Author: johnredwood

We all agree we want to abolish poverty. The arguments about how to tackle poverty and low incomes in UK politics are not about the aim. All political parties and all sensible politicians want to wipe out poverty, want more jobs and better pay. Our arguments are about how you make that happen.

This week the government has ventured into the difficult territory of trying to define poverty. The World Bank says you are poor if you have less than $2 a day to spend, as that means you cannot afford the basics of food and shelter. They go for an absolute standard of poverty, where to be poor you go hungry or have no suitable home. In the UK most of the organisations who talk about poverty prefer to use a relative measure, so our definition of poverty is of a much higher basic required income so that people can assume a standard of food, clothing and housing related to the average that people in a rich country like the UK enjoy.

As one of the leading anti poverty charities puts it ” When we talk about poverty in the UK today we rarely mean malnutrition or the levels of squalor of previous centuries or even the hardships of the 1930s before the advent of the Welfare state. It is a relative concept”

Labour in office defined child poverty as living in a household with an income less than 60% of the UK average. This means in a recession as in 2007-9 when average incomes fall you can have the paradoxical effect that child poverty falls, though children in low income households are not themselves better off. Similarly, if we enter a period of faster income growth then children in lower income households can be better off but there could be more in poverty as defined if inequality rises as incomes rise.

The government is looking at a range of measures including poor educational attainment, long term worklessness in the household, drug and drink dependency and family breakdown to get to the bottom of which children are at risk or getting a bad deal. Do you agree with this approach?

The IMF has apparently come to two conclusions on Greece which the rest of the Euro area does not wish to admit. First, Greece will not be able to pay back all that she owes. Second, she needs another Euro 50 billion. Why then did the IMF lend Greece so much before with the pretence that it would work?
If Greece is to stay in the Eurozone she will need Euro 50 billion or more, to have enough cash for her banks to distribute and enough money for her government to pay its bills. In a normal currency zone this money would be sent to the poorer part of the zone and much of it would be grant, not loan. A city or county in the UK with low incomes and high unemployment does not have to borrow from the rest of the UK, but receives central cash to pay welfare benefits, pensions and local authority costs by way of grant.
If Germany wants to carry on with her currency zone then she has to accept that German taxpayers – and the taxpayers of other rich countries – have to fork out to pay for Greece. Greece, for its part, has to accept that the Eurozone can then settle its budgets and interfere in its government decisions.
It is deeply damaging to the Greek economy and people to go on pretending that Greece can pay her way locked into the Euro, and to pretend the European institutions can get all their money back with the agreed interest. After seven years of agreed programmes for reform and all that borrowing Greece is no nearer today to being able to repay than when it all started. So the rest of the zone must either pay up or tell Greece to leave. Outside the Euro Greece will become more competitive immediately and better able to pay her way. Her borrowing will then be limited by the market to levels she can afford.
the zone is cruel and unrealistic. It needs to tell Greece to leave, or it needs to pay up and take social responsibility for the unemployment and severe cuts it has helped create.

On Wednesday we were told by various media outlets that the 36 degrees recorded in some parts of the UK was a new record.

That’s strange. The Met Office’s own website shows a high of 38.5 degrees in 2003. It’s still nothing like the summer of 1976 when the temperature from 23 June to 7th July was always over 32 degrees somewhere in the UK – now that was a hot summer.

This week is not the first time rails have buckled from heat, nor the first time we have hit 36 degrees. I seem to remember it used to be thought very hot if we hit 100 degrees Fahrenheit, which is more than 36 Celsius.

Yesterday in the Commons we debated defence matters. The Secretary of State explained the actions UK aircraft are taking in Iraq, at the request of the Iraqi government. He raised the issue of whether the new Parliament would reconsider the position in Syria, and allow air strikes by UK aircraft there as well. Several of us advised against.

I share his revulsion at the actions of extreme groups in various parts of the Middle East. We all feel we want to take action to make an attack like that in Tunisia last week less likely. However, a mature well armed state needs to think carefully before committing to military action. It should always ask Is this a war we can win? If we win this war will there be a satisfactory peace that is better than the current situation? Can we win the war without doing unacceptable levels of damage to the place concerned, and without excessive loss of life, especially for non combatants?

The UK has had to counter domestic terrorist threats. The UK always sought to respond to terrorism at home under the rule of law. The authorities tried to locate terrorists, assemble evidence and prosecute them as criminals. This remains our approach to terrorists in the UK linked to Middle Eastern fanatical groups. In the Irish troubles the terrorists sought special political status. There were endless arguments about the use of force for self defence by the UK authorities and about the legal processes and the detention of prisoners.

