John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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Labour’s moment

It is difficult squeezing a moment in for Labour with the huge run of news on Scottish secession, English votes, global warming policies and now possible further war in the Middle East. Today I will try, as this is Labour’s week and it would be good to hear from you o n the main alternative on offer in UK politics.

Mr Miliband’s speech summed it all up. Please don’t mention the deficit. Pease, please don’t mention immigration. The EU is just fine, and those open borders have to be accepted. Mr Balls showed how tough we will be in his speech by saying for two years child benefit will only go up by 1% a year.

Mr Miliband has defined the Labour party as the party of the NHS. It is fast becoming the party of the NHS, by some in the NHS, for others in the NHS. IT is at the centre of all they do and say and will clearly be the centre piece of their campaign.

This year they decided to switch the ever popular money from a Mansion Tax. Last year it was going to restore the 10% Income Tax rate. This year it will be spent on the NHS. They carefully exaggerate the amount it will raise by not allowing sufficient for all the income poor people living in expensive London flats who will be allowed to roll up the tax until they die or move.

Offering £2.5bn extra for the NHS which already has a £108 billion budget will not make a lot of difference. After all, this government has increased NHS spending by £10.7bn a year since being in office. This year the increase in spending is £2.7bn or more than Labour ‘s latest plan.

Labour’s vision is of a more equal UK with more spent on the NHS. They may achieve greater equality on their plans, as there would be plenty of reason for rich people and successful companies to move out of the country. They wish to collect less tax from the rich by increasing the rates back to the levels that collected less tax. They are remorselessly anti big business, having special attacks planned on banks, energy companies, finance companies,tobacco companies and others.

Their vision plays well to their narrow core vote audience. Their aspirations that more people should have good training and acquire skills, that more people should be in better paid jobs and more people should own their own home are all things I agree with. The issue there is why didn’t they achieve more in each of these areas when they were in power for 13 years with large majorities? And how does bashing business and potting taxes up help achieve any of this?

One of the curious things is that by7 putting the management of the NHS at heart of his campaign Mr Miliband has denied himself a message in Wales and Scotland. In those parts of the UK health spending and management is devolved to the Scottish parliament and Welsh Assembly. When Labour sends out literature to save the NHS they will be asked which election they are fighting, as the Uk Parliament does not decide !

The Scottish debate- well done the voters, pity about the campaigns

I am proud that the UK can have a sustained and passionate debate about identity and government, and come to a democratic conclusion. In so many other parts of the world the explosive issue of identity produces civil strife and war. I also agree with the many commentaries that say the Scottish people engaged greatly in the issues, argued and studied the consequences of both options, and voted in large numbers. They did so because it mattered. They valued their vote.

I do not share the opinion of many that the two campaigns were also great. The Independence campaign was based on two central errors. The first was the notion that Scotland could continue in a currency union with the rest of the UK once “independent”, when the UK Parliament was united in saying that was not on offer. The second was the idea that Scotland could slip back into EU membership quickly and easily, when other counties in the EU were angry that Scotland dared to want more independence.

I thought it bizarre that it was called an independence campaign, when the advocates wanted a new dependence – dependence on the Bank of England and a foreign country’s money policy, dependence on the EU, maintenance of the Queen as Head of State, and so much else. It was a divorce where they wanted to keep the family bank account and still go on the family holidays.

The Better Together campaign had a great slogan but they were often depressingly negative. Where were the great speeches and soundbites explaining the benefits of the union to the voters? Why did none of the main speakers articulate a forward looking vision of the UK that made sense to more Scottish voters? Why did the business community come in so heavily with threats, when presumably they still want to sell things to the 1.6 million voters they decided to pick a fight with? Why can’t the pro Union forces show how belonging to the wider union could offer more opportunity to the young and the poor in the urban lowlands? What will the pro union forces and the SNP government now do to offer a better future to them?

I learned from the campaign that according to the Scottish government Scotland is a rich country and has values that wish to share those riches around fairly. I look forward to them showing how this can be done within the UK now that we have decided we are better together.

Waning interest in global warming by world leaders

The UN’s summit on global warming, where they hoped to sign world leaders up to more green measures to combat carbon dioxide, is not proving to be a popular affair. The USA, China,  Canada, Australia, Japan and Russia want no part in more targets to cut carbon dioxide. China’s President, Xi Jinping has more pressing matters to attend to, as does Mr Modi of India. More surprisingly, Angela Merkel the German Chancellor and leading representative of the world’s last bastion of anti carbon dioxide enthusiasm, the EU,  is also unavailable to come.

