Category: Articles

It’s been a frustrating week at home with no Parliament to go to. Parliament is taking a recess whilst the three main political parties hold their conferences. The trouble is the world does not go away for three weeks whilst UK politicians meet to mull over what they have done and need to do next. Whilst the UK argues about domestic issues the Euro crisis rages. Meetings at the IMF, the World Bank and amongst the Finance Ministers are watched and commented on as markets plunge and fear stalks the financial world.

It was pleasant last week to be recognised favourably in Peter Oborne’s book on the guilty men who tried to take the UK into the Euro. He praised the few of us who made the long argument against Euro membership, and forecast that it would lead to a debt and economic crisis. It was always the case that if you want to share a currency with another country, you need to share a government with them. I used to make speeches explaining that joining a single currency meant taking out a bank account with the neighbours. All would be well until you fell out over how big the overdraft should be and who got to spend the money. We are now in the midst of a full blown Euro family row about that overdraft. Should the German savers have to send money to Greece to pay the bills? Should the Greek be able to use German credit worthiness to borrow more? It’s a tragedy for all of us that the EU didn’t work out these elementary issues at the start, before they locked themselves into such a scheme.

The aim of my speeches, interviews and website commentary is now to keep the UK out of having to pay the bills for the mess they are creating. The UK was right to stay out. I see no reason why we should have to pay to help clear up the mess. We may find Euroland can import less from us in the years ahead, owing to the damage the crisis is doing, but that’s no reason for us to try to bail them out, or to lose a fortune on loans that go wrong. There is talk now of a mega package of new loans to keep the overborrowed countries and the weak banks afloat. It’s not more borrowing they need. They need a work out, spending less or bringing in more income. You do not get out of a debt crisis by finding new lenders to offer you more debt.

There has been a lot of interest in www.johnredwod.com, recently voted best MP website. It’s my main way of telling you what I am thinking and doing to represent you in Parliament. Most of the contributors want us to spend less on the EU and be governed less by it. If Euroland is serious about wanting to create a single economic government for the area, the UK can be no part of that. We need a new relationship that makes sense for us, based on trade and friendship, not on a united government of the EU.

Last week was a hectic one in Parliament, after a needlessly long summer break. There was much to catch up on – the state of the economy, the Euro crisis, the aftermath of the looting, the advances in Libya, the changes in the NHS and even a vote on abortion counselling.

I have been preoccupied by the difficulties local and businesses here and around the country have in raising money for their development. The banks tell us they are open to lend, but it does not feel like that for many smaller and medium sized enterprises. It is also a lot more difficult for someone to find a mortgage as a first time buyer, than in the heady days of too much credit prior to the Crash.

I have put proposals to the government about how they might respond to the Vickers Inquiry into the banks. I would like to see them create new banks that could compete on the High Street for personal and business customers, offering better service at lower rates and prices. They could do this out of the assets and liabilities they own from past nationalisations and share purchases, and could float these new banks off, raising more money for them to lend from the markets at the same time. It would give a welcome and much needed boost to our slowing economy.

I have also worked with Parliamentary colleagues to try to get the government to see that the UK needs a different relationship with the EU, now seventeen countries are embarking on much closer union to try to salvage the damaged Euro scheme. They need to control budgets, taxes and spending to reassure markets that the Euro area as a whole is well run. The UK does not want decisions about tax, spending and borrowing taken in Brussels. We need to opt out, but we also need to get some power back, given just how much of our government has been subcontracted to Brussels by recent Treaties.

Some of you have written to me about the planning policy changes. I have had a further meeting with the Planning Minister, who assures me that if Wokingham wishes to protect green areas from development it can now do so by putting these clearly into its local Plan. I urge the Council to take advantage. The new policy abolishes top down regional housebuilding targets, so the Council can decide based on local circumstances what is the right level of development.

There have been some well aired rows in the press over national planning policy. Some in the Council for the protection of Rural England and the National Trust have been implying the new planning rules coming in will make it possible for developers to build on green belt or to erode the other important protections afforded to some of our countryside.

I was most concerned to read this. I contacted Greg Clarke, the planning Minister, to explain that in Wokingham we do not want  to be forced into building on protected areas that we value. He reassured me that is not the intention.

