Both main parties are experiencing an electoral torture over the vexed topics of free movement of people and immigration.

Labour has traditionally captured a large share of the recent migrant vote. It is reluctant to say or do anything that could upset that important constituency. It also under Mr Blair made a successful pitch for many more votes from the better off and higher earning sections of society. Many in this group welcome more migration, as they wish to employ the new migrants and  want to see the market for their goods and services expand.

Labour’s traditional voters often  take a different view. They do not wish to see migrants in the queue for social housing, nor like  cheaper competition in the labour market for unskilled jobs that already pay very little. The Unions are none too keen on a plentiful increase in the supply of labour when they are trying to get a better return for their members. Labour are now seeing some of their traditional vote disappear to parties of the  anti immigrant right and are not sure what to do about it. Some in Labour, never enamoured of the EU, want a new policy to get more control over the UK’s borders and welfare back. Others think the Blairite approach of appealing to the better off and  migrants will still be a winning combination so they can ignore the traditional Labour voters.

The Conservatives have been far less successful at attracting recent migrant votes, but wish to improve their performance with these groups. They also wish to improve their appeal to the young, to the metropolitan and to the more socially liberal, who all tend to accept or welcome more migration.

This produces the same problem as Labour’s. Traditional Conservative voters, especially pensioners, dislike the pace of change in their country and wish to see strict controls on migration. They worry about supply and access to benefits and public services and the impact on housing. It fuels the ability of UKIP to attract Conservative voters away, sometimes in sufficient numbers to deliver the Council seat or Parliamentary seat to Labour or the Lib Dems as recently at Eastleigh. In office past Conservative governments did impose much stricter controls on migration than the last Labour government. To do so again requires that renegotiation of our relationship with the EU, as free movement is an important part of the issue.

Some have written in to ask why I missed out the Tour de France from my list of English sporting events that have managed to project themselves onto the world stage and create jobs and profit for England. The clue is in the name . It is difficult to claim the Tour de France as a great traditional English event.

I understand that many Yorkshire supporters have come out to line the route and enjoy the cycle competition. Good luck to them. I cannot , however, see that this is a great business triumph. As I understand it all the viewing along the route is free, so there is no ticket revenue. The UK has doubtless paid a substantial sum to the French  promoters of the race to have it here. Councils have spent substantial tax revenues on providing viewing hubs with toilets, large screen tvs and entertainments to provide this free to spectators. They have also spent a lot on road closures, safety inspections and signs. It will be a heavily loss making popular event, offering  free entertainment to many. Anytime a Council or government  wants to provide free or subsidised entertainment it is likely to be popular with those who go.

My last blog was about developing an English brand and projecting in on the world stage in ways which bring in revenue to this country, rather than requiring payments out. One of the interesting issues surrounding Test cricket is the economics of matches at the differing English venues. Selling large numbers of tickets at quite high prices is usually easy at Lord’s and the Oval. Last year Durham was granted an Ashes test, and failed to sell all the seats, requiring help with paying the bills of holding the event. This year it was surprising to see how many empty seats there were even on the first day at Headingley, an old centre of popular enthusiasm for high class cricket. Thoughts on how one of our traditional games could boost its revenues in the north would be interesting.

Henley and Wimbledon show it is possible to specialise on a single location and gain a great worldwide reputation for a particular sporting event. Soccer and  Grand Prix show how  sports with a strong UK early development can easily become huge worldwide brands. The UK has in these cases to battle to stay in the top league and to gain its good share of the revenue.

The UK has been most successful in recent years at hosting teams of engineers and car developers for the whole Grand Prix circuit. It has not been so good at developing Silverstone into the best state of the art world circuit, in the way that Lord’s and Wimbledon are icons of their modern sports with great technology and facilities.

In soccer England and  Wales has one of the richest and best followed leagues in the world, with huge tv and related revenues. Its national team has other problems, and punches below the weight of the Premier League in world football.

