The role of the elected politician is to develop policy, to choose priorities, to raise revenue and to spend budgets in ways that meet the needs and views of voters.

The politician Minister can choose the experts he wants to help. He can subcontract the work to his officials who in turn may well use outside expert help. The skill of the Minister rests in choosing the right priorities, and then choosing the best experts to see the task through. The Minister has to apply commonsense and political judgement to the professional advice he receives.

In recent years it has been popular with the media and many in the political class to want to delegate or give away more and more areas to be run by experts. This is not a good trend.

Ministers can delegate anything they like, but it does not absolve them of blame or responsibility if things go wrong. If we have a great recession as in 2008  partly  owing to  mistakes by the so called independent Bank of England the public does not forgive the Labour Chancellor who had overall authority through Parliament to avoid a crash and maintain a strong economy. Nor could a previous Conservative government wash its hands of blame for the early 1990 s recession, brought about  by the European Exchange  Rate nechanism strongly recommended  by the experts at the Bank  and Treasury.

The crushing defeats of Conservatives and Labour after disastrous expert advice plunged the economy into slump reminds us that in the end the politicians are accountable. Evidence of the last two crashes says that the elected officials have to get more sceptical about official economic policy advice, not less.

Today the Bank is tightening roo much. The government’s line is they can do so because they are independent. It will be the government that takes the flack for the resulting needless slowdown. The UK has been dogged by very poor official advice on economic policy for much of my time in politics. Much of it has related to the experts wanting to copy or stay close to EU policy. The ERM and the banking crash were but two examples. It was also damaging to have a period shadowing the German currency, and to burden the UK economy with the substantial balance of payments damage that EU membership brought with it.

 

The ONS tells us productivity is still not rising. They say they got their forecasts wrong again and need to serve up worse figures for the UK outlook just in time for the budget.

I am not surprised they got the numbers wrong. They usually do get them wrong. They were fashionably too pessimistic for the year after the Brexit vote. It is a difficult task to get right.

Nor am I surprised they and others are worsening their figures for next year as growth is slowing a bit. I have forecast continuing problems in the housing and car markets thanks to tax attacks by successive Chancellors and to credit tightening by the Bank of England.

Productivity is stagnant for good as well as bad reasons. The UK economy continues to generate a lot of extra jobs in lower value added activities, whilst high value added like oil production and some banking services are in decline. Its good news we are creating more jobs. Industrial productivity is doing fine. The bad news is the weak productivity performance of the large public sector.

 

So what should the Chancellor do? Instead of going gloomy and saying there is no money for spending or tax cuts he should have a budget for extra growth.  Selective tax cuts to boost incentives and enterprise should  figure prominently. As I have often described, the right tax cuts can also pull in more revenue. The public sector does need a bit of extra spending and needs to help people work smarter. We need to make sure all EU contributions stop in March 2019 to help pay our bills.

I do not support Mr Shapps in his view that we need a Conservative leadership election.

I note that the other 29 MPs he has hinted are with him have not spoken out or let their names be known. They are either surprisingly reticent rebels, or they do not exist.

The media say he needs 48 MPs to sign a letter for a leadership election. They need to  add they would also need to find 160 Conservative MPs to vote for a leadership election, as a motion of confidence follows the letters. This is not going to happen.

Growing up as I did  in a settled country with a strong but flexible constitution, the issue of government  legitimacy and democratic consent were ones for the history books.

The transfer of major powers to the EU changed all that. I came to realise I was caught up in a re run of the democratic struggles of earlier centuries in the UK, as many people and some in Parliament  came to challenge the authority of government – not this time of the King, but of the EU.  We have now found our resolution, through the ballot box. We have also resolved the issue of Scottish nationalism through a democratic vote of the Scottish people, which was agreed to be a once in a generation matter by both sides prior to the vote.

In Spain they are far from finding a resolution. The Spanish state has always had tensions between the powerful regional states and the centre in Madrid. The Basque country has chafed at Spanish rule, and Catalonia has long had an independence movement.  These feelings have attracted more support as a result of the EU demanding more austerity year after year from the Spanish budget, and because the EU has assisted with a general economic policy which has failed to deliver good levels of employment and income.

In December 2016 the Spanish voters elected a Parliament which was simply incapable of forming any kind of government. Another election ensued in June 2017. Again no majority government could form. Instead the second largest party, the socialists, agreed to abstain so the leader of the largest party could win a vote to head a  minority coalition government. Mr Rajoy, the PM, was elected on a ticket of no tax rises, but has to put some into his budget to try to comply with EU deficit rules.

