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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Who wants an election?

It was curious to see how practically no Opposition MPs wanted a General election when offered the opportunity on Wednesday night.

The SNP probably do want an early election. They think they can improve their current position at Westminster.

Change UK and the Independents do not want an early election. They see from the polls that they are all likely to lose their seats. Of course many of the Independents recently created by their expulsion from the Conservative party will decide to take retirement. Most would probably like this Parliament to last a bit longer before they retire.

The Lib Dems probably think they could make some gains in an election, where they came a good second last time with a Labour vote to squeeze. Yet they  have decided to resist the offer so far as they are more wedded to keeping us in the EU than anything else. They are clearly conscious of the weakness of other Remain parties, the ambiguity of the Labour position and the opportunity to annoy the Prime Minister more by refusing an immediate election. They have  now said they wish to wait until the October 31 deadline has  passed before facing voters. They want the PM to have to ask for a new extension against his wishes, and they may well want a longer extension than the suggested one until the end of January.

The Greens May have a similar position to the Lib Dems. As they do best in similar seats they have a difficult decision to make about whether both should fight all the most likely seats or whether they do a deal over which to contest.

Labour is not in much of a condition to fight an election. It is low in the polls, and deeply divided about what its best course of action would be. What will a Labour Manifesto say about the EU issue? Will it repeat the previous one promising to take us out, with new added language about a deal which only amounts to changing the Political declaration and accepting the Withdrawal Agreement? Will they sketch a possible Agreement which the EU of course may well reject? Will they demand that whatever deal is agreed is subject to a referendum vote on a Remain or deal choice? Will they just ask for a second referendum to try to get the public to change their minds? It seems likely that they will avoid anything too precise, with language that permits some to believe they will try to  do a deal and others to think they will concentrate on a  second vote. This will still leave a lot of their Midlands and Northern pro Leave seats vulnerable to parties that believe in Brexit.

Some on the Remain side think all these parties need an understanding to put together some kind of Remain platform and avoid too many contests where they oppose each other. It seems unlikely this will work. Labour will be very reluctant to come out clearly for Remain given the voting base in many of their current seats and given the studied ambiguity of the leadership for some time. Without Labour as part of any understanding an important part of this vote base would not be part of any deal. In Scotland it would be especially difficult to arrange an SNP/Labour agreement, just as Greens and Lib Dems are too close for comfort making a deal difficult.

 

A useless Parliament

The absence of a majority for any governing party or parties, and the lack of unity over any positive proposal makes this a useless Parliament. The government’s decision to remove the whip from 21 Conservatives comes after the defections of Heidi Allen, Nick Boles, Anna Soubry, Philip Lee, Sarah Wollaston to Change, the Liberal democrats and Independence. The Conservative party is now down to 289 in the Commons, with 10 DUP, leaving the two parties short of the 318 needed for a majority.

A pro EU coalition did have the necessary votes to push through a fundamental constitutional bill effectively overturning the referendum result in just four hours yesterday. They could agree to stop us leaving without a deal ,but were unable to agree what a deal would look like that they could accept and which would be negotiable with the EU. The truth is the EU has negotiated the deal it wants, and the UK Parliament and people have decisively rejected that same deal.

The Bill went through with just a handful of amendments rushed to the chamber at the last minute, with no proper time for consideration or for external advice. The Bill now goes onto the Lords where the proposers wish to limit debate, limit the number of amendments and rush it through again without full consideration of its many important implications for our democracy, our economy and our society. The Remain side claims anything the government does is undemocratic, yet pushes and shoves our constitution in ways designed to curtail debate and thwart the wishes of the majority in the referendum.

The Commons then refused to vote for a new Parliament. A Remain Parliament wishes to disagree with the referendum majority and deny voters the opportunity to do anything about it.

I will post my remarks in the Commons debate yesterday.

How do you want the government to proceed?

This Parliament has argued and voted itself into an impossible position. 82% of the votes were cast in the General election for two main parties promising to deliver Brexit. Now one of those is doing everything to prevent it, and some Conservative MPs have also assisted them or have joined the Lib Dems. The Lib Dems make a mockery of their name  by insisting on not implementing the referendum, saying they want a second vote and finishing off their anti democratic credentials by telling us if that went the wrong way they might  ignore that too.  We have a Leader of the Opposition who has gone on and on about the need for an early election. Now he is faced with the opportunity of one he looks as if he might  instruct his party not to vote for it.