I have dared to write a couple of pieces this summer on sporting topics. Critics have said it is because I belong to the bread and circuses school of politics and wish to take people’s minds off the more important things. No serious regular reader of this blog could endorse that attack. This blog has never ducked the difficult issues of migration, house prices, EU membership or living standards, but I do not wish to write about the same things all the time.

I write about great sporting events occasionally because I like others enjoy some of them. I also write about them because they tell us something about leadership, brand promotion and the way the UK can earn its living in a very competitive world. Today I wish to examine the Wimbledon model of economic development.

England takes something which is essentially English, rooted in our past and our traditions, and turns it into a global event attracting the talent of the world. Wimbledon is a major world tennis tournament, based on English lawn tennis with grass courts, white shorts and dresses and strawberry teas, at a time when the rest of the world plays on hard surfaces with brightly coloured sponsored clothes and burgers. The centre has embraced some modern technology for line calls, with a retractable roof for all weather matches and greatly enhanced retail and restaurant facilities.

Henley is an even more dramatic example. There the technology has been frozen along with much of the dress code in the Edwardian era. The manual wooden board shows you where the racing boats have got to. There is no concession to the modern world with no large screens or  tv pictures. Ladies need to wear  skirts below the knee and gentlemen ties and jackets even on the days when the temperature reaches 80 degrees F. Meanwhile the standards of catering, shopping and crowd handling have been consistently improved over the years.

At Lord’s, the world home of cricket, the ancient pavilion and Long Room have been kept as the symbols of past glories. Meanwhile a stunning array of new technology allows play under lights, quick recovery of the outfield after rain, and great protection of the playing square in all weathers. Cameras and replays allow better umpiring decisions. New stands and a media centre cater for more spectators and better communications to a large worldwide tv audience.

These are things England is good at. There is spin off in sales of cricket bats, tennis balls and rowing equipment worldwide. The festival competitions bring large numbers of competitors and supporters to our country to spend on food, lodging and much else. The investment in these brands and the enhancement of the offers is an important part of modern Britain. The English green lawn is a source of inspiration for a series of summer sports that amuse the world.  The green lawns of Henley stretch down to the riverside. The green lawns of Lord’s and Wimbledon are analysed the world over by sporting coaches, commentators and players . They all need to know how a ball will bounce or turn on that special grass. Each of these festivals has found that happy balance of old and new, rules and freedoms, which enable them to sell all their tickets easily at good prices and to preside over events which delight many.  Tomorrow I will consider how we can stretch these brands and learn from their success.

One of the main reasons I voted against HS2 was the business case. From the figures before me I could not see how they will be able to sell enough tickets at  sensible fares to make any return on this large investment. I did not wish to see UK taxpayers stranded with large losses and half empty trains.

News recently  filtered out that maybe the Chinese will invest in HS2, though there has been no follow up with details of agreements. If the Chinese or any other potential investors out there will take over paying for the line and the trains in the belief that they know how to make a profit out of it, the taxpayer should welcome that and expedite a deal. It may well  be the Chinese could cut the costs of the investment and boost ticket sales. If they took over the project that would be up to them and the UK taxpayer would be spared the risk. Alternatively the Chinese may study the economics further and conclude it is a not so easy to do, as they are canny business people.

What we do not want is any kind of government guarantee or underwriting of possible  losses to be part of any sale to a foreign or private sector investor. The cheapest way of paying for the UK state investment will be for the UK state to borrow the money itself on its own balance sheet. Offering other investors guaranteed higher rates than the cost of the UK government capital would be a bad deal for taxpayers. Offering them shares in the venture whilst underwriting losses would be a  bad deal for taxpayers.

There are many other infrastructure projects which could make a profit where private capital can be attracted in and where the private sector could be made to take all the risk. There should be fewer subsidised rewards for private investors than at present, not more.

This week the Unite Union has offered some good advice to the Labour party. They said ” A policy which combines uncritical support for the present working of the EU while denying any opportunity for a referendum on Britain’s membership is thus likely to be an electoral millstone for Labour at the General Election”.