Mrs Merkel would be well advised to stay at home and with her energy advisers to try and work out how to keep the German lights on and the factory wheels turning at acceptable cost. Germany is very dependent on unreliable renewables, and also on Russian gas. As a result, ironically, Germany is turning more and more to depend on coal, one of the worst fuels if cutting carbon dioxide is your main aim. Germany’s anti carbon dioxide policy turns out to be both dearer and less successful than America’s. By going for self sufficiency in oil and gas, and relying more on domestic gas for energy production, the USA has done a better job in curbing carbon dioxide than Germany. The USA refused to join in global target driven approaches. The EU did join in but simply failed to hit the more exacting targets.

The Kyoto agreement ran out in 2012. The planned extension to 2020 agreed at Doha has so far only been ratified by 11 out of the 144 countries involved. It looks as if green is the last decade’s colour when it comes to the main countries of the world. It would be a good time to have an audit of what has worked and what has not when it comes to keeping the lights on, keeping the bills down and producing power that does least environmental damage. We might find that conventional wisdom about who has got it right and wrong is not correct.

One cheer for the Barnett formula – and three cheers for honouring pledges

The Barnett formula was a fix to settle by how much bloc grant for Scotland rose each year, given the extent of the rise in comparable English spending.

It currently polls very badly in England. The reason is that Scotland can spend around one fifth per head of the population more than England. This enables Scotland to offer free tuition for Scottish students at university, and better terms for care for the elderly amongst other matters. Now that Scotland is around the same income per head as England, and now SNP Ministers are constantly telling us Scotland is a rich country, many in England ask why the favoured treatment?

The Barnett formula relates to changes in annual spending. If, for example, a given public spending item was allowed £100 million more spending next year than this in England, Scotland would be allowed £10 million more for the same spending. The English increase is multiplied by the proportion of population in Scotland to England to derive the extra amount. If some of the spending item is not devolved, then the comparability percentage is also applied, so Scotland only gets an increase for that part of the budget which is devolved. If only 50% of the extra £100m budget was devolved, Scotland would get an extra £5million.

Given that Scotland therefore only gets the same per head increase as England, why does she end up with an advantage in the total? The main reason is the starting or base budgets in 1979 where Scotland already was allowed to spend more per head. This has been compounded by the relative decline of Scotland’s population to England. This means that the per capita value of the base budget has gone up compared to England.

The 3 leaders have made two promises to Scotland on these financial matters. The first is that Barnett will continue to apply. As a means of changing the future spend it can still make sense, as it means parity between England and Scotland for the increments. I would advise my fellow Englishmen and women to calm down a bit about the formula for annual changes, as it can make sense which is why it has endured for so long.

The second promise is that Scotland can raise its own Income Tax in future, and maybe some other taxes. As long as this money is taken off the bloc grant and the money that attracts the Barnett formula, this could help sort out the imbalances and tackle some English resentment at Barnett, as Barnett comes to cover a reducing balance of spending. There is a lot to be said for Scotland taking responsibility for more of its own revenue raising, and accepting that more of its spending will depend on its success in levying taxes on its own taxpayers. What matters is a fair baseline budget and settlement this time round when the new taxes for Scotland make a big change to the bloc grant.

Speak for England

The campaign to speak for England has taken off. I am receiving large numbers of emails and web contributions in support. There is a strong feeling that England deserves and needs a fairer settlement. There is a strong surge in opinion in favour of England having a voice and the right to govern herself as Scotland does. Tomorrow I will go to Chequers to present my thoughts on how to take this forward to the Prime Minister.

There is no nasty nationalist movement in England. Most English people do not define their Englishness by expressing dislike or hatred of other countries. There is none of that unpleasant undercurrent that you hear on the fringes of Scottish nationalism that is anti English. There is none of that strident nationalism based on anti Russian sentiment which we see in Ukrainian nationalism.

We English are on the whole glad Scotland voted to stay with us, and wish the UK to be our country representing us abroad and taking the big decisions on defence, war and peace and general economic and monetary policy. We also now strongly feel that if Scotland is to have more devolved power we too need our own devolved government to balance the kingdom. We want a fair settlement over who makes the decisions, and how the money is raised and spent.

We English would like there to be a BBC England which does for our culture and debates what BBC Scotland and BBC Wales do for them. We want to hear our worries and arguments more on our media, and know that our concerns and our public services will be dealt with by English MPs answering to their constituents.

Next week we in Parliament have to take up the task of sorting out a quick and straightforward way of ensuring that in future we have English votes for English matters. I just hope Labour and Liberal Democrats realise that if they wish to be serious contenders for votes in England they too now have to join us in creating justice for England. I could not justify to the electors of Wokingham giving Scotland the power to settle its own Income tax rate, and also giving to Scottish MPs the right to vote on what Income Tax we have to pay in England when they would not have to pay it themselves.

PS The Survation poll in today’s Mail on Sunday shows 65% are against Scottish MPs voting on English issues, with only 19% in favour.

