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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Mrs Merkel finds holding together the EU empire is difficult

 

               The EU visionaries want an EU empire from the Atlantic to the Russian border. I assume even they do not wish to push on to the Urals, well inisde Russia’s own territory, though sometimes rhetoric says otherwise. Recent events have shown just how difficult that will be to achieve.

                 In Scotland some want to split from the UK. The UK is relaxed about it and has agreed it will be settled by a referendum of the Scots. The EU is anything but relaxed, threatening an independent Scotland with no membership of the EU. The EU fears that a Scottish exit from the UK and the EU could create a popular precedent, likely to be followed by Catalonia. If both the UK and Spain were split, parts of the western edge of the EU would crumble. If Scotland left the UK, maybe England would be even keener to vote out of the EU altogether.

                Meanwhile, in the east, the EU empire has pushed too far too fast to get the Ukraine into the EU net. Russia has  preditably baulked at that, and has responded by seeking to split the Ukraine into a Russian sympathising area and an EU one.

                 The history of European empires, unions and currency unions  is a history of instability and break up. An EU empire from  the Atlantic to the Russian border is too big to be realistic. There will be several areas, regions or countries that do not agreee with this drift of policy. We are now seeing the costs of this vision, and the problems posed by the f0rces who disagree with it.

                Let us hope the EU wakes up to the reality that a lot of people inside the current EU and its  wider sphere of influence do not want to belong to a new European empire, before the actions of those straining to get out causes worse problems .

The EU does not prevent war in Europe – let’s make sure it does not lead to an EU army

 

One of the biggest errors  the pro EU advocates advance is the idea that the EU prevents war in Europe. As we are now seeing, there is the opposite danger. The EU’s actions and words in the Ukraine have helped create a dangerous power vacuum which Mr Putin is exploiting for Russian advantage. Whilst it is Russia which today threatens the peace and has acted illegally and rashly, we do need to study carefully the origins of this flare up.

The intervention of the EU in the break up of the former Yugoslavia also failed to prevent war, and some would say made that conflict more bitter and damaging.

The EU was all too ready to encourage  those who wished to overthrow the elected President of the Ukraine because he had declined to advance the interests of the EU in the Ukraine, preferring a stronger relationship with Russia.  I have no time myself for the evicted President, nor for the way Russia is behaving. The main threat to peace comes today from the Russian army, which seems to have taken control of Crimea on the pretext that they were invited in by the Crimean government, against the wishes of the Ukrainian government. Russia has violated the sovereignty of the Ukraine against international law.

I do however, think the EU should be more careful in how it proceeds. The President of the Ukraine  might well have been evicted in an election quite soon if as the EU thinks enough people in the Ukraine prefer the EU to Russia. A little patience would have allowed an orderly transition to a newly elected person with more moral and political  authority than the present interim government of the Ukraine.

Instead, pre-emptive and illegal action against an unpleasant regime led to the deaths of protesters, and the deaths of some police, before enough police defected and the regime fell. There is now a power vacuum, with a new unelected government who cannot command the support of the east of their country. This has allowed Russia to enter, claiming an invitation, with a wish to win a referendum to split the country. The west has been wrong footed. The Russians have taken the initiative and have gained a stranglehold over the Crimea well before the interim Ukrainian government or its friends in the west could organise any response on the ground.

The EU does not have the military power to take on Russia. The west will have to look to the US President to lead its response, as only his words are backed by overarching military power which even Russia respects. It looks as if the western response will be controlled, and based on imposing sanctions against Russia all the time she has troops occupying parts of Ukraine. Russia is likely to press on with its plan to hold a referendum and secure the consent of the Crimean people to the return of Russian government. If the west is lucky from here the limit of Russia’s ambitions will be the Crimea.

The UK should stay well out of this conflict. We should also make it clear that the UK does  not want to be part of a common EU approach on this matter, and certainly has no wish to commit troops to any common purpose EU force to intervene. The UK has never signed up to the concept of a common EU army. We must make sure this type of crisis does not lead to one by stealth that involves us. The world does not need another large power seeking to enforce its views of the political future on smaller states.

