John Redwood's Diary
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If you do not like the Withdrawal Agreement you won’t like the Political declaration either

Two  Treaties instead of one. That is Mrs May’s idea of leaving the EU! I have set out before the dangers of the Withdrawal Agreement, which would stop us taking back control of our laws, our money and our borders for at least another 21 months and quite possibly longer. The accompanying Political Declaration is the herald of an even worse Treaty to lock us into many features of the EU for all time, with  no exit clause.

Some parts of the Political Declaration are vague or contradictory. Does it mean a free trade deal with us free to follow our own trade policy, or does it mean effective membership of their customs union with limited scope to do better deals elsewhere? Does it mean respecting our own UK law codes, or does it in practice mean accepting EU laws and rules over many parts of our lives in order to meet their strong words that we must not compete unfairly and must observe a level playing field with them? Doesn’t a level playing field to them mean keeping taxes up, having the same regulations, and submitting ourselves to their laws?

Some of the text is detailed and finished. We must assume this would pass straight into any draft Treaty. Above all the EU has insisted on the same architecture for enforcing the Partnership Treaty as for the Withdrawal Agreement. They require a joint committee, where any matter raising EU law will be determined by the European Court of Justice!

That’s no Brexit. That is continued subservience to the EU and its powerful court. I did not vote leave to end up in 2 EU Treaties that recreate many of the features of our membership. The EU sees the Partnership treaty as a kind of EU Association Treaty. These are the devices they sign with countries like Turkey to gradually to  bring them in line with the EU as a prelude to possible membership. That is not what Leave means.

Knife crime

I went to the Urgent Question on knife crime on Monday. MPs all round the Commons are concerned at the escalation in these crimes of violence in various communities in the UK and keen to see more done to reduce and control it. I asked the Home Secretary what action he is taking to spread best practice from those towns and cities that are making progress with prevention to those with the worst problems, and what can be done to ensure extra money and personnel going into policing and responding are being targeted in the right way to tackle this trouble.

During the exchanges there was a general feeling that the Glasgow approach has had some success. Some favour wider use of stop and search powers to remove knives from young people, including random searches without grounds for suspicion. Some think more police in general is what is needed, whilst the Prime  Minister has suggested that there is no correlation between police numbers and knife crime.

Clearly having an active police presence in areas of our towns prone to knife crime attacks at times of the day and night when they are most likely must be an important part of the response. We also need to see that this is not a problem which the police on their own can solve. All the young teenagers caught up in this violence have parents or guardians , teachers, adult wider family members, youth and sports club organisers and others who know them and take an interest in them. Any one of these adults could say or do the right thing to reduce the chances of that young person carrying a knife or being drawn into gangland activity.

Some young people are drawn into gangs out of  a  sense of adventure. Some are groomed by older gang members. Some end up in a gang out of fear. Whilst young people do not want to be subject to home detention, adults in the family do need to take an interest in how much time their children spend out on the streets and what risks that might bring to them.  Young people that have been looked after by the authorities or are the products of a broken home are particularly vulnerable to gang grooming according to the Children’s Commissioner. The gang culture can lead to drugs and other criminal activity. Once lines have been crossed the young person can be forced into continuing with a way of life  they would not have chosen had they known how it ended, of if they had enough support at the beginning to say No.

De selection and staying true to your party and Manifesto

Both parties are prey to de-selection motions against sitting MPs. This has been brought about by changes of mind or stated  belief by Conservative MPs over EU exit, and by a combination of factors over the style, policy and direction of the party in Labour.  The imminence of a no confidence or de-selection motion is one of the drivers of recruitment to the so called Independent group of MPs. The 8 Labour and 3 Conservatives so far recruited by this new organisation shelter together from such moves by  their old parties. The Conservatives and Labour   in turn can get on and choose replacements for them for the next election in their seats now they have gone.

