Budget Resolutions

John Redwood Excerpts

Wednesday 11th March 2020 Commons Chamber

[Mel Stride (Central Devon) (Con)]

There is no doubt that this Budget has been framed against one of the most challenging moments in this country’s economic history. As the Chancellor set out, many fundamentals of our economy are strong: record levels of employment; the lowest level of unemployment since 1974; low and stable inflation; and real wages that have risen over a two-year period. Nevertheless, the Chancellor was equally right to point to the huge challenges that lie ahead. He did not mention the trade deal that we are negotiating with the European Union, or—at least explicitly—the many accelerating challenges around climate change. Instead, he rightly and substantially focused on the challenge of coronavirus.

These challenges often emerge without much warning. In 2013, the then newly appointed Governor of the Bank of England, Mark Carney, was asked by the Treasury Committee about what he saw as the main challenges over the coming years, and he did not mention one of the three external challenges that I have just presented. These things come at us pretty fast and are sometimes very unexpected, and the Chancellor is to be congratulated on looking closely at those challenges, and coming up with robust responses.

None the less, at the heart of this Budget hangs an important question: are the fiscal rules to which we are working robust enough, and do the spending and taxation proposals in the Budget—we will, of course, pick over them in some detail over the coming hours and days— stack up in terms of maintaining the fiscal responsibility that the markets expect of us? I think the Chancellor said that he was fundamentally sticking to the rules in the Conservative party manifesto to ensure that day-to-day spending is in balance over a three-year horizon. I think the Chancellor also suggested that, given the OBR’s forecasts, in about 2022-23 the head- room around those rules would be something in the order of £12 billion. That is all well and good—that is a reasonable level of firepower—but he also pointed out that the impact of coronavirus will not, because the cycle of the Budget forecasting by the OBR will have had a cut-off about two weeks or more ago, have been taken fully into account. I suspect that one of the key questions we will be putting to the Chancellor of the Exchequer, when he appears before our Treasury Committee this time next week, will be to probe the figures around the headroom that is assumed in those particular numbers.

[John Redwood (Wokingham) (Con)]

Does my right hon. Friend not accept that in these very exceptional circumstances the rules have to be flexed for the temporary expenditure on the virus consequences, just as even the EU has said it to Italy, where Italy obviously has a very difficult problem?

[Mel Stride]

My right hon. Friend is absolutely right that we flex the rules to accommodate the circumstances. My point is that when we talk about headroom within our fiscal rules, we have to make sure that the number we are focused on is as accurate as possible. Given what is happening with coronavirus and the fact that the OBR struck its forecasts some time ago, the current forecasts are almost certainly already out of date.

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[John Redwood]

There is a £6.6 billion saving this year on interest on Government debt anyway, but of course there has been another major collapse of interest rates since those figures were put together, so there is something on the other side of the account. I would therefore urge my right hon. Friend indeed to say that we need to spend what it takes.

[Sajid Javid]

My right hon. Friend is, characteristically, absolutely right to make that observation. I think he will also agree that while this is welcome, and will, absolutely, cut the cost of interest, it also reminds us that interest rates are incredibly volatile, and no Government should rely on interest rates remaining low for an incredibly long time.

I have often said that small and medium-sized businesses are the beating heart of the economy, and rightly where our focus should be. If SMEs are the heart, then cash flow is their lifeblood, and that is where we must focus our help most, so I very much welcome the emergency support package for SMEs that my right hon. Friend the Chancellor set out today. If I may, I will make three quick observations about what more can be done. First, on time to pay, I strongly welcome the announcement today to extend the existing HMRC scheme. While it is absolutely right that we carry out the fundamental business rates review that we set out in our manifesto, this will not happen overnight, as the Chancellor recognised, so we need to act now. I do welcome the announcements on business rates that he made today, but may I also suggest that the time-to-pay arrangement is extended to business rates too? Although they are collected by local authorities, not HMRC, it is possible to delay collection while making sure that no local authority loses out in terms of cash flow.

Secondly, on support for workers, firms should not have to shed workers because of temporary cash-flow problems. That is why I would like to keep open the option of a temporary cut in employers’ national insurance —perhaps over a three-month period—thereby relieving the cost of labour.

Thirdly, since the financial crisis, it is true that monetary policy has lost some of its potency. A decade ago, central banks were the star turn; now they are more like the supporting act, but they can help. That is why I strongly welcome the action by the Bank of England that was announced this morning, and I am pleased to see the co-ordination that has taken place with the Treasury. I am particularly encouraged by the restart of the term funding scheme, especially how the incentives have been set out to encourage an increase in lending to SMEs.

While the coronavirus has captured the attention of the front pages, my right hon. Friend the Chancellor is right not to lose sight of the long-term failures of UK economic policy under successive Governments—failures that have caused profound regional inequalities and a sense of anger and betrayal in many of our communities. We need to put people and place back at the heart of a more human capitalism. I therefore welcome the investment in skills and education, especially the £1.5 billion for FE capital. We should think about not only the flow of students but the stock of skills that we have in our country. There are talented individuals who have left full-time education and would benefit from retraining. That is why I am unapologetically keen on a long-term plan for skills, including the right to retrain for all working adults.

It is clear from today’s Budget that my right hon. Friend shares my enthusiasm for the infrastructure revolution and my conviction that, with the right scale and the right mix of investment in roads, rail, digital, decarbonisation and flood defences, we can tackle our most significant economic challenges: low productivity and regional inequality. As I have long said, we should take advantage of record low interest rates to invest properly in our economic future.

I welcome the Chancellor’s indication that he will continue the work that was begun to rewrite the Green Book, so that we can better allocate investment across the nations. I hope that he will look carefully at what else we can do to help the infrastructure revolution, including looking at planning, especially reform of the compulsory purchase order regime; the infrastructure delivery model, so that we do not have a repeat of the overspending on HS2; and labour market requirements at a time of record employment.