We do not need another charge of the Light Brigade

 

Some in the media condemn the west’s weakness for not make military moves over Ukraine. I for one am glad the west is not threatening military action. Just because the UK saw the Crimea as an area of concern at the height of our imperial power, does not mean that today the future of the Crimea is worth the lives of British soldiers. The UK has to accept it does not have the military might sufficient to take on Russia, so it should not attempt some modern equivalent of the charge of the Light Brigade.

It is true that Mr Obama’s refusal to make warlike noises may well encourage Mr Putin to intervene by proxy in the Crimea. Mr Putin sees the Crimea as a crucial interest, close to home, once part of the Soviet empire, and important to his Black Sea fleet. Mr Obama has a simple choice to make. Does he wish to threaten Russia, saying he will strike against any Russian troops deployed? If he did this how could he be sure they were just Russian troops he hit? What if they are fully supported by the local Russian speaking population? How could he confine the military battles to local troops concentrations in the Ukraine without extending it into a fight against the whole might of the Soviet military? Any threat or intervention is fraught with difficulty.

Mr Obama as always on military matters is gripped by indecision. A stronger President may well have threatened Russia with the full might of the US military machine. A credible President would by this means have deterred a Russian advance. Mr Obama does not have that stature or image in the world, so he has to accept that Russia will push the boundaries of acceptable behaviour more.

As for the EU, it is all talk and no might. May it stay without might, but will it learn to speak accordingly?  I have no wish to be dragged into a war about who governs the Crimea thanks to membership of the EU. I do not see the Kiev government as some new saviour of democracy and upholder of my values, any more than I like the people who have taken some power in the Crimea.

House prices

 

House prices in much of London are very high, making it difficult or impossible for many to become home owners for the first time in the capital.

This is not a new phenomenon. The nearest I could get to London where I worked as a young man was to buy a home in Didcot and get on the train. Then as now central London was expensive.

However, today prices are even higher relatively in central London. There is little property available on the market. The two observations of course are related.

Today more is being built in central London than in the past. There are many new towers of private sector flats rising on the skyline and along the Thames. Many of those are being bought by overseas buyers, who like the idea of a well appointed home in the centre of one of the world’s greatest cities. I have commented before that it is one of our luxury exports, just like the Germans selling the same rich people powerful and expensive cars they do not really need either. The flats do generate jobs and income for Londoners involved in building, maintaining and servicing the properties.

There is another reason why London property is scarce. Few people who currently own a flat or house want to sell. Even if they no longer use the property very much, they hold on. If they think they might like to move to the country beyond the city and get more house for less money, they often hold back.

One of the reasons is tax. The new high levels of Stamp Duty are a consideration for anyone thinking of moving. If someone owns a London flat as a second home, they are unwilling to sell and pay 28% on the gain they will have made. Why not hold on for a bigger gain later? Why not hold in the hope that the government might return to Labour’s lower levels of CGT sometime?

Tax and regulation damage markets. The housing market in London is currently suffering from an acute shortage of supply of second hand properties. Part of the reason is tax based. Stamp Duty is effectively a tax on London.  The government could see if it can help. There is also space for more development in London, as more new homes will also assist.

 

Of course Mrs Merkel was not going to offer much now to the UK

 

I did not understand why there was so much hype about Mrs Merkel’s visit. She is a cautious politician who always prefers to put off decisions or difficulties where possible. Her speech did not say Yes and did not say No. It was a model of ambiguity.

Given Mr Miliband and Mr Clegg’s position that the UK should stay in the current EU without renegotiation and with no referendum to allow us to leave, Mrs Merkel rightly concluded the UK problem  can be deferred until after the 2015 election.  Only if Mr Cameron wins will she need to have a new approach, when she will then want to try to keep the UK  in, knowing that many UK people just want a vote to get out. She will then face a united UK government that cannot accept our current relationship.  There will be no offer to the UK all the time the UK Parliament is short of a Eurosceptic majority.

Decriminalise the BBC licence fee

 

If someone fails to pay their electricity bill or their Sky subscription the company concerned can pursue the customer for the money and should  succeed in getting the money back with a civil penalty. The law says the customer should pay for the goods and services supplied, but does not make failure to  payment a criminal offence.

