Enjoy the game!

The one good thing to come out of the Chequers meeting was confirmation that the government will speed and complete its preparations for leaving the EU without a deal. The government says it  does not want to have to do that, but it needs to do it in case that it is the outcome to the slow and unhelpful talks. It is also important to put some weight behind the UK’s bargaining position.  Only if the government is prepared to exercise the No Deal  option does the UK have clout. We should expect to see and hear more of the successful preparations in the days ahead.

No Deal delivers most of what Brexit voters want. It means we leave the EU on 29 March 2019 as promised. We leave without paying any extra money to the EU as a leaving present. We regain control of our laws, our borders and our trade policy. The only thing it does not give us is a free trade deal with the EU.  I suspect if we look as if we mean to leave without a deal the EU would want to extend its current offer of a free trade deal for Great Britain into an offer for the UK, as we will of course not accept one which leaves out Northern Ireland.

The  biggest win from no deal is the opportunity to spend £39 billion at home on our own priorities that we would otherwise give away to the EU. £39 billion spent at home would be a big  boost of 2% of GDP. It would cut our balance of payments deficit by the same amount. Depending on the mixture of tax cuts and extra spending we chose, there would  be additional gains from the stimulus effect of the money. The right tax cuts could power faster growth and more business success. Well deployed spending on education and training could help more people into better paid jobs.

We should also use all the £13bn we colect in tariffs on EU imports to give as tax cuts to UK consuners so we are no worse off from the tariffs. Doubtless we will also buy more UK goods when EU ones are dearer so we will be better off.

The next win from just leaving will be the right to control our own borders and settle our own migration policy. I expect the government to  make it easy for tourists, students, investors and people with good qualifications to come to the UK.  What the public wants is a decent control on people coming to the UK to take low paid employment, when we need to up the wages and recruit more local people to do the jobs, whilst investing in labour saving automation where the jobs are unattractive. We need to alleviate some of the stresses on housing and infrastructure which high migration rates in recent years have exacerbated. We want a fair policy, which does not give priority to people from continental countries over people from the Commonwealth.

The third win will be in global trade. Australia, New Zealand, Singapore, Canada and the USA are keen to sign trade deals with us. We could join the Trans Pacific Partnership. To do such deals we need to be free to make our own calls on regulation, tariffs and non tariff barriers. Through our membership of the WTO we can create relatively friction free trade, as we enjoy today on non EU trade, with the added advantages that trade deals can bring.

The fourth and biggest win of all is we will re establish our home democracy. Our laws will be made in the UK, and can be repealed or improved by Parliaments we elect and influence. The UK will regain her vote and voice in a number of world bodies, including the World Trade Organisation and various standards bodies, so we can have direct influence on world regulation.

Any deal worth accepting has to be better than this.  It would need to be a  very good offer indeed to be worthwhile paying them £39bn more.

I was not surprised by the resignations. The Chequers statement brought to the surface arguments that had been underway for many months. David Davis felt his department and his advice was being sidelined by the Cabinet Office officials. He had argued against the EU’s sequencing of the talks, and had sought to dig in more over money and the so called Withdrawal Agreement. Boris Johnson felt his advice was also being ignored when he set out an upbeat and optimistic view of Brexit. He complains about the extent of the concessions made and possibly planned.

Some people close to the PM made it worse by the silly briefings that Ministers would have to walk home if they resigned at the Chequers meeting, and by effectively challenging some Ministers to leave the government. Today in the Commons the Prime Minister robustly defended the red lines that matter to many of us. She assured us that freedom of movement will end, we will have our own migration policy, we will not pay large sums into the EU and will be able to sign our own trade deals.

However, the small print of the Chequers statement implies her officials do think we need to make concessions that rub out these important red lines. It is these apparent contradictions between the principles and the detail that has caused all the trouble. A majority of the country, Brexit voting and some Remain voting, want reassurance that the government will implement the wishes of the people. That does mean taking back control of all our laws, borders, money and trade policy. It is difficult to see how this is compatible with a deal that ties our hands on goods and agricultural business and trade. Nor does the detailed language rule out some payments, some role for the European Court and some side deal to allow more migration.