I urge the Chancellor to consider in his next fiscal statement 100% capital allowances—in other words, full expensing for businesses, to encourage them to invest more in capital. I want to end by underlining the importance of fiscal responsibility.

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[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests, although I am of course not speaking for them.

I congratulate the hon. Member for Ilford South (Sam Tarry) on an excellent maiden speech. He was warm and informative about his predecessor, who was much respected on both sides of the House. He rightly drew attention to injustices and problems which he has a passion to solve. I would just like to reassure him that there is no monopoly on wishing to solve those problems on his side of the House. That is what we are all here to do.

It is a great pleasure, for the first time in about five years, for me to be able to welcome the actions of the Bank of England today. It is a pleasure to see the Bank of England and the Treasury co-ordinating their work, and doing things that are massively in the public interest. For the past five years, it has been my miserable task to be the one voice in this House pointing out that the Bank of England has consistently got its economic forecasts wrong and that it had made a number of very bad decisions. I have been particularly critical of the way it decided to tighten monetary policy and slow the economy from spring 2017 onwards, culminating in the very ill-judged decision it made at the end of last year to increase the counter-cyclical capital buffers, which meant denying loans to businesses that wanted to expand or to solvent people who wanted to buy a new car or a new home. It was a very bad policy and it is wonderful news today that the Bank of England, with its new Governor, has started off on a much better basis and has cancelled those counter-cyclical buffers. It is the single biggest amount of money we are talking about in this debate. As the Bank of England itself calculates, it means up to £190 billion more is now available for good projects, for business requirements and for individuals who want to borrow for big ticket items. Of course, banks must still be prudent and sensible in the way they advance that money, but the previous controls were too tight. Against the background of world downturn, it is very important that that firepower is made available.

Just to reinforce the position and to deal with the special problems that the virus is now likely to create, the Bank of England also put forward a new medium-term lending scheme for the banks, so they can get access to large sums of money—up to £100 billion in total—at the new very low rate of 0.25% to lend on to medium and small-sized enterprises. Again, that was something I was very keen for it to put forward. I am delighted that it has returned to this idea. It is much needed, I fear, because we already see the virus having a very negative impact on certain businesses, most obviously in aviation and other transport, but now also in events and some other tourism-related activities where we see the pinch already being established by the virus. If, as we fear, it spreads more, that is going to get rather worse, so I welcome the double set of actions by the Bank of England. I am not sure that 50 basis points off the interest rate makes very much difference. It is not something I would have done myself, but I can see that it was well intentioned and it sends a very clear signal that borrowing should not only be available but cheap in these very extraordinary times.

I also welcome the fiscal stance the Government have adopted in the Budget. If anything, it is on the prudent side of what one might have expected in the current circumstances. Some of my colleagues will find that curious coming from me, a former hawk, on how much this country can afford to spend and borrow. However, in these circumstances, and against the massive monetary and fiscal tightening we have experienced for some three years and the very noticeable slowdown or faltering of the world economy, it is obviously sensible to have a fiscal stimulus. The £18 billion underlying stimulus is definitely at the bottom end of the kind of range that many people were thinking about.

On top of that, there is the £12 billion package which the Government have wisely put forward. They stated that if the virus problem gets worse there will be more. I hope it will be the case that the virus problem does not get that bad and we do not need to spend the £12 billion or anything like it, but I am pleased the £12 billion is there by way of additional resource for the health service should the need arise and as additional money available particularly for the business sector, which, in certain circumstances, if we have anything like the experiences of some other countries abroad have now had, would need cash injections. I am very pleased that thanks to the Bank of England it will not just be a question of lending at cheap rates through the commercial banks, but that in some cases, particularly in hospitality and tourism-related areas that are already being fairly badly hit, it will be a reduction in their bills.

I listened carefully to the very long address by the SNP spokesman, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). I cannot see how that party’s VAT proposal would help, because VAT is turnover-driven and we are talking about businesses that lose much or all of their turnover, so it would not deal with the problem. The Government have a much better answer: to take a cost that businesses cannot get out of quickly or avoid—their property cost—and say that the Government should not be charging them for using property when no money is coming in, because there is no turnover as they have lost their customers. I agree with the Government.

[Sir Edward Leigh (Gainsborough) (Con)]

I was not allowed to intervene on the leader of the SNP, but surely any sensible person would come to the conclusion that when faced with an existential threat to our country, such as the coronavirus, we are much better dealing with this together, as a United Kingdom, than as separate nations.

[John Redwood]

My right hon. Friend and I think that, but more importantly, that is what the Scottish people voted for just a few years ago, when we very wisely and democratically said, “Yes, let the Scottish people decide.” They did decide and I wish their elected representatives here would understand the result of the referendum and remember that their colleagues told us at the time, when asking for it, that it would be a once-in-a-generation matter. While I am a democrat who thinks that these things occasionally need exploring, we cannot explore them every five years. These are fundamental things that are very disruptive if we keep going into them. I had to wait many years to get an EU referendum—rather longer than I wanted—but I do not think we should have one every five years. That would be quite inappropriate.

To go back to the Budget judgment, I was interested to see that quite substantial increases in spending, which we need in health, education and police, for example, have been relatively easily accommodated. It is good to see already in the first-year figures—for 2020-21— £4.6 billion of Brexit savings coming through. It is very good to see that there will be another £10 billion on top of that by the end of the forecast period, so the Brexit bonus is available and is beginning to come into these figures.

It was also good to see the £6.6 billion of interest cost reduction, thanks to the quite substantial falls in interest rates that had occurred before this month. The point that I was making to my right hon. Friend the Member for Bromsgrove (Sajid Javid) is that those savings would be considerably bigger if we forecast them at today’s interest rates, because interest rates for Government borrowing have fallen even further. He countered and said, “Yes, but you still have to be very careful because you can’t necessarily assume that that will go on into the future.” The bad news is that interest rates are going to stay low for a bit, but the good news is that the Government can borrow for 30 years for practically nothing, so now is surely a very good time to lock those interest rates in so that the future interest rate programme is very cheap, as well as the present one. It is something the Government need to think about. I know they have issues about how long they fund, but this is surely a time to move in the direction of longer funding so that we lock the very low rates in.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

On the very low costs of borrowing, does my right hon. Friend recognise that there is enormous demand in the City of London for long-dated assets? There is a lot of money looking for long-term investments that will provide secure returns, which is ideal for long-term infrastructure spending.

