In 1999 I wrote a book called “The Death of Britain?”. It argued that Labour’s devolution policy was likely to split the country up. It also said that Labour’s passion to put us under EU control would destroy our democracy. Boris reminded me of it yesterday in his article which referred to it.

The first of these arguments is coming home to roost this week in the Scottish vote over independence. Whichever way now it turns out, devolution has damaged the union. Devolution has split Scotland in two, with  half the public wanting to leave the UK as soon as possible and the other half wanting to stay in only on more favourable terms with less commitment to common government.

The second argument about the EU destroying our democracy  is still  not fully understood by enough people. It was good yesterday morning to awaken again to voices on the Today programme threatening us with unspecified adverse economic consequences – and the loss of car  manufacturing – if we vote to leave the EU. In the light of what negative campaigning has done in Scotland, can we please have more of these lies and pro EU propaganda BBC? Clearly some see the read across from a vote for Scottish independence to a vote for UK independence from the EU even though the two cases are somewhat different.

Only if enough people understand the damage done to our democracy  will we secure a vote to leave the EU as currently constituted.

In my book I argued:

“The end result of Labour’s constitutional reforms will be a nation in tatters… Will Scotland now seek to shatter the Union by demanding full independence?”

“devolution Labour style will devolve more power not to people but to politicians and administrators. Far from cementing the UK, it will pull it apart”

“Undoubtedly the government’s devolution plans will create more tension and conflict rather than less. ….It is helping to fuel nationalist movements in Scotland and Wales.”

Labour’s approach is to   “offer more devolved power to that part of the country where they are most worried about the strength of separatist as well as devolutionary tendencies. Usually the granting of more and more powers for separate development and separate government within a once unified state leads inexorably to stronger nationalist movements and often to eventual separation”

The crowning irony of Labour’s devolution policy and its failure is its impact 0n Labour. They are the UK political party with far the most to lose, as they often rely on Scottish votes in the Commons to have their way, and on Scottish MPs to act as Ministers. Conservatives won the General Election outright outside Scotland in 2010. It is curious that Labour could not see the obvious in 1999 when I warned them of the consequences of their policy.

 

 

I have always assumed Scotland will stay in  the Union. I have defended Scotland’s right to make this decision and have stayed away from their hustings as Conservatives have been advised to do. I would be happy for them to remain in our country.

I have also said we only want them to remain if they are happy to do so and see the value of our union to them. I do  not think it right to threaten them with bad things if they vote for out, nor would I shower them with new promises about what it means to stay in. They know what being in means. They are exploring what being out might mean in this referendum.

Given the narrowing of the polls and the sense of panic in some senior Labour statements, it is now appropriate to offer advice to the government of the rest of the UK in the event of a Scottish decision to leave.

The first thing the UK Parliament should do is pass a short Act. This would say that Scottish members of the Westminster Parliament will no longer vote on any matter  not applying to Scotland, and will take no part in settling the response of the rest of the UK to Scottish withdrawal. It would also cancel the May 2015 General Election in Scotland. Current Scottish MPs would continue for their residual functions until the split of the kingdoms in completed.

There  is no need to delay the General Election in the rest of the UK. The new government for the rest of the UK should be formed from the winners of the election in England, Wales and Northern Ireland.  The remaining Scottish MPs would be excluded from calculating the majority and would not be eligible to be Ministers.  On Wednesday I will discuss the negotiating position I wish to see from the rest of the UK should Scotland trigger the split.

 

On  Friday the Conservative party was defeated three times in the House of Commons over a Bill to amend housing benefits. A Liberal Democrat MP with the full support of Liberal Democrat Ministers proposed substantial  changes to Housing Benefits without the agreement of Conservative Ministers. Conservative Ministers asked the Conservative Parliamentary party to vote down the measure.