We are told a few large companies think a failure to negotiate some customs deal will be damaging to them. It is difficult to see why. These claims are similar to the claims such businesses made to force us into the European Exchange Rate Mechanism, which proved an economic disaster. They are also similar to the statements of some big businesses that they would stop investing in the UK or might withdraw if we failed to join the Euro. Instead they stayed and invested more. We have just had a devaluation against the Euro of more than 10%, so the UK has just become a lot more competitive. Our trade is not at risk if we leave and trade under WTO rules.

I repeat my advice to the PM. There are only two sensible options, a comprehensive free trade deal or exit on WTO terms. She should table a free trade deal and ask if the EU wants one or not. We need to leave on 29 March 2019.
We have sent the letter and passed the EU Withdrawal Act, so we have done all we need to do to leave legally. The remaining issue is do the EU want free trade or want to trade under WTO terms.

This week the UK welcomes the President of the USA. Let me risk criticism by saying I wish this to be a successful visit, stressing the things the USA and UK can do together to make the world a better place. As good hosts we should not be in the business of taking public political shots at the President or stressing the things some in the UK do not like about his stance. In private of course the government can make representations where it disagrees.

There are many areas where we can and should make common cause. Both the USA and the UK believe in NATO, and believe that to be a fair and strong alliance all its partner states should spend a minimum of 2% of GDP on their contribution to the mutual assurance. As one of the few members who does so we should help the President make the case with other members, and should show we are determined to increase our spending to be a decent ally and helpful partner.

President Trump thinks President Obama was wrong to tell the UK that we would be at the back of the queue for a trade deal. He is willing to get on with one. The UK should respond positively and progress the talks. It would be good to have an Agreement ready for ratification as soon as the UK leaves the EU.

The President is a big advocate of lower taxes. His dramatic tax reform is boosting the US economy. US companies are busily repatriating profits and spending more money on wages, investment and dividends. US families have more money to spend thanks to the income tax cuts. The UK should congratulate the President on his success with this, and should add income tax reductions to the corporation tax cuts we have carried out.

The President has published a study which finds that some Chinese companies steal or obtain western ideas on the cheap. He is trying to get improved conduct from China. There are UK companies who have experienced Intellectual Property difficulties with their own brands and products. The UK should share its knowledge of this with the USA and discuss what might be a good agreement with China to improve the position. The Chinese authorities have themselves said they oppose IP abuse.

The President is pushing both China and the EU for lower tariffs, better market access and “fairer trade”. Where the demand is for a lower tariff or for easier market access, the UK can be sympathetic. Clearly we do not support the unilateral imposition of tariffs to try to force the pace of change, and wish to avert a trade war. This week is a chance to influence the President by offering positive ways that we can help get Chinese and EU barriers to trade down.

I suggest we keep off the topic of walls. The EU has helped financed a long border defence for Turkey, and has seen a number of border fences or walls spring up in recent years, so we are not in a strong moral position to lecture the USA on this sensitive subject. The UK herself wishes to tighten controls on migrant numbers.

I returned after a busy day to see people deliberately misrepresenting my first sentence. I will repeat what I have always said and still believe:

No deal is better than a bad deal

Any deal we accept has to be better than No deal to make it worth accepting.

No deal means no payments of any money after March 2019
Freedom to undertake our own trade deals
Settling our own migration policy
Deciding our own laws

I think there are two main options open to the negotiating parties. One is the WTO so called No deal option. The other is a comprehensive free trade agreement for goods and services.

The latest UK government statement is going to be expanded in a White Paper to be published soon. I will comment on it when it is available. This will be the second such White Paper and will presumably make compromises and changes compared with the first.

It seems unlikely it will be accepted by the EU. It needs to avoid surrendering control of our money, borders and laws. I have also always said you do not have to pay to trade, so have never favoured offering the EU money by way of a withdrawal present. As nothing is agreed until all is agreed, the UK should make clear the money is not a firm promise.

