So just five months in the government dumps its most attractive and exciting promise to make the U.K. the fastest growing G7 economy. They want to perpetuate this century’s experience of falling further and further behind the US, clinging to EU style slow growth, high taxes and bad regulation and cosying  up for more of it.

Their excuse is they want a target that relates to how we feel and lead our lives. Boosting people’s spending power is fine, but of course it  would have happened with the faster growth they offered us for the election. Difficult to achieve without faster growth.

It makes many other Labour policies unhelpful. Most people who can afford it want to buy a petrol or diesel car. Labour will ban them soon.

Most people think U.K. energy prices are too high, cutting our real incomes. Labour put them up and want to close down more of our cheaper power generators.

Most people think their cars are the best way to get to work and the shops. Labour try to make driving dearer and more difficult.

Most people think taxes are too high and there are too many taxes. Labour puts them up on an industrial scale.

Many find it difficult to contact and deal with government who want people to deal with computers under threat of punishment if they make a mistake.Labour serves the civil servants not the public.

 

The railway is largely nationalised. The four train companies already run by  the state run like the others over fully nationalised track, signals and stations to government controlled timetables. Three of the fully nationalised ones have very poor records for cancellations and delays.

As we go into 2025  we learn there will be more inflation busting fare rises  next year with other train companies to be transferred to state control.Far from the end of the need for profits to bring fares down, the arrival of bigger losses and the limits on subsidies will drive prices up more.

British Rail was in continuous decline as a nationalised industry. It was a big loss maker.It kept getting rid of staff. It lost passenger numbers regularly. It did not adjust to changing patterns of travel. It lost much of its freight business by being too inflexible over waggon loads and failing to put branch lines and sidings into new industrial parks in the way it had before WW2.

Nationalisation of the railways will bring higher fares, no improvements in service quality and insufficient innovation to reflect changing travel and demand patterns.

There is talk of renationalising the steel industry. Why pay to take over an industry which dear energy ,high taxes and other problems have just led into closure. Why buy a steel works with blast furnaces that are shutting? The government is wrong about losing basic steel making. If all it wants is some steel recycling plants there are cheaper ways of getting the private investment they need than nationalising what they partly replace.The government could hold a competition to see who would build and run recycling plants and to see how much subsidy and other support they would want.

 

One of the main reasons the  US is a lot better off than the U.K. and growing much faster is the UK’s self harm policies in the name of net zero. Under President Trump the US increased its output of oil and gas by 50%, adding plenty of extra tax revenue and well paid jobs. Even under President Biden more oil and gas licences were allowed and output went up a bit more. Both Presidents put America first and encouraged much more US based manufacture by tax breaks and subsidies. As a result the USA was able to save Europe over the Ukraine crisis, sending LNG from its own surplus to replace Russian gas. Meanwhile the current U.K. government has

1 Banned all new oil and gas exploration

2 Delayed or blocked opening up new oil and gas reserves about to be developed

3 Increased high windfall and corporation taxes on domestic oil and gas to ensure remaining investment is throttled

4. Strengthened emission trading, carbon taxing and high company  tax regime and put up managed energy prices to make high energy using business in U.K. very uncompetitive

5 Allowed policy mix to lead to closure of Grangemouth refinery to make us more dependent on imported oil products

6. Confirmed inherited policies and approved closure of all remaining  steel blast furnaces

7. Failed to commission new gas fired power stations which previous government was looking at, and altered policy to end their use by 2030 to decarbonise generation then

8. Delayed decision on which bidder will take forward work for a fleet of new smaller nuclear stations

9. Brought forward ban on all petrol and diesel car sales to 2030 and failed to remove fines for unrealistic inherited targets. Plant closures now following.

10. Failed to find a buyer for Britishvolt giga battery project which had entered administration

11. Unconcerned at hostility of policy mix to ceramics, cement, paper, glass, aluminium, petrochemicals and plastics manufacture in U.K. Likes the  import model.