[John Redwood]

Let us hope that that is right, yes. We hope that the City gets better at managing the gap between those who say they have all this long-term money and the projects that are available. We seem to need a bit more work on that. I am very keen that more of it is privately rather than publicly financed, so that we can get more investment for less strain on the public finances.

The Government, looking at their forward budgets, have rightly said that they wish to increase public sector infrastructure investment. In principle, I agree, but I urge one thing on the Government—I wish that they would look at a large number of smaller, quicker schemes, because what we need to deal with transport problems, in particular, is quicker-acting, smaller schemes that we can get up and running and that will have some tangible results. On the railways, we could have short sections of bypass track on existing main lines to get express trains past stopping trains when the timetable falls over, and digital signalling on a very widespread basis, which could give us something like a 25% capacity increase much more quickly and cheaply than some of the rather big schemes that we have been looking at in this place recently, but I will not be dragged down that particular avenue today.

On roads, the immediate priority is the digitalisation and rephasing of the many traffic signals in this country, because they are not optimised, meaning that junctions restrict traffic much more than they need to. Roundabout substitution, right filters with right lanes and junction remodelling are also possible. We need to get people on the move, and junctions are often a cause of tension and delay. Junctions would also be safer if we optimised them and had less frustration and conflict between vehicles at those junctions. I hope the Government will look at that. We also need lots of bypasses and other local roads to relieve the main motorway system, which is a fixed entity; nobody is suggesting building a new motorway any more, so we need to relieve the pressure on the motorway network with more local road projects. I want to see those projects going in and some concentration on that in the investments we will see in that programme.

I hope that we will look at water management on both sides: we probably need to store more water for water use—there is plenty of it around at the moment, and it will be galling if we have a long hot summer and then discover we are short of water, given what we have just been through—but we also need that accelerated development of drainage projects and probably more pumps, more dredging and more routes to take water safely away from areas of habitation. It is not good in a first-world country to see the kind of scenes we have seen this winter, with this prolonged period of excess rainfall.

The Budget is going in the right direction. The Bank of England has joined in and is doing the things it ought to be doing—we hope we will not need all that credit, but it is important that those facilities are available against a possible worsening of the virus situation—and I am glad we are making down payments on what we need to do on health and education spending. I have said how I would like the infrastructure money to be accelerated and developed into smaller projects that will really work. We also need more tax reform. My one worry about the Budget is that it does not cut taxes enough; I would like to see more tax cuts. We only have five years to show how fast this economy can grow before the electorate will judge us, and the more the Government cut taxes, the more the economy will grow, and the more we trust people with their own money, the better they will spend it and the better the economy will do. I say to the Government: trust the people and cut taxes more, and then it would be an even better Budget.

Ministerial Code

John Redwood Excerpts

Monday 2nd March 2020 Commons Chamber

[Mr Speaker]

Order. I am expecting to run this urgent question for about 45 minutes.

[John Redwood (Wokingham) (Con)]

I am someone who strongly supports the work that the Home Secretary is doing to make sure we are secure and to have a new borders policy. Can the Government guarantee that this will be a quick process, so that we can get to an early answer and she can get on with the job?

[Michael Gove]

My right hon. Friend speaks for many in the country. The Home Secretary is doing a superb job. The new points-based immigration system is in line with what this country wants, and we want to make sure that this process is expedited in a fair way.

Debate on the Address

John Redwood Excerpts

Thursday 19th December 2019 Commons Chamber

[John Redwood (Wokingham) (Con)]

It was a pleasure to see our new Speaker in the Chair at the start of the debate, and I would like to send my congratulations to him through you, Mr Deputy Speaker. I was delighted at his election, and I am quite sure that he will be a fair and experienced judge of our affairs and will look after our House very well.

The recent election and the conversations that I was able to conduct even more intensively than usual with the electors of Wokingham told me that they do want some changes. I made promises to them that I would come here again as an advocate for more money for our local schools, which have been short-changed in recent years, so it is a pleasure to see in the Gracious Speech the down payments promised for next year, and I look forward to those continuing in the years that follow.

My electors and I agreed that we need more money for our local surgeries, more nurses and doctors to be recruited and better support for our local district general hospital in Reading. Again, I see that answer already in the Gracious Speech, with a promise of substantial new resources—financial and personnel—for the national health service, which will be laid out in legislation for a five-year period. I welcome that. It is a pleasure to say to my electors that two parts of the job seem to be well on the way to being done, but having a little experience of government, I know that there will remain, day by day and month by month, issues to sort out, to ensure that my constituency gets its fair share of the money.

[Liz Saville Roberts]

In his capacity as a former Secretary of State for Wales, does the right hon. Gentleman share my concern and disappointment that there was no mention of Wales whatsoever in the Queen’s Speech, as well as my concern about how the money being promised to England will find its way to Wales, through the Barnett formula or wherever? Finally, will he perhaps ask the same question as me: how much longer do we need the Wales Office for? Looking at the behaviour of this place, there will be people outside saying, “Surely Wales could do a bit better than this.”

[John Redwood]

The right hon. Lady knows full well that there is a formula and consequentials from the English settlement. I am quite sure that my right hon. Friends in the Government will look after Wales, and it is her job to test them out in the appropriate debates. This speech is not the appropriate moment, because I am not here to speak for Wales; I am here to speak for Wokingham and West Berkshire, and I am here to speak for the wider nation, as we all do.

I am also looking forward to the promises on infrastructure. The Government have rightly said that we have a big job of work to do to improve our railways and roads, to make sure that people can get to work and get their children to school, that we can bust the congestion and that people have easier journeys. That, too, will reduce pollution and increase safety.