It is this very weak type of government that has to handle the Catalan crisis. It is true Mr Rajoy can count on more Parliamentary support from Spain outside Catalonia, the Canary islands and the Basque country. Most of the rest want to keep Catalonia in Spain, where it makes a substantial contribution to tax revenues above its share of public spending.

The Spanish government’s decision to deploy national police to take control by force set public sector workers employed by the Spanish state against public sector workers employed by the devolved Catalan government. It has shaken the whole question in many Catalan’s minds, of who should have the authority and the power over them? Mr Rajoy may come to appreciate  that in a democracy those with the power must behave in a way which preserves the implied consent to the system by most of the people for most of the time. If too many people come to resent or challenge the democratic authority, the fact that it was elected does not solve the problem. When elected to office, particularly in a weak coalition that cannot even command a majority as a coalition, office holders should understand the need for sufficient consent to exercise their constitutional powers.

The new car market was growing before the Brexit vote, grew well after the vote and continued growing after the Article 50 letter.It turned down in April of this year as a result of Tressury  and Bank of England policy.

The Bank has required banks to rein in car loans. The Treasury hit buyers with higher VED on dearer vehicles. The government put question marks over diesel and petrol vehicles leading people to worry about future values. This continued decline was to be expected and I have explained this before on this site.

There is no greater gift that we can pass on to our children than the gift of living in freedom.

I was born into a free country. I valued the democratic traditions, the rule of domestic law, the ability to fire the government through the ballot box, the right to voice a view and debate what was wrong.

I watched with growing apprehension as the decision to join a common market morphed into the wholesale loss of our freedoms.

We surrendered the right to make our own decisions about what taxes to impose,  what laws to pass,  what tariffs if any we should impose on our imports and how the government should spend the money it has raised. The European Court struck down our duly enacted legislation, made us repay corporation tax to large companies, and often found our country in violation of their wishes.

The decision to leave the EU changes all that.

Today, in the EU we are not allowed to remove VAT from female hygeine products as Parliament would like to do. We have to place taxes on a wide range of green products from insulation to boiler controls, that Parliament would like to abolish. We have to impose high tariffs on a range of foodstuffs coming to us from the Commonwealth and the wider non EU world, making food dearer and punishing developing countries. We see our fishing grounds run down under an EU policy that manages to be harmful both to the fish and to our fishermen. We have gone from being a large exporter of fish prior to joining, to being  a net importer.

Leaving the EU gives us all the chance to change things for the better.

Where we like an EU law or regulation we can keep it. Where an EU law or tax is unjust or damaging we can amend or remove it.

Young people will be particular beneficiaries of the change leaving generates. It will create great opportunities for enterprise, for creativity, for better government. It will strengthen the voices of the young and give more power to their votes. They will inherit a political system which allows them to shape or dismiss the governments that rule. We are not turning our backs on Europe. There will still be plenty of joint working, cultural exchanges, movement of people to visit, learn,  shop and invest in each other’s countries.

Just look at the opportunities it will offer us for more and better jobs. There will be big scope to replace imports with domestic food and industrial products. This will provide opportunities for well paid jobs and for establishing new businesses. If the EU opts for tariffs and other barriers as they seem to want, our farmers will supply us with more of our own food, and our car factories will produce more of the cars we chose to drive.

Just look at the opportunities it will offer to improve our laws and make our government bend more to the popular will. We will be able to spend the £12bn a year we currently send to the EU and do not get back will help in many ways. We need to debate more how we should spend this Brexit windfall, whilst reminding our government we do not want to go on sending money to rich countries in the EU once we have left. Education and health are priorities which we can spend more on once we have left.

Above all where young people see an injustice or want to follow a cause for a better country they will be able to do so safe in the knowledge that we have the powers here at home to adopt the remedy. Where today the answer is so often Brussels will not allow us to do that, tomorrow once out we will be able to do as we wish.

Freedom is heady. It teems with opportunity. Let us unite in confidence that when the UK is a free country again, it can also be a better country as  a result.

 

 

 

At Conference I was handed the following figures taken from NAFC Marine Centre Study 2016

 

EU (ex UK) boats land 10 times more fish from our waters than we land from theirs

14 times more cod and haddock

173 times more herring

16 times more mackerel.

 

This is a very one sided Common Fishing Policy.

