John Redwood's Diary
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Leave means leave

It was good to hear the Prime Minister confirm that if we vote to leave the EU that is exactly what we will do. I know some of you worry that you could vote to leave, win the vote, and then be cheated out of leaving. I have always said leave means leave, and that is now official.  The  sooner the better, when you look at the current very high cost of remaining a member, and look at the shambolic immigration, energy and currency policies the EU core is pursuing.

The Maastricht controls on debt and deficit

The most recent UK figures on debt and deficit come as part of the UK’s reporting to the EU on these important matters. We are reminded in the official communication that

“The Protocol (to the Maastricht Treaty) on the excessive deficit procedure defines two criteria and reference values with which member states should comply. These are a deficit (net borrowing)to GDP ratio of 3% and a debt to GDP ratio of 60% ”

The latest EU reports show that 14 member states still exceed the 3% control on budget deficits, and 16 remain with debt over 60% of their GDP. Some are way beyond the targets. Italy and Portugal have debts at more than 130% of GDP. Spain and the UK remain well above a 3% deficit target amongst the larger EU countries.

The total Euro area has a debt to GDP ratio of 92%, and the EU 28 a ratio of 86.8%. The Euro area as a whole has now got its deficit down below 3%. The UK in the year to March 2015 ran a deficit of 5.1%.

 

I read that the left of centre parties who won the Portuguese election have not been allowed to take office because they have dared to challenge the Euro disciplines. The Euro once again overrides democracy.

One of the main arguments in the Euro area is when and how will the Maastricht criteria be enforced? All the talk of a Euro Treasury follows hard on the introduction of the so called EU semester, an attempt to intensify the reporting and the pressure to conform with the required controls on debt and deficit. It is difficult to run a single currency without imposing a strong discipline on total government borrowings in the single currency area. Surplus countries dislike borrowing countries attempting to free ride at lower interest rates based on their prudence. Borrowing countries resent the tight controls on their borrowing the surplus countries wish to establish. So far the Maastricht criteria have not been observed by a majority of states. They are nonetheless an important constraint on worse performance, and they are now once again in the centre of the argument about establishing a Euro Treasury.

Meanwhile it is difficult to see why the UK has to report its debt and deficit to the EU at all, when successive governments clearly have no wish to hit the EU targets, and when there are rightly  no penalties for failure to do so. The most recent figures show the UK deficit gradually reducing, with tax revenues growing more quickly than the growth in public spending, as planned.

What is curious is that the left wing UK parties in the UK who thunder against “austerity” by which they mean cuts and controls on public spending and borrowing never fulminate against the more intense public sector austerity the EU requires under its Maastricht criteria. Why do they not spend some time and energy trying to change that?

To the BBC English votes is a Scottish issue, and to Labour it is an issue they wish to ignore

After my speech in the Commons on justice for England BBC Scotland wanted me to give interviews. There was as always no call from BBC England.

I agreed to do a radio interview for BBC Scotland yesterday morning. The wish was to debate the SNP false allegations of second class MPs and possible damage to Scotland and the Union. Understandably there was no interest in whether these proposals help England enough or are fair to England.

In England Radio Berkshire asked to interview me. They too took the SNP agenda and sought to confine the interview to the issues of so called second class MPs and alleged damage to the Union. They did not ask a single question about how it might help Berkshire. They did not ask if it gave enough power to England. They did not ask how we might want to use the power. They did not grasp that the settlement of the money is going to be a crucial issue which is only partially dealt with by Thursday’s vote.

If the BBC wishes to pose as broadcaster for the whole Union of the UK it has got to learn the lines of the English as well as the Scottish. It needs to probe and ask questions from an English point of view as well as from a Scottish point of view. It needs to be voice for England and to offer us some English coverage. We need a BBC England.

Labour made the situation worse by their behaviour in the Commons on Thursday. Few Labour MPs came in for the debate. Their response was led by a Welsh MP, with Welsh MPs more prominent than English on their sparsely populated benches. Their threadbare arguments were similar to the SNP, complaining about second class MPs and an alleged inability of the Speaker to read whether a bill or spending item related to the UK or just to some part of it.

Labour failed to speak for England. Most of Labour’s English MPs were notable by their absence. They allowed a debate on England to become more a debate about Scotland. Again there was no BBC England to ask them why they don’t care about the injustice of devolution to England, or to prise out of them a policy on how England should in future be looked after on our fast changing constitution.