Currently some land has Green belt status. This will remain a national designation, and the future  protection of it will continue as before. Some land is designated as  a Site of Special Scientific Interest. SSSIs will remain as before, with special protection.

Some of the important green gaps between settlements, high grade agricultural land  and leisure space is not protected by one of these national legal frameworks. This is where the government’s new policy of localism comes in. The Council can designate land as important to remain without development for a variety of good reasons. This may  include green gaps between settlements, agricultural and landscape value, leisure use, and absence of suitable transport and other services to enable the construction of sustainable communities. Once land is specified with protection in the local plan, that will inform and direct Planning Inspectors to turn down applications should anyone wish to test out the opportunity for developing it.

The government is changing the presumption for other land. If land is not specially designated with a national protection or in the local plan as being permanent green space, then there will be a presumption in favour of sustainable development. This makes the contents of the local plan even more
important. The Council needs to make sure it has protected the important green spaces that have most popular support, as the complement to its policy of concentrating development in its own preferred locations.

I am sure people in Wokingham will want continuing protection – preferably better protection – for important areas free from development, as some offset for development in the designated sites. I will support the Council on appeal where it has designated land for protection, should need arise.

I was pleased to receive an email from Wokingham police to confirm that no copycat violence had broken out in our area during the disgraceful wave of looting, arson and violence we saw on tv recently. I was even more relieved to see the police decision to put many more officers on the streets of our main cities and to intervene more directly to make arrests. It did succeed in stemming the criminal activities.

Many of you will join with me in thanking local police officers who went to help neighbouring forces in difficult conditions. The police took a battering in order to re establish control of our streets. The cancellation of leave was a necessary sacrifice they made to do the job.

I have written extensively on johnredwood.com all last week about the problems, and have been inundated with responses. Most agree that the first priority was for the police to get in control by a strong physical presence and by actively arresting those who are looting or in other ways threatening people and property. We cannot create jobs, offer good public facilities and meet people’s aspirations, if warehouses are torched and shops ransacked. We need to do everything we can to attract investment, new business and enterprise to our cities. The easiest way of turning it all off is to wield the petrol bomb and the pick axe. The second priority is to ensure proper penalties are imposed on those who were guilty of crime.

In the aftermath of last week’s violence we need to consider what else we need to do, apart from the more muscular policing. There should be no reward for rioting. There should be sensible soul searching about our society, and how we can improve it. It emphasises the importance of the government’s welfare reforms. It always needs to be more rewarding to work than to stay on benefits. Parents need to take a strong interest in the wellbeing and discipline of their children. Schools everywhere have to offer a framework of quiet authority that allows ambition and talent to flourish, and more to feel they can achieve through conventional means.

Drugs, excessive alcohol, and gang culture all need more attention and will I trust now receive it. There are things government can and should do. There are also things the rest of us can do, as we all need to contribute to the creation of a responsible society where each of us strives to avoid harming others. Many of you can offer some leadership to the groups and people you are close to.

I will be working with Ministers to see early implementation of welfare reforms and to strengthen an economic policy capable of generating many more jobs. Wokingham shows how many can provide service and effort that helps the whole community. We need to spread the successful ways of bringing up children, avoiding or removing drugs, and offering hope of a better tomorrow into all parts of our country. In the meantime we need to make it clear that criminals will be detected and prosecuted.

Debt is easy to get into, but difficult to get out of. In 2008-9 the debt crisis was all about people who had borrowed too much on mortgage, and banks which had lent too much. On both sides of the Atlantic that is being sorted out. Gradually people are paying off debts, and taking out fewer and smaller new mortgages. The rules have changed, making it more difficult for people to borrow too much to buy a home.  The better banks have raised more money to pay any losses. The weaker banks have been given state support.

Now the problems have switched to the governments. Many of them have borrowed too much, and made it worse by propping up weak banks with state money. This summer has seen big worries about Greece, Portugal, Ireland and Cyprus. There are developing concerns about Spain and Italy.  Recently even the USA has had a wobble, as the politicians fell out over how to control the debts the US state is building up.

