its own currency to complete its independence. The Scandinavian and latin currency unions broke up in disagreements over the debts around one hundred years ago.

We have recently seen two interesting cases of the political arguments which can emerge in a currency union when people within it start to question the political union that goes with the currency. In the case of Scotland I think it was the wish of a majority of Scottish people to keep the pound that led them to vote to stay in the political union called the UK. They saw that all the Union parties rightly agreed that if Scotland left the political union the currency union would also be broken up, as it would be unsustainable. Why would taxpayers from the rest of the UK wish to shore up Scottish banks if we were no longer part of the same country? What would happen if Scotland followed economic and tax policies which were incompatible with the policies of the rest of the UK within the currency union? How would Scotland manage if oil revenues collapsed but no longer received compensatory payments from other UK taxes and taxpayers?

In the debates over Scottish devolution I raised the issue of how far can you go in unpicking the benefits, tax and transfer union before there are problems for the currency area? Parliament is going to have to return to the issue of the money before the new devolution settlement is completed. Under present rules there are common rates of benefits, and a sharing of the risks of paying for those benefits throughout the single currency area by all taxpayers in the UK.

As Scotland presses to see how far you can go in dismantling a political union which backs a currency union, Greece is testing how far a country has to go in accepting a political union in order to justify a currency union. Today there is a strong enough political union with revenue and expense sharing in the UK for the pound to work for Scotland and all other parts of the sterling area, but there is insufficient political union with revenue and expense sharing in the Euro area for the Euro to work for Greece. Greece has lived in almost perpetual recession for eight years, with a loss of one quarter of its income and output, partly because there are no proper mechanisms to share revenue and risk within the Eurozone. The Euro needs much more political union to even out the gross imbalances between the rich north and the rest.

Several of you want to write and talk about Calais. Here is your chance.

I want the UK to gain control of its own borders through renegotiation or leaving the EU, as I have made clear on many occasions.

In the meantime I want us to use all legal means to ensure economic migrants do not cross the channel illegally. I am glad the government has said it intends to strengthen our frontiers in Calais and stated any illegal migrants who do get through will not have access to cars, homes or bank accounts if they do come. Illegal migrants need to see that coming without permission does not work for them. The rest of the EU needs to improve its border control. France needs to work with Italy and Greece on their borders and access of illegal migrants to France from southern ports.

Clearly anyone arriving in Dover from Calais cannot be an asylum seeker as France is a democratic country with proper human rights, so anyone wishing to claim asylum should be returned to France.

What measures do you propose?

I will be writing to Mrs May about this and will post what I say to her. The UK government must ensure that only people with legal travel documents that entitle them to come to the UK come here or are allowed to stay here, unless they are genuine asylum seekers arriving directly from a country where they may be at risk of their lives.

If you look at the EU figures for incomes and output per head the dominance of a few large cities comes across from the statistics. in the 2013 figures Inner London is by far the richest region within the EU. It records an average income per head of 80,000 Euros,more than twice as high as any other part of the UK and more than twice as high as most other EU regions. The dominance of Paris in French economic success is also clear. The Ile de France area , Greater Paris, enjoyed an income of 44,200 Euros a head. The next richest region in France was Rhone Alps at Euro 26,400. These two largest cities in the EU are the most successful in generating high value added services and output, and sustaining more better paid jobs than elsewhere.

Most other European cities are of modest size by modern world standards,and do not establish the same lead over incomes elsewhere in their countries. Berlin is relatively poor. Hamburg is Germany’s top performer with a high income level. In Austria Vienna is the highest earning area by a decent margin, and in Belgium Antwerp is the leader. Outer London is relatively weak, with an average income considerably below the Home Counties that lie beyond it. In the UK Bristol is the one other city aside from Inner London that delivers a higher average income than most parts of the country. Were the EU figures to combine Inner and Outer London it would look more like Paris/Ile de France.

The figures show that cities do seem to offer the best prospects of concentrating, nurturing and using talent to boost incomes and jobs. It is not a universal panacea, as some cities enter periods of decline, stuck with older industries and patterns of working that no longer command high wages. They may also lose talent as it migrates elsewhere, and have a higher ratio of people dependent on state assistance. Fast growing cities on the other hand suck in more talent and may have younger average ages and higher proportions in work.