Today the Commons will seek to drive a dangerous Bill through all its stages in one short sitting. Its purpose will be to  deliver the UK into the power and control of the EU. The PM will be required to ask for an extension of our membership, and to accept any terms the EU wishes to dictate. No sensible Remain voter, let alone a Leave voter, can think that a good idea. The Commons procedures have been changed to allow this to happen. An urgent debate which was always on a neutral  motion has been attached to a detailed Timetable motion not of the government’s choosing, binding the Commons and changing Standing Orders. This teems with irony. The MPs who have done this claim to be the true democrats and the defenders of the constitution. Instead they warp the constitution to seek to pass a Bill which would  bind the UK into EU servitude against the express wishes of the electors in  the referendum and in the 2017 General election.

There are usually constraints on MPs other than the government legislating. Only a Minister can move a Money Order, so any new legislation entailing substantial expenditure requires government agreement. This proposed Bill involves spending £1bn or more extra a month for however long we have to stay in the EU. Yet we are told the Speaker is unlikely to agree it needs a Money resolution.  This Bill affects royal prerogative. It therefore should require Queen’s Consent – usually offered by the PM on her behalf- before its third reading. It will be interesting to see if this convention is observed. The government would wish to use Queen’s consent to stop the debate on this Bill to prevent its passage.   In recent times Queen’s Consent has been witheld from Bills the government did not favour. As this is a fundamental constitutional Bill of great significance, it would usually get substantial debating time in both houses, yet yesterday’s timetable motion tramples over this normal protection.

Issues being debated include would an early election help? Should  Conservative MPs  who back this legislation lose the whip? The danger of that is then there are fewer MPs to whom the government can look to get any aspect of its programme through, making it even more difficult to govern.

A general election?

The media is awash with election speculation. The PM confirmed in his remarks yesterday evening to his MPs that he does not want an early election.

It is by no means clear that the Leader of the Opposition wants one either. His party lags badly in the polls. It cannot say what policy it would offer on Brexit, with some  wanting revocation of our notice to leave, some wanting a second referendum and some wanting some unspecified renegotiation with the EU that the EU might reject anyway. Of course he  has to say he wants one, but he seems happier proposing rebel legislation to delay our exit.

It is quite likely an early election before we had left the EU would be an acrimonious re run of the referendum, with parties wanting to do well having to be clearly leave or remain. There is no guarantee the voters would create a good majority for one single view of Brexit in any new Parliament. Politics is only likely to return to some sense once this so far hopeless Parliament has  fulfilled its main task, to get us out of the EU, as promised by both Labour and Conservatives in the last election.

Our main problem is not too few elections. Our problem is the inability so far of this Parliament to implement the decision of the referendum. Until that is done there will be anger about those MPs who have failed to vote and speak on Brexit as promised in the last election, and an inability to move on to discuss how an independent UK will use its new freedoms. Those MPs have to decide today and tomorrow if they will after all uphold the view of voters in the referendum. If they pass legislation to undermine the government they may just be ensuring the end of their time as MPs as they show disdain for the views of the majority on Brexit.

Austerity economics comes directly from EU policy and the Maastricht requirements

Sometimes important things are hidden in plain sight. The contentious requirements of getting the Uk budget deficit down below 3%, and getting state debt to fall as a percentage of GDP which have guided policy since the crash under Labour, Coalition and Conservative governments were made in Brussels. I supported the Labour and Coalition governments from 2009 saying annual borrowing was too high and needed curbing to avoid a crisis of confidence in the UK as a borrower, but have not agreed in recent years with the anti growth stance that the Maastricht state debt rules has encouraged in much Establishment thinking. These rules have been the background to low and no growth in several countries on the continent and to mass unemployment in much of the south and west of the Euro area. In the Euro area countries are threatened with fines if they do not comply.