On the Conservative side I read that Sarah Wollaston and Heidi Allen were likely to face action by their former Executives or wider Associations.  Anna Soubry had defeated  one no confidence move, but faced a petition of others protesting about her perceived change of approach to Brexit. It is put out in the press  that at least five MPs  all face significant opposition within their Conservative Associations. I do not know  whether these stories are true.  It is true that  some local Conservative parties  are angry with MPs who have deviated from the Manifesto position on leaving the EU. That said we would leave on 29 March 2019, with or without a deal, and stated that No deal is better than a bad deal. All Conservatives fought the last election opposing the second referendum on the EU which the Lib Dems championed. It is always difficult if an MP changes his or her stance on crucial matters like these after an election but does not carry his or her local party members and electors with them for that change.

On the Labour side there is the added issue that the party leadership has now changed the party stance on the second referendum. Labour was in agreement with the Conservatives in 2017 at the election that there should be no second vote and we should get on and implement the decision of the People’s vote in the summer of 2016. Maybe as many as 70 Labour MPs are said to be unwilling to support the new referendum policy, as they represent heavily Leave voting areas and promised to support getting out  in their election literature. This includes a dozen or more Shadow office holders.  Labour too is riven with disputes over anti Semitism, over the tough  style of the leadership towards non believers in its project, over the general drift to the  left. Recent flare ups over whether Labour is anti semitic have not helped relations between members and MPs, nor between different local party organisations.

The party leaderships face a dilemma. If they encourage de-selections of people who clearly have drifted from the leadership line they could end up creating a bigger Independent Group, thereby nudging it towards forming a proper party and fighting elections. The more risk of de -selection the more likely an MP is to jump first. If they do not impose some discipline over the party line and leave people alone within the party who have little or nothing in common with the rest of the party they encourage poor discipline within the Parliamentary party and have a battle with the local associations. Whipping  breaks down and the leaderships are left looking weak and less important. There should be a big difference in treatment for  an MP who occasionally votes against a 3 line whip to keep in line with the party’s Manifesto and in line with the membership who supports him or her , and an MP who regularly votes against a 3 line whip in order to deviate from  the  Manifesto. If an MP has used a popular Manifesto set of proposals to get elected and then unilaterally  tears up those promises it causes understandable stress within the party.

Both leaderships are likely to muddle forward on a case by case basis, with events often under the control of local parties rather than under national direction. The Conservatives have far fewer MPs seeking to deviate far from the Manifesto line, but more at risk as they need to keep up their stated party numbers in order to qualify as a coalition government with a majority of votes in the Commons.  The Conservatives will  have a  problem if  the leadership seeks  to deviate from the Manifesto line itself on the issue of leaving the EU. The  overwhelming majority of party members and a significant number of MPs want to stick with it and keep pledges made to voters about no deal being better than a bad deal and taking back control by leaving the EU, its single market and its customs union on 29 March this year. Labour’s leadership too is moving away from the Manifesto, and that is splitting their party.

Letter to Geoffrey Cox about the draft Withdrawal Agreement

Dear Geoffrey,

I am glad you are seeking to replace the unacceptable Irish backstop which is written into the Withdrawal Agreement which was vetoed in the recent Commons vote.

There are other features of the Withdrawal Agreement which I and other MPs cannot accept which also need attention in the national interest.

Under the draft Withdrawal Agreement the EU will enjoy of period of at least 21 months, and up to 45 months, when it can legislate for the UK under the wide ranging competencies it  has from the Treaty. This would permit the EU to enact laws and regulations banning or requiring changes to the way we do business, control the environment, treat people, offer business support and organise trade which could be against our national interest.  It could  require the transfer of business into the Eurozone at our expense. We will no longer have the power to veto or to create blocking minorities to prevent  measures that are damaging.

What action are you taking to prevent abuse of these wide ranging powers and  to ensure we are indeed taking back control of our laws?

The EU is moving to impose and alter more taxes by qualified majority with a view to increasing the range and incidence of EU taxes. As we will have lost our veto over tax anyway, what powers are you seeking to avoid the imposition of new taxes and additional taxation on us via the Withdrawal Agreement?