There were three main issues in play. The first is the Referendum Bill. Conservatives are keen to legislate this Parliament for an EU referendum to be held before the end of 2017 giving people an In/Out choice.  Labour and Liberal Democrats are against a referendum. They wish to accord priority to other private members bills to try to squeeze out the Referendum Bill which is in third place following the ballot. This was the highest placed Bill slot which any Conservative was allotted.  The Conservative party wished to vote down the Lib Dem Bill to give the Referendum Bill more chance of c0mpleting its passage before March and the end of this Parliament. If it remains third in the queue its chances are reduced.

The second issue  is controlling the state deficit and the affordability of welfare. The cost of the Lib Dem proposed  Bill would be an extra £1 billion of spending a year. It was not just a measure to assist the disabled and those unable to find a suitable smaller property. Indeed these  hard cases are already  being taken care of through extra benefit money made available to Councils to help people who need a larger property because they are disabled, or who cannot find a smaller one. The Bill also includes removing deductions to Housing Benefit where other earners live in the property. Conservatives received  no answer to the question what else  the Lib Dems and Labour would  cut to pay for this, or which tax would they increase.

The third is the Liberal Democrats clearly wanted to find an issue which played into one of Labour’s biggest campaigns so they had a chance of winning in the Commons against the Conservatives. For them it was good politics, showing they wish to align themselves more on the left as they have been losing too many votes to Labour. They hope they are rehearsing for a future Lib/Lab coalition.

On the day Labour and Liberal Democrats did well mobilising their full forces.  They do have the votes to defeat Conservatives if they all unite, as they did. The absence of some Conservatives made the defeat bigger.

 

One of the compelling reasons the UK needs a new relationship with the EU and needs to be outside the current Treaties is the lack of control we now have over our welfare system and  borders.

The news this week that Calais cannot cope with all the illegal migrants who wish to come to the UK highlights the problems.

First, in a common border area your border is as weak as the weakest border in the EU. If the southern states will not police their borders more effectively to prevent first entry to the EU, then the northern countries will end up with more and more problems with  migrants.

Second, if the UK has to offer under EU rules  the same in work and out of work benefits to all recent arrivals from the EU as we offer to our own citizens, it will  attract more people.

Third, if the UK economy continues to generate a lot of jobs, but the Euro area economies remain mired with high unemployment, the UK will attract a large share of the illegal migrants to the EU.

The UK answer to this problem is to remove ourselves from the common border and welfare policies. We could do a better job controlling our own systems than we can do under EU rules.  The EU answer should be effective border controls throughout the EU. It would also help the EU case if they changed their mind and allowed the UK to take tougher action over access to benefits.

 

Diplomacy is an up market kind of politics. It is smart talking paid for by the state and directed by politicians.  Today both politics and diplomacy are derided by many, condemned by cynics as lying at the public expense. I want to make the case for them both. Done well they are the means that we reconcile our  differences, create and uphold the peace, and make progress as individuals and nations. I would far rather jaw jaw than war war. Diplomacy and politics are much better than civil or international war. The covering of civilisation in any human society rests on the successful conduct of politics and diplomacy. We see in all too many countries what happens when politics and diplomacy break down, as in Syria, Libya, Iraq and the Ukraine today.

I want my diplomats and politicians to do two things above all else. I want them to promote peace and demonstrate democracy. Of course internally a state has to be firm to maintain the rule of law.Those who commit acts of violence against others and the state, or who steal or damage the property of others have to be prosecuted and punished.  Externally a state has to show it has the means and the willpower to defend itself  should need arise. A large and powerful state like the UK should also be willing to use its power with allies and through the UN to deal with rogue states that disrupt the peace of others, where  the use of military force is necessary and can improve the situation. The UK was right to liberate  the Falklands,  and Kuwait with its allies.

The EU which now presumes to be a state with embassies, a foreign policy and interventions in other countries fails both my tests for diplomacy. It often fails to  promote peace, and it does not demonstrate democracy. Its interventions in the Balkans during their period of civil war and war between the emerging states at the end of the Soviet era were far from helpful. More recently its decision to back those who wanted the fall of an elected President of the Ukraine and wished to bring their country closer to the EU started a chain of events which led to the annexation of Crimea by Russia and the civil war in eastern Ukraine.