Policy needed  amendment to promote industry when they came to office. Instead Miliband’s sole preoccupation with domestically produced CO 2 has made the U.K.uniquely  hostile to high energy using industry. It is no good the  Industry Secretary saying he doesn’t agree with deindustrialising when that is his government’s  policy. It is a tragedy for the U.K. It will bizarrely increase world C0 2 given all the extra fossil fuel expended on the imports.

 

 

The government thinks it has to choose between following the EU more or the USA. As its main aim is faster growth to afford better public services, it needs to recognise this century the US has been growing more than twice as fast as the EU. Making the U.K. more like the EU would mean dragging our low growth rate and GDP per head further down  to get to the EU average. Why do that?

US faster growth hinges on four big differences

1. Going for so much more output of domestic gas and oil, whilst the U.K. is seeking to accelerate our exit from oil and gas production. This sector is a big source of tax revenue for public services, and of well paid jobs.

2. Going for abundant cheap energy. US electricity and gas prices for industry are around one third or less of sky high U.K. industrial prices .The U.K. is busily closing down steel, ceramics , cement, paper, glass, aluminium and much else as energy is so dear. The U.K. makes energy dear with high taxes, carbon pricing and emissions trading.

3. Allowing and encouraging digital revolution companies to expand. The US has led the world with on line shopping.software, search, data  centres, A I and the rest. The U.K. and EU have sought to regulate the industry and to find ways to fine and limit the US success stories,

4. Spending a lot on defence with plenty of spin off from home based defence production to civilian applications. The EU and U.K. have spent less, imported more and innovated less.

I am glad the PM is going to sharpen up his government and set out aims with targets so he can be judged on outturns. I assume he will keep the main target which drove the election strategy, which I have always welcomed. That is to go for faster growth, to make the U.K. sustainably the fastest growing G 7 country.

He should learn from his first few months. He has spent far too much time, political capital and public money on travelling to sort out the alleged concerns of other countries. PMs need to tell the Foreign Office that the U.K. comes first, and that the Foreign Secretary can handle much of travelling. With a tight budget giving lots of money to Mauritius and giving Chagos away is a bad idea. Being one of only 4 of the G20 leaders at COP 29 was also doubtless an expensive trip, agreeing to treble U.K. contributions to emerging economies by 2035. Seeking to lead Western responses to Ukraine without backing a Trump peace initiative runs the risk of helping split the European and US responses to a crucial war.

Seeking a better relationship with the EU will not unlock extra growth. We grew slowly this century in the EU. Now we are out we have a Free Trade deal and our exports are up since 2016. The EU is mainly a source of imports which far exceed exports. More imports reduces National output and income, making  us ever more dependent on energy imports from Europe is an especially damaging anti growth policy.

In future pieces I will look at other policy changes needed to hit the demanding growth target. Today the message is simple. Spend more time on domestic problems, PM. Do not keep on making concessions to foreign countries.They just think you are weak and will ask for more. They cannot vote for you.

 

I have been reading Boris’s account of the last few storm tossed political years. It is written with panache and wry humour, avoiding boastfulness and self pity. It sweeps you along with his boosterism, his impishness, his sharp observations of events and people and his ability to see what others saw.

I was particularly interested in how he handled the economic performance of the government 2019-2022, as he had often invited me in to talk about it and I had prepared various slide shows for him setting out the likely developments and the options. As readers of this site will know, I was very critical of Bank and Treasury policy, and alarmed by the huge negative impact such a long and comprehensive lock down for covid would have. I had with a few other MPs led by Mark Harper fought for a different approach to the pandemic.