Other forces can provide high incomes. NE Scotland has done well out of oil, providing enough well paid jobs in that industry to make it one of the best paid regions on average. In the UK Cornwall and West Wales are the lowest income areas, with Lincolnshire, East and South Yorkshire and Merseyside also towards the bottom of the table. The Northern Powerhouse can help boost the great northern cities. As the figures show the lowest incomes in the UK are in rural areas.

In much of the EU the regions that wish to be independent are the richer parts of their present countries. In Spain Catalonia is the most enterprising and highest income part of Spain along with the Basque country which is also keen on having more self government and control of its own tax revenues. In Italy the main force for independence comes from the Northern League where average incomes are much higher than in the south and where economic performance has been much better than in the rest of the country. Venice is a particularly successful city state with a strong wish to be independent. In Belgium the richer north is keenest to split away. In Germany there is less force for self government thanks to the relative success of federal economic policy despite the lander system of devolved government, but even there it is rich Bavaria which seems the most semi detached. In the UK it is different. The richest part of the country is London but there is no serious move to create a City state independent of the UK, whereas some parts of the Union that require substantial transfer payments with lower average incomes have a strong sense of individual identity. Scotland’s wealth and income is a matter of dispute depending on how you account for and project oil revenues.

Language is often a force for separation. The Catalan and Walloon speakers of Spain and Belgium see their language as part of their difference from the rest of their current country. The EU has fostered the development and revival of local languages which has reinforced these feelings. The EU seemed to want to use local and regional identity as a force to weaken the power of unitary states like Spain and Italy. It appealed over the heads of the member states to these regions. It had in mind not a host of smaller new countries claiming independence, but a subsidy or dependency union for the regions. It looked forward to regional allies and gratitude for the money sent to the regions, money it only had thanks to the contributions of the member states.

Now the EU is so much more powerful it has new problems to resolve. Will it seek to play down the demands for independence generally, as it is clearly doing in Catalonia? And now it has ambitions for a common foreign policy, how will it respond to similar tensions in non EU countries? Is it pleased with its work in Ukraine, where it wants the Russian minority to accept the pro EU policy of the western majority? In the Middle East is it feasible to ally with the Kurds against ISIL but to deny them their aim of a Kurdish state? Does the EU seek a federal solution to the governance problems of Iraq and Syria?

Outside the EU the politics of identity can become violent and extreme. It is most important the EU treads carefully if at all over these intricate and deep seated issues within Europe as we wish to keep the peace.

Shock horror. Apparently a socialist has managed to conceal himself within the Labour Party. He kept himself unobserved by being a member of the party and an MP for the last 32 years.

He has now revealed himself to the wider world by standing for election as Labour leader and daring to show he has support. He has some shocking views according to his Blairite or “mainstream Labour ” critics. They worry because  he opposed the Iraq war and opposes other Middle Eastern military interventions, and does sometimes criticise the EU. He dares to point out that the extreme austerity policy in Greece has done substantial economic and social damage.

I hasten to add that I would not wish to see his UK economic policies implemented, and do not agree with all his views on foreign affairs but then I am not a socialist.

Labour should have a good debate between the four candidates and decide who they like best. That will define what they want to offer the public in the next general election. It is strange to see some of them complaining already that one of the candidates is not allowed to be poplar and maybe his popularity invalidates the electoral process or the electoral list. Surely it is up to the candidates who disagree with Mr Corbyn to enrol people and gain the support of people who are members by showing why their vision of the future is better for the UK.

Some of the dafter commentary says the leadership election shows Labour is split. The whole point of a leadership election is to allow the different strands of opinion and support within a major party to run their views and seek to show support for them. Labour started all this ridiculous briefing that a party cannot govern if it contains different opinions and groups. It is the ultimate irony to see this myth come back to haunt them when they are having an entirely proper leadership election. The Wet /dry conflict under Mrs Thatcher during Conservative government and the big Blair/Brown row under labour always showed it was nonsense to claim split parties cannot govern.

Those who have already made up their minds to recommend staying in the EU whatever Mr Cameron negotiates think they can control the referendum for Yes. They aim to run a campaign claiming that Yes is Yes to the status quo, Yes is the risk free option, and that No would mean all sorts of dire futures which they intend to portray by lies and scare stories.