Why does this matter? Because all taxpayers have to help pay the interest on the debt, and one day have to help pay it all back. Government borrowing is our borrowing – it’s a grand collective mortgage, on top of our own personal mortgage and credit card debts. It matters because if the government takes on too much debt, it can land us all in the mire. Far from being friendly and caring to borrow more to pay for our public services, it can get out of hand. When you borrow as much as Greece the interest rate the state has to pay goes through the roof, then the markets refuse to lend you any more. That leads to bigger and more rapid cuts in public spending, and poor economic performance as the politicians belatedly seek to get on top of the problem.

 I have been busy this summer talking about and explaining the UK economic problem. The UK has borrowed too much. It is still adding to the debt on a large scale.  I agree with the Coalition government that they need to curb the debt before it swamps us all. This government plans to increase the state debt by £485 billion over five years – that’s £8000 each, or £32,000 for a family of four. I do not understand those who think this is not enough, and want the government to spend and borrow more.

I also think they do need more to promote growth. I am pushing for another package of measures to make it easier to do business in the UK, and to take some of the pressure off private sector business and family budgets. Some tax rates could be lowered to get more revenue in – some rates are now putting people off saving, investing and bringing money to the UK. Some regulations are expensive and not very effective, and could be tamed or removed. The state owned banks still need changing, so they offer more support for small and medium sized enterprise.

There’s a lot to do this summer, as we seek to fend off the Euro crisis and keep our recovery on track.

Last week Parliament felt better about itself. Parties and politicians who had been craven before the media suddenly found voices. They united to speak out against the Murdoch press. Labour and Coalition jostled to be the more demanding. By the end of the week Parliament had got what it said it wanted – an Inquiry into the press, the resignation of Rebekah Brooks, the promise that both Murdochs would attend a Parliamentary Committee, and the withdrawal  of the bid for  Sky Broadcasting.

Many Parliamentarians used lurid language to describe the alleged horrors of what has happened. I agree that where crimes have been committed they need to be investigated and prosecutions brought. I agree it was in bad taste to hack into the phones of  victims of tragedies, and I hope proper apologies are made.

It came as no surprise for me to learn my phone had been hacked, just as I have been followed and subject to eavesdropping in the past as journalists seek to find a story, even where there was none. If you are in public life you need to keep some sense of proportion, and to object only where the lies and distortions are  excessive.

I just wish Parliament could show similar resolve to speak out and achieve something about a real  threat to our democracy, our capacity for self government and our freedoms – the European Union. Instead, the natural federal majority in the Commons usually holds sway. The Euro is crashing around us, a crisis of confidence in the loans of some foreign governments is weakening banking systems, and the EU simply demands more tax revenue and more borrowings to try to patch and mend the mess it has created. They are going to press ahead with more power for the Brussels centre, as they wrestle with the world markets who scent victory.

I am concerned that Parliament is yet again breaking for a long summer period, when all sorts of trouble could brew on the continent. I would like the Euro zone to move quickly and positively towards  resolution of its crisis. Either they need to create more of a single government, and accept responsibility for each other’s debts and borrowing levels, or they need to eject the weaker members from the union. Either way, the UK must stay well out of all this. We cannot afford a penny of ours to be wasted on Euro bail outs, a point I have made often and voted for in the Commons. We should use any move towards a more integrated Euroland government to demand less interference from Brussels in our own affairs. They need a tighter commitment, we need a looser arrangement.

Unfortunately it seems unlikely there will be an early solution, as Germany,  France and European Central Bank are unable to agree on how to proceed. As they drift and dither, so more damage is done to the struggling Greek economy, and to the weaker European banks. I am glad to have helped keep the UK out of this mess. It will do more damage than the Exchange Rate Mechanism, which was a dry run for it. The costs will be counted in  many lost jobs, broken businesses, and squandered opportunities. The UK will find the going a bit tougher when it comes to exporting to the continent, but at least we are not locked into a failing system, which will cost the ones who are a great deal of economic grief as well as public money.

In recent days politicians have had old age on their minds. The Commons turned down a proposal for tax relief for health insurance for people after they have retired during the Committee stages of the Finance Bill. That helped keep us debating high finance until 1.30 in the morning. The public sector held a series of strikes to complain about proposals to cut the costs of providing  public sector pensions. This week Mr Dilnot from St Hugh’s College Oxford produced a Report suggesting that taxpayers pick up more of the bill for care for the elderly.

