The latest figures show a further decline in the UK output of cars for domestic sale, as the government wished. They imposed higher taxes and threatened more taxes and bans. How much bigger fall do they want?

There were many years ago apparently  scientific experiments to test the idea that if you left an amphibian in water which you heated up gradually it would not notice, dying when it got too hot. I always thought that a strange idea based on most cruel experiments. Most people think it is untrue. An animal will jump out when it senses the water is getting too hot. I am glad they do, for their sakes.

Some in the political world use the story of the boiling water as an analogy based appropriately on a falsehood  to describe the way some people apparently will stick around supporting policies and proposals they dislike intensely if they are introduced slowly and stealthily. There has been a rumour about the Remain forces in the government using this technique to get more Leavers to accept more and more of the EU they are seeking to leave, by gradually introducing these features back into the promised Brexit the government is arranging. Thus we saw a progress of more EU controls, payments and laws being introduced from the original Lancaster House statement to the Florence speech, and from Florence to the Mansion House text, to end up with the Chequers proposals.

Gradually the crucial features of Brexit were eroded or removed. Instead of getting all our money back from Day 1 we were told there would be a big and lingering bill. Instead of getting freedom to set our own benefits and work permit policies, we were told we needed to accept some freedom of movement and some payment of benefits to EU citizens on arrival. Instead of getting full freedom to negotiate our own trade deals, we were told we had to live with  accepting many EU rules and regulations which might get in the way of trade agreements. Instead of leaving on 29 March 2019 we were told it would be delayed for another 21 months for no good reason. Instead of getting control of our fish from next year, the timetable slipped and the language implied we would continue to give away much of our fish stock.

As any sensible person would predict, the latest version of Chequers represents unacceptably hot water, so the Brexiteers have indeed jumped out. The government has kindly proved again the commonsense view that you cannot get people to change their minds on fundamental issues by seeking to change them gradually and by stealth. They do notice, just as any animal spots the water getting too hot.

The main issue tackled at Salzburg is of great interest and concern. How many migrants should the EU admit? What controls should it place at its external border to control numbers arriving? How many of those borders should be hard physical borders with walls and fences, watch towers and plenty of staff? The EU has helped fund just such a tough border for Turkey with the states to the south, and some states like Austria and Hungary have also built their own walls and fences with razor wire.

The EU has a European Border and Coastguard service or Frontex, with a headquarters in Warsaw. The informal Council discussed whether this should be substantially beefed up with 10,000 new recruits to help member states handle the big issues of entry into the EU. To date Frontex has always claimed member states have the responsibility for policing their own borders, to an approved set of common rules. Frontex has access to specialist personnel and equipment to come and assist where there are particular problems or pressures. Recruiting many more staff would be a precondition for Frontex becoming a much more active participant in border security. Frontex offers ships, trained personnel and surveillance equipment.

Member states are divided on this issue. There is a strong wish to see tougher common EU border security, but also in some cases a reluctance to surrender power to police the border to an EU authority. Some states like Hungary and Austria have pushed their interpretation of EU policy a long way in the direction of hard  borders and tough controls. The EU is now responding. It has a good relationship with Egypt to deter migrants from that country. It is now collaborating with the Libyan coastguard so more people rescued at sea who started out from Libya are returned to Libya. It is looking to enter agreements with more North African states, just as it has done with Turkey. In return for substantial sums of money, Turkey has agreed to provide a home for Syrian refugees and not to send them on to the EU.

Mr Salvini in Italy is pressing hard for a much tougher EU stance on migration. He has been refusing boats the right to land, and has recently organised the removal of a Panamanian flag from a charity boat that brings migrants from the sea to the shores of Italy, to remove the boat’s right of passage. The EU do not like his approach, but so far have been unable to stop it.

Many people are tired of the model of business which keeps inviting in people from the continent to take low paid jobs. No wonder we have a productivity problem, as recruiting tens of thousands each year to low productivity low paid jobs has become common.

I want business to employ more people who are already settled here. I want them to offer better wages to encourage more people into work. Because wages have to be earned that means offering training and investment support to each new worker so their productivity  justifies the better pay. More computing power is needed to raise productivity in clerical and administrative functions. More machine power is needed in warehouses, on building sites and in older factories, to make the task easier for employees.

It is better to employ fewer people on  better pay, and to seek to motivate and mentor them so they earn their wages and get more out of their jobs. There are many good firms in the UK who do a lot to nurture talent, to give people a second chance if they did not do well at school and need some educational support as adults. There are companies that like to promote from within, to give people a clear sense of career progression and opportunity within the firm. Good bosses welcome talent, foster better standards and higher achievement, and  understand the training and motivational needs of their employees.