English votes for English issues

I was glad the Prime Minister announced his support for this measure from the doorstep of 10 Downing Street yesterday morning. Mr Hague has a crucial task to pilot this through the political difficulties ahead.

Listening to media voices yesterday, there are still plenty of misunderstandings about this. The first is the question what happens if the majority of English MPs is a different party from the majority of Union MPs? Far from posing a problem the answer to that is the English majority chooses the Ministers, makes the laws and settles the policies in the devolved areas. In this it would be the mirror image of Scotland. They have an SNP government. There will never be a Union SNP government, as they never fight seats outside Scotland. The Union government can still govern in Westminster, even though a rival party is busily making decisions and passing laws about the devolved matters in Scotland. England needs the same arrangement.

Then there is the question how do we define an English issue which Scottish MPs can’t vote on. That too is easy. It is any issue which is defined as a devolved issue for the Scottish Parliament. We just want the same list for England.

They ask how would the Chancellor of the Exchequer still run the economy if England had devolved budgets. In the same way as he does at the moment with devolved Scottish budgets. The Union could still control overall levels of spending and borrowing, and would still control considerable tax revenue.

They ask why don’t we devolve power to cities? Because not every one lives in cities, and we all in England want a fair settlement for us in an age of Scottish devolution. We will want one English Income Tax rate when that is devolved to Scotland, not many. English MPs could of course decide to give more powers to English cities if that is popular and sensible.

Labour still hankers after the break up of England through regional governments. That EU plan was decisively rejected by the voters of the North East when they were offered regional government. I note Labour does not propose splitting Scotland and Wales into regions though that could also be proposed.

So why not agree England wants to make more of her own decisions just like Scotland? The cheapest and easiest way to start down that road is English votes for English issues. If Mr Hague cannot get agreement to that from Labour then we need to shame them into accepting that Scottish MPs voting on English business is simply no longer acceptable. If Labour wishes to win in England as it has in the past it too needs to speak for England on this matter.

Does “devo more” mean more money for Scotland?

Now the negotiating begins in earnest to try to settle the country around a new devolution settlement. Of course that settlement has to be fair to England as well as to Scotland. Today I want to ask how the main parties think the money will be managed for Scotland.

During the campaign the Better Together parties appeared to offer more tax raising powers and more borrowing rights for Scotland. The three leaders – and Mr Brown – also clearly promised to keep the Barnett formula so Scotland can carry on spending more per head than the rest of the UK. How do these three things gel? What do they mean for English taxpayers?

Under the current dispensation Scotland can raise additional Income Tax by imposing a 3p in the pound surcharge and spend that. It has chosen not to do so. It can borrow an additional £2.2bn for additional capital spending, with permitted annual increments of £240 million.

The Liberal Democrats and Conservatives offered to Scotland control over all its Income Tax. Labour offered control over three quarters of standard rate Income tax. Presumably the grant will be reduced by the amount Income Tax raises in Scotland on the handover of the tax raising power. Presumably this will be projected forward, so if Scotland enjoys a windfall of extra Income Tax or if it changes rates to raise more Income Tax it will benefit from that. Presumably also if Scottish Income Tax falls short of expectations English taxpayers would not have to make good the shortfall in order to fulfil the Barnett pledge – or would England be required to take the risk of tax revenue shortfall? We need clarity on this important detail. From the English viewpoint we would expect Scotland to spend less if it raises less in Income Tax, and would not wish to top up the UK grant to them if their Income tax receipts fell short.

The current borrowing powers allowing up to £2.2 bn extra are in the present public spending and borrowing figures for the UK. If Scotland is to be given wider powers to borrow against its own Income tax revenue this will have a knock on effect on the rest of the UK. Will England have to borrow less if Scotland decides to borrow more? Or will the UK government automatically increase the annual UK borrowing total if Scotland does decide to borrow more?

Meanwhile, the English government will also expect similar powers. We will wish to set and control our own Income tax, and will expect a proportionate borrowing limit for our capital projects.
What are your thoughts on what would be a fair financial settlement for England and Scotland?

My contribution to the debate on the Ukraine, Middle East, North Africa and Security

We should talk more and bomb less. I say that as someone who wants us to have strong defences. I want our country to play a leading role in the world and to be available, with the UN and allies, or if necessary on our own, to reinforce our values. I accept that there are occasions when we have to fight a just war. We were right to liberate Kuwait with our allies, and we were right to liberate the Falklands, but we need to ask ourselves some hard questions about some of the military interventions we have made under Governments of both parties in recent years.

I am glad that the Government accept that we can go to war only if the House approves such action, which I think has always been the case, and I am glad that they recognise that that is the most serious thing we can do. We have the power, collectively, to authorise our troops to go to kill other people in a foreign country. That is a very serious thing to do, and it should be done only after full debate and, if necessary, on a vote of the House to show that it has at least majority approval—it is even better when there is consensus.