Once a year the UK has a Parliamentary debate around a Treasury Statement on how we have got on in complying with the Masastricht rules. In the last three years the government has been able to report they are below the annual deficit ceiling, but have not until recently started the bigger task of getting state debt down to 60% of GDP. It is this latter rule which encouraged first Mr Osborne then Mr Hammond to resist tax cuts and spending increases that could have boosted the growth rate and improved our investment in transport or improved performance in education and training . Mr Osborne said he wanted to go further and faster than the outgoing Labour government in meeting the Maastricht requirements from 2010 onwards, inheriting big cuts in spending and tax rises from Labour who were also wedded to the policy. In practice he ended up by 2015 in achieving the extent of deficit reduction Labour were planning. He wisely alleviated the extreme cuts on capital spending Labour put into their forward budgets.

As we leave the EU it is time to rethink our economic guidelines. Of course we need to control annual deficits, but we should be less concerned about the debt as percentage of GDP at current levels, and less concerned about borrowing to invest where the public sector has genuinely worthwhile projects that can earn a decent return. As proof that our economic policy has been dominated by Maastricht, I reproduce below a few sentences from the ONS who have set out at length our dependence on the EU rules and our efforts to meet them.

ONS :
“•General government gross debt was £1,821.3 billion at the end of the financial year ending March 2019, equivalent to 85.2% of gross domestic product (GDP) and 25.2 percentage points above the reference value of 60% set out in the Protocol on the Excessive Deficit Procedure.

•General government gross debt first exceeded the 60% Maastricht reference value at the end of the financial year ending March 2010, when it was 69.6% of GDP.

•General government deficit (or net borrowing) was £25.5 billion in the financial year ending March 2019, equivalent to 1.2% of GDP and 1.8 percentage points below the reference value of 3.0% set out in the Protocol on the Excessive Deficit Procedure.

•This is the third consecutive financial year in which general government deficit has been below the 3.0% Maastricht reference value.  

The EU government debt and deficit statistical bulletin is published quarterly in January, April, July and October each year. This is to coincide with when the UK and other EU member states are required to report on their deficit (or net borrowing) and debt to the European Commission.

Article 126 of the Treaty on the Functioning of the EU obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines two criteria and reference values with which member states’ governments should comply. “

The Chancellor’s Autumn Spending Statement – we need a new fiscal framework

We are promised a Statement on Wednesday, and now know some of its contents from pledges made by the Prime Minister and Chancellor. We know that they will ensure every secondary school receives a minimum of £5000 per pupil per year of grant, and every primary school £4000. I have been pressing for this for some time as Wokingham and West Berkshire schools are at the bottom end of the English spending league tables, and need more cash. This was apparent in an unflattering tv account of a Wokingham School this week. The government will increase money for all schools, but see that the lowest funded get a larger increase to take them up to the new higher minimum. This is only fair, as it does not cost less to employ a teacher or buy some books in Wokingham than in a large city.

We know that the government will pay for an extra 20,000 police to be recruited and employed, and will increase money for Further Education Colleges. It has also announced an additional £1.8bn for the NHS, targeted particularly on 20 different hospitals in need of extra investment and revenue.

I assume this will be a prelude to an early budget this autumn which needs also to cut taxes. The UK economy is slowing too much, in line with the slowdowns in the Euro area but more than in the USA. The US economy has enjoyed faster growth thanks to big tax cuts, a spending boost and an easier money policy. The UK needs the same treatment, at a time of Euro slowdown. Most forecasters expect the UK to grow a bit faster than Germany or Italy, but we need to do better than current forecasts and that requires policy stimulus.

Some worry about the present level of state debt, and wish to follow the EU policy of cutting state debt from its current stated gross level of 85% to the 60% Maastricht target. The actual level of UK state debt is currently 65% of GDP, if you eliminate from the calculation the £435bn of gilts owned by the Bank of England who in turn are owned by the taxpayers. The annual deficit is now well under 2%, which in turn is well below the rate of investment by the state sector. These figures allow scope for some fiscal relaxation. A suitable new rule might be that we keep the idea of a ceiling of 3% on the budget deficit from the current rules, and aim to be at zero or below when the economy is growing at more than 2.5% with more risk of inflation. When the growth rate falls below 1% the government should go closer to a 3% deficit ceiling, with the deficit being borrowing to finance capital investment. This would be compatible with a normal current budget surplus, and with no current deficit in low growth periods. We can of course spend more and cut taxes more once we have stopped making large payments to the EU, which I wish to see from November.

