I gave an interview yesterday  to Talk tv about Bank of England monetary policy.

I called for an urgent review of their economic model and forecasts. The Bank has admitted its forecasts have been wrong on inflation  for sometime but have announced a long winded review of what to do about it. If they cannot forecast inflation well it is difficult to understand how they can carry on setting rates to adjust inflation.

Their justification of a fourteenth rate hike this week was they needed to depress demand more to cut inflation further. They wish to do this by hitting the spending power of those with mortgages. It does not seem to have occurred to them that raising rates increases the spending power  of those with savings. Their current policy is creating a manufacturing and housing recession.

I called for an end to selling bonds at huge losses. They pass the bill to the Treasury and are now lurching from creating too much money to destroying too much. Letting their balance  sheet contract as the bonds repay is sufficient a squeeze.

Why does the Bank lurch from inflation to recession inducing policy yet again?

find my interview with Talk TV’s Mike Graham on You tube where we discussed the Bank of England’s forecasts and monetary policy.

You can find it between: 33:4344:23.

We have discussed the  strange agreement in much public debate that there are a defined  number of public services which need to be in public ownership or control owing to their importance to our lives.  These include the obvious ones of health and education, where it is a generally agreed fundamental that the state should pay for the care and education. There is no need for the same state involvement in water, rail travel, and electricity  where customers pay. The danger is they want monopolies in the utilities, when customer choice is crucial to higher standards, more innovation and lower prices.

Health and education are special cases. All main parties agree healthcare and schooling should be available free to anyone who needs them, so all agree the state has a big role. There remains choice and competition for those with good incomes, with some people opting to send their children to fee paying schools or to buy private healthcare despite their eligibility for the free public service.  The state allows a smaller private sector to compete whilst charging patients and pupils. The state also harnesses substantial private sector involvement in these services. Both main parties have accepted all drugs are supplied to the NHS by competing companies, many for profit. Both have accepted substantial private provision of meals, cleaning and other essential services within health and education. The NHS continues with many GPs as private contractors. The large pharmacy based sector provides  healthcare for profit for more minor aliments.Labour introduced the idea of the NHS buying in medical capacity from private hospitals and clinics.

The other ones on the list of those who think the state should own or run them are all privatised utilities where customers have always paid all or  most of the bills for what they use. Instead of offering everyone free or subsidised water or electricity, money is given to those on lower incomes to help them afford these bills for essential needs.  There are competitors to many of these offerings. Rail travel faces formidable competition from road and air travel with much larger private involvement. Competition was deliberately built into the privatised models for telecoms and energy, to provide more forces for innovation and better prices. Water was not given so much competitive challenge which has lessened the favourable impact of privatistion. Some say these are natural monopolies.

The truth is there is no natural monopoly. It is easy to have competing producers of electricity. You can run competing trains on different lines – west coast and east coast  to Scotland for example – and you can use a regulator to ensure train pathway allocations over fixed track for competing services in many places. You can let competing water companies gain access to common pipes, as oil and gas suppliers share pipes for some of  their deliveries.

Competition puts the customer in charge.  It drives innovation and productivity improvements and forces companies to deliver high quality services. Monopoly does not create the same benign pressures and leads to everyone blaming the government that owns them for poor performance and poor quality.Instead of calling for further nationalisation of water or rail those who want better service and more provision should  call for more competition.

I was used to an open democratic process when helping make laws in the UK. A Green paper setting out the problem and legislative options invited those with  views to suggest improvements or alternatives. A White Paper setting out a detailed government proposal invited forensic criticism. Three readings in each of the Commons and Lords, with a detailed scrutiny of the draft line by line on Committee ensured plenty of opportunity for MPs, peers and outside interests to defend or attack the idea of the bill and to work to improve its details. At every stage the public could be involved. Every stage was undertaken in public.

The EU system as so different, restricting public discussion and scrutiny. The main debates over the draft laws took place in secret. The Commission drafted the law. Ministers from member states were not meant to draft laws or even to table amendments. It is true that over the years the European Parliament did develop more open procedures to consider draft laws, but only based on  laws the Commission had written and the Council meeting in private had approved.

As a legislating Minister I wanted to open it up for wider public scrutiny. I did what I could by showing drafts to the UK parliament and encouraging debate there before I went to Brussels to negotiate. I kept in my mind what each country had said about the draft when the Council came to debate it and sought to share this with the press. The press were not interested. They explained to me that they needed stories on all the days I was not in Brussels, and the Commission took a dim view of anyone saying what had happened in the Council. Of course many Ministers did tell their national press what they wanted them to know about their own role, without having to worry about anyone having a different recollection of what they said and did.