So why is the BBC licence fee, another service charge for customers, any different? Apparently 12% of Magistrates’ courts time is taken up with prosecutions for failure to pay the  BBC licence fee. Anyone found guilty then has a criminal record. The poor and elderly figure prominently in those who get a criminal record by these means.

Andrew Bridgen MP is proposing an amendment  to the Deregulation Bill to shift the BBC licence fee from a criminal matter to a civil matter like any other household bill. Do you agree this would be a good move? It would free Magistrates courts of these criminal cases, and create parity of treatment between the BBC and other tv service providers.

A letter to Angela Merkel

 

Dear Mrs Merkel,

You will be made most welcome in the UK today. Many of us wish you well in your battles to improve financial discipline within the Euro area, to sort out the problem debts and deficits in the zone, and the remaining substantial difficulties  in Eurozone banks.  We would like the rest of the Eurozone to enjoy similar growth and prosperity to Germany’s, based on hard work, enterprise and business success.

As you know, the UK did not join the Eurozone, for both economic and political reasons. Seeing the damage the European Exchange Rate Mechanism did to us and others on the continent, we showed ourselves to be good Europeans by staying out. Had the UK entered, with a banking system and economy that was not harmonised with the rest, we might well have brought the whole Euro crashing down in the crisis of 2008. Who would have stood behind the UK banks at risk when we no longer controlled our own money supply and money markets?

We also stayed out because the UK electorate and government have no wish to be part of a common government from Brussels. The UK entered the EEC  after the founder members, and did so to belong to a common market. It was such a concept that the voters approved by referendum in 1975. They did not consent to ever closer union, and more common government. They were reassured by the Labour government at the time that we would not lose sovereignty.

Today UK voters want reform in many areas. They want benefit reform, better control of our borders, cheaper energy, better flood protection, less interference with small companies and enterprise. In each of these areas the UK government is blocked or diverted by EU laws.  Increasingly we feel we suffer from having two governments for the price of three, with high taxes and high energy prices limiting our ability to compete with the USA and Asia.

The UK is of course willing to back Germany in any sensible moves to tackle the problems with dear energy, open borders and welfare reform on an EU wide basis. However, at the same time many in the UK want a new relationship with the EU. We have no wish to stand in your way as you go about your necessary task of leading the Eurozone to reform and greater economic policy control from the centre. As non Euro members we wish to go in the opposite direction, and need to protect our interests as an independent trading nation.

We of course have no wish to impose any new constraints on German exports to the UK. We appreciate the importance of the UK market to you , with many here enjoying  buying  German goods. Similarly we are sure Germany would not wish to impose any new barriers against UK exports to the continent.

I wish you a happy stay, and trust we can make progress both in general EU reform and in establishing  a new relationship for the UK as a non Euro member wishing to restore its national independent democratic government. Many of us who are English would also like our country to be recognised and to be proeprly considered in debates, instead of being pushed off the map of Europe altogether.

 

Yours etc

 

No more coalitions

I was pleased to read this week that Mr Cameron plans to rule out another coalition with the Lib Dems after the next election, if Conservatives have not won a a majority. As a Conservative who did not want a coalition last time, the experience of the last few years has not changed my mind. The Lib Dem refusal to allow any renegotiation of our relationship with the EU, and above all their refusal to allow an In/Out referendum shows why coalition is a bad idea. In order to make the right decisions and choices for the UK we need to remove ourselves from EU government, whilst continuing to allow Germany and others to sell us all their exports in return for access to their markets.

Mr Cameron’s wish to rule out any future coalition underpins his promise of a negotiation and a referendum on the EU as urgent business in the next Parliament. If we want cheaper enegry we need to change the arrangements with the EU. If we want to control our own borders we need to change the relationship with the EU. If we wish to limit welfare payments to recently arrived people in the UK we need to change our relatiosnhip with the EU . There are many more areas where Ministers cannot do as they wish and as the public want owing to EU Treaty commitments, regulations and directives.

The current Commons has an inbuilt pro EU majority from Labour, Lib Dems and nationalist MPs. The one Eurosceptic party, the Conservatives, is prevented from dealing with the EU issue as it wishes by coalition. I am glad that will not be a problem next time. Now all that remains is the issue of whether the public will vote for a Eurosceptic party that can win the General Election or not in sufficient numbers to create a Conservative majority. Our chance of an In/Out referendum rides on that, as all the pro EU parties in the present Commons are united against a referendum.

