I will soon be submitting some thoughts to the government on possible constitutional reform.

The last Parliament submitted our constitution to a battering, as an alliance of MPs from all the Opposition parties aided by a few Conservatives who subsequently left the party worked with the Speaker and the law courts to delay or prevent Brexit. In acting in this way they opposed the decision of the majority in the referendum which most of them had previously pledged to honour. The Labour and former Conservative ones  also reneged on or redefined their promise to see Brexit through, made to win the 2017 election.

The main issues that arise include:

Fixed Term Parliament Act

This became a major problem, preventing a government from  holding an early election to resolve the tensions Parliament could not sort out. The Act also showed it was eventually meaningless, as we held three elections in four years under a law designed to limit elections to once every five years.

It should be repealed, leaving the power to hold an election at any time up to 5 years in the hands of the majority in the Commons. The Commons needs to have this option, as it also has the option of expressing or withdrawing confidence in any given government.

Powers of the courts to settle political and Parliamentary issues

The decision of the Supreme Court to delay Brexit by nine months  to require an Act of Parliament prior to sending  a letter necessitated by the referendum result was unhelpful and very costly to the country.

The decision of the Supreme Court to prevent a prorogation of Parliament which was only slightly longer than the normal September recess was seen by many as  a partisan decision as it was designed to allow those who wanted to stop Brexit more time to debate and vote on it.

These two decisions were damaging to our constitution. It is most important most people more of the time believe in the impartiality of the court system and believe the judgements are fair and reasonable.  Major issues of constitutional significance need to be decided by Parliament so both sides can put their case and the decision is made by majority vote, reflecting the votes of the people in a previous election.

These decisions were seen by many Brexiteers as being decisions to delay or prevent Brexit, however good the legal reasoning . It would have been better if the Supreme court had said in both cases they were not matters for a court but matters for Parliament to resolve, or a for a General election to settle.

The respective roles of  government, Parliament and courts in prerogative matters needs clarifying, with more protection of the courts by removing their competence in matters relating to how Parliament conducts its business or how government with Parliament  undertakes its Treaty roles and international negotiations.

The EU tells us they are going to stimulate faster growth in the Euro area through commitment to faster decarbonisation.

They have announced a “Green deal” with access to just Euro 7.5bn of transition funds to subsidise the losing areas that face closures of mines, coal power stations, gas plants, petro chemical plants and the rest. They hope to top these funds up through money already included in their budgets for regional development

The big push comes from capital investment, where they suggest they might help foster a Euro 1 trillion investment programme across many industries and countries over the next five years. The EU itself will contribute to this investment through loans from the European Investment Bank . They plan a series of new rules and checks for private sector investment companies to encourage more of the savings they handle to be put to work in companies pursuing the green agenda.

The Commission is currently wrestling with the problem of inherited schemes for substantial additional investment in gas supplies as replacements for coal being phased out and to ensure sufficient capacity in energy supply. Some think they should refuse to assist in funding more fossil fuel schemes to accelerate change, whilst others are concerned that without additional and replacement fossil fuel investment the Euro area will be short of energy.

The difficulty comes over pace of change and over the interconnections of different sectors and activities. Over the last year the EU motor industry has taken a hit because tax and regulation has put people off buying diesel cars before enough are ready to buy electric cars instead. Car volumes are down and manufacturing has declined. Too speedy a transition away from gas energy could leave countries short of energy in total or could drive prices up with adverse consequences for energy intensive industry in a very competitive world.

Of course setting up new factories, launching new products, and investing in new ways to generate electricity and to deliver power to factories and vehicles creates jobs and adds to growth. It has however to be done at a pace which more than offsets the loss of jobs in traditional products and methods of production and propulsion. There also need to be good ways to retrain the people who are out of work and to reuse the assets that the old businesses can no longer operate profitably.

Central to success is a new generation of home heating systems and vehicles that people want to buy.

One of the worst features of past highways mismanagement in the UK has been the practice of putting water pipes, gas mains, phone and broadband wires and electricity cables down the middle of busy roads and covering them with large amounts of concrete and tarmac.

The Highways authority has to grant access to the utility undertakers to close all or part of the road, dig it up and repair, monitor or replace the pipe or wire. Parliament has tried to impose some discipline, giving the Highways Authorities the power to schedule the work, to time limit it and to fine the contractor for non performance. Of course access has to be granted immediately if there is a gas burst or a water mains leak where safety is paramount. There are roads that are designated sensitive where the Authority can demand that repairs and replacements be done off peak or at night owing to how busy and crucial the road is.

I have urged utilities and Councils to put new networks and replacement networks into verges, under pavements or away from main  roads, preferably in accessible conduits so there  will be no need in future to drill through layers of tarmac and concrete to find your particular pipe or cable without skewering someone else’s. Wokingham Borough tell me they are doing this with new developments. It would be good if universally we were starting on a long work out to get rid of this problem.

In  the meantime we have to manage a situation where most cables and pipes are under main  roads. So today I ask how should Councils manage the demands for access to repair and replace? Do they need any new legislative powers? Is the balance right between the needs of the utilities and the needs of the users? Should we be tougher and demand mpre off peak working?