Mr Redwood’s speech during the debate on English Votes, 22 October 2015

John Redwood (Wokingham) (Con): I speak for England. For some 18 years English MPs in this United Kingdom Parliament have proposed, encouraged, or come to accept with good grace major transfers of power to Scotland, substantial transfers of power to Wales, and the transfer of other powers to Northern Ireland. Now it is England’s turn.

Alex Salmond (Gordon) (SNP): The right hon. Gentleman says that he speaks for England. We all recall that, in a former existence, he once tried to sing for Wales.

John Redwood: In those glorious days of great singing, we had a unitary country, which meant that anyone could do anything from this great House of Commons in the Government across the whole United Kingdom. We have this problem today because, in our collective wisdoms, we are transferring massive powers to devolved Governments and to all parts of the United Kingdom, but not to England. Now it is England’s turn to have a voice, and England’s turn to have some votes.

I welcome today’s proposals, but I must tell my hon. Friends that they do only half the job. What England is being offered today is the opportunity to have a voice and a vote to stop the rest of the United Kingdom imposing things on England which England does not wish to have and has not voted for. That is very welcome, but we still do not have what the Scots have. We do not have the power to propose something for our country which we wish to have and which may well be backed by a large majority of English voters and by English Members of Parliament, because it could still be voted down by the United Kingdom Parliament. So this is but half the job for England. Nevertheless, I welcome half the job, and I will of course warmly support it.

We are given but two pathetic arguments against the proposal by the massive and angry forces that we see ranged against it today. First, we are told that it will not be possible to define an England issue. Those Members never once thought there was a problem with defining a Scottish issue, and, as we know, issue after issue is defined as a Scottish issue and passes through the Scottish Parliament with very few conflicts and problems.

In your wisdom, Mr Speaker, you will be well guided in this respect, because every piece of legislation that is presented to us will state very clearly whether it applies to the whole of the United Kingdom or just to some parts of the United Kingdom. The decisions on who can vote on the matter under the double-vote system will therefore become very clear, because they will be on the face of the law. How can this House produce a law that does not state whether it is England-only or United Kingdom-wide? The law must make that statement, so it will not be any great problem for the Chair to sort that out.

Then there is the ridiculous argument that this measure will create two different types of MP. The problem, which some of us identified in the late 1990s when devolution was first proposed and implemented, was that it created four different types of MP, and we are living with the results of that today. English MPs have always been at the bottom of the heap. I have to accept that Scottish MPs come here and vote on English health and English schools in my constituency, but I have no right to debate, or vote on, health and education in Scotland. That problem needs to be addressed, and we are suggesting a very mild and moderate way of starting to address it. I hope that the House will give England a hearing.

I find it extraordinary that so few English Labour MPs are present today, and that not one of them is standing up and speaking for England, saying “Let us make some small progress in redressing the balance.”

Several hon. Members rose—

John Redwood: I do not have time to give way, and others wish to speak.

Today is the chance to start to put right some of that injustice to England. Today is the chance to start to rebalance our precious United Kingdom. Today is the chance to deal with lopsided devolution, and to give England something sensible to do. In the week of Trafalgar day, let me end by saying, “England expects every England MP to do his or her duty.”

How much extra did the UK have to pay the EU?

There was rightly an outrage when the EU announced last year that the UK along with other member states had to change the basis of calculation for its GDP in a way which meant we then had to pay more money as contribution to the EU budget. The government argued strongly against the gross payment, and many voters thought it unfair that the UK was required to make such a large payment for past years.

The latest government publication on spending, tax revenue and the deficit offers some clarification of what has now happened. In December 2014 the UK public finances recorded a gross payment of £2.9 billion extra money to the EU, though no cash was transferred at that point. The first cash payment of £0.4 billion was made in July 2015, and the second payment of £2.4bn was paid in September 2015.

Against this unwelcome payment are substantial offsets. The UK is promised a repayment as the EU returns to all member states additional contributions ” related to data revisions.”. The Office of Budget Responsibility estimates that the UK will get £1.2 billion back under this heading. So far £0.5bn has been received in February this year. In addition the UK will receive back an estimated £0.8bn as additional UK rebate under the method of calculating that.