Getting the right structure of rewards and incentives is not easy. If there is no financial recognition of superior effort and achievement it is difficult to drive a business to higher levels of  quality and efficiency. If there is too much emphasis on one or two variables that determine a bonus, it can distort the efforts of staff or even lead to unwelcome practices as we have seen in some companies where bonus calculations lead to conduct which is not in the customer interest. Successful bonus and pay rise schemes align the interests of the employee with the interests of the customer, and therefore also work for the shareholder.

In every business all staff need to know they are important and what they do is important. They need to know there is plenty of opportunity to learn and to gain higher pay and more responsibility if they are good. They also need to know above all else that everything they do has to be for the benefit of the customers, who pay their wages as well as the shareholder dividends.

We often have the parade of those few Remain advocates  claiming to speak for big  businesses that want to stop Brexit. They frequently repeat themselves,  going  public to help the Remain cause. They argue more than  one foolish   contradiction.

The most obvious is their statement that leaving the EU without a very costly  Withdrawal Agreement is plunging off a cliff, conjuring false  images of sharp falls in output. They then follow this with their number one complaint that once out of the EU we will lose access to cheap labour from the continent which they  say is needed to deal with the increased demand and expansion of business which they will be grappling with.

If they truly believed  output will fall and stay lower as they imply, they would not bother to seek more labour. They would be planning an orderly reduction in the size of their workforce as people retired or left for other reasons. Their economic forecasts have been so bad for many years. The pro EU lobbyists  wrongly wanted the Exchange Rate Mechanism, which did lead to a sharp fall in activity and business  output and led many  businesses to sack people without warning  because they had failed to foresee the results of their ill judged  lobbying for the ERM. They  wrongly  went along with or encouraged the Euro, which did considerable damage to UK export markets on the continent after the banking crash, when that was extended and worsened in the Euro area by the Euro crisis.

Next  they wrongly forecast a fall in UK output  in the months immediately after  we voted to leave, which did not happen .  Nor is there any  no good reason to think that actually   leaving  should lead to that. Of course the UK needs to follow good positive domestic policies to thrive outside  the EU, just as we needed to do that to grow or to offset harmful EU policies when in it. If we just get on with spending domestically all the money we save on leaving, the economy will perform well.

Let me reassure them again. UK output will not be damaged by leaving. It could expand more than currently  if the government stopped its ever tightening monetary and fiscal squeeze. The correct thing to do would be to offer tax cuts and increased spending in this  autumn’s  budget, covered by ending payments to the EU.

Business needs to turn its mind to productivity, and wean itself off the ever more cheap labour model. Together we need to build a world of higher pay, high skills and more computing and machine power to help people be more productive.

I accepted the verdict of UK voters as a young man in 1975 when I was on the losing side of the referendum on staying in the EEC. I decided I had to make the best of it. When I entered Parliament I  tried to limit the EEC/EU to what people voted for, a common market. My worry had always been it was a much mightier political project, but Remain always told us in the early years it was  not a currency and political union in the making. Later of course it became obvious that it was a currency union, with a political union in the offing.

So what changed my mind about the common market part of it? It was being given the role of Single Market Minister in the 1990s, when the EU wished to “complete” the single market. That turned out to be a double lie. The EU did indeed have a massive legislative programme which it called the single market programme in those days, and did more or less complete the stated programme by 1992. It then went on to invent many more legislative programmes in the name of its new creation for many years afterwards, proving the single market was in its view no where near completed in 1992 despite the claims. It was also misleading, because as I discovered it was not primarily a programme to open and liberate a wider market. It was a huge power grab. It  thrived on the doctrine of “the occupied field”, pressing EU legislation into many new areas in the name of the single  market to take powers away from national democracies and to place them in the hands of unelected Commissioners and European Court judges.

As I used to point out to the bureaucratic, legal and regulatory minds assembled, you only need one simple rule to have a common market. That rule, established in a famous  European Court case, states that if a product is of merchandisable quality and has passed the tests to be offered for sale in one part of the common market, it should also be allowed for sale anywhere else in that market. It does not mean British people have to suddenly develop a passion for German sausage or French people need to learn to love English cheese. It does mean that as Germany tells us their sausage is fine for consumption their sausage makers should be allowed to offer it to British consumers to see if they want to buy it. It means each part of a common market has to trust each other part for their standards of safety, hygiene and the rest, or allow only limited specified national overrides for public health and safety  but not much else to restrict the flow of goods.