To guide the Government, whether we are approaching such a position again or not, they should ask themselves these questions. First, are they sure that diplomacy and politics have broken down completely and that there is no further scope for diplomacy and politics to carry the problem forward and try to make it better? War is not a good answer. It is what happens when politics and diplomacy fail.

Secondly, after we win a war—even if we have had a great victory, as the allies had in 1918—we need to go back to politics and diplomacy and get it right. Otherwise, we might find that we have created a worse monster that requires yet more conflict, as we are in danger of proving in the middle east. The west has the power to get rid of a regime it does not like, but it does not necessarily have the power to support and create a democratic regime in its place that has the acceptance of enough people in the country to keep it together and make it a better place. It is not a win if we get rid of a nasty dictator and replace them with warring bands who kill even more people.

We need to get the Government to ask whether diplomacy has failed and whether the situation is one in which the use of force, if successful, is likely to make the situation better. If we are going to use force, can we please have a diplomatic and political strategy for the aftermath of successful military engagement? We need to know what military success looks like, but more importantly, we need to know how military success leads to a happier country, democratic values, tolerance and toleration, and all the things we believe in. When we inject more weapons and fighting into a situation, we normally make people not more tolerant, but more intolerant. We make them not happier, but more resentful.

England arise – England could be the winner on Thursday

Whatever the Scots decide to do there is a winner. England.

I always thought of myself as British. My country was the UK. I now also think of myself as English, and my country is England. Years of listening to devolutionists and nationalists from other parts of the UK have persuaded me to change my approach. I now feel English as well as British.  My British identity is being threatened and undermined from elsewhere in the Union. My English identity is the future.

If Scotland votes to leave, England is the winner. My fellow countrymen and women will become English as well, divorced by the Scots from our old country. We will soon see what a great future England can enjoy.

The 8% of UK output accounted for by Scotland will be replaced by just three years economic growth in the rest of the UK after they have gone. More contentiously, the 5 million people will be replaced by new people from  inwards migration in just 20 years if we carry on at past rates, though many would like us to change  that.

If Scotland votes to stay they will do so with beefed up devolution. It will be different. We will know for sure that around  half the Scots want to leave us immediately and many of the  other half want to sup with us only with a very long spoon. The very least we should insist on is the same devolution of government to England within the residual union that Scotland will enjoy.

If they do vote to stay, as many of us hope and expect, it will be on new terms. Anything that Scotland wants England should be given as well. I welcome the new spirit in Scotland for an equal partnership. That  means an English Parliament for us. That means fair burden sharing when it comes to taxes and benefits from the Union.We must make sure this time England’s voice is heard. England expects….

Scotland wants to have the government they voted for. In the Scottish Parliament for devolved matters they do. England voted Conservative in 2010 but got a Coalition government. It’s high time England also got the government it voted for, at least for all devolved matters.

Don’t break up England just because some want to break up the UK

 

The reaction of some in the Lib Dems and Labour to the moves in Scotland to leave us or to loosen the Union ties is to seek to demolish England at the same time. In proposing this they gravely misjudge the mood of the English people.

Poll after poll shows overwhelming support for the idea that Scottish MPs should no longer vote on English matters. What part of that do Labour MPs from Scotland not understand? If they want their party to have a chance to do well in England they should withdraw from English votes, just as the Scottish Nationalists have done.

A majority of proposals for elected Mayors have been voted down by English electorates. There is no sign of  huge pent up demands for more powerful elected local government. If it is wanted that will remain possible with an English Parliament, just as it has been on offer from the UK Parliament. Mr Clegg will have to come up with a better idea than more powerful cities. And why in Mr Clegg’s world of unfair and lopsided devolution do cities deserve better than suburbs or rural areas? Why should Sheffield have more devolution than Wokingham?

The old idea of elected regional governments was even less popular than elected Mayors. In Labour’s  favourite place to try it, in the North East with traditional strong Labour support and as far away from London as possible, an overwhelming majority said No to regional government in a referendum. What part of that did people  not understand? Why do some think they can revive this idea? Do they not see that England, a Eurosceptic country, has no wish to be broken up into Euro regions.

Liverpool does not want to be placed under Manchester control in the North West. Sunderland and Newcastle have made their views known on the North East. Cornwall does not fancy being governed by either Exeter or Bristol, and Exeter and Plymouth would be suspicious of Bristol claims to be the heart of the South West. My part of the country is in  several regions that we do not recognise and do not  wish to govern us – Thames Valley, rest of the South-east and the south.

If the problem is the potential break up of the UK, the answer is not to break up England. It is time for England to have her voice and her own unity.