Wokingham is a very fast-growing area, because we are doing more than our fair share for the national housing achievement. We particularly need support on putting in additional transport links, with digital signals on the railways so that we can have more capacity and more trains, and an improved road network. It was a pleasure to work with the previous Secretary of State for Transport in the last Parliament on the idea of strategic local highway networks. We needed more money and support for those important roads, which are under the control of councils. They do not qualify for trunk status but can often relieve trunk roads and provide an important means for my constituents and others to get to work or get their children to school. The previous Government answered that, but it falls to the new Government, with the more generous financial settlement that I look forward to, to ensure that we can work together, so that I can get some of those road schemes and rail improvements for the Wokingham area, which will be much needed.

The big thing, which represents a seismic shift in Government policy and which I welcome, is the introduction of optimism and enthusiasm—the belief that this country can achieve great things, that we do not have to constantly cut under the Maastricht criteria and that we should no longer make state debt the main objective of economic policy. I have been working away for some time to get that change of policy, but Philip Hammond was not sympathetic to my views in all sorts of ways. I am delighted that the new Prime Minister and the new Chancellor are enthusiastic about the idea that the aim of economic policy for this Parliament must be prosperity— prosperity for the many, and tax cuts for everyone.

Tax cuts are a very important part of creating greater prosperity. People work hard, and they want to keep more of their own money. They are often better judges of how to spend their money than councils and Governments. It falls to a renewed Conservative party to take that message to every part of the country, implement that message in the forthcoming Budget and show that not only will we find more money for schools, hospitals and roads, which is needed, but we will also have some money for tax cuts.

Some tax cuts do pay for themselves because our rates are too high, and if we cut them to an affordable rate, people work harder, stay here, contribute more and are more enterprising, and we get more money in. Other tax cuts will reduce the revenue, so we need to grow the economy, and over the years it works because growth generates more jobs and higher incomes, and in comes more money.

To fulfil this new objective, the Government have rightly changed the basis on which the economy is going to be governed. We have gone away from state debt as a percentage of GDP, the iron rule that dominated the last dreadful years of the Labour Government—a period of collapse, when state debt got out of control—dominated the coalition period of recovery and dominated the Philip Hammond Conservative Government period, when he seemed to like that particular proposition. Now we have a much more sensible idea, which is that we should of course be prudent—there is no magic money tree, and we cannot spend safely on the scale Labour recommended to the country—so what we are suggesting now as the golden rule is that any current expenditure must be covered out of taxation, but we can borrow up to 3% of GDP to put in those big new investments and the myriad smaller investments in broadband, rail, road, water and the other things where public money is needed as an adjunct to the substantial private investment that will in many places be going into those important developments.

This will make a lot of difference, because this Parliament needs to understand that there has been a very nasty world manufacturing recession over the last six months or so and there has been a worrying slowdown in the world economy over the last year. It began, as these things always do, with the central banks that get it wrong. It began with the tightening of the central bank in America, the Federal Reserve Board, in the third and fourth quarters of 2018. We could feel the shake on the world economy, and we saw what was happening to world markets. It spread to the eurozone, which stopped all its quantitative easing, although its economy was still very weak and could not really take that particular shock, and it came to the United Kingdom, where we had a very severe policy being pursued by the Bank of England. Very predictably—I remember warning about it some time ago—these changes in central bank policy did indeed slow the world economy.

Now things have changed, but they have not changed yet in the United Kingdom, so I urge the Prime Minister and the Chancellor to get the UK authorities into line with the analysis and the prescription of the world central banks outside the United Kingdom. What we have seen in the last six months is a very big move to cut interest rates worldwide by most of the major central banks not only in the advanced world, but even more dramatically in quite a number of the emerging market countries from Turkey to India and Brazil. We have seen cuts in the United States of America, and we have seen the reintroduction of quantitative easing—bond buying, created money—in the eurozone, because the eurozone economy has shuddered to a halt in some places. We have seen further developments in Japan, which carried on with quantitative easing and zero or negative interest rates throughout the difficult period, but it too needs to boost things rather more.

However, there has been no response in the United Kingdom. Indeed, only in the last few days the Bank of England has gone the other way. It has done a series of stress tests on the major banks, and I am delighted to say that our major banks passed with flying colours. The worst case in the stress test was very severe, but there were no problems for the banks, as the Bank of England reported. However, the Bank of England then said that the clearing banks had to double the counter-cyclical buffer of capital they keep. That is technical language. What does it mean? It means there is about £20 billion less available for mortgages, car loans, business expansion and new investment. That is what it means—a very fundamental monetary tightening. It happened at the same time that sterling went up about 10%—another very strong monetary tightening.

Money growth is eye-wateringly low in the United Kingdom, unlike in the eurozone, and it is well below that in the United States of America. At exactly the point when we were doing this, the Federal Reserve Board, with 2%-plus growth in America, which we would love to have on this side of the Atlantic, was injecting billions—I think about $150 billion was injected in a single month—into the money markets to keep things liquid so that the American consumer, car buyer, mortgage demander and small businesses would have access to the money they needed to continue the very successful American growth strategy. Let us ensure a growth strategy in which monetary policy does not stand too much on the brake.

There is also the issue of how the Treasury has been recalculating our obligations at official level. Around October, when it probably thought that we might be leaving the European Union—there was a chance of that at the time—it decided that the student loan system was costing us £12 billion a year more, although that system had not been accounted for in such a way up to that point. There were no changes to the student loan system, or to the experiences of those who could not repay their loans, yet the figures that we presented deteriorated sharply as a result of that decision. I do not think we should allow that to deviate from what I hope will be a positive Budget—probably at the end of next month, given the rumours I see in the press.

We need the Budget to provide that boost to growth. I think it is eminently affordable to have the increases that we promised and talked about in the general election regarding schools, hospitals and infrastructure, and also eminently affordable to have those promised tax cuts to business rates and national insurance. We would not need to offset that with other tax increases, because this economy desperately needs a boost.