One of my favourite green policies is to ease congestion and get traffic moving smoothly without so much stop start interruption. We could save so much fuel and cut emissions substantially if vans, cars and buses could proceed at a steady pace more often.  Allied to it is greater safety, through better modelled junctions with fewer frustrated drivers taking unreasonable risks.

I have often argued that roundabouts work much better than traffic light controlled junctions to maximise flows and minimise interruptions. Today I wish to share with you some work I have been doing on light phases, following careful observation of a large number of regularly blocked junctions with lights.

One of the common causes of delay is the four phase light set at a conventional crossroads. If we assume a 100 second complete set of phases for the lights then  traffic from east, west, south and north have a green phase just 25% of the time or 25 seconds each way. Traffic from any direction can use that green phase to carry straight on, turn left or turn right when they finally reach the turning points. This means each direction of main road is not being used for 75% of the time, apart from turning traffic.

It would be much better if the lights were rephased so that most of the time east and west traffic have a green light for straight on or left turning, or north and south traffic have green for straight on and left turning. There should be short right filter phases, with one allowing north and south to turn right, and one allowing east and west to turn right.

If we allow 7.5 seconds for each of the two right filter phases, the primary east-west and north-south phases then operate for 42.5 seconds per 100 seconds instead of for 25 seconds.  This gives us a 70% increase in road use or capacity across the junction, which will greatly cut delays and allow more smoother flows of traffic.

Another regular cause of delay at off peaks is lights turning red on main roads to allow access from lightly used side roads when there is no traffic present in them. All light sets allowing side road traffic onto a main  road should have traffic sensors, with constant green for the main road unless traffic is detected, when the normal timings of phases would then kick in.

The IMF published their latest forecasts for growth yesterday as I opened the first debate in Westminster Hall this decade, choosing the topic of how to promote faster growth. The IMF cut some of their forecasts. They also drew attention to how the monetary easing (other than in the UK) has led them to expect 0.5% extra growth world wide within their 3.3% forecast for 2020.

The IMF expects the UK to grow at 1.4% in 2020 compared to 1.3% for France, 1.1% for Germany and 0.5% for Italy and 1.3% for the Euro area as a whole. These are poor Euro area figures and are despite the Euro area enjoying a substantial monetary easing from the ECB. The UK could grow faster than that if the government and Bank of England took the actions I have been proposing.

The IMF shares many of the assumptions of the Davos internationalists, urging states to drive the green revolution faster. The IMF usually fails to forecast turning points, missing recessions until they are happening, and exaggerating negative consequences for any country not following the global agenda.

It is probably right to be so pessimistic about Italy where the Euro rules impede change and about Germany where the green policies are damaging the car industry. The UK should continue to outperform the Eurozone this year if pro growth policies are followed through.

As we leave the EU we need to create our own approach to preventing unfair competition and avoiding unacceptable subsidies. The very wide ranging EU regime under the control of the Commission and Court can be too long winded and unfair itself.

There are some industries which can benefit from exit from the EU once we can change the rules. Fish is the most obvious which I have talked about before. As we take control of our fish stocks again we need to stimulate a larger domestic fishing fleet to capture a much larger proportion of a smaller total catch. This in turn can act as a means of creating a larger fish processing and related food products industry.

Farming too can be given a domestic boost by leaving the restrictions of the CAP and providing a system of financial support which encourages more domestic food production.

When we leave we will also be able to strengthen our domestic capability to provide the weapons, vehicles and protection that our armed forces require from their suppliers. When the government wishes to buy naval vessels or aircraft or body armour or small weapons the competition should preferably be organised for domestic producers so that the technology and ability to scale up production rests here in the UK should need ever arise created by a larger conflict. We can rebuild parts of our defence industries that have been run down in recent decades as a result of smaller budgets and shared procurement.

Where we wish to buy good products from allies that are already available we should seek the capacity to make them in whole or part under licence, to have access to the technology, or have an alternative we can control in the event of disagreements. Of course there are benefits from sharing ideas with allies and from buying from each other, but there needs to be fair give and take and satisfactory arrangements to ensure we have the ability to replace and repair the weapons in any circumstances.

It needs to be easier to set up a business, to work for yourself, to take on your first employee, to find new premises and to expand a larger business. All these barriers to growth need examining and changing if we are to achieve the government’s  ambitious target of 2.8% growth from here. Today we need to look at the regulatory framework and the relationship with government.

The government has rightly made clear it has no wish to lower employment standards or weaken health and safety and other essential protections. There remain many opportunities to make life easier for businesses without making it worse for employees or neighbours.

More freeports offer the opportunity to run a business which brings in imported raw materials and components, transforms them into goods and export them  without having to pay tariffs and taxes  until you sell them on  and make a profit. It cuts down the paperwork and promotes lower cost production.

More Enterprise zones allow business to obtain better capital allowances or business rate relief. They could also offer simplified planning and access to cheaper land with permissions.

As the government steps up its funding of science and technology in schools and universities, it should also encourage university/business collaboration and offer contracts which foster business spin off from research. The very successful Oxford and Cambridge clusters of research and business parks can be replicated elsewhere and grown everywhere.