It is most important no additional tax can be imposed without UK consent.

The Withdrawal Agreement sets out under a  general heading where it reserves to the EU the right to send us big bills in the future. The £39 bn cost of the Withdrawal Agreement is a low estimate of what it might mean compiled by the UK Treasury. It is not an EU accepted cash limit. What safeguards are you seeking to ensure the bills do not escalate and to ensure the UK can refuse to pay unreasonable bills submitted under the  general powers of the EU? Spending our own money on our own priorities was a big part of the reason to leave.

I will make these questions public as they are of considerable national interest, and look forward to your reply. I assume  you are pursuing these matters as part of seeking  a fair deal, and in order to reassure the many MPs who cannot currently support the Withdrawal Agreement.

Yours ever

John Redwood

Why a second referendum would be a disaster

Labour has adopted its new policy with all the enthusiasm of a group of naughty children  deciding how to tell their parents of their misconduct  because they have been rumbled. They successfully kept opposing the government on Brexit without having a clear position of their own. They implied this was somehow compatible with fighting the 2017  election on a pro Leave ticket. Under pressure they opted for the idea that it needed a General election to resolve matters, which served their own interests and kept them united for a bit. Once they lost a vote of no confidence the internal arguments forced a change of line.

I am spending time on their  views because their votes matter in the Commons in the next few weeks. They have said only the public can now decide because Parliament is unable to. This ignores the fact that Parliament despite their opposition has passed the EU Withdrawal Act which means we leave on 29 March without a deal unless Parliament changes its mind and repeals or amends the legislation. Labour’s proposed second referendum clearly cannot happen before we  leave, so it implies they now want to delay our exit  and wish to amend or repeal the legislation about our departure.

It also implies that they expect the EU to acquiesce in a delay to allow a referendum to take place. It would take most of the rest of this year to legislate for a referendum  if Parliament was willing and then to hold the vote. It would require the consent of all 27 member states to the delay. If they wanted to change the terms of our membership or relationship that would need further UK legislation. If the EU  were happy for us to continue our current membership then we would need to field candidates in the European elections, which no-one has proposed in any motion before the Commons.

If an opposition party wishes to show it is ready for government and wants to propose positive policies then it has to draft the relevant documents and propose the necessary motions. The absence of a Labour motion to fight the European elections brings their wish to delay into some doubt. The absence of draft legislation to handle the delay period with the EU also shows some sloppiness or hesitation. Even more surprising is their inability to tell us what question they would want the referendum to ask.

Mr Starmer seems to want a referendum for Remain voters. It would ask do you want to remain or to accept Mrs May’s Agreement. There would be  no option for the 17.4 m who want to Leave, as  most of us do not see the Withdrawal Agreement as being any kind of Leave.  Some  Leave voters willing to compromise might accept a vote on would you like to leave without a deal or accept Mrs May’s deal?  This is unlikely to assuage Remain campaigners for a second referendum. Some now say they want a three way, asking between No deal, the Withdrawal Agreement and Remain.

This three way has two fundamental objections. The first is it  is primarily a re run of the first referendum, so what is the point of it? People are likely to say the same again, with more probably voting to leave out of anger with the political classes for failing to do as promised the first time.  The second objection is the winning answer might only get 34% of the vote, with almost two thirds of the country unhappy with the outcome. That would be more divisive than the first referendum.

Some in Labour want to put their different approach to Brexit negotiations  on the ballot paper as an option. This is itself a bit vague but probably entails membership of the customs union with some kind of shadowing of the single market and acceptance of EU views on movement of people and citizens rights. There seem to be different versions of whether Labour accepts or wants to end freedom of movement, and whether  they want us  in effect under the ECJ for many of our laws to stay compliant with the single market.  There would need to a written down detailed version of this to be able to  ask people about it. More importantly it would need the EU to sign off in principle that they would agree to it, as otherwise we would be voting on a nonsense which was  not negotiable.