To end the terrorist troubles in Northern Ireland successive UK governments, both Conservative and Labour, came to the conclusion that they needed to undertake a political process, engaging terrorist organisations in talks and finding a democratic answer to the conflicts within a troubled community. No political party in the UK ever advocated pursuing a war on terrorist organisations,authorising shooting or bombing by the state.

I raised the question of how the UK can contribute to a negotiated settlement in Iraq or Syria, and drew attention to the contrast between treating terrorism as a serious policing matter, and treating it as a war to be fought despite the terrorists being embedded in civilian communities of people who are not themselves killing others. The Minister reminded me that in the case of Iraq we have the request of the civilian authority and operate under that legal cover. In Syria we do not wish to be friends of the Assad regime, so there is no similar legal base for intervening in Syrian territory. The Minister implied that any intervention would be as a result of extending the remit from Iraq, chasing terrorists over the border who have been operating in Iraq itself.

I understand the frustration of many that we have not so far been able to stop some of the advances of terrorists in Iraq and Syria, though nor have we in Nigeria and other Middle Eastern countries where there is no UK wish to take military action.There are many other well armed powers in the region that can and do take action and know the local religion, culture and languages better than us.

The questions the government needs to ask are the ones in this piece. I do not see a way for the UK military to improve the situation in Syria by bombing. The UK should be neither on the side of the Sunni nor the Shia forces in this religious war. We should remember just how difficult it has proved to create a stable peace in Libya after taking military action. We should also remember our soldiers and air crews. Their tasks should be both feasible and legal.

Today begins a government journey to give some justice to England. The minimum required is a guarantee that England will not have to pay a higher rate of Income Tax than Scotland based on Scottish votes at Westminster, that England’s MPs have a veto over laws the Union Parliament wishes to impose just on England, and that England has more power to decide how to spend the money we raise in taxes which is the equivalent of the Scottish bloc grant.

This was something I highlighted last summer during the Scottish referendum campaign:

August 10 2014 post
“On Tuesday I am giving the McWhirter Memorial lecture at 7.30pm on HMS President, moored on the Victoria Embankment in London.

I will use the opportunity to make the case for England. If we assume Scotland votes to stay in the Union, the three main Westminster parties have promised more powers including powers over parts of taxation will be passed to the Scottish Parliament. This will be the time to recognise that England too wants and deserves devolved government, enjoying the same powers of self determination of laws, spending and taxes as our Scottish neighbours and friends.

I will ask Who currently speaks for England? Why do the EU and many senior politicians in the UK want to break England up into regions that we do not seek or recognise? Why can’t English MPs at Westminster make the decisions for England, and speak for England, in the way the Scottish Parliament in Edinburgh does for Scotland?

If we are revisiting Scotland’s settlement, we need to consider England’s at the same time. Many English people will not accept Scottish members of the Westminster Parliament voting through taxes on England that they do not have the power to impose on Scotland.”

I was delighted to read the Business Secretary’s speech to the CBI this week. In it he told them in no uncertain terms that if they continue to say the UK must stay in the EU come what may, they undermine the Prime Minister’s negotiations. He reminded them that in a negotiation you need to set out what you want, and to indicate that you will walk away if you do get a good offer. Business is for ever telling us they want to stay in a reformed EU, not the current EU. They should now tell us what reforms they want. They should also tell Brussels what reforms they want, and tell Brussels that people in the UK will vote against staying in if we are not offered solutions to the problems with our current membership.

At the base of the UK’s unsatisfactory relationship with the modern EU is the way in which the EU uses the so called single market as an excuse to regulate, legislate and interfere in a range of other important matters in ways which UK voters do not approve. The modern challenge for business is the way in which the demands of the Euro for more taxes, more financial controls and more business regulation are also spilling over into the wider EU. Big business does not like the banker bonus controls, the Financial Transactions Tax and the new banking capital rules from Brussels, though these may be popular with some voters. Nor does business like the results of the EU’s energy policy, with dear gas and electricity driving energy using businesses out of the UK.

The truth business needs to understand is that membership of the current EU is not a comfortable status quo that they can live with, but a ticket for a wild ride to political union which may do all sorts of things they do not want. The recent programme set out by the 5 Presidents of Euroland and the EU show just how central to the EU the Euro project has become. They want legally binding targets and controls on economies, a Euro Treasury, a financial union, and a political union. The UK has wisely decided not to join the Euro. Few business leaders want us to join the Euro. They therefore need to understand that any UK government now has to negotiate a new relationship with the emerging Euro state. We want to trade with them, be friends with them, have a range of sensible agreements with them but we do not wish to be governed by them.

It is an urgent task to get more business people to grasp that now we have an opportunity to free ourselves to be more prosperous, and to free the Euro area to get on with what it wants to do. The UK and our businesses do not wish to be drawn into a massive transfer union where we have to pay more tax to send to countries in the Eurozone that need more aid and support. That is why now is the time for business to tell us what reforms they need as we seek this change of approach.