In a world where some other Governments are boosting on the fiscal side, and practically every other country is boosting on the monetary side, in order to see off the threat of the world slowdown turning into something worse, it is important that the United Kingdom authorities do the same thing. I have every confidence in my right hon. Friend the Prime Minister, who I think is single-handedly turning around the mood with his message of confidence and enthusiasm for how we can do better. That will take some cash, however, and now is the time to spend a bit of that.

This country and its economy can achieve a lot more, so let us ensure that the new message of prosperity for the many and tax cuts for everyone is seen through. That is the way to bring most people in this country together, and honour the promises that many of us made in the general election. That will show that the country has made wise decisions up to this point, and that Brexit will not be damaging to our economy, but can be part of a positive move towards faster growth, better jobs, and more paid jobs, just as we have experienced in recent years and months.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

It is a great privilege to follow the right hon. Member for Wokingham (John Redwood), and it was a delight to hear that he is a convert, however late, to increased public spending. He made some interesting points about macroeconomic policy and he spoke about the new fiscal rule that the Chancellor announced just before the general election, which I hope the House will soon get to debate. He welcomed that rule, but I have some concerns about it as I think it rather old-fashioned. I would like a new fiscal rule to consider the net worth of the public sector and ensure that it is growing over time; at the moment it is in negative territory, particularly because of various pension fund liabilities. That would be a much better approach to managing fiscal policy long term, because it looks at the whole balance sheet of the public sector, which is what a normal business would do. We now have a data set for the past three years from the Office for National Statistics, and I hope we can have that debate later on, because it is important to get fiscal policy right.

The right hon. Gentleman made two other interesting points about monetary policy. He spoke about wanting to bring back quantitative easing, which is an interesting question.

[John Redwood]

indicated dissent.

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[Sir Edward Davey]

There is always time for redemption, but if the hon. Gentleman is hoping for it in this case from this Prime Minister, I wish him well.

Some of us have led successful negotiations, pan-Europe, in Brussels—difficult negotiations that I won for Britain—on everything from economic reform of the single market to climate change. I did not succeed by adopting this Prime Minister’s tactics of bulldog bluster combined with the record of a turncoat. I do not believe that that is the right approach, and I do not believe that he will succeed without reneging on all, or most, of his previous promises to leave voters. My parliamentary interest in this is whether or not, in the dark Conservative forests of the Brexit Spartans, his erstwhile friends have yet smelt betrayal. We shall see, but as we oppose Brexit and continue to point out the extra costs, economic damage and loss of influence, we will also remind Government colleagues of the previously unthinkable concessions that now need to be made for any chance of a deal next year.

I turn to the NHS, which the Prime Minister has made so much of. Every Member of the House was elected on a manifesto committed to increasing spending on the NHS in real terms—maybe there is a little political consensus there. I, for one, am relaxed about putting a spending commitment for the health service into law, but that prompts one question: is the spending enough? I do not want to repeat the election debate, where the Labour party and the Liberal Democrats were arguing for higher health spending than the Government. Instead, let me approach it in a rather different way, in terms of what our medium-term NHS spending target should be.

Most health analysts tend to talk, not as the Prime Minister does, in the abstract—in total spending, which is bound to go up with an ageing population and economic growth—but in comparisons between similar countries: on spending per person, on the percentage of the national income. If we compare the UK’s health spending in these ways—even with the Prime Minister’s rises—against the world’s other largest developed countries, the UK fares badly. In the G7, our health spending per person is the second lowest—lower than Germany and France. As a share of national income, in the G7, the UK again performs badly, with Italy the only country that is spending less.

I readily admit that the NHS is far more efficient as a health service than, say, the health system of the United States, but surely we should be really ambitious for the NHS, and the factual evidence shows that this Government and this Queen’s Speech are not. As we legislate for future NHS spending targets, why do we not take the opportunity to be really ambitious? Why do we not aim to spend 10% of our national income on the NHS, as a minimum? That would bring us up to G7 comparators, and I think that the British people would back a policy where £1 in every £10 of the national cake was spent on the nation’s health. I accept that the Government may be nervous about spending targets based on national income because their economic policies look set to fail so badly and national income will grow very slowly.

[John Redwood]

Does the right hon. Gentleman accept that comparing a health service that is completely free to the user with one where there are payments through insurance schemes and collections of money is not a fair comparison? He should add in all the costs of the Inland Revenue in the UK, because that is the way we collect the revenue. And in relation to a previous point that he made, I think Brexit is good for the economy, not bad—I have always said that.

[Sir Edward Davey]

I will come to that last point in a second, but the right hon. Gentleman’s point about health systems is an interesting point for debate. I point to countries such as Denmark, which have a taxpayer-funded system and spend a significantly higher share of their national income on health. I am afraid that his point is not valid.

Early Parliamentary General Election

John Redwood Excerpts

Monday 28th October 2019 Commons Chamber

[John Redwood (Wokingham) (Con)]

This Parliament is once again misjudging the mood of the public. We were elected here to do serious things on behalf of our public. Conservative and Labour MPs alike were elected to see Brexit through. Three years and four months later, there is no sign of that. Instead, we have this discordant, argumentative Parliament that will do nothing. It will not throw the Government out of office and it will not allow the Government to govern. We owe it to the British people either to allow our Government to govern or to let the British people decide on a better group of MPs who can form a Government and do positive things for our country.

[Andrew Percy (Brigg and Goole) (Con)]

Every constituency in my region voted at the 2016 referendum by a huge margin to leave the European Union. At that time, lots of my constituents, in some of the most deprived communities of this country, told me that they did not trust this Parliament to deliver it. They said, “We won’t get it. They’ll never let us leave.” The five Conservatives out of the 10 MPs in my region might have voted to deliver Brexit, but is not the truth of it that the Labour MPs across my region, bar one or two examples, are never going to vote to leave the European Union, sadly proving right my constituents who said, “They’ll never let us leave”?

