John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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Promoting jobs

We now have the opportunity to get rid of regulations, taxes and charges imposed on  us by the EU as we leave fully at the end of December. We need to use these freedoms to promote faster growth and more employment.

The government could begin by repealing the Ports Regulations. These were strongly opposed by our port industry when they were in negotiation, and are not relevant to the UK where our ports are mainly private sector owned competing businesses.

It could go on to make the Data Protection legislation less bureaucratic and more effective. The EU system has set off an avalanche of box ticking exercises, often impeding legitimate communication with groups of people who wish to be on mailing lists. Of course we need high standards of protecting sensitive data, but we do not  need a system which stops legitimate sales promotion or information flows  to people who want to be in touch.

We need to remove VAT from a variety of items often mentioned here.

We need to tear up the fishing regulations and replace them with UK based ones that are kinder to our fish and to our fishing industry.

Getting people back to work

It is time for government to come out with proposals that can make it easier to start or re start a  business and to keep or create new jobs. Unemployment is already far too high thanks to the anti virus policies adopted, and is set to go higher as we limp out of lock down.

It is quite clear that there will need to be accelerated change in our economy to cope with the social distancing rules and the other changes that the pandemic has brought on. There will be more on line shopping and less shopping in physical stores. There will be more remote technology working in  health and education, in leisure and office work. These big changes will require large companies to be adaptive, and will require many more new and smaller businesses to offer new models and services and provide the flexibility fast change needs.

Let’s start with cutting into those great lists of the unemployed. Why not let any self employed person take on an employee or assistant, with the first year based on them being self employed. It is often the hassle of National Insurance, pensions and other paperwork that puts the self employed off expanding a successful business  by taking on additional staff. Give them up to a year to work with someone to see how good it can be and to guide them into the idea of accepting full employer responsibilities. Alternatively it might lead them to adopt a partnership or franchise model with the new person. We need more self employed to expand their often successful businesses.

End the threat of IR35 changes. We are losing business to foreign companies, as large groups here worry about carrying on or taking on a UK self employed contractor for fear that their tax status will be queried at a later date.

Raise the VAT threshold to allow small business more activity before they need to go through the complex process of registering for VAT.

There were around 5 million self employed when the pandemic struck. We need to see them as an important part of our future, and give them every help to get going again and to grow their activities. Sometimes the Treasury seems to see them as a nuisance, seeking ways to tax them into working for a large employer or not working at all. It is a prejudice we cannot afford.

Public spending

It is right for the government to cushion individuals and businesses temporarily losing their incomes owing to the lock downs. It is right for the government to provide a fiscal boost to offset some of the massive deflationary forces unleashed by the global anti virus policies. It is not right to waste public money or add to the burden of the debt with marginal or unwise spending.

So I renew my list of spending reductions that are even more needed now, given the state of public finances.

  1. Reduce overseas aid spending. It will exceed the 0.7%  of GDP legal requirement this year given the fall in GDP unless it is reduced. Start by taking £1bn off plans.
  2. Improve collection of the charges for use of the NHS by overseas visitors. It is a National, not a Global Health Service. Possible £400 million extra.
  3. Cancel HS2 saving up to £100 bn over a period of years
  4. Toughen enforcement against people trafficking to cut the costs of illegal migrants.
  5. Insist on leaving the EU at the end of the year with no further payments to them. Savings of £1bn a month thereafter.
  6. Stop Councils building property asset portfolios based on low cost public borrowing.

Billionaire influence?

Some people want me to publish their personal campaigns against a few named billionaires. I tell them repeatedly I will not do so. It is  not the purpose or nature of this site.

Some claim these billionaires lobby governments, setting up lobbying institutes to  seek attention for policies they favour. Indeed , some of them do just that. So do Trade Unions ,raising millions from their members, large charities, spending a fortune on  adverts and lobbying, opposition political parties, every large company that has a government affairs department and many others. All of these people and institutions use money they have earned or raised to sharpen their message and to try to influence Ministers who make decisions and to influence the  officials who help them. Sometimes they want governments to do things that are self serving for them and possible damaging to the rest of us. Ministers need to stay alert and work out who to trust.

One of the  purposes of this site is to examine the quality of the decisions governments and public institutions  make and the consequences of them. As an MP I am also seeking to   influence government on  behalf of my constituents and in line with my and my party’s view of how to proceed in the national interest. Where external lobbies are putting forward damaging or ill judged proposals then I am always willing to give a voice to the counter arguments to their theories and propositions.

I am not willing to publish personal attacks on people who believe they are working for the wider good just because one or you – or I myself – disagree with their advice. I do  not have the capacity to research the truthfulness of claims made about them. Please find somewhere else in the media who do want to run with conspiracy theories if you believe you have a case. Governments do not have to follow these people – sometimes they choose to do so, presumably when  they think they are right.