I think it unlikely there will be a Commons majority for a second referendum. It is a spectacularly bad idea, guaranteed to split the country more, frustrate good government for longer and undermine the UK’s stature and reputation abroad. Leave voters do not want a second referendum and see no need for one.  Were a second referendum to give a different answer why would that answer be better than the answer properly given to the first one?

Getting the economy growing faster

Too much navel gazing about Brexit is crowding out time and space to discuss how we should respond to the worldwide slowdown in growth, to the recession in parts of the European continent, and to the need for policy change here to stimulate more enterprise, jobs and higher living standards.

In the USA, UK, Euro area and China the Central Banks have been tightening. Money and credit growth slowed markedly in 2018 especially in the UK. The US had rate rises and  reduced Quantitative easing, but there was a big offset with the large tax cuts the President put through the Congress. Money growth fell off late last year. This year the Fed has reduced its QE cancellation rate and signalled a softer approach, leading to some rebound in money growth and a big rally in share markets from relief.

In the UK we had two rate rises, the cancellation of special loan facilities for the commercial banks, no more QE and tough guidance on consumer credit, on  top end mortgages and car loans. Money growth halved. UK tax policy has been hostile to property and to cars, with big hikes in Stamp Duties on numerous transactions, and in Vehicle Excise Duty deterring purchases of new vehicles. UK fiscal policy has also tightened considerably, and this year there was an additional substantial further tightening from an unplanned extra cut in the deficit.

In China a doubling of car purchase tax to 10% and a credit squeeze brought down their car market and added to the slowdown induced by tougher money policies. In the Eurozone they ended Quantitative easing , continued to battle under reserved banks and hit the car industry with new emissions regulations. The gilet jaune protests damaged French sales and growth. Italy moved into recession. Germany had a fall in GDP in Q3 with no growth in Q4.

In such conditions with slowdown in our major trading partners around the world the UK should be taking sensible measures to promote expansion. Inflation is below target and unlikely to become a problem any time soon. The government should cut Stamp Duties. The present rates are reducing the revenues and have caused quite a shortfall compared to Treasury and OBR forecasts. The government should take VED back to pre 2017 budget levels to reduce the tax on buying a new car. Business rates on the High Street should be cut to help retailers. VAT should  be removed from green products and domestic fuel, helping keep inflation down.  The Bank of England should announce new good value loan facilities for commercial banks wanting to on lend for new business and growth. It should remove its special strictures against car loans as there is no evidence of credit danger threatening the system. It should state, as the Fed has now done, that it will be patient before any rate rise, and will want to see evidence of faster economic growth and a decisive upturn in money growth before a rate rise. This should all happen whatever we do on Brexit.

Let us assume  we leave on 29 March without signing the Withdrawal Agreement which is what will happen unless Parliament legislates to delay or stop Brexit or legislates some Withdrawal Treaty. The government should then hold a budget in early April to spend the money we will be saving from end March on our net budget contributions. It could spend an additional £12 bn next year on better public services and tax cuts without increasing the deficit. Given the substantial tightening and the low level of the planned deficit I would go further and spend £20bn or half the budgeted £39bn cost of the Withdrawal Agreement in the first year. That would provide a welcome 1% boost to the economy. Our schools, social care and public security budgets all need more, whilst selective tax cuts could boost home buying, cars, green products  and the High Street if we cut VED, Stamp Duty, Business rates and VAT. Some of these tax cuts would yield more revenues as they are currently stifling business.

The endless pessimism of Remain MPs

I have never known so many MPs be so pessimistic and so lacking in enthusiasm for anything about our country, our people, our ambitions and our opportunities. It is as if they are in some kind of trance, trotting out EU propaganda and Project Fear scare stories as if no-one had heard them all before, and as if they were about to change Leave voters minds. We did not  believe them the first time we heard them, and we still do not  believe them.