Instead the EU embarked on a comprehensive legislative programme to superimpose EU law on top of member state law to govern everything from food standards to control of hazardous chemicals, and everything from labour rules to environmental protections, all in the name of the single market. The laws often told businesses  how they were to make or design something. It was very clearly a programme to create a supranational government. It soon replicated all the main departments of national governments, with a foreign policy, a security and defence policy, an environment , transport and employment policy and much else.

The market part of it proceeded by the Commission working with the dominant companies of the day in each sector to draw up a set of rules which would be required of everyone. These rules were welcomed by the big business that helped inform them, because they already met them. They were opposed by some big businesses which had not been so successful in lobbying and drafting. They often acted as restraints on c0mpetition and innovation, as they prescribed the way firms were allowed to make and sell things. These rules were imposed in the name of cross border trading, but were also mandatory for the much larger flows of goods and commerce within each individual member state where they were not needed to assist international trade and might override perfectly good familiar national systems. Many smaller businesses found the extra cost of EU regulation, and greater prescription, made market entry and offering competitive product more difficult.

In the first ten years of our membership of the EEC our motor car output halved, unable to face the onslaught of German and French competition without tariffs and under EEC rules. Meanwhile in the areas where we were strong in services no similar market opening occurred, leaving us a growing and large balance of payments deficit which has persisted to this day. I came to the conclusion that the single market was not designed to help the UK, and we would be better off making our own rules and running our own global trade policy.

 

We must leave the single market and customs union when we leave the EU. That’s about the only thing the official Leave and Remain campaigns agreed about, and is also the view of the EU itself.

We cannot stay half in the single market, and we should not want to.

The government has to accept the verdict of Salzburg, that the EU  don’t want Chequers either.

We should offer a good Free Trade Agreement. You do not pay to trade.

The EU is merely offering a Withdrawal Agreement. That is all take for them and no give to us. We should reject it.

We should not want to spend another 21 months in the EU in a so called transition. It would be a transition to nowhere, with 21 months of uncertainty and argument over what the future might  bring.

 

If we just leave just look at the upside:

 

An end to  business uncertainty, and proof that the stupid scare stories were as wrong as the Remain economic forecasts for 2016-17.

£39bn to spend on tax cuts and public service improvements over two years, giving a good boost to jobs and our economy

The right to settle our own migration policy, and to encourage more people settled in the UK into jobs with better wages

Taking back control of our fish to rebuild our damaged fishing industry

Setting out our own agriculture policy so we grow more at home again as we used to before we went into the EEC/EU

Deciding on  our own tariff levels – with lower tariffs or no tariffs where we cannot grow or make the things concerned.

Signing trade deals with many countries that want even better trading relations with us.

 

The government says it is getting on with No deal planning. So bring on the fishing, farming, trading and spending policies that we need and want, to use our new won freedoms.

 

 

 

Mr Tusk’s dismissive treatment of the Prime Minister was not the action of a peacemaker who wants to bring the two sides closer together. It reveals that the EU has little self knowledge, and no knowledge of how others see it. It is because the EU is no bowl of cherries that many of us wish to go. There are no cherries to pick.

As to cake, we have to pay for our own and pay for cake for other countries  too whilst an EU member. I look forward to us paying just for our own cake, and making more of it at home. That way we can have better cake and more prosperity. At least Mr Tusk has just made it a whole lot easier for us to leave without a Withdrawal Agreement.

So as I and my allies predicted, the EU has turned down the Chequers proposals. We tried hard to persuade the PM to move on from Chequers. We did not want her  rebuffed for proposing the impossible. How do her advisers who disagreed with us and told her to throw all her political weight behind Chequers explain what they have done? What do those Cabinet Ministers who went along with it have to say now about the delays and loss of negotiating  capital it has caused? Can they now see they set her up to fail? Will she now listen to pro Brexit advisers who want what is best for our country based  on organising an early exit?

 

The Prime Minister got just ten minutes to state her case to the assembled heads of state and government after dinner on Wednesday at Salzburg. The long dinner conversation was about borders and security. The working session yesterday was also about security and borders, in preparation for decisions on these matters at the October Council. The 27 did have a lunch time conversation about Brexit in the absence of the UK.

This tells us something very important about the EU. They are very worried about the political movements in member states demanding a change of policy on migrants and borders. Maybe they  do not see Brexit as sufficiently important to allocate proper time at member state level to discussing it, preferring to let their representatives from the Commission handle these matters. Maybe they were so annoyed at Chequers that largely ignoring it seemed the best response to them .