Mr Juncker’s 29th June press conference is already infamous for his parting jibe that the Greeks should not commit suicide because they are afraid of death. There is a serious problem of suicide levels in Greece thanks to the economic misery the Euro and its policies have created. This made the remark crass. Talking of mortality as a simile for the Euro and its policies also showed a curious lack of judgement.

As remarkable was the way Mr Junker decided to talk about the crisis as being about him. He explained how personally saddened and aggrieved he felt by the events of last Saturday. He felt betrayed by the failure of the Greeks to respond to all his personal efforts to bring about a deal. (Je suis profondement afflige, attriste, par le spectacle qu’a donne L’Europe samedi dernier…..apres tous les efforts que j’ai deployes…je me sens un peu trahi parce qu’on prend insuffisament en compte mes efforts personnels…). Highly paid officials do not usually vent their feelings in public about complex negotiations they have to conduct on behalf of their organsations. Mr Junker is paid around £300,000 a year in salary, expenses and benefits to be a professional. Most people could put up with a few difficult meetings for such a large public reward from taxpayers.

In the wider scheme of things Mr Junker’s feelings are of little significance. They do, however, reveal the growing gap between the lives and views of the EU ruling class and many of the voters and taxpayers who have to pay their salaries and live under their unsuccessful policies. The suicide comment is Mr Junker’s “let them eat cake” moment. It could prove to be almost as memorable as its predecessor should Greece dig in and be forced out of the Euro by its lack of cash, the intransigence of the rest of Euroland and its own high spending and borrowing inclinations. Mr Juncker’s personal quest for recognition and for our sympathy for his hard and so far fruitless work to find a compromise or agreement is more a sign of incompetence than proof of a worthy and trusted official who has been treated badly.

Perhaps Mr Juncker should now apologise to the Greek people for his remarks. His closing words in his press conference were a direct appeal to the Greek voters in their forthcoming referendum. He tells them to vote Yes whatever the question. As far as he is concerned he says the real question that the referendum decides is whether Greece stays in the Eurozone. The Greek government say the question is the one they put on the ballot paper, which is about whether to accept the last offer from the rest of the Euro area or not. His speech implies he thinks the question is whether the Greek people come to recognise the talent and hard work of their EU President of the Commission, and whether they give him carte blanche to override their government and sentence them to a few more years of Euro austerity.

What should be on the agenda for the new Chairman of Network Rail?
I would like him to start with an analysis of who the users of the railway are, and where the growth in passenger and freight demand might come?

The opportunity seems to lie mainly in two big areas. The first is travel into and out of the larger cities, especially but not only at peak times. The second is more rail freight, taking heavy loads off trucks for longer distance haul. The first is genuine demand, even at current high ticket prices in the case of peak travel . The second is desirable new business which will be price and convenience sensitive.

I would want him to see the problem from the traveller’s point of view. The traveller wishes to go from A to B, where neither A nor B is a railway station. The traveller is interested in speed and convenience as well as price, and will look at total journey time rather than time of the train. This means the successful railway manager does have to ensure good car parks, set down points, bus and mass transit links to mainline stations. The problem with the commuter railway is the problem of peak usage. The railway has to allow for much greater demand at busy times, and have surplus capacity for the rest of the time. More flexibility in running shorter or longer trains would help adjust. Taking too many trains out of the off peak timetable makes the total service less desirable.

Trains need to be lighter, so they can brake more quickly. It would then be possible to increase throughput on lines, from around 30 an hour to 40 an hour in the peak, greatly improving services and adding 33% extra capacity when needed. The long lengths of empty track visible in the morning peak is testimony to an old technology and an unwillingness to innovate to help customers. None of this requires a change of traction from diesel to electric. Customers do not on the whole want electric as opposed to diesel trains, though they would like new trains with more capacity for busy periods.

The problem of freight is one of access and single wagon marshalling. Few businesses have a trainload of traffic for the railway each day. British Rail allowed freight to run down, losing much of the old single wagon business it enjoyed on pre war industrial parks with rail access. The railways came to rely on coal, steel, cars, cement – a few large businesses with large quantities to haul. These in turn have declined or found other cheaper ways of sending their goods.

The railway should ask how can they put freight branch lines back into larger industrial parks and urban industrial areas, so they can pick product up for large manufacturers who lack a trainload? How can they provide marshalling yard access for businesses which are prepared to drive a container to the railway to travel longer distances by train? How can they start to match or beat the price of road haulage? They should be able to cut costs of manpower, as a long train needs but one driver, and cut the costs of fuel. There has to be an allowance for the extra costs of getting to and from the railhead. Maybe the railway has to offer tractor units and delivery drivers to take freight from main freight depots to end destinations.