[John Redwood]

My hon. Friend is right, but it is now about more than Brexit. It is about confidence in our parliamentary system to deliver orderly government that can do things for the people or to allow the public to decide who should be a better Government, because the House has no confidence in the Government.

This Parliament needs to put through a Budget quite soon. Our economy needs a boost, and we need to know whether we can have the tax cuts as well as the spending increases, but I suspect that the Government fear bringing a Budget to the House because they think there will be no co-operation as they do not have a majority and this Parliament will not allow a majority to be formed.

This Government have recently brought a Queen’s Speech to the House. It contains a number of good measures that I do not think were ideological or Conservative provocations to socialists and those of a more left-wing nature. They were chosen to build some consensus and address the issues that worry people. But again, I think the Government rightly fear that any one of those measures, if introduced, would probably meet with resistance and a lack of co-operation, in exactly the way that we have been experiencing with all these other measures.

But above all, this House needs to think what message it is sending to all our partners, friends and allies—countries around the world; the businesses that our businesses do business with; all those contacts we have around the globe. They see this country as a great beacon of democracy—a country of great experience in the art of democratic government; a country that has often led the world in putting forward and fighting for those freedoms and showing how they can improve the lives of those governed by them. But instead we are sending a message that we do not know what we are doing and can never agree about anything—that all we can do is have endless rows in this place, for the entertainment of people here perhaps, but to the denigration of our country and the undermining of its position.

How can a Government conduct international negotiations when everything they propose is undermined or voted against by the Opposition, because we do not have a majority? Above all, how have we got to the point where this House decides that it is good legislation to say that the Prime Minister has to break his promises—where it has turned the demand that he break his promises into something that this House calls an Act of Parliament? No wonder we look ridiculous. No wonder we cannot resolve Brexit. No wonder we cannot have a Budget to promote our economy. No wonder we cannot govern with aplomb in the interests of the British people.

The Prime Minister is right that if this House cannot do better, it must dissolve and ask the people to choose a better Parliament. Either we need to be a better Parliament or they need to choose a better Parliament as soon as possible.

--- Later in debate ---

[Sammy Wilson]

The hon. Gentleman is trying to draw me into saying that this should be decided by a second referendum. I do not believe that it should be decided by a second referedum, because, of course, the first referendum has not been delivered on. We want to see the first referendum delivered on, and delivered on for the whole United Kingdom.

The argument has been put forward here tonight that we need a general election because this has now become a zombie Parliament—the Government cannot get their business through. We are not wreckers. We do not want to see the United Kingdom ungovernable. Indeed, the reason we voted with the Government on the Queen’s Speech last week was that they had a programme to get through and we wanted to give it support. We do not want to see the United Kingdom made ungovernable. But the one thing we are not prepared to do is to see the United Kingdom divided and the Union destroyed, and that is why we cannot give our support in the vote tonight.

[John Redwood]

Would it be a way through if the Government went to Brussels now and said that they would like to initiate free trade talks immediately so that we could leave with no tariffs and new barriers, if such talks were agreed to, rather than signing the withdrawal agreement?

[Sammy Wilson]

We are wandering a bit from the motion now, Mr Speaker, but I hope you will indulge me just to answer this point. That is one of the arguments that the Prime Minister has put forward—that surely all this will just disappear if and when we have a free trade arrangement. But the withdrawal agreement makes it very clear in section 13(8) that—this would have to be agreed with the EU so it would have a veto; so much for the claim that we have got our sovereignty back—the EU could still have a free trade arrangement that would leave Northern Ireland fully or partly within the protocols in the agreement.

While I would love to think that that would be a way out, and we would love to see it be a way out, unfortunately the agreement that the Prime Minister has signed does not allow it to be a way out. That is yet another reason why we have to get this right, and yet another reason why we do not believe that debating, scrutinising and accelerating the passage of the Bill through the House, and an early general election to get a mandate to implement it, is correct.

European Union (Withdrawal Agreement) Bill

John Redwood Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Tuesday 22nd October 2019 Commons Chamber

[John Redwood (Wokingham) (Con)]

This Parliament is letting the public down. Three years and four months ago, I and 17.4 million people voted to leave the European Union. We voted to take back control of our laws, our borders and our money, and we are still waiting for that to happen. We were told by the then Prime Minister that he would send a letter announcing our decision immediately after the result, and under the treaty we expected to be out after two years with or without agreement by the European Union.

Instead, we find ourselves today having yet another debate after so many groundhog days in this place, with the same people rehearsing the same arguments, as around half the Members of the House of Commons—we will find out whether it is more than half—are still trying to stop any kind of Brexit, and are forcing those of us who believe in Brexit to dilute what we are trying to do and delaying our enjoying the fruits of our Brexit vision.

Let us look at the agreement, because it is far from ideal from the point of view of a leave voter. I am delighted that the Prime Minister has today reassured us that we will completely take back control of our fish, and that we will decide how that amazing resource is nurtured, looked after and used by our country. That is very welcome. I also accept that the documents show that we will not have to go into battle with our troops on a vote that we have lost, and that we are not about to be sucked into losing the sovereign control of our Government and Parliament over our foreign and defence policy.

But we are still in trouble with the powers of the European Court of Justice over our laws. I am grateful to my hon. Friend the Member for Stone (Sir William Cash) for contributing to the Bill, because there is now a sovereignty clause, and I hope it works; it is a definite improvement. However, I am extremely worried by the situation in Northern Ireland.

[Jim Shannon]

Does the right hon. Gentleman not understand that Unionists believe that our sovereignty has been removed by this agreement and that being a Unionist in Northern Ireland is very different from being a Unionist in the rest of the United Kingdom, including the right hon. Gentleman’s constituency? Does he not feel that Unionists have been duped and deceived in how this agreement has been brought forward?