I am no supporter of the Russian actions nor of rebel violence.   The only good news is the most recent statement of the EU that there can be no military solution to the civil war in east Ukraine which mirrors what President Obama is also now saying. When will the EU pursue its interest in the Ukraine by offering to help broker a peace between the Kiev government and the armed rebels? If the EU does not like Mr Putin’s peace proposals, where are their own?  Why does the EU seem to think it is acceptable for a European government to be shelling its own people, instead of trying to find a way of restoring peace to its troubled country?

Which brings me to the EU’s main failure, its failure to be democratic or to advance democratic causes. The EU dislikes Scotland having a free referendum on whether to stay in the UK or not. It has intervened in the debate on the side of the Union not because it likes the UK but because it is worried that the Scottish precedent will catch on. The EU which did so much to foment tensions within member states in the early years of its existence by encouraging a Europe of the regions, now wishes to suppress separatist movements. The EU does not want the Catalans to have a free vote on whether to stay in Spain. They do not welcome the idea of Venice or Lombardy voting on whether to stay in Italy. They clearly do not see the need for the UK to have a vote on whether it stays in the EU or not.

The EU has designed a thoroughly undemocratic way of legislating. Deals and arguments between the Council, the Commission and the Parliament, many of them conducted in private, result in a  torrent of new laws. In any individual country these laws are in effect immutable, however much they may be disliked or however bad they may be. One of the main principles of UK democracy is that no Parliament can bind its successors. If a Parliament enacts a law which is unpopular or proves to be ill thought through, the people can vote that Parliament out and replace it with people who will change or repeal that law. Now today a new UK government cannot amend or repeal much of the law it inherits from the previous government, because it is made in Brussels.

 

This is based on a speech I made yesterday to the “EU Foreign Affairs” conference at Europe House.

 

Yesterday morning a group of MPs met in Committee Room 14 to discuss the EU’s plans to take control over all the main ports in the EU, establishing by direct EU regulation their right to determine how they are run and how they charge.

This is one of many such scrutiny committees that have met over the years as the EU has greatly expanded its legislative activities. Under Labour the Minister would recommend the EU measure to the committee, and the Labour majority would vote it through, usually with no Labour backbench speeches either in favour or querying any element.

The EU’s wish to regulate the 47 largest ports in the UK is opposed by the  ports industry. Measures which may make sense for state owned or state subsidised ports in Mediteranean countries make no sense for free enterprise competitive  ports with market prices and no subsidy in the UK. The Chairman of the European Select Committee was present though not a member of this scrutiny committee, as his  Committee had recommended that this important new EU measure should be debated on the floor of the Commons. Bernard Jenkin and I were also present, though not voting members of the committee.

Mr Jenkin began the proceedings with a point of order. He argued that the latest draft of the EU proposal available to the committee was dated 23.5.2013. There have been various redrafts since then. There were also some other papers missing. He proposed that the committee be adjourned until the government had circulated all the relevant papers. I backed him up. The Minister, Mr Hayes saw the merit of our case and offered to move the adjournment of the committee so the right papers could be circulated and read. The three of us followed it up with speeches saying the whole matter should be taken on the floor of the House in good time before any decision was made in Brussels, with the latest text. The whole committee swung behind the idea of delay and the need for proper texts, and many also backed the proposal that the debate should be for the whole Commons given the importance of the power grab. We have already told the Minister that we think the whole regulation should be stopped as it is not needed.

The Minister I expect agrees with us that this Regulation is not needed and  is not in our interest. The problem is, it can be pushed through by qualified majority against our wishes. I trust he will vote against it if  the others want to push ahead with it this time It is yet another example of the growing legislative tentacles of the EU operating against the UK’s interests.

 

For many years Tesco sold people the groceries they wanted. Tesco’s market share went up and up. Profits and dividends rose whilst prices remained competitive. Sir Terry Leahy presided over a huge success.