The truth is somewhat different. As I set out in the Commons, the present EU is a wild ride to political union. It is not a friendly status quo, a restful membership of a finished structure allowing us to trade and be friends with the neighbours, but a cauldron of disagreements, arguments and a state of permanent revolution as they seek to complete their political, banking, Capital markets, and fiscal unions.

There is no necessary advantage in asking people to vote Yes. After all, No won the Scottish and the AV referendums in recent years. It is true that these two No campaigns were for the status quo, but so in a way NO will be on the EU matter. Many voters think the EU should just be a common market, and those who argue for Out will be arguing to leave the Euro and political union which increasingly impinge on us, not to turn our back on trade and friendship with the neighbours.We want the common market some voted for in 1975.

Anyone independent minded person who has not yet decided how to vote, reasonably wanting to see what terms Mr Cameron comes back with, will want to see how the UK could defend itself from the growing power of the Euro union. Recent events with an attempt to get the UK to pay some of the Greek bills for Euro failure will doubtless give many more pause for thought about the absence of a status quo within the EU.The obvious failure of the EU to control its borders and therefore the problems it poses for UK borders inside the EU is a major issue where the EU seems unable to gain control and unwilling to let the UK control its own territory. The people who want in have no answer to the migration issue. They also want to sign us up to paying more and more of the bills for a proto political union we are trying to keep at arms length.

Some have raised the issue of the UK’s loans to Ireland, made at the point of transition from Labour to Coalition in 2010.
The Coalition decided to lend money bilaterally to Ireland so it was not part of an EU scheme, and offered no precedent for the UK in future having to join Euro area bail outs.

The loan reached a total of £3.2 billion when the final drawdown was made in September 2013. The money is repayable in instalments between April 2019 and March 2021. By September 2014 the UK had received £148 million in interest payments. The interest receipts are now running at £42 million a half year, and all payments have been made on time. The interest rate is a little higher than the UK government current ten year borrowing rate.

There is no reason to suppose anything will go wrong with this loan. The Treasury expects repayment on schedule. It established no precedent. I speak as someone one who was against it at the time, as I just felt the UK had to do everything to get its own borrowing requirement down.

I remain keen to ensure the Uk does not have to pay any of the costs of the unsuccessful Euro economic policies in the states that are suffering from their position in the currency. I also wish to see the UK enjoy tax cuts and lower borrowing by ending the huge payment we make yearly to the EU under our current membership.

I have always assumed that the EU and its core, the Euro, will eventually be swept away by powerful senses of identity in some individual counties and regions of its vast rambling empire. Might it be the UK who tires of EU meddling in its affairs? Will it be Germany, refusing to pay the bills for its expensive currency union with the neighbours? Or will it be smaller countries and regions who want more self government?

History tells you that’s what will happen. The Roman empire united by force fell when that force met its match from nationalist revolts. The Catholic hegemony was undermined from within, mainly by the successful transmission of heretic thoughts allied to national self belief in parts of the old Catholic union. The Holy Roman Empire fell to pieces under the weight of opinion wanting more local identities. The Scandinavian unions broke owing to strong loyalties to the individual countries. The Latin and Scandinavian currency unions broke up over disputes on how to spread the debts. The USSR empire was destroyed by a series of public revolts state by state, and its currency union split up relatively peacefully and successfully afterwards.

I hope that this false union will go peacefully, through the ballot box. The paradox of the EU is the way it is splitting some of the larger countries of Europe through its own passion to build a Europe of the regions. On the way to power the EU decided that it would good to appeal direct to regional governments below the level of the member states. It set up a series of programmes where regions could apply for EU monies ( money originally sent to the EU by their national taxpayers and those of the other national states), to strengthen regional government. It was happy building the governments of Catalonia, southern Italy, Scotland, and other regions around the EU.

Now the EU has much more power it is becoming more wary of what it has created. The EU was not helpful to those who wanted Scottish independence. The EU is helping the Spanish state deal with rising Catalan nationalism. Just over the EU borders, the EU is far from amused by the demands for autonomy or independence in parts of Ukraine. The issue for the next few years is can the EU help suppress the nationalisms its has helped unleash? What will the impact be on the EU if some of these states within a state, countries trying to get out of larger countries, have their way? I will look at more of this soon.