[John Redwood]

I do not like the provisions on Northern Ireland for the reasons that the hon. Gentleman and his colleagues have set out. I want the whole country to leave, and Northern Ireland to be a full part of the United Kingdom under the same arrangements. If there are any different arrangements, I certainly want a consent mechanism that is acceptable to the representatives from the Democratic Unionist party and the people they represent.

I am also extremely worried about the money in this set of proposals. We never talk about the money, and so many MPs seem to think that giving billions away to the European Union is just fine. Taking back control of our money was central to the campaign. Indeed, it was very contentious, because people argued about exactly how much it was. I do not think it has been properly quantified. The liabilities are potentially large and long lasting, and there is no attempt in the agreement or the Bill to control them.

[Mr Paterson]

Could my right hon. Friend give us his best estimate of what he thinks the bill will be?

[John Redwood]

Well, we are told £39 billion, but I think that is a very low estimate; I think it will be considerably more than that and will stretch many years into the future under some of the headings that we are providing for. My worry is that the EU will be the main driver in deciding what the bill is because there is not a satisfactory dispute resolution procedure. The EU could levy the bill, saying that it is European law and that it knows best what we should be paying. We have to be extremely careful.

If the Bill does make any progress tonight—that is not looking very likely from some of the things people are saying—I hope that there will be considerable concentration in Committee on whether there are mechanisms for having better discipline over the money, because we voted to take back control of the money. I want some of that money for hospitals, schools and other public facilities in my constituency, and I hope that many other Members of Parliament take the same view. It would be very galling indeed if we found that we were technically out of the European Union but were still paying it a great deal of money.

I approach this agreement in a spirit of disappointment, but I think the Prime Minister was deeply damaged and undermined by the European Union (Withdrawal) (No. 2) Act 2019, which greatly reduced the bargaining leverage of the United Kingdom Government, and I think people recognise that. It is strange that that legislation, which might as well be renamed the “breaking the Prime Minister’s promises” Act, is permissible because surely we either have confidence in our Government and in the Prime Minister to be able to keep his word, or we do not have confidence in our Government collectively, in which case we can get a different Government. This Prime Minister has said that he will take us out on 31 October. There is a lot of support for that in the country, and I hope that we can find a way to make it take place. The Prime Minister has said that we would preferably leave with a deal, but that if we cannot get a decent deal we will leave without a so-called deal.

I think the language is totally misleading. There is no such thing as a no-deal Brexit. There is either leaving and signing a withdrawal agreement or leaving and not signing a withdrawal agreement. Were we to leave not signing a withdrawal agreement, there is an aviation agreement and a Government purchasing agreement, there are haulage and customs arrangements, and there is a general agreement on facilitation of trade through the WTO, so we would have a managed WTO exit, which I think would work extremely well.

I want to spend that money in Britain to promote growth and a stronger economy. I want the free trade agreements that I think we might be able to generate with the rest of the world. If we just left, the EU would want to negotiate a free trade agreement with us, but all the time it thinks it has a chance of our not leaving it is not going to offer anything or be positive about that, because it thinks it might, from its point of view, do something better.

Preparations for Leaving the European Union

John Redwood Excerpts

Monday 21st October 2019 Commons Chamber

[John Redwood (Wokingham) (Con)]

There is no such thing as a no-deal exit; if we leave without the withdrawal agreement, there would be all sorts of agreements and arrangements in place. So will the Government do more to tell the country about the 2017 facilitation of trade agreement between all World Trade Organisation members to ensure smooth borders, the government international procurement agreement to allow Governments to transact business, and the customs, haulage and aviation arrangements and agreements, which are all in place. People should stop scaremongering.

[Michael Gove]

My right hon. Friend makes a very fair point. If we leave without the withdrawal agreement being ratified, we will leave without that deal. “No deal” is sometimes used to cover that specific outcome, and it is with respect to that widely accepted description that I use the term. He is right to say there are other agreements, and there will continue to be agreements, that we have concluded, both with individual EU member states and with the EU overall, which will govern our relationship. However, I am strongly of the view that a withdrawal agreement which has been ratified in this place will be the best possible way in which we can ensure both that we recognise the Brexit referendum vote and that we continue to have free trade and friendly co-operation.

Preparations for Leaving the EU

John Redwood Excerpts

Tuesday 8th October 2019 Commons Chamber

[Michael Gove]

I am grateful to the shadow Brexit Secretary for his questions. First, he asked where the Prime Minister was. The Prime Minister is talking to our EU partners, attempting to secure a good deal, and he is doing so with the full-hearted support of everyone on the Government Benches. The question that many people will be asking outside the House is why, if the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) says that he is anxious for a deal, he declined to support one on the three opportunities he had to do so. If he wants to be taken seriously as an advocate of compromise and a deal why, in cross-party talks in which we both took part, did he attempt to erect an obstacle at every turn to consensus across the House? That is the conclusion that people will draw.

There is another conclusion that people will draw. The no-deal report was made public three hours before the right hon. and learned Gentleman began asking questions. Having had time to absorb 156 pages, he did not have a single question about no-deal preparation; not a single point to make about how any sector could be better prepared; not a single suggestion, query or contribution about how we can ensure that British business is in a robust position. There was just a series of questions that we have come to expect from him about politics, rather than policy; about positioning, rather than practicalities.

The right hon. and learned Gentleman asked about customs checks in Northern Ireland. He knows—it has been made clear—that those customs checks can take place away from the border, at the manufacturer or other distribution sites. He also asked whether our proposals were serious about maintaining the integrity of the single market. They allow the EU to maintain the integrity of the single market, but is he serious about maintaining the integrity of the United Kingdom, because he and his party are more than willing to see a customs border erected in the Irish sea? We would be the only sovereign nation in the world with such a customs border, but he is more than prepared to dance to the EU’s tune, rather than standing up for the UK.

That is the spirit in which the Benn Act was passed. That Act signals to the EU that there are people in Parliament who do not want to conclude a deal, who do not want to leave by 31 October and who want to delay. Indeed, the right hon. and learned Gentleman is one of them. He has had every opportunity to engage meaningfully with Government, not just on the deal but on no-deal preparations.

