During the pandemic a Conservative government presided over a major expansion of state debt offset by a major purchase programme of that debt by the Bank of England, itself owned by the same state. This mirrored a similar exercise by  Labour and the Coalition 2008-12 to overcome the banking crash the authorities engineered in 2007-8.

It looks as if on both occasions the state has got away with it. By the end of this year The Bank o& England will own £875bn of UK government debt which is therefore no longer a debt the state owes to overseas investors or to UK savers, but to itself. Normally states cannot get away with effectively just printing money to spend because it is inflationary. In the conditions of collapsed demand both brought on by the banking induced recession and then by pandemic closures creating so much fiat money was not inflationary. Whilst the Bank observed the nicety of buying up second hand government bonds instead of just giving the new money to the government to spend, it underwrote the government borrowing at close to zero interest and has removed the need to repay the debt to third parties.

Some say the pandemic printing may yet prove inflationary. It is true that like the Great Recession printing it has proved inflationary for financial assets and houses but so far general inflation stays around target. It could get more inflationary if wrong decisions are now taken about carrying on printing and borrowing too much. This is happening in the USA where inflation is already at 5% but the Bank of England has wisely announced an end to money printing this year. There still needs to be a stronger recovery before undue  monetary tightening.

The government response to the pandemic here and in most countries around the world damaged the free enterprise parts of economies, boosted state spending and borrowing and greatly increased state control. In the next few blogs I am going to look at where this is now unhelpful and how it can be reversed as economic recovery advances and as pandemic controls are dismantled. I am conscious that some officials in government posts and most MPs in Opposition parties will see the special measures for countering the pandemic as desirable in themselves and an advance they wish to consolidate and extend . The Opposition parties have been ever keen to vote for more restrictions and more state spending, and reluctant to countenance relaxation or tapering of special financial support. There have been few voices speaking up for the many small businesses that supply so many of our needs.

Whilst people were prepared to accept direction of where they worked or whether they worked, when and where they could go out and which if any friends and family they could meet in order to defeat a killer disease, there is no reason to carry on with such draconian controls with the death rate massively down thanks to vaccines. Government should expect increasing opposition to lockdown and growing resistance to the advice on how to lead our lives. We cannot still claim to be a free society if we carry on with the very detailed controls and regulations we experienced during the various lockdowns. The first necessity is for government to reassure us we will not be going back to lockdown if cases rise again of a disease that usually now remains mild thanks to vaccinations.

The economic cost of lockdown must remain a one off for 2020-21, not a recurring scarring of our economy matched by a progressive build up of state debt. The sooner furlough is no longer needed, the sooner the labour market finds the people to fill the many vacancies there now are, the better. The remarkable thing is how many businesses are ready to go and wish to recover quickly despite all the obstacles of lockdown and the long delay in removing controls.

The EU Treaty contains the following:

Artic1e 8.1 The Union shall develop a special relationship with neighbouring countries, aiming
to establish an area of prosperity and good neighbourliness, founded on the values of
the Union and characterised by close and peaceful relations based on cooperation.
2. For the purposes of paragraph 1, the Union may conclude specific agreements with
the countries concerned. These agreements may contain reciprocal rights and
obligations as well as the possibility of undertaking activities jointly. Their
implementation shall be the subject of periodic consultation.”

The EU is very bad at getting on with its neighbours. This is despite the clear legal requirements it has imposed on itself through the Treaties to have good relations with neighbouring countries and to advance free trade with them. The EU has led Turkey and Ukraine to believe they could become full members, enticing them into signing up to very restrictive Association Agreements that have caused them problems. The EU has allowed a lot of fences and walls to b e put up from Ceuta in the west to Hungary  in the east to try to stem the flow of migrants as it struggles to control its own borders.

Since the UK left the EU and its single market the EU has gone out of its way to try to drag the UK back into membership by its excessive and unfair interpretation of the Northern Ireland Protocol. France has taken UK money to assist in stemming the people smuggling across the Channel but delivered limited results. The EU as a whole keeps sending large bills which it claims we still owe even though we are no longer members and no longer receive any money back from their general budget. Many other countries around the world have found it difficult or impossible to negotiate a free trade agreement with the EU.

The UK has been too tolerant of EU behaviour, and needs to be more independent to deliver the Brexit the majority voted for.

Sir John Redwood (Wokingham) (Con): The success or failure of the COP26 rests heavily on whether the UK, as chairman, can persuade China—the world’s largest emitter of carbon dioxide—to set tough targets to cut its output. Is this affecting the Government’s response to this issue? What is the UK’s strategy to influence China across the piece, as there are many areas where it needs to do so?

The Minister of State (Mr James Cleverly): I can assure my right hon. Friend that the actions of the UK Government in response to this cyber-attack are driven by this cyber-attack and our complete unwillingness to accept it as a pattern of behaviour.

He does make an incredibly important point though, and it reflects the point that I have made that we cannot simply ignore China. A previous question this morning highlighted the fact that China is still heavily reliant on coal as an energy production source, and we know the climate change implications of that. We want China to behave better on the international stage both on things such as cyber-security, intellectual property and human rights, but also on the incredibly important agenda that will affect our children, our grandchildren and our great-grandchildren, which is the protection of the environment and a move towards greener energy generation.