We all know what many would like to see. In an ideal world good public sector final salary based pensions would continue, and the state would be more generous in supporting the elderly in need of care. There has always been some misunderstanding on what the state does and does not pay for at the moment. Elderly people like the rest of us qualify for free health care, but that does not extend in many cases to the hotel services of a care home. Some think it should, as the one blends into the other.

All political parties in office so far have kept the dividing line as best they could. They have said that if an elderly person has to vacate their own home and go to live permanently in a care home, the proceeds from the sale of their home should be used to pay for their new accommodation. Their  extra health care is free. Now all parties are on the move. There will be genuine attempts to hammer out some cross party consensus on whether this old convention should be removed, and a more generous deal offered to the elderly with means of their own. Elderly people with little capital and no home to sell already receive free nursing home care and hotel services.

Meanwhile Ministers agonise over how affordable public sector pensions are.  They have rightly said they will not remove any earned pension entitlement already established by a public sector employee. They have also proposed for the future that the pension should be indexed to the CPI, not the RPI, that the age of retirement should be raised, that employees should make a bigger contribution and that in some cases they should move to career average rather than final salary.

 Various public sector employees have written to me worried about these measures. I think it is important the government and the Unions negotiate in good faith. They should negotiate over how big a saving is needed to make it all more affordable, and negotiate over how to achieve the required savings. As a public sector employee with a final salary pension plan myself I understand how people feel about it. I also think in the case of the MP scheme we need to contribute more, even though our contribution rate was raised to 11.9% some time ago, and look again at the cost of the range of benefits offered under it.

                It was always going to take a long time to turn round the financial and economic mess this country was in. So far the Coalition government has put taxes up – VAT and National Insurance – to start to bring the deficit down. Now they are meant to move on to getting more value for all the public money we are still spending.

                This week in Parliament there has been much talk behind the scenes about  how much money we should give and lend to foreign countries. Many of us feel that as government asks people to do with less at home, we should make sure we are not spending too much abroad.  I am very happy to support medical work which saves childrens’ lives in very poor countries. This government is rightly stopping the  money we used to give as overseas aid to China and Russia. It   will be better spent saving children in very poor places. I have urged Ministers to delay further increases in overseas aid until we have got on top of our own debts.  A financially strong UK will be much better placed to help in future than a UK weakened by too much additional  borrowing.

                 My main concerns are the escalating costs of the European Union, and the bail out monies for Eurozone countries in trouble.  The government did stop an even larger increase in the EU budget than the one we finally got this year. They have more power to influence future EU budgets. I want to see big cuts, linked to reform of the agricultural policy so poorer countries can export  cheaper food to us in bigger quantities for our mutual benefit.

                 I also oppose UK money being put into bailing out the Euro zone. Countries like Greece and Portugal do not need bail outs, they need work outs. It is no good giving more debt to a country which cannot afford the debt it has already borrowed. With the support of many of you I helped lead national campaigns to save the pound and to warn of the dangers of the Euro before it was set up. We predicted then  that if they allowed too many countries into the Euro before they had hit all the targets set out for the scheme, it would end in tears. They stupidly allowed in several countries that were miles off qualifying, and so today we face a nasty crisis.

                 The best answer would be to ask Greece and other struggling members of the Euro to leave. They could devalue, setting up their old currencies, and price themselves back into jobs and growth. Stuck in the Euro they are mired in unemployment and find it difficult  to export their way to prosperity. Their debts are getting out of control, and the markets will no longer lend to them on affordable terms.

                  As many EU politicians seem determined to press on with the Euro, whatever the cost, the next best answer is to create a Euroland country as quickly as possible. In most currency unions – like the dollar and the sterling ones – you have a country to control and back up the currency. People in the richer areas of the US or UK accept they have to pay more tax to subsidise and help the poorer areas. If the Germans and French wish to live in a currency union with Greece and Portugal, they will have to pay more of their bills.

                I am disappointed with the way the IMF is running its affairs. The EU seems to be able to turn the IMF into a cash dispenser for troubled Euroland countries. Some of that money is our money, and it is being put at risk in an unacceptable way. IMF money should primarily be for poor countries in real need, not for rich countries that have made a self inflicted mess. The answer to the Euro’s problems is not more borrowing. The answer is a different way of handling the budgets and borrowings, keeping them under better control. They need a work out not a bail out. I did not vote for the last bail out, and will continue to put the case against.