Given the position of the UK Prime Minister and the clear position of the EU on the integrity of the single market and its wide ranging associated policies, there is no deal in sight. They need to take that into account at the October Council. As someone who thinks leaving without a Withdrawal Agreement works well for the UK, the same cannot be said for the EU. Their one sided Withdrawal Agreement is a very good deal for them, which they can lose through the casual approach of the Council allied to the formal and legalistic approach of Mr Barnier.

Could the two sides get an agreement?  Only if both change their approaches substantially. The UK has to give up the ideas in Chequers that we stay in the single market for goods whilst leaving the rest of it and leaving the customs union. The EU wishes to preserve the integrity of their bureaucratic single market, and not have a country half in it. We need to abandon the idea that we will collect their customs dues for them. The EU has to give up the idea that it can split the UK by treating Northern Ireland differently to the rest. Then there is a simple question for both parties. Do they want a comprehensive free trade agreement like the Canada one or not? If they both do,  it could be agreed in time for exit on 29 March 2019, based on the Canada draft with some added advantages that come from starting from a tariff free position on all items.

My view is as there is no legal obligation to pay a Withdrawal sum there is no need to sign the Withdrawal Agreement, and no need to pay for a Free Trade Agreement. Doubtless some  in the government would be willing to compromise on this approach in order to get something agreed. In order to get any compromise  through the UK Parliament, it has to be visibly better than simply leaving without a Withdrawal Agreement. £39bn is a huge sum of money that could do a lot of good at home. Trade under WTO rules with the rest of the world works fine for us, so we can manage on March 30th with no Withdrawal Agreement and no so called transition or further delay. The sooner the UK sets out its tariff schedule for March 30 next year the better. The tariffs do not have to be as high as some EU ones are. EU tariffs  are high on food and 10% on cars. Much of our export activity including all services  will be tariff free even on EU tariff schedules.

Listening to those who lead and manage our armed forces, I have been struck by the significant change in the army as we detach ourselves from Middle Eastern conflicts. During the Blair/Brown/Cameron years the UK made a substantial military commitment to Iraq and Afghanistan, as allies of the US and as part of a wider coalition of the willing. The UK accepted the US analysis of the need to respond to the atrocity of 9/11 by seeking to root out terrorists from some parts of the Middle East, and sought to assist in defeating terror groups in the interests of establishing more stable democratic states. Over the years of these conflicts the army had to direct its training to the difficult task of counter insurgency, to fighting with restraint in troubled urban environments. It required a change in equipment as well, with arguments over the number and effectiveness of armoured personnel carriers, and over the best style of military policing of areas with a terrorist presence or threat.

The nation rightly remained strongly loyal to our armed forces, who usually showed bravery, restraint and professionalism in difficult circumstances. The political nation was more divided and unsure about the remit given to our armed forces, and over the wisdom of these military interventions. It was one thing to support troops who did succeed in moving terrorists out or in stabilising an area. It was another thing to be able to assist in the creation of a stable democratic system, a good government and a more flourishing economy to replace the terror ridden troubles of many communities. The interventions did not create stable prosperous democracies quickly, and maybe could not do so. If there was a failure it was a failure of politics, or an over reach by the West who may not be best placed to transform the domestic politics of the area. I was one who thought we intervened too much. I also thought we asked a lot of our young soldiers on the front line, who had to show great restraint when afraid of attack, unable to speak the local language and finding it difficult to identify who the enemy might be amongst a civilian population they were trying to protect.

Today we need to ask what do we want our army to do now? To be ready, seems to be the answer. It needs to be ready in case danger or need arises. That makes training difficult, as you cannot be sure what you are training to do. Some in the army think it makes managing the army more difficult. Providing a positive and exciting career if you all you do is train is a challenge. Whilst most of us like peace and are pleased to be spared the risks and dangers of war, some who join and train to be soldiers do so to be placed into dangerous situations where their actions can make a difference.

The last thing we should want to do is to find a dangerous situation to put our troops at more risk. It is the highest success if having an army there are no wars for it to fight. I am one who thinks the main reason we have a good professional army is as an insurance and deterrent. What do I most want the army to do? To persuade any adversary that it is not feasible to take military action against our home islands and protectorates. My second wish is to have armed forces that are strong enough and professional enough to be able to intervene many miles from home should need arise. That capability means our diplomacy has teeth, and makes negotiated solutions more likely. At the end of any war you need to sit down and organise the peace, establish a new rule of law, and allow self government where you have intervened with force on the ground. If you can sort things out like that without the war, we are all better off. As a member of the Security Council of the UN and a country with interests around the world, we do need to be able to project and use force away from home.

So I invite you to tell me what you want our army to do.