John Redwood MP

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UK repays a little debt in July

The UK borrowing figures are coming out better than the Office of Budget Responsibility and some other forecasters have been suggesting. In July we had the first July surplus since 2002, at £0.2bn. This leaves borrowing at £22.8bn for the year to date. It seems likely the government will borrow less than the OBR forecast of £58.3 bn for the year as a whole.

The main reason given for a better performance was the increase in self assessment income tax receipts. Total revenues were up 3.4% whilst spending was up by 1.6%. The total stock of official debt stays at £1758 bn or 87.5% of GDP. The effective stock of debt is £1323 bn or 65.8% of GDP, as the state has bought in £435bn of the debt and now owes itself this money.

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What should a UK foreign policy look like?

As we leave the EU the UK will be free to design a new foreign policy. Whilst it is true that the present Treaties allow an EU country to express a different view about a third country from the common EU line, it is becoming increasingly centralised with more resources being put into the EU diplomatic service and more loyalty expected to the EU High Representative’s view. In many areas, ranging from trade to climate change the UK and other member states have to accept the common line and allow the EU to lead. The UK is bound in to a trade policy by Treaty, and has to watch as the EU represents us at the WTO even though we have to pay a membership subscription to the WTO. There are many other bodies making standards and regulating business worldwide where the EU has taken over form the UK. When it comes to military intervention the UK and the others still have the power to decide for themselves whether to commit to common action or not.

The UK needs a new foreign policy not just to incorporate the areas the EU currently does for us, and the new freedoms we will have to shape a policy in our own national interest. We also need it to reflect on the problems caused by coalition and NATO actions in the Middle East and elsewhere in recent years. Many UK voters are critical of the UK’s policies this century, disliking the military interventions in Iraq, Afghanistan. Libya and Syria, and disliking the inability of the UK to argue its own case in matters like trade and energy to look after its own economic interests. Take back control was mainly articulated about migration, taxes and domestic laws, but it was also relevant to the conduct of foreign policy.

I wish to explore how we should use our new freedoms, and what we should learn from the military interventions of recent years, in a series of blog posts over the weeks ahead. Today I wish to start with the issue of what should be the main purpose of UK foreign and defence policy? I would propose that the main aims are

1. Creating friendly and positive relationships with our neighbours and partners, including promoting more free trade, more exchanges of ideas, investments, intelligence, cultural activities and the rest.
2. Having sufficient power to defend and protect the UK islands and our dependent territories, and sending clear messages of our resolve to protect ourselves should need arise.
3. Working with allies and partners to promote peace and prosperity worldwide, seeking conflict resolution and better economic development in troubled developing countries. Acting where we can make a difference for the better.
4. Recognising the limits to our abilities to reform or amend governments and their policies far from home. We are not to blame for all the ills of the world and cannot solve all the worlds problems.
5. Seeking mutual understanding with the major powers of the world, whilst being able in conjunction with our NATO allies to protect ourselves if diplomacy fails.

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How should the UK develop a European foreign policy?

The UK will need clear and well defined relationships with the EU and with Russia. All the time there are some powers for independent action, especially militarily, amongst the EU states, we will also need good links to Paris, Rome, Berlin and Madrid as well as to Brussels.

The aim of the relationship with the EU will be one of friendly collaboration. If we leave with a deal we will be continuing free trade with them as well as many close workings over Intelligence, defence, policing, trading standards and the like. If we leave without a deal and the EU decides to impose some barriers on our access to the EU markets, then the UK will have to retaliate with tariffs against their food, cars and other items attracting tariffs under WTO rules. This might then lead to a change of heart by the EU, who may wish to enter talks about how to remove those barriers again. The UK should be willing to do this, though there is no need for the UK to be desperate to do it or to give ground to secure such a change.

More difficult is our approach to Russia. I have no more time for Russia’s military adventures in eastern Europe than the western governments or NATO. I do, however, think there is a chance that Russia could be a better world citizen if the west collaborated more and resorted to sanctions and condemnations less. The west should of course keep up its guard and be aware lest Russia does resort to aggressive and illegal actions, but should not go looking for trouble. The West through the EU and NATO intervened in Ukraine in ways which provokes a mixture of anxiety and aggression in Russia, fearing for the security of its warm water naval base. Whilst this did not justify the illegal annexation of Crimea, the west did not facilitate a peaceful solution to this problem by allowing a referendum, for example, to let the people decide where they wished to belong as the UK has recently done in Scotland.

The UK has intervened too much in past centuries in continental politics and wars. Whilst the West did have to engage to bring Hitler down, it is more difficult to see what national interest the UK pursued in the First World War. The main aim of our foreign policy should be to keep out of continental rows and conflicts. The UK has sold the pass on the old idea that we need to stop a single power dominating the continent. It is now Foreign Office policy to encourage and allow the consolidation of power on the continent under the EU. In that case we need to be global in reach, have partners around the world, and keep out of the EU’s more contentious issues.

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