So the latest official forecast is the UK will end up paying an additional £0.9bn, not the £2.9bn gross figure originally debited to the accounts. At the moment the UK is £1.9bn out of pocket, with the promise of further rebates and repayments.

All this reveals the complexity of EU affairs, and the fact that even a Eurosceptic government with no wish to pay any extra ends up having to pay something all the time it is a member of the EU.

Controlling public spending

It’s that time of year again when spending is reviewed. Every year I have been in Parliament spending has gone up, and every time all the debate has been about cuts. That’s the way the public sector likes to organise its debates. There are cuts in forecast increases, cuts in real rather than cash spending, cuts in baseline budgets that overstated the spending, and sometimes even real cuts in real activities. Whatever the cuts made total spending goes on upwards and upwards in cash terms, and usually in real terms as well.

This spending round is a bit more significant than normal. it is the start of a probable five year Parliament, and the start of a Conservative government. The government does wish to control the rate of increase in total spending. It has also ensured real increases in defence, pensions, schools, the NHS, overseas aid and the EU payments, so it needs to probe more incisively the other spending areas that do not have one of these special protections.

This week MPs have been lobbying the Chancellor and the Chief Secretary over what they would like to see in the new budgets. I am therefore inviting all of you to make your requests known.
Some of you will want to cut overseas aid and end our payments to the EU. Those options are not on the table as far as the government is concerned, though ending the EU payments is in the power of the British people when we get to the EU referendum.

MPs have been proposing a number of good ideas. The huge expenditure on climate change research, administration and policies could be usefully cut back. After all, as the proponents tell us the science is now completely settled, why do we still need people studying and researching it in government departments?
The large land banks of the state sector are far bigger than any likely operational needs. It is time to sell some of that land, and to get some of it into better use for homes or commercial premises.
The vicious circle between Housing benefit, higher social housing rents, and larger surpluses by housing associations could be altered to give tenants and taxpayers a better deal.

What are your ideas?

The Housing Bill

The new Housing Bill marks an important change in housing policy. It starts from the realisation that home ownership has been falling in the UK since 2003, though home ownership is still the preferred form of tenure for 86% of the public. 23% of the public rent but would like to own. 48% of 25-34 year olds now rent, compared to just 21% ten years ago. They do so because many of them cannot afford a home to buy.
The Bill requires planning authorities to make provision in new developments for affordable homes for sale. These are the promised properties offered to first time buyers under the age of 40 at a 20% discount to the market price. It also enshrines the right to buy from social landlords in law, and allows the government to compensate those social landlords for the discount on market value of the property they will suffer from a tenant’s purchase. Social housing providers will be expected to build another property for every one they sell, adding to the total stock as a result.
The Bill encourages social landlords to sell high value subsidised properties when they become vacant. Money from such sales can be used by the public sector to build more homes out of the proceeds of high value property. It also tells Councils to make sufficient planning permissions available to meet the demand for self build and custom housebuilding.
The Bill toughens the law about rogue landlords to assist tenants, introducing a database of such people and legislating for a banning regime for people who have committed offences and are deemed unsuitable to act as landlords in future. Social landlords will also be required to collect a market rent from high income tenants.
The Bill also includes a number of changes to the planning system. This is designed to speed up responses to applications, to make it easier for Councils to establish and amend local plans, and to allow housing to be added to a national infrastructure project. Comments on the Bill would be appreciated.
The Bill also revokes Sections 225 and 226 of Labour’s 2004 Housing Act. These clauses required Councils to assess the needs of gypsies and travellers and prepare strategies to meet their needs. In future the Council will have a duty to consider the needs of all people, without separate specification of the needs of travellers and gypsies.

Statement on the EU summit

Yesterday in the Commons the Prime Minister reported back on the recent EU summit. It was dominated by debate over how the EU should respond to the pressures on its borders from economic migrants and refugees. Apparently there were heated arguments between member states who are members of the Schengen common frontiers about how they should police their external border, how they should allow or help people to move within the common border area, and how realistic it is to take the large numbers now seeking to enter the EU.