There is growing agreement amongst politicians and their advisers that housing is a central part of the new political battleground. Years of inviting in large numbers of people to live and work in our country against a background of building too few new homes for them and for the natural growth of the settled population has left us short of decent homes at affordable rents or prices.

Some years ago there was a strong establishment view that the UK needed to be more like the rest of the EU with a larger private rented sector. This duly came about as a new generation of private landlords rushed to purchase Buy to Let properties. Frustrated by taxation of other savings and the restless changes made to the taxation of pension plans, many thought owning a Buy to let or two would make provision for their retirement years and represent a good store of value. The establishment  visionaries seemed to think younger people would benefit from renting rather than buying, though most of them making this recommendation were safely housed in a property they had bought at  much lower prices when they were young. They argued that renting was more flexible, and kept the young person free of mortgage debt.

I disagreed at the time with the view that renting was superior to buying. I pointed out renting is bound to be dearer over a lifetime than buying and owning. The longer you delay buying a property, the more rent you pay. You usually end up having to pay much more for the home you do eventually purchase. Rental agreements are not that much more flexible than buying if you sign a commitment to a longish fixed period of paying the rent. Finding a suitable rented property is not intrinsically easier than choosing a place to buy.

The Conservative party needs to commit itself anew to creating a new generation of home owners. Polling shows many people who rent would like to be able to buy their own home. The problem is they do not think they can afford to do so, owing to the high transaction costs, the need to find a large deposit, and the availability of mortgage credit.  In contrast there are few  opeople who own who would rather rent, and of course there is nothing stopping someone who owns from switching to rent if they did wish to do so.

The government can and should do more to lower the transaction costs of buying and selling properties. Lifting more people out of Stamp Duty altogether, or cutting the lower rates would help. To make the market work better the government also needs to see how Stamp Duty and CGT are impeding sales of BTL homes and larger properties owned by people who might otherwise downsize. The older generation include people who have more property than they want, reluctant to sell owing to the tax costs in doing so and buying something smaller. The younger generation includes many people who would like to buy the family homes but cannot afford to.

Getting house prices more in line with wages needs to occur at a sensible pace. Controlling the numbers of people coming to live here each year would help by cutting demand. Encouraging more building, as the government is doing, will assist by expanding supply. The  Chancellor committed himself to helping get real wages up, which also will assist.  The Bank of England and the commercial banks can also help by recognising  that most young people will b e good risks to lend to to buy a home, just as their parents did before them.

I look forward to more positive announcements from the government on how it will transform more dreams of ownership into reality,

I have now read through all the submissions about what we need to prepare to have a smooth Brexit with No Deal.

Most of the worries are ones which have been argued over and discussed endlessly. In many cases I dealt with these worries on this blog before the referendum. Most are general in nature.

I will summarise my response to these old issues below:

What will happen about passported products in financial services?

The most common is the UCIT Investment fund. As these are all registered companies in countries that will remain EU members there is no problem. The UK will retain the contracts to help manage them, whilst the funds will continue to be available throughout the EU. The UK will be happy to allow UK nationals to continue to buy and hold these funds. Other  passported products resident in the UK will be able  to continue under  the  doctrine of regulatory equivalence.

 

What happens about the future of the City if there is No Deal?

We will be able to trade as do other non EU members, using the doctrine of equivalence and world trade rules.

Will derivative contracts still work?

They should. The market has plenty of advance warning of our departure on 29 March 2019. Markets adjusted easily and rapidly to the abolition of the DM and the introduction of the Euro in 2000 which was  bigger set of changes. As the markets start to offer contracts that go beyond exit date they will reflect this in the contract small print.

Will there be more red tape to export?

No Deal will entail customs filings for tariff based goods for No Deal. This can be an additional line in an electronic filing. Importers and exporters already need paperwork or electronic files to handle product specs, safety and a wide range of compliance maters, which can remain the same.

How can there be a smooth Irish  border?

The UK government has issued a paper on this setting out how. If the EU does not like the UK proposal it needs to make a counter proposal, as its member state the Republic of Ireland is keen on a smooth border continuing ,as is the UK.

 

Will universities suffer?

No. The government has  made clear there will be plenty of visas for students and faculty members coming from the eu as there are today for non EU. E U funding will be replaced by UK money. The UK may negotiate to continue to contribute to and belong to various European schemes.

 

Will we reassert our territorial limits and set out a UK fishing policy

That is the current plan