It is also disappointing that Remain  MPs elected to improve the living standards and lives of UK voters have so little confidence in the abilities of the UK to govern ourselves and to raise living standards by our own efforts and by good policies. Opposition MPs seem to think all good standards require an EU law to set them out, as if we cannot pass laws we are proud of for ourselves. They are desperate to give away as much of our money as possible to the EU and refuse to examine the outrageous vague overinflated and long lasting financial pledges in the draft Withdrawal Agreement.

They  make endless repetitious speeches around a few tired soundbites.

They tell us  leaving without a deal would  be “catastrophic”. When you ask why and how, there is no solid response as it would not  be a catastrophe. The  best they can do is to say we will be starved of food and medicines, as if the UK was about to mount a blockade of our own imports to deny our shops and customers access to the products the rest of the world still wants to sell us. No main EU supplier has said they want to terminate their contract, and  no-one has explained what blocks we will create at our ports to stop the goods coming in.

They tell us we will be leaping off a cliff if we leave without a deal. If you ask how and why again there is no factual or sensible response. They sometimes say Just in time supply chains would be disrupted. If you ask how and why there is no sensible response because they will not be disrupted. They seem to think EU trade is friction free, which it is not, and that non EU trade is impossible. In practice there are mixed supply chains for manufacturing in the UK, with materials and components coming in from EU and non EU. If they are all under rest of the world terms after Brexit  it will work fine. They seem ignorant of Intrastat declarations, of food and animal inspections and the other features of current EU trade. They ignore the old fashioned and worrying paper and wet stamp system written into the Withdrawal Agreement which would slow things down badly and is worse than the WTO  system we use for non EU trade today.

They tell us there is a genuine Irish/Northern Irish border issue. They seem unaware of the fact that it is today a complex international border. It requires changes of VAT, Excise, and currency. It has collaborative systems both sides of the border to combat terrorism and smuggling. If there have to be customs paid they will paid electronically away from the border as VAT is today. If there need to  be other checks on goods they too can be done away from the border. Most will  be done as today at factories and farms before shipping product, with electronic manifests providing the necessary detail, and or at arrival at the warehouse or store taking delivery.

Another pro Leave Minister resigns

We heard a lot about the need to keep three dissident pro Remain Cabinet members in the government to justify the change on possible delay. Meanwhile yet another good Minister from the Leave side understandably felt he had to resign given the continued drift of policy away from our Manifesto. This repeats the pattern so far.

Not a single pro Remain Cabinet Minister has resigned. The PM has instead lost from the pro Leave side a Foreign Secretary, two Brexit Secretaries,  and a Work and Pensions Secretary from the Cabinet because they did not see the Chequers proposals and the Withdrawal Agreement as compatible with the Manifesto pledge to leave. The government has also lost two Brexit department Ministers, a Northern Ireland Minister and now a Fishing and Farming Minister from the Leave side. There have been 15  resignations from PPS and Vice Chairmen of the party roles as well from the Leave side. 23 resignations over the same policy is trying to tell the government something, and shows how important this matter is that so many will give up interesting jobs they wanted to keep  to make their point. I doubt there has ever been a policy in British history that has caused so many people to resign, without generating the necessary change of policy being sought.

The latest loss of George Eustice is a serious blow to the government. George is well versed in agricultural and fishing matters and was piloting through important changes for those industries so they can do better once out of the EU.  He has been both patient and willing to compromise to help the government , but now rightly feels there has been too much drift away from the Brexit we set out in the 2017 election. He will be a welcome addition to the backbench campaign to secure a proper Brexit, but is a further shift of expertise and talent from the government to the backbenches.

Delay and the European Parliamentary elections.

I see no point in delaying our exit from the EU. I have never understood why we would be able to strike a good deal after March 29 if we were unable to strike a good deal in the 2 years 9 months of delay so far in implementing the decision of UK voters. Leave voters expect Parliament to implement the decision, not to seek out ways to undermine , delay or cancel it.

Yesterday the President of France and the Prime Minister of Spain both seemed opposed to the idea of delay in Brexit. France might consider it if the UK had changed her mind about leaving and now wanted a second referendum. Mrs May rightly continues to rule that out. Neither favoured a delay or further negotiations about the draft Withdrawal Agreement.  Spain like Ireland strongly believes the Irish backstop has to stay in place unless and until both the EU and the UK agree it can be removed.

