Author: johnredwood

On 25th March 2013 David Cameron made an important speech on immigration in Suffolk. He said:

“Immigration has to be properly controlled. Net migration needs to be brought down radically from hundreds of thousands a year, to just tens of thousands”. He reported good progress in curbing non EU migration and went on ” Now what we need is to work across government so that our immigration policy is factored into our benefits system, our health system and our housing system”. He wanted to stop Britain being a “soft touch”.

Yesterday he had to report disappointment in hitting the targets, explaining that continued recession and poor economic performance on the continent was pushing more and more people to the UK to find work. Yesterday he announced further measures to curb new migrants access to benefits and housing for the first four years after their arrival. He said

“I want to get net migration back to the tens of thousands which it was in the 1990s. This is not some sort of outlandish unachievable pledge”. “It is not wrong to express concerns about the scale of people coming into the country. It boils down to one word. Control”. In the 30 years to 2004 net migration totalled 1 million. In the next 7 years there were an additional 1.5m people from migration.

Both the 2013 and the 2014 speech shows he fully understands the level of public concern, and shares the worries about how we provide sufficient healthcare, housing, welfare and other public services for all the people currently coming.

The main things he now wishes to do to control numbers is to require people to be here four years before getting any tax credits, child benefit or access to social housing. He also wishes to stop people claiming child benefits for children not living in the UK.

Do you agree with his aim of controlled migration in the tens of thousands? Do you think these new measures will do the job?

There have been varying interpretations of what the Smith Report says on fixing Income Tax for Scotland and for the rest of the UK.

Labour and the Lib Dems quote the part which says “Income Tax will remain a shared tax and both the UK and Scottish Parliaments will share control of Income Tax. MPs representing constituencies across the whole of the UK will continue to decide the UK’s budget, including Income Tax”.

They wish this to mean that Scottish SMPs in Edinburgh can decide Scotland’s Income Tax rates and thresholds with no advice or votes from the rest of the UK, whilst Scottish MPs can come to Westminster to vote on the tax rates and thresholds for the rest of us.

However, Smith goes on to say “Within this framework the Scottish Parliament will have the power to set the rates of Income Tax and the thresholds at which these will be paid for the non savings and non dividend income of Scottish taxpayers. As part of this there will be restrictions on the thresholds and rates the Scottish Parliament can set. All other aspects of Income tax will remain reserved to the UK Parliament.”

Conservatives take this to mean that English votes for English issues would obviously apply to Income tax rates and thresholds, as these are no longer a UK reserved matter under the Smith settlement.

The decision to let Scotland settle her own Income tax rates and thresholds intensifies the pressure and the need for English votes for English issues, including these crucial tax powers. Some Labour MPs in private see the justice of England’s cause. Smith does not rule out justice for England, which must be getting much closer as we contemplate these large powers going to Scotland.

The announcement by the Smith Commission that Scotland should in future decide her own Income Tax is an important moment in the evolution of the United Kingdom.

The new West Lothian or Wokingham question must be who imposes Income tax on the English?

Instead of the Scottish referendum settling our united country for another generation, the generous offer of the Conservatives and Lib Dems of full Income tax powers, and the offer of substantial Income Tax powers by Labour means we are moving to new kind of looser federation. Time will tell whether this latest settlement is then stable as some of us hope, or whether it will embolden Scottish voters to ask for more once this round of devolution has been digested.

What should be clear to all politicians is the grant of these major powers to Scotland will require the grant of powers to England too. (I  leave out Wales and Northern Ireland for simplicity, but the same principles should apply to them. Devolved issues to them will be settled in their parts of the UK. Anything not devolved to them will still be settled by the Union Parliament with all MPs voting on it who do not come from a part of the country where that matter is devolved. Some votes will be English, some will be English,Welsh and Irish, and some will be UK wide)

The new West Lothian or Wokingham question is simple. “Why should Scottish MPs come to Westminster to impose a higher rate of Income Tax on England than the Scottish Parliament is imposing on Scotland?”

You cannot answer this question by fobbing off England with limited devolution to some English cities or regions. England (maybe with Wales and Northern Ireland) will want a single Income Tax rate which we need to settle for ourselves.  That requires English votes for English issues in the Westminster Parliament as the first step on the road to justice for England within a new looser federation.

I have often spoken up for cheaper energy. It is time to do so again, as businesses tell me that the UK – and the rest of the EU – is  no longer competitive on energy prices. Much energy intensive business is at risk as the EU gas and electricity prices for industry are more than twice the level of US ones. Assembly manufacture is also damaged by high energy prices, as energy can be  a more expensive cost than labour in a modern automated factory.