                I don’t think UK voters want to save at home, only to have to send our money to bail out countries that foolishly entered a currency scheme that cannot work as currently designed.

This week I am writing to the company set up to develop Wokingham’s town centre. There is plenty of good will behind the idea that Wokingham needs a facelift. The town has attractive buildings around the Market Place, and it serves a well populated area. Today it does need some new retailers and some new or refurbished shops in some locations. There is little disagreement about the general aims – to create a vibrant, attractive and flourishing town centre with more retailers and better shops. There is also little disagreement that the town needs to have stores for the main larger multiples. It could do with one or two new names, and maybe larger stores for some already here.

Taxpayers now have an important aim – to get their money back now they are standing behind the project and own some of the real estate. Existing traders would like reassurance that they have a future too in the new Wokingham, and that there will be suitable sized shops with rents and rates they can afford. This is where Wokingham’s development company will have to show some skill in reconciling the differing interests.

An answer is to set rents for the new shops that are low to attract a wide range of new and existing retailers, but to include a turnover linked element to the rent. That way successful national retail chains pay a good rent based on their higher turnovers, whilst smaller local businesses pay less if their turnovers remain low. If the rents are set at a basic low level, the landlord might wish to include a break clause for him to operate to terminate the tenancy, if the tenant has failed to meet agreed  modest targets for turnover over a realistic period like three years.

It is then in both the landlord and the tenants interest to work to get footfall in the town higher, and for them both to attract more purchasers to the shops. The developer/landlord has a continuing interest in promoting the town and in highlighting its attractions to shoppers.

It is most important that the development company sees the current traders in Wokingham as part of the solution to their plans for a bigger and more commercial town centre. It should be easier to keep the retailers we already have, than to attract new ones. There need to be flexible approaches to rent, so small retailers can make a start and see trade build up as the centre develops. It is also the case that we need to charge decent rent for the larger and more successful, so the taxpayer has a chance of getting their money back. Rents generally outside London are under downwards pressure. It is a very competitive retail world at the moment. That’s why Wokingham needs to show some flair and some understanding.

The best innovation in this new Parliament is the creation of days when backbenchers can choose the business to be debated. I held one of the first debates under this scheme last year on the need to promote economic growth. On Tuesday I was one of the instigators of a debate on the bail outs of Euroland economies.

I do not think the current approach to Euroland financial repair is working. I see no reason why the UK should be expected to contribute any money to the questionable policy they are pursuing. The Coalition government agrees with me up to a point. The Chancellor has made clear his view that the UK will make no contributions to propping up Eurozone states after 2013, when they bring in new arrangements to allow bail outs from other Eurozone members alone. He argues that as much as possible of  the current bail outs should also come from other Eurozone members. Where we disagree is over the use of general EU money voted under a provision of the Treaty to help other member states facing natural disasters.

The decision to commit UK funds through a common EU facility to help Euroland members in trouble was taken by Mr Darling acting as Chancellor after the General Election of May 2010. He consulted Mr Osborne who said he did not like the idea. Mr Osborne feels bound by Mr Darling’s decision. The purpose of our motion was to say we think the UK should question the legality of the whole approach. I do not think the problems of the Euro are a natural disaster. They were an entirely predictable debt disaster of the EU’s own making, which some of us forecast when the currency was set up. The debt problem was one of the reasons we recommended that the UK stay out of the currency, and one of the reasons we persuaded the British people that this was the right course of action. If you are in a single currency scheme you have to help pay the neighbours bills when they get into trouble.

In the UK’s current financial plight I do not think we have the spare money to go to the aid of Euroland members. I also fear their approach of extending more lending to countries that have already borrowed too much is not going to work. Unfortunately there are not enough MPs who share this view in the current Parliament, but I and some others felt we needed to make the point again. Maybe one day the government will move that extra distance, as it does agree with us in principle that the UK is not in a good position to be lending them more money.

I find it strange that commentators have been so  kind about Mr Strauss Kahn’s economic brilliance when he was one of the cheer leaders for the Euro scheme, and one of the architects of the first Greek loan which clearly failed to solve the Greek problems. I find it worrying that the IMF, set up to help struggling poor countries, should now be spending so much of its time and our money propping up a currency scheme which is seriously malfunctioning for a group of relatively rich countries who should know better.