Any deal has to be better than No Deal to be worth accepting. No deal gives us all our money back and restores control over our laws, our borders and our trade policy.
We need to take back control of our laws, borders, money and trade policy.
It is unlikely the EU will accept the Chequers position and will demand more.
The EU has always made clear that customs union membership comes with freedom of movement and the supremacy of EU law, which is why I have three times helped vote down the idea of seeking to stay in the single market or customs union, in support of the government.
The red lines that we do not accept the jurisdiction of the ECJ, do not pay them more money, and have our own migration policy remain very important.

I hear a lot these days from people who say we need to defend the international rules based system. I thought it might be a good idea to see which rules people think are really important, and to check those who believe in the rules based system believe in it regardless of the decisions reached. May I suggest some good rules for the better conduct of open democracy?

1. Where a country holds a legal referendum which attracts a substantial turnout the government accepts the need to implement the wishes of the people, whether it was in favour of the result or not. If it does not wish to do this it should give power to a government that does.

2. Where a country or region within a Union or larger country has a strong body of opinion that wants to be independent, and evidence in elections that that body of opinion is prepared to vote accordingly, there should be a referendum on whether to create an independent country or not. The result should be binding. There should not normally be a repeat of such a vote for at least a generation, with all agreeing to accept the result.

3. Where a part of a country elects a large number of nationalists to elected bodies but is not granted a referendum, those elected should not be arrested for wishing to pursue an independence agenda by peaceful means.

4. Unelected international bodies have to respect the views of elected governments. They may of course insist that the government adheres to binding Treaty commitments made in the past by that country, or agree to arrangements for the country to leave the organisation if the disagreement persists. International law should not be used to prevent a fairly elected government pursuing a chosen course of policy which meets normal standards of behaviour towards others.

So today, just for a change, the Cabinet discusses our possible future relationship with the EU. If they agree what they would like the EU will probably turn it down, as they have turned down most of the positive proposals the government has put forward so far. I have been urging the government to table a comprehensive free trade agreement with the EU and ask them to respond, as that offers a way through if the EU wants any deal.

If we just leave in March 2019 life will go on much as it did before. Planes will still fly into Heathrow from the continent. Just in time deliveries will still pass through our ports with electronic manifests and off site supervision as they do from non EU sources today. Germany will still be selling us plenty of cars, the Netherlands plenty of salads and vegetables, France plenty of cheese and wine. Most UK exports to the continent will flow tariff free under WTO tariff schedules, as there are no tariffs on services or goods like aerospace, and low ones on everything else apart from agriculture and cars. We and the EU will trade under the WTO’s Facilitation of Trade Agreement, which deals with non tariff barriers. Where tariffs go on the UK will expand domestic production to meet more of the home market demand and will have the opportunity to import more cheaply from outside the EU as it wishes. As we have a large trade deficit in cars and food with the EU they will lose more from tariffs, so it is in their interest to agree tariff free as we propose.

The UK economy will get an immediate boost from spending an extra £12bn a year on public services or through tax cuts as we will save the money as soon as we leave. We can rebuild our fishing industry once we control our own waters and fish stocks. We can put in place our own migration policy, that is fair between EU and non EU migrants.

Above all the UK will be a self governing democracy again. So will the Cabinet rise to the challenge? Wouldn’t it be good if they came out from their meeting with a range of plans to use the new freedoms, rights and cash leaving will bring. Brexit offers considerable scope to improve our lives and services here at home and to grow our economy faster.

I am disappointed but not surprised that a few warm days without rain and the water industry is already saying we need to be careful about use. Hosepipe bans are being introduced in some places.

This winter January, March and April all saw rainfall well above average. It was a wet and cold winter, with February and March well below average temperatures of the last 40 years. I remember urging the industry to collect enough of the large quantities of rainwater and snow melt that we experienced just in case we got a hot summer.

From the forecast and the temperatures so far this is not going to be re run of the very hot and dry 1976 nor of the even drier 1995. It is a bit more like a hot summer of yesteryear than some more recent overcast and cooler summers. We need to plan for these events, as they are well within our range of experience. Water is a glamorous growth product. As people get better off so they want to use more water to wash their cars, water their gardens, fill their children’s paddling pools and take more showers when it’s hot. As water is an entirely renewable resource, the industry needs to put in enough capacity to meet our needs. The industry needs to remember that in parts of the country like the south east the population is growing quickly, which means the need for more piped water.