Please do not send my constituents’ money to the Ukraine

I wish the different factions and forces well in the Ukraine. They need to settle down after the violence on both sides, to working through democratic and peaceful means of settling their disputes. That is not something the UK can or should try to do for them.

I hear they now want loans and grants from the IMF and EU to make up for the frozen Russian loan which they have disrupted by their recent change of government. We should be careful before allowing any of our money to go to the Ukraine. We have just witnessed scenes where the people of Ukraine have been demolishing street furniture, pulling up paving and parading in paramilitary uniforms instead of peacefully going about their business. Some say they had to do that, but before we advance any money we should seek sensible reassurance that in future the people of Ukraine will take care of their collective property. Loans require a government to be in place which is properly elected, peace loving, and in charge of the country. Any such government needs an economic plan which makes sense, and an ability to control its debt and deficits.

We should also ask what collateral there is for any loans they seek. How will any new  Ukrainian government go about boosting the economy, as Ukraine’s main economic problem is too little output and low incomes. Will their policy be more successful than the last? Will it be continued by whoever wins the next election?

How will the Ukraine sort out its energy dependence on Russia? Will this entail higher gas prices, and what will that do for an already weak economy?

My constituents will want evidence that lending money to the Ukraine would help them and that we will get it back, before the IMF  sends anything on our behalf. I sought assurances from Mr Hague on this yesterday in the Commons. He did confirm that the lending would not be without conditions.

Russia, the Ukraine and the West

I have no more liking for governments that kill their own voters than most who write about the Ukraine. Nor do I like corrupt governments, or Presidents who imprison their opponents. These ways of behaving are incompatible with a modern democracy.

Equally incompatible with democracy is taking to the streets with Molotov cocktails, pulling up the cobbles and paving stones to throw at the police, or taking over the main buildings of a government in paramilitary uniforms, with weapons in hand. The dreadful scenes from the Ukraine, and the tragic loss of life, shows that country has a long way to go to create a stable democracy.

In a democracy those who disagree with the government campaign noisily but peacefully for change, in the knowledge that a bad government will be thrown out at the next election anyway with a peaceful transition to something new. Opposition enjoys immunity for what it says, short of libel. In a democracy the government moves willingly towards its critics when they have good points to prevent its popularity plunging too far. Both sides accept the rule of law, and the police are neutral. The government does not shoot or imprison political opponents, and political opponents do not take to arms themselves.

So far I trust all are in agreement with me. We then have to ask what is the role of the EU in these fast changing events in the Ukraine? Does it make sense to be on one side and to encourage revolution, when the west if it has an interest should be helping a fractured country build a more stable democracy? Did the negotiations the EU undertook to force change on the government help, when the revolutionaries saw the compromise as a sign of weakness that they need not accept. The EU compromise did not last for a single day.

The events in the Ukraine revealed the weakness of EU intervention, given the fact that the EU was never going to intervene on the ground to reassert law and order and decide who governs. The main issue concerning the EU is how is its intervention perceived by others outside the Ukraine? What will it do to Russia, who has interests in the region? Does it make a split in the Ukraine between the Russian influenced East and the EU influenced west more likely? Isn’t the EU just playing dangerous big power politics over the heads of a troubled country, without the troops and the political will to intervene directly? I hasten to add that the last thing I want is an armed EU that does intervene.

The west generally has to understand that Russia has legitimate interests in the region, as well as being a force to reckon with. Whilst I am no lover of Russian policy here either, I do think the west needs to distinguish between Mr Putin’s legitimate needs and aims, and where he pushes too far in an anti democratic direction.

If the EU were serious about challenging Mr Putin they should first gain energy independence by going for cheap locally produced energy instead of relying on Russian gas. One of the main reasons I want my country to be able to run its own affairs again is I think pushing for energy self sufficiency for the UK is a realistic goal, if only we did not have to follow EU policies. A country or group of countries that is dependent on too much imported energy will always have to compromise in ways it may not like.