I thought I would reproduce the government’s statement on its Borders bill, as some of you are complaining that the government is not doing enough to stop illegal migration and some are concerned about government intentions.

The Bill will be firm but fair: fair to those in genuine need, but firm to those who break
the rules.
The principles behind the Bill are simple. Access to the UK’s asylum system
should be based on need, not on the ability to pay people smugglers; Illegal
immigration should be prevented. Those with no right to be in the UK should
be removed. Those in genuine need will be protected.
The case for change is overwhelming.
The system is broken. We stand by our moral and legal obligations to help
innocent people fleeing cruelty from around the world. But the system must be a fair
one. In 2019, UK asylum applications increased by 21% on the previous year to
almost 36,000 – the highest number since the 2015/16 European ’migration
crisis’. The current appeals system is too slow. As of May 2020, 32% of asylum
appeals lodged in 2019 and 9% of appeals lodged in 2018 did not have a known
outcome. Shockingly, the asylum system now costs over £1 billion a year to run.
The Bill – and the wider New Plan for Immigration – has three key objectives:
1. Make the system fairer and more effective so that we can better protect
and support those in genuine need of asylum. Over the last six years the UK
directly resettled 25,000 people from places of danger – more than any other
country in Europe.
2. Deter illegal entry into the UK breaking the business model of criminal
trafficking networks and saving lives. Small boat arrivals reached record levels this year, with over 3,700 people arriving in the UK this way in the first
five months of 2021. This is more than double the comparable figure for
2020.
3. Removing from the UK those with no right to be here. In 2019, enforced
returns from the UK decreased to just over 7,000 (7,192), 22% lower than the
previous year, and continuing a downward trend since 2013.
To make the system fairer and more effective, we will:
• Continue to resettle genuine refugees directly from places of danger, which
has protected 25,000 people in the last six years
• Continue to offer refugee family reunion, which has seen a further 29,000
people come to the UK over the last six years
• Meet our statutory commitment to lay in report in Parliament on the
outcome of the safe and legal routes review including family reunion for
Unaccompanied Asylum Seeking Children (not in legislation but being taken
forward alongside the Bill)
• Improve support for refugees to help them build their life in the UK, integrate
and become self-sufficient members of our society.
• Introduce a new temporary protection status for those who do not come
directly to the UK or claim asylum without delay once here but who have, in
any event, been recognised as requiring protection. This status will afford only
basic entitlements whilst still meeting our international law obligations.
• Introduce reception centres for asylum seekers and failed asylum seekers who
require support (to replace hotels) so that they have simple, safe and secure
accommodation to stay in while their claims and returns are being processed.
• Introduce a new and expanded ‘one-stop’ process to ensure that asylum,
human rights claims, and any other protection matters are made and considered
together, ahead of any appeal hearing. This will prevent repeated last-minute
meritless claims that are simply designed to frustrate proper removal. Introduce a
new legal advice offer to support individuals so that all relevant issues can be
raised at one time.
• Strengthen the law to withhold modern slavery protections from serious
criminals and those who pose a threat to national security, set out the
circumstances in which temporary leave to remain should be granted to
confirmed victims of modern slavery and clarify the decision making thresholds
for potential and confirmed victims, in line with our international obligations.
• Reform nationality law to make it fairer and to address historic anomalies.
To deter illegal entry into the UK, we will:
• Introduce new and tougher criminal offences for those attempting to enter the
UK illegally by raising the penalty for illegal entry from six months’ to four years
imprisonment and introducing life sentences for people smugglers.
• Provide Border Force with additional powers to:
o Search unaccompanied containers located within ports for the presence of
illegal migrants using them to enter the UK;
o Seize and dispose of any vessels intercepted and encountered including
disposal through donation to charity if appropriate;o Stop and divert vessels suspected of carrying illegal migrants to the UK
and, subject to agreement with the relevant country such as France, return
them to where their sea journey to the UK began.
• Increase the penalty for Foreign National Offenders who return to the UK in
breach of a deportation order from six months’ to five years’ imprisonment.
• Implement an Electronic Travel Authorisation (ETA) scheme, similar to the
USA ESTA programme, to block the entry of those who present a threat to the
UK.
To remove from the UK those with no right to be here, we will:
• Confirm that the UK may remove people including criminals to a safe third
country and declare as inadmissible those who come here from a country where
they could have claimed asylum, so that they can also be removed to another
safe country
• Introduce expedited processes to allow rapid removal of those with no right to be
here
• Introduce a power to impose visa penalties on countries that do not cooperate
on the removal of its nationals who do not have a right to be in the UK.
• Ensure that compliance with the asylum or removal process without good
reason must be considered in deciding whether to grant immigration bail.
• Increase the length of the window in which Foreign National Offenders can be
removed from prison under the Early Removal Scheme for the purposes of
removal from the UK.
• Place in statute a single, standardised minimum notice period for migrants
to access justice prior to enforced removal, and confirm in statute that a new
notice period does not need to be re-issued following a previous failed removal,
for example where the person has physically disrupted their removal.
We need to act now.