The government will want to improve FE, technical and vocational training and ensure accessibility for all ages and experience levels. Training a better workforce is central to raising productivity which allow higher pay and the fulfilment of more individual ambitions.

The Chancellor gave us an upbeat message yesterday in  his FT interview.  He is putting growth at the forefront of his economic policy, as I urged. He thinks we can achieve the average  growth rate since 1945 of 2-.7-2.8%. It’s a bold ambition, given the poor rates of growth we have witnessed in the advanced world since the banking crash and Great Recession in 2008-9. Most forecasters now think the trend rate of growth is more like 2% than 3% from here, with some now thinking the UK and the Euro area can only manage 1.5%.

On Tuesday I am  leading a debate in Westminster Hall for 90 minutes on how we can put in place a Growth strategy. We clearly need to reverse Mr Hammond’s fiscal squeeze, as the government has promised to do. The state debt rules hold the EU in thrall and help keep growth down because they keep taxes up.  They do not flex for the Laffer effects of lower rates bringing in more growth and in due course more revenue. The USA went for big tax cuts in 2016 and delivered much faster growth than the EU as a result.  

We clearly need the Bank of England to get in line with all the main Central Banks of the world and have a policy which fights slowdown and recession  instead of promoting slowdown. I have written plenty about that since the spring of 2017 when the Bank started to tighten.

Today in preparation for the debate I am asking  for ideas on which taxes and which tax rates should we cut to get faster growth. There are three broad categories, tax on transactions , tax on work and income, and taxes on growing a company and owning and managing assets. Some of the tax rate cuts could bring in more revenue, some will result in lower revenue.

Transaction tax cuts  to consider that could boost growth include Stamp Duties, Vehicle Excise Duty, and VAT on some purchases.

Taxes on employment and income include Income Tax, National Insurance., the Apprenticeship levy, and  IR35.

Taxes on managing and owning businesses and assets include Capital Gains Tax and Business rates .

 

It has been widely accepted that the Iranian authorities made a tragic mistake. They now confess that they wrongly thought a civil airliner with 176 people on board was an incoming cruise missile.

In a world desperate to calm tensions it is probably wise to accept the latest Iranian explanation of what happened. It is important, however, that Iran learns the lessons of this tragedy. The plane they shot down had only just taken off from their main civilian airport.  It had been given clearance by the Iranian authorities for take off, and must still have been in closely controlled airspace adjacent to the airport. Their military need to know of civilian movements from a central civil aviation hub under the control of their government. They could always instruct the airport to avoid take offs at times of high tension where and when  they might unleash missiles.

It appears that many people in Iran are now angry with their government over the delay in offering this latest explanation of the last seconds of the airliner, which in turn is reminding them  of their dislike of other features of the Iranian regime. Iran’s stance supporting various terrorist movements around the Middle East, and backing proxy wars against  Saudi Arabia and other Sunni states has led the USA to impose strong sanctions on Iran. These are gradually damaging the Iranian economy, and are forcing Iran to find sales outlets for her oil away from traditional markets in the West. Some Iranians also dislike the disregard for personal freedoms and the limited adherence to human rights.

Mr Trump clearly still does not want to go to war with Iran. Because he had signalled his wish to avoid military encounters in the Middle East he felt Iran saw this as weakness and thought they could attack the USA and her friends in the area as they chose. The President countered with an unexpected targeted attack on the high command of Iran. It was a formidable demonstration of the powers of US military technology, knowing exactly where a named individual would be and being able to kill him from a distance with no US individual needed anywhere near the scene. The Iranian government thought they saw an opportunity to speed the USA’s departure from the Middle East, hoping they could accelerate US withdrawal of troops from Iraq.

The US President hopes he has found a technological answer to so called asymmetric warfare. If Iran uses terrorist groups and informal armies to kill Americans and damage US installations, the USA will use precision to kill the leaders responsible. The danger is a possible escalation. The fact that so many Iranian people now think their government has gone too far is a better augury. Any sensible person wants peace, which means different future conduct by Iran to be matched by the USA responding favourably to such moves.

Members of the Monetary Policy Committee are now telling us that maybe they should cut interest rates after all. Having watched as their tight money policies predictably slow the economy, they now express surprise at what they have done and seek some change of tack.

I am not proposing a 25 bp rate cut. I would urge them to look at the substantial tightening their Bank has undertaken through changes to the capital buffers, tough guidance on lending and the cessation of the Funding for Lending scheme. There is practically no money growth in the UK, implying continued slow performance from the economy.

Meanwhile the reintroduction of Quantitative Easing by the ECB has led to a spurt of money growth which probably heralds some pick up in the economy later this year. The Fed has stimulated a sharp rise in money growth in the USA which probably means a decent recovery for an economy still growing faster than the other advanced countries as the year advances.

Why has it taken the Bank so long to notice the obvious? Why are they still so out of line with all the other major Central Banks of the world? This institution got the ERM comprehensively wrong, the banking crisis and great recession hopelessly wrong and now is getting the world slowdown wrong.