So what are the barriers to cheaper energy in the UK? We are after all an island of coal and gas surrounded by a sea of oil, coal and gas. In the past we have relied heavily on our coal. More recently we were self sufficient in oil. Today we need to do more to produce and use the abundant oil , gas and coal reserves we have, using new technologies to lessen the environmental impact of extraction. Conservatives in the government are seeking to speed up gas extraction, and Ineos has  now announced a major investment programme to help.

We also face the problems of high cost wind energy on our grid. Huge investment in recent years has been committed to try to meet the EU requirement to a high renewable component to our power. The choice of wind power is both high cost and unreliable, as winds do not always blow. As a result our margin of spare electricity capacity has come down and we could be stretched in future winters if cold weather coincides with no wind. It is a pity the renewable investment was not made in hydro or tidal as that would have been more reliable.

Today the imperative must be to find and use more gas, and to provide more back up power stations.

Owen Paterson made an interesting speech yesterday. He was right to say the UK has no wish to pursue the political union being created on the continent, and right to say our future must lie outside the federalising treaties, as  many of us have been arguing for years.

His best section drew attention to the way there are now important global or international standard making boards and councils which the UK used to be part of, where now we are represented by the EU. As he says, these bodies often influence and decide the direction of legislation and regulation for whole industries and areas of life. It would be better if the UK outside the current EU could regain direct influence by having seats at the tables of these bodies.

Given the influence of these international bodies over the EU, let alone over individual member states, he is right to say the UK needs to change the bodies it sits on to have stronger influence. Which leads one to ask about the single market. As many of its standards are derived from global bodies above it, surely it is more important for the UK to sit directly on the superior global bodies?

The detail of how Mr Paterson wants to get to the UK being in the single market but out of the political project is less important than this central perception. I would add that we want free trade and sensible trading arrangements, but it is better to help shape the forces which shape the single market by being on the global boards that control business and industry through their moves to global standards and regulations. Mr Paterson cannot, of course help get us to this outcome until we have a majority UK government that wants to renegotiate and offer a referendum.

We await Mr Cameron’s big speech on immigration, which was delayed until after Rochester. It is time to ask what could be achieved within the EU, or do we have to leave to get control of our borders back as some propose?

There is no inviolable principle which always takes precedence over a political deal in the EU. The famous  four freedoms have still not resulted in free trade in services, where various member states still can and do impose barriers against service providers from outside their own country. The belief in keeping every country’s budget deficit down to a maximum of 3% has been more breached than observed in recent years. The original idea of keeping each country’s balance of payments in reasonable balance has been ignored throughout the EEC and EU’s life, with Germany allowed to build huge annual surpluses despite the impact this has on other countries. The free movement of capital was suspended when it suited them to do so for  Cyprus, and Greece was allowed to go bust as a country when it could no longer meet the various budgetary and economic requirements. So we know that the EU does amend or suspend so called fundamental principles when politics requires it.

Successive UK governments always made clear we did not want to be part of a common  borders system. We opted out of Schengen arrangements, and were told  by the last Labour government that keeping control of our own borders was a red line which had been defended. Instead they signed up to a system which did take many of our powers of self government in this area away, without asking the permission of voters. That is why so  many voters are unhappy today.

It seems likely that the UK can negotiate a better deal on benefit payments. Maybe the UK could within current rules switch to a UK system where people had to pay in – or  be brought up and attend schools here – before being able to claim benefits. I have proposed such a means of tackling the immediate problem before.  Maybe with German help the UK can get the EU to allow tougher rules preventing people coming here to seek work from qualifying at the same time for unemployment benefit or top up in work benefits. After all, the original idea was the free movement of workers,  not the free movement of benefit seekers.

It is also the case that when the Eastern European countries joined the EU the EU itself proposed a longish transitional period during which citizens of those countries did not have free movement rights into the richer countries unless those countries accepted them. Only the UK under Labour declined to take advantage of the transitional block on migration from these countries.

If it was possible to suspend or deny free movement rights when the  new countries joined, by definition the EU could suspend or modify free movement rights for other reasons. If, for example, the imbalance  in wages and job opportunities is too great then there could be disproportionately large movements of people from the poorer or higher unemp0loyment areas to the more successful areas. This causes strains in both the country losing the people and the country gaining the people. The country losing may lose some of its brightest, best educated and energetic workers that they need to build their economy.The receiving economy may have to build too many new homes and public service facilities, putting too much strain on public service and infrastructure. It could be in everyone’s interest to have a system to limit or brake the numbers moving.

Of course many of you will say a simple exit from the EU is the quickest fix. That could be true if that is what the UK voters vote for. However, it will take both a Conservative government and a vote in the following referendum to get us out. Other potential governments of the UK would   not dream of heading for the exit,  nor will they give us a referendum. All political parties need to consider what they can negotiate inside the EU, and those contemplating out need to think about the reciprocal arrangements we will need outside the EU given the position of UK citizens in other EU countries. UKIP got into quite a muddle over this recently.