Mr Cameron was able to report that there was no criticism of the UK for taking a different view of how to handle this problem than that taken by the Schengen countries. The UK was praised for doing more to help migrants and refugees in camps in the Middle East, where the UK’s food and other aid programmes have helped to provide some support for people away from their homes and to spare them the dangerous and expensive journey to the EU. By staying out of Schengen, and by providing a different analysis and policy prescription than the others the UK has been able to help more and avoid some of the obvious dangers of the common policy.

The UK policy has not encouraged more people to risk death or harm by undertaking perilous journeys to the EU, and has done positive things to help those who have had to flee their own homes in war torn parts of the Middle East. The UK also understands that the true answer to the current crisis lies in helping resolve the conflicts and economic disasters which force people to leave their homelands.

I supported the Prime Minister’s stance on Syrian refugees against Labour, Liberal democrats, the SNP and the bishops who want the UK to take refugees and migrants who have made the journey to the EU, acting as a further magnet to others to do so. I also pointed out that the UK has been able to have a different policy on this, and to stay outside the Euro because of past actions over EU integration. It for me underlines the need to gain our freedom to pursue the policies we think best in other areas the EU does currently control.

Labouring with delusions

It’s been a fascinating few weeks e Labour conference and the start of Parliament with Labour’s new leader. It has been a struggle for some of the MPs to adjust, as they discover just how out of touch with their members their policy positions and statements had become.  It is also a reminder that political leaderships do need to lead. They do have to explain to passionate followers what is possible , and to remind  them they are there to serve the wider public and not just the believers in their causes.

Labour  now say they are against austerity. This is the party which first spent all the money, then announced the need for major cutbacks to get the budget deficit under control. This is the party that slashed capital spending especially heavily prior to 2010 as their downpayment on getting the accounts into shape.

They need to discover this truth. Any sensible politician or party is against austerity. I want prosperity for the many, and an economic policy which delivers it. Labour delivered massive austerity to voters through the great  recession in 2008-9. The issue in politics is not between proponents of austerity or prosperity. One of the central issues is how do you best create prosperity for the many?

Labour seems to think you create prosperity by raising taxes on business and successful business people. It thinks you create prosperity by spending more on benefits. It wants to legislate its way to prosperity with more laws and regulations. History tells us this is the opposite of how you bring prosperity about. You do not make the poor rich by seeking to make the rich poor.

Labour also hopes you can create growth by more public spending and more public  borrowing. As our economy recovers the danger of such a route is you might end up with more inflation, and far too high a debt interest burden. Labour is wrong to say the Conservatives are balancing the books at the expense of the poor. Conservative tax cuts take people on low incomes out of tax altogether. Conservative economic policies promotes more jobs and better paid jobs. The best way out of poverty is to have a job, and to move on to a better job.

Save our steel

The tsunami of closures and sackings which the Euro has unleashed on the southern economies of the zone has now washed up as a wave of closures of heavy plant here in the UK. We do not suffer the intense misery of the fixed exchange rates and EU managed budgets afflicting Greece, Spain and Portugal, but we are suffering from the dear energy policy and from the lack of EU action over fair trade in steel.

I have often warned of the threat of EU policy to energy intensive business in the UK. Our aluminium industry has already been dealt bad blows, and our petrochemical and chemical industry is struggling. Today the threats to steel are large. Redcar has been closed. Llanwern and Scunthorpe are under review.

The steel industry has made three requests of the government at its Steel Summit this week. The first is to get our energy prices down. Under EU rules this is difficult or illegal. However, Germany subsidises her heavy industry to combat this problem. All the time we remain in this job destroying body we may need to do the same. The subsidies are needed to offset the high costs of energy built into the energy policies. The longer term solution is to have our own cheaper energy policy based on more modern gas fired power stations and based on the extraction and creation of more of our own energy.

The second is business rate relief. This too would be a possibly legal way of assisting our industry at a time of cut throat competition from abroad threatening to destroy our domestic capacity. Taking a smaller percentage in tax now would be better than attempting to sustain a higher percentage of nothing once the plants have closed.

The third is anti dumping cases where foreign suppliers are dumping. Proving that is never easy , but as the custodians of our trade policy the EU could at least try to do that to help.

The UK is going to need a lot of steel to build cars in our successful motor industry, to modernise and expand the railway, to add to the stock of taller offices and flats in our main cities, to sustain our oil, gas and petrochemical industry and for many other uses. This is worth fighting for. It once again highlights just how much damage to jobs and living standards some EU policies do.