A sovereign people delegate to a sovereign Parliament

The Brexit vote was based around the proposition that we the people need to take back control from Brussels of our laws, our borders and our money. Brexit voters wish to recreate a strong UK Parliament, answerable to voters, with sovereign powers. The MPs keep their jobs for as long it pleases the voters, who decide at election and by election time if their Parliament is exercising their sovereignty in the way they wish.

The Remain MPs just do not understand this central idea of people’s sovereignty. They have done all in their power over many years to remove power after power from the UK Parliament and therefore from UK voters by transfers to the EU through a series of Treaties and through acceptance of all ECJ rulings, Directives and Regulations the EU makes. They misled the country over the extent of the power grab by Brussels, sought to deny Parliament proper debates and votes about much of the law and decisions coming from the EU, and where debate was forced over EU laws rightly had to tell us it did not make any difference what Parliament thought or said as laws, decisions and judgements made by the EU could not be amended or set aside by our Parliament.

Now they are seeking to thwart popular sovereignty by appealing to our law courts. They ironically claim they are seeking to buttress Parliamentary sovereignty by asking judges to set the Parliamentary timetable, and to interfere in the legislative process. This achieves the very opposite. A sovereign Parliament (sovereign because it is derived from the sovereignty of the voters) sets its own timetable, decides what it will debate and legislate or how else it will make and communicate its decisions. If a majority in Parliament disagree strongly with government direction of the timetable then they have many options to overturn the decision or the government.

The Gina Miller judgement created a costly delay in our departure from the EU – around £7bn of extra EU net budget contribution for starters. It required Parliament to legislate a decision it had already taken, the decision to send the Article 50 letter. Parliament did so by a very large majority, showing the demand for a longer legislative means of expressing the decision made no difference to the will of Parliament then that we should leave. Mrs May was wrong not simply to legislate straight away to cut down the loss of time and head off the legal challenge. The legal challenge weakened Parliament by placing the Courts above Parliament in an important matter of political judgement.

It is to be hoped that the courts this coming week understand it is not their role to tell Parliament when to meet or what to debate. It is for government to lead this. If the Parliament has lost confidence in the government’s judgement in these matters then it is for a new Parliamentary majority to emerge to vote the government down. We do not elect the judges. We cannot sack them at an election if they cease to please. The decision on how and when to leave the EU is one that only Parliament can take. It has to take it in the knowledge that it promised to take us out of the EU following the vote. If MPs do not keep their word on this they should expect voters to show their strong disapproval when next they judge the performance of the members of this Parliament in an election. Either Parliament gets us out soon, or the sovereign people will demand a different Parliament.

Pathways out of poverty

The most common way to prosperity is to get a well paid job. One of ways to get a well paid job is to start with a less well paid job, do it well and work your way up the organisation. Today’s shelf stacker in the supermarket may be tomorrow’s section Head in the shop, and the store manager in due course. Another way is to do well in education and training, emerging with qualifications and skills employers need. That way you can enter higher up the pay scales when you begin. Some lack success in education, but have energy and an impulse to serve others which develops successful small businesses.

Many companies now do a good job helping their workforce to achieve more and earn more. Companies often have training programmes for those who did not get on well at school and did not leave with good relevant skills. Many companies recognise that they do not just need to attract talent, but they also need to nurture and create talent. Employers have to serve the local community in many ways, including helping people to help them as better employees. A good company appreciates it has an employer brand as well as a customer brand, and will attract better or more willing people if it has a good reputation as an employer.

Families, teachers family friends and other adults known to the young person are important and they can help. Grown up children will often get their first job whilst still living with their parents. Parental or other adult support and guidance over how to accept the disciplines of the workplace and how to make your way in the office or factory can make a difference to a person’s prospects. Just as an employee has a right to expect a caring and supportive employer, so an employer would like an employee who is keen to learn , who wishes to do well for the business and understands the importance of customer relations and customer satisfaction to the ability of the company to pay good wages.

Now we have much fuller employment that task of encouraging jobs for those still in long term unemployment is more difficult. Some find entering the job market difficult owing to a lack of role models in their families and possibly owing to drink or drugs or some mental health problem. That is why local and national government has many programmes to tackle addictions and afflictions and spends large amounts of time and money on trying to assist the most difficult to help.