There is a general briefing line coming out of Brussels that any delay could not  be longer than two to three months anyway.  They argue that the UK will cease to be represented in the European Parliament from 2 July when the newly elected Parliament takes over. The UK is not planning to field candidates, and the EU has decided to redistribute some of the UK seats to other countries and to abolish the remainder. If the UK is not in the Parliament it cannot legally be a member of the EU as it is no longer represented in the body that is an important co legislator with the Council, responding to the agenda and draft laws of the Commission.

Mrs May has always made clear the UK will not  be contesting the next European election. It is a good fortune that the old Parliament expires shortly after the official date for Brexit. There have been no moves from rebel MPs in Parliament to seek to reinstate UK candidates or UK seats, which would of course require the consent of the EU. Whilst nomination papers do not have to  be in before April, some party campaigns have already begun on the continent and parties are preparing for the new distribution of seats resulting from the UK’s departure. The longer the UK leaves wanting to fight the election the more unreasonable it would be to other EU members to seek to join in when others  have planned their election campaigns around the configuration of the Parliament without the UK.

I assume neither the Labour nor the Conservative parties will be wanting us to contest the EU elections. Were they to do so it would create great anger amongst the Brexit supporters in the country who would see it as breaking promises to leave. It would create ideal conditions for pro Brexit parties to do very well at the expense of traditional parties.

Delay would make the UK look weak. It would increase and prolong uncertainties. It would invite the EU to demand even more concessions. The UK government always said No deal is better than a bad deal. If you issue such a statement you have to be prepared to carry it out.

The collapse of Labour

Mr Corbyn must have been  forced into a corner over a second referendum. He had wisely held out against it and sort of kept his party together and his poll ratings up. He then gave in just after 8 MPs left mainly over de selection , unpleasant treatment from their party and anti Semitism. We read his advisers thought a second referendum would be the way to stop more dissenters. That is not necessarily the case, as MPs  leaving seems to have more to do with the style of the party , the threat of deselection and a wider range of issues than the EU. It does mean, however, he will lose a lot of Leave voters who stuck with the party in 2017 in the belief that Labour  now supported exit.

I have not met or heard from any Leave voters who think we need a second referendum. The campaign to hold one is of course a movement of Remain voters who cannot accept the verdict of the People’s vote. The Remain MPs  spend their time slanging off Leave voters by saying we were too stupid to vote properly or patronising us by saying we  were misled or not given the true facts. Allying himself to this group drives a new wedge into his party, alienating Leave voters and putting many MPs in a difficult position having promised their Leave voters Labour backed leaving. Given the way they treat us Leave voters it is difficult to see why any of us would want to change sides and join them. A second referendum looks like a hopeless mission. Even this Parliament should vote it down. Were one to be held why wouldn’t Leave win by a bigger margin, given all that Remain has said about us, and all the false forecasts they have come out with? The hardline Remain MPs are remorselessly negative, run down our country, think the UK can do nothing for itself, and take the EU’s side in any negotiation. These are not becoming characteristics for those who wish to represent most UK voters.

Labour has not defined the question for its  referendum, but have said it will include Remain, so it is a re run of what we have already v0ted on. The only question to be resolved is do they want a proper WTO exit as an option, or would they seek to deny Leave voters even  that? The last thing Leave voters could accept is a referendum between staying in as a full member and staying in some limbo land with a pretend Brexit under the cosh of a Withdrawal Agreement and in due course an Association Agreement.

The immediate polling is dire for Labour as a result of all this. It looks as if they have plunged well below 30%, with a worse result if the so called Independent group becomes a party that contests elections. That group could poll into double figures, damaging Labour and the Lib Dems but not polling enough to  hold the seats of those MPs who have decamped to it. Any party which ignores the wishes and views of 17.4 million voters will struggle for support.