For many years  Manchester United built up a reputation for being the best or one of the best clubs in the Premier League. Under Sir Alex Ferguson the club won many trophies, increased its world fame and fan base, and became a huge revenue generator  from tv rights, sales of products and even from selling tickets for games.

During their glory years both UK success stories had their critics. Tesco attracted endless criticism for being too big, for being too tough in negotiations with suppliers, Councils and other partners. Yet they remained the UK’s favourite grocer as measured by how many people shopped there and by  how much product they purchased. Manchester United of course drew the criticism and the jealousy of the supporters of many other teams that they usually defeated, and the special criticism of the few teams that could give them a good match and could sometimes  beat them in competitions. Sir Alex’s style with the  media often encouraged verbal retaliation.

When these two leaders retired from their jobs, both organisations started to record disappointing performance.  Manchester United had a poor season last year under a new manager chosen with the support of  Sir Alex. This season has started badly under a costly  new foreign manager who was meant to change things for the better. A club like Manchester United with very expensive and well trained players does not expect to lose 4-0 to MK Dons nor to be so far adrift of the top of the Premier league.

Tesco has reported slipping market share, with more people going to competitors than before. Last week came the shocking news that things were  not expected to get better anytime soon, and the dividend was slashed by three quarters to conserve cash and reflect the realities of lower profits.

In each case there are three popular explanations of the changes.

Some think Leahy and Ferguson were special managers, and their replacements so far have failed to show anything like their skill at mobilising the very considerable resources at their command and inspiring their teams to perform.  They have on their side the fact that the decline seemed to set in in each case on the departure of the old boss. In each case there has been subsequent management change as the owners seek to recapture the old success, implying those most involved think management is the problem or part of it.

Some think the later years of both super managers left problems behind which suddenly surfaced or became clear on their departure. Did Sir Alex fail to buy the new younger players needed in time? Did Sir Terry push too hard to cut costs and raise profits to the point where service was damaged or prices were too high? It is always tempting for new incoming management to blame the outgoing, and some times it is right. The weakness in this argument is the new management at Manchester United was able to buy new players, and Tesco’s management has been free to raise service levels and or cut prices if they were an inherited problem.

Some think the problems lie outside the managements, especially in the case of Tesco. Maybe the competition has just got a lot better, which would have posed as big a problem for the retiring managers had they stayed.

In the last couple of years Manchester City with a big chequebook and a skilful leadership, Chelsea with billionaire backing and talented management, and an improved Arsenal, Liverpool and Tottenham have all perhaps made it more difficult for the old leader.

In the grocery area the last couple of years has seen a strong and well marketed challenge from the big discounters to Tesco and to the other old leaders including Sainsbury. It may not just be Tesco that suffers from the outbreak of much tougher price competition, with customers becoming cannier and reaping the benefits.

Do you have a favourite explanation? I suspect there is some truth in all three explanations. I also think Ferguson and Leahy do make the case that some managements can make a lot of difference and are worth the money.

 

In the peak year under Labour an 18% Capital Gains Tax rate brought in £7.8 billion of revenue. Last year a 28% rate brought in just £3.9 billion, a fall of 50%.

In the peak year under Labour with  a 40% highest rate, Income Tax brought in £22.5bn from self assessment Income Tax. Last year with a 45% rate it brought in £20.85billion, a fall of 7.3%.

In the peak year under Labour the then lower Stamp duty rates on property brought in £9.9billion. Last year with higher rates the Treasury collected £9.4 billion, a fall of 5%.

The one tax increase which did work, bringing in substantial new revenue, was the VAT increase. Labour’s peak year for VAT brought in £89.9 billion. Last year the higher rate brought in £118 billion, an increase of 31%.

The tax cut that worked, taking more people out of Income Tax altogether with higher thresholds for standard rate payers, still allowed an increase in revenue from PAYE from Labour’s peak £126.4 billion to last years £135.5 billion.