I was surprised to read that Boris did like what I had been telling him, as I did not get the policy changes I was pressing. He writes “Before I became Mayor in 2008 he (John Redwood) used to drift into my room in Parliament and we would talk economics. You can take it from me :he forecast the financial crash perfectly and uniquely. The Queen famously asked “Why did no one see this coming?  and she was right that almost everyone missed it except Redders. So I took him seriously and I instinctively agreed with him”….”He sent me email after email warning me that they (the Treasury) were trying to box me in, trying to go back to austerity – the very policies voters had rejected in 2016. We had the room for manoeuvre, he said. We had space to cut taxes and really unleash the animal spirits of the wealth creators”

He goes on to describe how he pressed his Chancellor to do more to promote growth and to cut taxes, whilst reining in the over large administrative overhead that had greatly expanded over covid, and wasteful spending where I had also made suggestions. This policy would have worked  much better than the adopted mix. I had also raised the issues over the Bank of England and its inflation and recession inducing balance sheet policy but that does not appear in the memoir.

It was the same mix I proposed to Liz Truss who decided on the tax cuts whilst expanding spending at the same time, not a wise combination given Treasury and Bank views. She also ignored the advice on the Bank balance sheet which as she arrived was being  used aggressively to promote recession, after a long period creating inflation.

 

The U.K. government has been completely silent on how much extra money the state will give emerging economies every year up to 2035 despite signing a formal pledge that the world annual total from 43 richer countries will treble.

So far the U.K. pledged £11.6 bn of state finance over the period 2021-2 to 2025-6. Unlike other countries that mainly offered loans the U.K. mainly sends grants. (85%).

Given taxpayers had to pay for the travel and hotel bills of 470  U.K. participants in COP 29 you would have thought they could provide the PM with a clear bill to present to the Chancellor, and should tell the rest of us who will be paying  it.

If over the next five years we just double the last, on the way to trebling  next decade, that is another £11 bn black hole entirely of this government’s making.
Time to come clean.

I find in the book on Truss a  wrong assertion about myself

p 77  “John Redwood was a figure early on at Chevening until he made it clear he didn’t want to become minister for personal financial reasons, so he was replaced by Chris Philp, who was to succeed Clarke as Chief Secretary to the Treasury”

I was not offered any job by Liz Truss at any point. I made no statement on my finances.   When I went to Chevening Chris Philp was already part of the team they had assembled there. I went to offer her advice on what a first budget could look like. I included a number of tax cuts designed to speed growth though no income tax rate reduction. I proposed some offsetting  spending cuts and a much more modest energy support package than they adopted based on  helping those on low and no incomes. I  wanted to keep the deficit under control.

 

Anthony has agreed to correct this .

Today Parliament will take a vote on the principle of legalising the assisted death of terminally ill people who wish to die

I have no special insights into this topic and have not studied the two cases. Had I remained as an MP I would have widely consulted with constituents and voted in accordance with where I thought the majority lay. I would not have argued a case or adopted a view of my own. Today I have no need to decide as I have no vote.

As a result I am offering this unusual short opinion free blog as an opportunity for those of you who know more of this than I do or who have a strong case to make to do so.

The case for assisted death majors on the desirability of people having this freedom. The case against rests on the dangers of others placing undue pressure on a sick person and of a wrong diagnosis of how ill the person is.

The ONS upward revisions to past migration figures are huge. Some here have commented before that they did not trust the figures. With so many people entering and leaving legally, judgements have to be made about which ones are going to stay for a longer time, with or without permission. The authorities also need to enforce better where a person enters as a short stay visitor then embeds as a resident without the necessary permit.

The numbers reinforce the need which some of us stressed to the last government that policies had to change to make a very large reduction in legal numbers. Finally this January the government did put up the minimum  income level for a job, limit dependents coming with students and sought to limit the occupations qualifying for work visas. As a result legal migration is said to be down 20% from a very high peak.

Today’s debate should be about what further measures will this government take to cut numbers more? The income level needs to be raised higher. There need to be more sector work plans to get more U.K. non working residents to take jobs, as was done with drivers post Covid. This is implied by the government’s back to work policy but needs more detail and urgency.

The case for much lower has often been set out here. Too many low pay and no pay migrants leaves us short of homes, NHS capacity and other public facilities. It may be cheap labour for companies but dear for taxpayers.