In support of Mr Frost’s letter

Mr Frost’s letter to Mr Barnier told him some home truths. Is the EU stupid or wicked in thinking that the UK wants to stay as part of the single market, and therefore needs to make concessions to do so? The UK has made it crystal clear we are leaving both the single market and the customs union. We have also made it clear we would be willing to grant the EU a Free Trade Agreement, which will help them more than us, as an act of friendship which could also be of modest benefit to us as well.

As Mr Frost asks, why is the EU apparently unwilling to offer the UK something similar to the FTAs it signed with Canada and Japan?  They obviously thought those were in their interest.

I at last got a speaking slot yesterday in Parliament. I made clear there must be no UK concessions and no extension to the negotiations. Either they come round to an FTA or they do not. It’s up to them. The UK will be fine either way. We do not need to pay to trade- not  in money,  not in fish nor by sacrificing our freedoms.

Freer trade outside the EU

Yesterday the government issued an excellent document setting out the basis on which we will trade from 1 January 2021 as an independent state and member of the WTO. We will set out own common tariff for the rest of the world which will apply unless we have a Free Trade Agreement with the counter party.

Our tariff is lower, simpler and easier than the EU one we currently have to offer to non EU countries. It takes tariffs off items we cannot grow or produce for ourselves.  It takes tariffs down to zero for products manufacturers in the UK need to help them make things here. So cotton, and   various engineered tools drop to zero for example.

It takes all tariffs that are under 2% to zero to save all the admin. It takes fiddly tariffs down to the nearest whole number. It takes tariffs off energy saving, recycling and renewables. The tariff on thermostats for  example disappears.

The Secretary of State for Trade confirms two crucial matters. Firstly, she makes it clear this will apply from 1 January 2021, so there are no plans for any delays to our full exit. Secondly, she confirms there will be no tariffs between Northern Ireland and the rest of the UK. The EU will not be allowed to wrestle Northern Ireland into their customs union and out of our common customs system.

Many of us  MPs wanting to implement the referendum  have been pressing for just such an outcome for many  months.

Her Majesty’s Government announces UK Global Tariff

The Government has this morning (19 May) announced the UK’s new tariff regime, the UK Global Tariff, which will set out the duty charged on imports from other countries. This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Transition Period, by which point we will have reached an agreement on our future relationship with the EU. The UK Global Tariff will only apply to goods from all countries with which we do not have a preferential trading relationship.

It is a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£), not euros. It will scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers and back UK industries to compete on the global stage.

The government is taking a common-sense approach to our new tariff schedule by streamlining and simplifying over 7,000 tariff lines and lowering costs for businesses by reducing administrative burdens.

The UK Global Tariff will provide a baseline from which we will negotiate free trade agreements with partners around the world, giving us the leverage to negotiate the best deal for the UK, and replace the EU tariff that we currently apply.

  • The UK Global Tariff will make it easier for businesses to trade. o Our tariff will be in pounds – not euros. Paid in pounds, calculated in pounds, this is a stable tariff for UK traders.
  • Our tariff cuts administrative costs for businesses. We are getting rid of needless tariffs which create administrative burdens. All tariffs below 2% are gone (e.g. fire extinguishers, school pencils and gardening tools, move from 1.7% to 0%).
  • Our tariff is simpler to use. We will round tariffs down, making them simpler for traders to use (e.g. reading glasses move from 2.9% to 2% and alarm clocks from 4.7% to 4%). We will also scrap the EU’s complex calculation for certain processed goods- which results in over 13,000 tariff variations on products like biscuits, confectionery, and spreads – applied under the EU Tariff.
  • The UK Global Tariff will back UK manufacturing and production. UK manufacturing and production. We are dropping tariffs to zero across a wide range of products used in UK production (e.g. tools for tapping and threading metal move from 2.7% to 0%, and spanners and wrenches from 1.7% to 0%).
  • The UK Global Tariff will reduce cost pressures and increase choice for UK households. Tariffs will be removed on products that we do not produce, or do not produce much of in the UK. Removing these tariffs will lower cost pressures for UK households and businesses (e.g. pistachios move from 1.6% to 0% and cotton yarn from 4% to 0%).
  • The UK Global Tariff will protect developing countries. These countries will maintain tariff free access into the UK on goods such as vanilla (6%), plantains (16%) and bedlinen (12%). Whereas non-developing countries will face the UK tariff on these goods, where a trade agreement is not in place. Therefore, the UKGT maintains the continued preferential access for these countries.
  • The UK Global Tariff will promote a sustainable economy. We are cutting tariffs on over 100 products to back renewable energy, energy efficiency, carbon capture, and the circular economy through recycling and reducing single use plastics (e.g. thermostats move from 2.1% to 0%, vacuum flasks from 6.7% to 0% and LED lamps from 3.7% to 0%).

As set out in the Protocol, Northern Ireland is a constituent nation of the UK and part of the UK’s customs territory. Tariffs are not payable on goods moving within the UK. The arrangements the government will introduce will reflect this.

As we recover from the unprecedented economic challenges posed by coronavirus, the UK will champion free trade, fight protectionism and remove trade barriers.