Meanwhile, total public spending has risen from £655.6 billion in 2009-10 to £711.5 billion last year, a rise of 8.5% in cash terms. There are arguments about whether this is a small reduction or a small increase in real terms. Bearing in mind the  planned freeze on public sector wages, which are a main component of public spending, the inflation rate in the public sector has clearly been reduced substantially.

The latest figures for total spending and borrowing remind us there is still a lot to do in the next Parliament to eliminate the deficit. This remains a necessary task.

 

We are always told the  EU model is the best in the world, combining free enterprise to deliver the goods with bigger government to enforce redistribution and social justice. We are told by many that this model gives us all a better lifestyle. We are told that the wonderful single market provides the driver for more jobs and greater prosperity.

I have often commented on how the single market measures are frequently counter productive, leading to higher costs and fewer jobs. I have regularly pointed to the very poor record of the Euro area on employment and unemployment, showing they have got a lot wrong. Today I want to look at the big picture of overall income levels in the EU.

In 2013 the average US income was a healthy $53,000. The average EU income was a much more modest $34,000. If you allow for the fact that some of the smaller and more recent members of the union have further to catch up with the EU average, you could get the adjusted EU level up to nearer $40,000. So each person in the USA is on average somewhere between one third and 60% better off than the average EU citizen, depending on how much grace you wish to give the EU for its more recently joined poorer members.

These are huge differences. Why is no-one at EU level worried about it? Why is there no plan to ask what does the USA get right economically that the EU gets wrong? Why is their so much anti American rhetoric and so little understanding of the free enterprise system which has greater sway in the US than in the EU?

I am no uncritical fan of all things US. I am an opponent of neo con military interventionism.  The USA has more than its fair share of rules and lawyers seeking to slow down its enterprise economy. Compared to the EU, however, it gets a lot more right economically.

Take energy policy. It is busy producing more of its own energy and going for cheaper energy to fuel its reindustrialisation and heat its homes,. At the same time the EU is busily shutting down cheap energy facilities and making  itself ever more dependent on a lethal mix of very expensive and unreliable renewables and imported gas from Russia.

Or take transport. The USA provides roadspace for flexible cars and trucks to get people around its single market. The EU does what it can to make driving more expensive and more frustrating at every turn.

Look at modern technology. The USA leads the world with its digital revolution. The EU struggles to keep up, and mainly uses large US based service providers to automate its own activities.

The USA dominates the university world , the world of knowledge, with most of the world’s leading institutions. Only the UK from the EU manages a couple of entries in the top ten.

There is no evidence that EU membership is helping us catch up with the economic success of America. There is a disappointing lack of energy about the EU when it comes to helping business and entrepreneurs. The EU is in the slow lane, and proud of it.

 

The Ukraine’s application to join NATO on the eve of the NATO summit is an unhelpful intervention in global politics.

We were told by the EU and others that the EU wished to sign an Association Agreement with the Ukraine to promote more trade and friendship. It was not for military purposes. The Agreement belied that, as Russia pointed out, as it did include a clause about defence matters. To compound that with offering NATO membership would alarm Russia.

There are three good reasons to say No to the Ukraine. The first is we do not know what country  would join. Is it Ukraine on its old boundaries? In this case we have the dangerous anomaly that part of a NATO country would be under Russian control. Would it be on current de facto boundaries? In which case parts of a NATO country would not be under the military and civil control of its main government. Would it be the Ukraine minus its Russian speaking pro Russian areas? That would be unacceptable to the current Kiev government.

The second is NATO is in no position to guarantee the borders and territory of Ukraine from all comers. The Ukraine is too close to Russia. We could not protect it fully at acceptable military cost to ourselves, and without undue death and damage to the Ukraine if some  of it is taken by Russia as Crimea has been.

The third is we should not be willing to encourage the government in Kiev all the time it is part of the violence and death being visited on its own people, whatever the rights and wrongs of who started it and who is mainly to blame for its continuation. NATO should encourage democratic and peaceful regimes, who can keep their countries well governed by words and votes, not bombs and bullets.