How wise those words are. The UK both needs a new relationship, and needs a vote on that deal if government thinks there is merit in staying within some parts of the current treaties. Official Labour policy offers neither the opportunity to renegotiate what we have, nor the chance to get out of what we are in.

Meanwhile Mr Balls made an important and thoughtful speech on 30 th June. He implies that Labour would need to renegotiate. ” We know that we need reform of the EU to deliver value or money for taxpayers and to make Europe work in our national interest”. Mr Balls fondly imagines that the UK can pull off the trick of improving the EU for all in the ways he wants, which is extremely unlikely. The Euro has its own centralising logic, pushing the EU in the opposite direction to the UK’s needs. Any successful negotiation is going to be primarily about opting the UK out of a lot more of the common government the others want or put up with.

Perhaps the most telling phrase in the whole speech relates to the explosive subject of immigration. Labour fears the splits, wanting to keep its migrant vote whilst worrying how to stop the loss of more traditional voters to UKIP and in Mr Balls’s seat as he points out to the BNP. He said ” On immigration too we need greater international co-operation so that we can keep the benefits of skilled migration, while controlling and managing it fairly. …..While still in Europe we need longer transitional controls…restrictions on benefits.  Because we face such an acute challenge to make work pay for unskilled people, we should not be subsidising unskilled migration from the rest of the EU”.

So Mr Balls only seems to accept the doctrine of free movement for skilled people within the EU. He wants new controls on benefit seekers and on low wage unskilled labour. To do this, something Labour never attempted in government, he will need to make his party more Eurosceptic. The logic of Mr Balls’ position is a renegotiation for the UK, because the other states do not share his agenda. The logic of Unite that we also need a referendum serves to remind Labour of the popularity of that policy.

There is a forest of cranes around London. Street after street is partially blocked by construction traffic and by skips to take away the rubbish from old buildings that are being knocked down or substantially altered. The work is now spreading outwards from the capital. The latest index of future  activity, the PMI, hit 62.6 last month, its highest level since 1997. (Anything over 50 means growth in activity).  New housebuilding is leading the charge, followed by private commercial developments to provide the new offices  companies require as they expand.

The annual rate of increase in house prices hit 11.8% last month. For the first time average UK house prices are above the peak level in 2007 before the crash. This is in cash terms – they remain well down when adjusted for general inflation. In London house prices rose by a massive 26% over the last year. The average price of a home in London is well above  any first time buyer’s reach on a normal income, unless they have other money to put in as a deposit. The government and Bank need to look at how to deal with this.

I welcome the general change in  the UK economy as it resumes its growth path. Manufacturing is up as well as construction and general services. The rate of job creation is excellent, and many more people have now found work after the high unemployment of the 2009 recession.

I still think these buoyant figures suggest that the Bank of England should be taking more action to normalise interest rates after such a long period of rates close to zero.

I read in the papers that the Treasury is considering a merger of National Insurance and Income Tax. The logic would be that it could save money on collection to have a common system, and it would remind people that our tax rate on income is still quite high when you add the two together. The stories have been denied by Downing Street.

There are reasons why you cannot simply merge the two without other changes. The government would not wish to make pensioners pay national Insurance on top of their Income tax, as they do not currently have to pay NI. It would take time to exempt everyone on lower earnings below £10,000 a year  from NI, as there will be a revenue loss, just as it has taken time to get everyone  on less than £10,000 a year out of Income tax.

National Insurance is currently payable on earnings between  £7956 and £41865 a year at the full rate, and at 2% above £41 865. Presumably the reform would not be a device for increasing top rates of tax further on a merged basis.

Some might object to the ending of a special tax called NI, as it removes the last vestige of the idea that you pay in to get back pensions and certain contributory  benefits. As most will appreciate, the so called National Insurance scheme was never funded but was always a pay as you go scheme. Merging NI and Income Tax just makes it clearer that all of us who have paid NI over the years rest on future Parliaments continuing to pay us pensions, as has been the case through  the State pension years.