When I last spoke to the House, on 25 September—the right hon. and learned Gentleman referred to my statement then—I invited any MP in this House to come to the Cabinet Office and the Department for Exiting the European Union to discuss a deal and our no-deal preparations. Only one Opposition MP, the hon. Member for Leicester West (Liz Kendall), accepted that invitation. Oh sorry—and the hon. Member for North Down (Lady Hermon). Two Opposition MPs. That is the measure of the seriousness with which the Labour party, the SNP and all the Opposition parties take our Brexit negotiations: an open offer, an invitation, to come and talk rejected hands down.

Is there any surprise? The right hon. and learned Gentleman in 2017 said of the referendum:

“We’ve had a decision and we respect that decision.”

He also said that the Labour party cannot spend all its time trying to “rub out yesterday” and not accept a result it is honour-bound to respect. As I mentioned earlier, after voting against the deal three times, he rejected the opportunity to come to a consensus between the Front Benches to get a deal through.

We in this Government have compromised. We in this Government are showing flexibility. We in this Government seek to leave without a deal, but faced with the delaying, disruptive and denying tactics of the Opposition we say, on behalf of the 17.4 million: enough, enough, enough—we need to leave.[Official Report, 16 October 2019, Vol. 666, c. 3MC.]

[John Redwood (Wokingham) (Con)]

When Mrs Merkel says that either the UK or Northern Ireland have to stay in the customs union, is she speaking for the EU following consultation with the other 25, or is she just making it up and assuming they will go along with her totally unrealistic and inflexible view?

Brexit Readiness: Operation Yellowhammer

John Redwood Excerpts

Wednesday 25th September 2019 Commons Chamber

[Michael Gove]

The right hon. Lady is right about the Schengen Information System. If we leave without a deal and the EU does not put provisions in place, we will lose access to that database. However, I have had an opportunity to question people who have been involved in national security and individuals who work for Border Force. Appropriate mitigations are place, and, indeed, new powers are available.

[John Redwood (Wokingham) (Con)]

Can my right hon. Friend confirm that in the case of our current borders with the EU—our currency borders, VAT borders, excise borders—all the calculations and payments that those require take place away from the border; and so will not customs also be handled electronically, away from the border, not leading to queues?

[Michael Gove]

My right hon. Friend makes a very important point. It is the case that for most companies, the customs procedures that they will now need to engage in will be conducted away from the border, at offices of departure, by authorised consignees, and as a result, with the operation of the smart border that the French put in place in Calais, that should lead to as smooth as possible a flow of trade.

Prorogation (Disclosure of Communications)

John Redwood Excerpts

Monday 9th September 2019 Commons Chamber

[Mr Grieve]

I understand my right hon. Friend’s point. That was a matter that exercised me very much before I decided to table this motion, but against that, we have to face up to another fact: those necessary protections for civil servants cannot and must not be used as a device to hoodwink this House and the public as to the way the Government conduct their business. The Government have a duty. They can sometimes have a duty not to say something, but they certainly do not have a right to mislead, and this is such a fundamental matter that I think we are right to pursue the issue. Of course, if it turns out that the information I was given was mistaken, well, in those circumstances, I shall be the happiest person of the lot, but I have to say that I think it is sufficiently serious in its nature and content that I would be failing in my duty as a Member of Parliament if we were not to seek to ascertain whether it was correct.

[John Redwood (Wokingham) (Con)]

Surely all that matters is what was in the Prime Minister’s mind—his reasons for making the decision—and we cannot work that out from the personal testimonies of lots of officials, some of whom met the Prime Minister about this and some of whom did not. The question is what was in the Prime Minister’s mind, and the House has had ample opportunity, which it has already used, to cross-examine him and to satisfy itself as to his true motive. I do not see how knowing what some officials thought helps at all.

[Mr Grieve]

If I may say to my right hon. Friend, last week, at Prime Minister’s questions, my right hon. Friend the Member for South West Hertfordshire (Mr Gauke) and I asked questions of the Prime Minister seeking to elicit an answer about his motive and state of knowledge, and I was rather struck by the fact that he avoided answering both questions completely. He made not a single attempt—my right hon. Friend should look at Hansard—to answer the question. I am afraid I do not have much confidence that my right hon. Friend the Prime Minister has the capacity—frankly—to answer questions of this kind, because he does not appear to understand how serious they are and appears to treat them with a high level of flippancy.

G7 Summit

John Redwood Excerpts

Tuesday 3rd September 2019 Commons Chamber

[The Prime Minister]

The right hon. Gentleman makes a serious point about the US’s attitude towards Russia. May I gently remind him that, when it came to the Skripal poisonings in Salisbury, the United States expelled 60 diplomats in support of the UK, in solidarity with the UK and to show their revulsion at Russian behaviour? As for whether or not it is right to have a Queen’s Speech, the Opposition have been calling for a Queen’s Speech just about every week—finally they get one, and they protest.

On the EU, it remains the policy of the Scottish nationalist party once we have come out of the European Union on 31 October—it is their avowed policy; they are inevitably committed to this by logic—to go back into the EU. That is what they say they want to do if they were to achieve independence: to submit to the whole panoply of EU law, to scrap the pound in favour of some unknown currency hitherto unbaptised—the Salmond, the Sturgeon or whatever it happens to be—and, above all, to hand back control of Scotland’s fisheries to the EU, just as they have been reclaimed by this country. What an extraordinary policy!

[John Redwood (Wokingham) (Con)]

Will the Prime Minister confirm that, from 1 November, it will be the UK Government and authorities in control of our ports such as Dover? Will he confirm that it will be the Government’s policy to ensure the smooth transit of food, pharmaceuticals and other goods into our country, as today, so that there will not be shortages?

[The Prime Minister]

I am grateful to my right hon. Friend. I can confirm that that is exactly what the Chancellor of the Duchy of Lancaster and others have been preparing for months and that those measures are now well in train.