In practice most Ministers went along with the Commission that they needed to reach an agreement, however needless or undesirable yet more laws might prove. I objected to the way there was no official opposition saying either we did not need that law, or telling the Commission how it  needed a major rewrite. At every stage in the UK Parliament the opposition is there to challenge the need for a law, the principles behind the law, and the detail of the draft.

No wonder we ended up with so much law that proved to be anti innovation, complex, bureaucratic and costly. It is a major brake on the progress of the European economy.

The worst job I was given in government was the UK’s single market Minister. I held it at the time of maximum activity, with the EU claiming it needed to hurry through a substantial number of new laws to complete the so called single market programme for 1992. They wished to regulate so many different sectors and activities in the name of freer trade. I found myself in disagreement with the underlying theory. You do not need to standardise everything to have a successful market. You do not need to lay down required methods or standards for every good and service to be offered for sale. It seemed as if the single market was being used as an excuse for a large expansion of EU power.

The EU believed in the doctrine of the occupied field. Starting from a position where member states made their own laws and enforced their own justice, the EU wished to get to the point where the EU made most of the laws and had superior powers to national legislatures to impose and enforce their preferred ways of doing things. If the EU could get any directive or regulation agreed for a new sector or area, however weak or general, it could then go on to more detailed legislation on the grounds that it had already established its competence in the chosen area.

The EU also practised code based law where they wished to set out in detail what you could do rather than the common law approach where you could do as you wish subject to specific bans or general duties to act safely, responsibly etc. To me a single market just required the enforcement of a rule their court had already established in the cassis de Dijon case. If a product was offered for sale and was of merchandisable quality in one country in the EEC then it could be offered for sale in another without further regulation or checking. Labelling would tell customers sufficient so they could make their own decisions about whether they wanted to buy a product from another country.

I found the EU was hectoring and bullying if you objected to their legislative proposals. Meetings were always being pressured to pass more laws, whether the laws made sense or were good or not. I had to spend a lot of time trying to build blocking groups of countries against draft laws which I thought particularly damaging or needless.  It was never ending work as the Commission and rotating Presidencies were merciless in wanting to get laws through in bulk.When I protested that people would not want an extra law on a topic the reply usually disparaged the people, as they did not approach lawmaking in a democratic way.

Now we are out we can refine our common law system which is more useful to the rest of the world than the EU code system. It is very disappointing that so many people in the UK governing establishment are unable or unwilling to grasp and use our new freedoms, but great to know we can if we wish. The EU still wants to treat us as a naughty member who needs to obey their rules.The UK  government needs to move on from the misery of compliance rows over their spiders web of controls. Time to use and enjoy our freedoms.

In 1973 when the UK joined the European Economic Community it had to impose tariffs on Commonwealth countries, put in VAT and confine its free trade ambitions to the European continent. There was a sense of betrayal in New Zealand and Australia where they saw Europe replace themselves in crucial export areas like food. The UK was brusque and unhelpful to those countries that had done most to stand by Britain, especially during the long and brutal second world war when the UK was fighting against Germany and Italy, two founders of the EEC.

Winston Churchill put out many ideas about the future and about how the world might develop. He did envisage a European Union, though any careful reading of the relevant speeches makes clear that was for the continental countries and did not include the UK herself. His work has been much traduced since by those who claim he was an early pioneer of the EU. To reinforce the point Churchill wrote a long four volume history of the “English speaking peoples”, not of the Europeans. That concluded that he thought there would be a union of the english speaking peoples and it would begin as a defence alliance.  All his life he had closest affinity with the English speaking world, from his family and strong political links with the USA through his early adult life in South Africa to his passions for Empire and then for Commonwealth.

Today this takes shape. The UK is a member of the five country 5 Eyes alliance for sharing deepest intelligence with the USA, Canada, Australia and New Zealand that goes beyond what NATO members share. There is the 3 country Pacific AUKUS defence alliance with the USA and Australia. The USA and UK have been the leaders of NATO, given the French on off involvement and wish to create a separate EU defence arrangement. The TPP with a services chapter missing from many EU trade deals is more suited to the UK needs and may attract the  USA as a member to join the UK, New Zealand and Australia.

I do not myself favour unions of states and do not expect an eventual union of the UK with either the English speaking world or Europe. You do not need to be governed by trade partners to trade with them. Most jobs and income in the UK will continue to depend on home UK trade.