Our new tariff is tailored to the needs of the UK economy. It will support the country, by making it easier and cheaper for businesses to import goods from overseas from 1 January 2021.

The UK Global Tariff will protect UK sectors, such as agriculture. Tariffs will be retained for products such as lamb, beef and poultry. The Government has removed tariffs on products that cannot be produced in the UK – including approximately 150 agricultural products such as various vegetables, fruits and oils.

No extension to Brexit talks

Today Parliament will hear a statement on the Brexit talks.  Like last week all my  requests to ask oral questions or participate in Statements have failed in the ballots for slots because time is so limited,

What I wish to say and have said many times to Ministers is we must not delay our exit. Nor should we concede our fish, money or law making powers. The UK has rightly offered a Free Trade based Agreement and should stick with that offer.

Mayor Khan – travelling safely?

In March the London Mayor told us travelling on buses and the tube did  not pose a threat of catching the virus. More recently he has supervised a major cut back in services and expressed worries about the safety of staff and passengers.

The background to his astonishing U turn on public transport safety  is the fast deteriorating financial position of London Transport on his watch, which pre dated the collapse of revenues on lock down but worsened  when that happened. His early comments on the virus were probably motivated by the need to keep revenues up and to hit targets for more people using the tube and bus.  His lower fares policy left LT short of revenue to pay all the running costs and finance the improvements and expansions this growing business needed.

He has now been forced into asking for a big bail out from central government and national taxpayers. Last week the Transport Secretary agreed a grant of £1.095 billion and a loan of £505m just  to see the Mayor through to October. In return the Mayor had to accept the need for a government review of the finances and efficiency of LT, and to two government representatives on the Board.

Mr Shapps the Transport Secretary  now needs to sharpen up central analysis and supervision of this expensive state  business. The writer of the  official government release said this:

“In order to reduce the risk of crowding and to encourage vulnerable groups to from using (sic) public transport at the busiest times when there is greater risk of transmission it may not be possible to socially distance, (sic) the deal will see the temporary suspension of the Freedom Pass and the 60+ card concessions to off peak hours. It will also see temporary suspension of free travel for under 18s and special arrangements will be made to ensure children eligible under national legislation can still travel to school for free. The changes will take place soon as (sic) practicable”

There is immediate work to be done on how many services and what the rules are over the number of people allowed on each train and platform. It will also be complex to allow free travel to school but not for other junior journeys.

The  new Board members need to examine the impact of Mayor Khan’s fares policy on the finances of LT before the virus hit, and to help LT find the right fares policy to maximise permitted use and generate more revenue relative to costs. The whole structure of costs has just changed substantially with revenues much down for the next few weeks at least. They need to re-examine the whole business approach, with safety and costs in mind.

Educational divides

One of the tragedies of the lock down is the growing educational divides it is creating.

The minority of pupils whose parents pay fees for their schooling may well  be at a school that is teaching a full timetable of lessons today. Parents who pay directly for their children’s education expect it be delivered. Many public schoolteachers are delivering their normal lessons on line. They give their lesson or lecture on video, supervise the class who log in and are required to participate, take in electronic work for marking and set homework electronically. Some state schools too are providing an excellent on line education.

The teachers doing this find it exacting as everything they say is recorded and can be reviewed by a parent or colleague, but they accept it is what they and the school are paid to do. Some are flourishing, learning to use the special features of internet programmes to encourage more participation and to share more material more easily.  Universities too are often teaching a full timetable of on line lectures, seminars and classes. I will be giving an on line lecture soon in Oxford in a digital lecture series on central banking. It was possible to say Yes  because I do  not have to find four hours for travel there and back.

Some state schools are not offering this on line full timetable teaching option, so the divide between schools is in danger of widening. I have asked the government to look at bridging  the computer divide where low income families in receipt of benefits do not have a hpme computer that can receive internet lessons. It would be good to offer a laptop or other suitable device  programmed  to receive intranet lessons and free educational information over the web to those who need one. Many families do have a number of digital  and internet devices at home which could allow children in the family to pick up the lessons by borrowing that. The wider family might also help in equipping the pupils for digital lessons where necessary.

There is also  a further divide within the state pupil community. The gap is not one between rich and poor. It is  between homes with a parent or parents who believe in education and who encourage their children to listen, read , watch and download material which adds to their knowledge, and those who do not. Some high income  families do not take time to encourage learning or to share books, articles and internet sites with children.They do not  see it as their job to supervise learning.  Some low income  parents take much time and trouble to pass on knowledge. The gap is between the educationally rich and the educationally poor households. The privileged may of course include the children of teachers and of professional workers who have had to learn to earn and want their children to do the same.

It is time to review the role of technology in education. If we use on line lectures and classes more, we could give more students access to the best minds and the most accomplished work. It gives an opportunity to share materials between schools, from one expert to another and out to the wider student body. One of the benefits I found from an Oxford undergraduate education was an open lecture list. You could go to lectures in subjects you were  not officially studying as part of your general education as they were often pitched at the right for such an interest. You could hear the best known or highest regarded academics in person .