Getting the better paid job is just part of the route out of poverty. It also opens up the opportunity to own assets, allowing people to establish some store of wealth for the future as well as income for the present. People make very different uses of this opportunity.

A new session of Parliament with a new Queen’s speech

Shock horror, we are going to have the same 3 week break for party conferences we have always had. Bigger shock horror, we are going to end the longest Parliamentary session since the civil war, and have a new Queen’s speech as we used to do every year. Worse shock horror, the Remain forces who have dominated the Parliamentary agenda for three years complaining about the result of the referendum will not have many more days to repeat this. Most of the country will breathe a sigh of relief if the endless rows about Brexit are over and we can get on with a decent agenda for the UK.

The irony of Remain is they now dare to say it undemocratic to implement the referendum decision, undemocratic to have a new session of Parliament with a new agenda for a new government, and undemocratic if the majority get their way. It is they who launch the attack on democracy, by denying the result of the referendum and seeking to stop the transfer of powers of self government back to Parliament, which was the whole point of the Brexit vote.

So what should we want from the new Queen’s Speech? Certainly an end to the endless and pointless wrangling about what type of Brexit we want. We will now get the one sort available to us, Brexit without a Withdrawal Agreement. We need from the Queen’s speech a clear statement of how the powers and money we are getting back from the EU will be used to boost our economy and lift our public services. The new government has made clear its wish to spend more on schools, the NHS and the police. It needs to show how this money will be spent, so the money buys more capacity and better quality in these important areas.

The new government needs to set out its plans for better infrastructure. We know it wants to send fibre broadband and 5G to every corner of the country. Does it want a version of HS2 or will it come up with cheaper and faster plans to enhance rail capacity and service? What actions will it take to improve our road network, starved of investment for two decades?

Will it embark on a bold programme of tax reform, to raise more money by lowering rates and encouraging enterprise and investment? Will it remove VAT from green products and home energy, once we are free to do so? Will it free the homes market by cutting Stamp Duties?

There is so much a good positive post Brexit government can do. I want the government to launch all this in a Queen’s speech, so the opposition can debate and vote on it and the government can set out just how much better off we can be once Brexit is behind us.

What is Marxism?

Some people bandy around the label Marxism too easily, without recognising what Marxism is. It might help the debate to remind people what Marx himself recommended by way of public policy in his much circulated Communist Party Manifesto. It contained ten wide ranging policy proposals, to recast the citizen’s relation with the state and to give the state a much mightier role in the economy and society.

Just one of the ten proposals has gained widespread support today and been adopted throughout the advanced world. That was the last proposal, that the state should offer free education to all children, and child’s labour in factories should be made illegal. This is now common ground for all UK political parties.

Three proposals related mainly to property. One demanded the confiscation of all property of emigrants and rebels. One required the abolition of all rights of inheritance. A third was the most wide ranging, seeking the abolition of all rights to property in land, with the state owning all land and charging rents. It was this system which helped lead to famines and agricultural disasters in communist countries trying something like it. In the USSR output of food was much stronger from the limited number of independent farm owners that survived, only to led to brutal attacks upon them for being successful.

Three policies proposed a massive extension of nationalised ownership. All banks would be converted into a single state monopoly bank. Communications and transport would be nationalised. There would also be substantial state take overs of industry and factories. This system led the USSR to fall behind the west technically and in terms of productivity. The Soviet economy was heavily skewed towards weapons production and heavy industry at the expense of consumer goods, owing to the low levels of per capita national income achieved.

There would be a heavy and progressive income tax. This was a good way to drive out talent and create a closed impoverished economy by advanced world standards.

There would be a requirement on everyone to work, with “industrial and agricultural armies” established to enforce the employment duty.

The state would combine agriculture with industry, “gradually abolishing the distinction between town and country by a more equable distribution of the populace around the country.”

I spent my early years in politics exposing why nine of these ten proposals caused misery, low incomes and a lack of freedom. I recommended the alternative, the Popular capitalist manifesto, based around the promotion of ownership for all and greater personal freedoms. How much of a threat are Marxist ideas again today? What can we learn from Venezuela? Why do advocates of Marxism as a political programme always claim states that followed their ideas were not true Marxist states, because they usually create poverty and tyranny combined.