I would be interested in your thoughts on this proposal.

Mr Cameron succeeded at the summit in getting the following paragraph added to the conclusions:

“The UK raised some concerns related to the future development of the EU. These concerns will need to be addressed.

In this context, the European Council noted that the concept of ever closer union allows for different paths of integration for different countries, allowing those who want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further.  etc”

This careful prose is a prelude to the renegotiation the UK is going to need, given the centralising drive of much else in the document and in the Commission work programme. In the Commons yesterday Mr Cameron reaffirmed that the UK does not wish to move to political union at a slower pace than the rest, but wishes to go in a different direction, with the restoration of powers to the UK . The UK wishes to see accountability and legitimacy for government through national Ministers  and elected national Parliaments, not through the Commission and European Parliament.

Elsewhere in the document the rush to more EU power and policies continued. Problems with migration gives us the statement

“the EU needs an efficient and well-managed migration, asylum and borders policy, guided by the principles of solidarity and fair sharing of responsibility… Europe must develop strategies to maximise the opportunities of legal migration through coherent and efficient rules…”

This is clearly a situation where the UK will need domestic control of its own arrangements.

The document also reaffirmed the need for an integrated energy market with more mutual dependence and connectivity between states. The aim is to share what we have rather than taking steps to increase supply of cheap energy sufficiently.

The UK’s exit from the EU is not unimaginable. The rest of the EU would get over it. Let me reassure my German friends . An independent UK would want to let German carry on selling all the goods to us they currently sell.

As the German Finance  Minister wisely said when he could imagine the UK’s exit, Germany would want a trade agreement with the UK on exit. As the  minority in the UK who want to stay in only ever argue about the need to preserve the trade, they should accept that it is in the rest of the EU’s interest to do just this!

UK foreign policy in recent decades has not been true to our history or our normal beliefs as a nation.  Instead of standing up for the self determination of peoples in Europe, the UK has gone along with those who wish to centralise power and control under an EU government. Instead of being the true friend and ally of the smaller countries and the outs, the UK has turned a blind eye – or has kept quiet in public – to a massive move towards Brussels control with one flag, one anthem, one court, one currency and one much else.

In the sixteenth and seventeenth centuries England, then  Britain, was a leading voice and power to allow people the right to choose their own religion. Britain backed the Dutch in their revolt against the Catholic hegemony,  and supported the smaller German states who wished to be Protestant. In the eighteenth and early nineteenth centuries Britain stood against French military conquest and domination of smaller counties in Europe, and fought wars to prevent French control. In the twentieth century twice the UK fought with allies to prevent German control of the continent. The UK did so because we have a long tradition of freedom,believing peoples and countries have a right to govern themselves, choose their own laws and settle their own beliefs.

Today mercifully we are  not called upon to fight wars for these freedoms in western Europe. All the main countries accept these things should be settled by arguments and votes, not by bullets. This does not mean we have to proceed by consensus or accept beliefs and laws we do not like or want. It should mean greater freedom and diversity for the peoples of Europe, safe in the knowledge that the large countries no longer wish to conquer and dominate by force of arms.

Post the Juncker vote I hope the UK can return to its historic role of being the voice and the votes for freedom – freedom for individual countries to govern themselves and choose their own laws if they wish. EU co-operation and common action should be neither coercive nor expected. If countries willingly want the same laws that is fine. The EU scheme seems to have gone too far in creating too much central control, then intimidating or coercing by words and threats of legal and economic sanctions too many countries and governments into accepting what they do not really want.

The UK in this post military EU world needs once again to free Europe by its exertions. Let small countries flourish. Let business thrive without so many laws. Let us celebrate diversity, rather than seek to impose a compromise driven conformity which could well end in fewer jobs, less prosperity and much more political frustration.