New economic policy A better NHS

An important feature of the Brexit campaign was to take back control of our money. Many want to see cash from our cancelled EU contributions spent on NHS matters. I set out a Brexit budget for the referendum as an illustration of what can be achieved.

That budget included money to train, recruit and retain 4000 extra doctors and 60,000 extra nurses. It included cancelling student loans for nurses, and returning to grants. It offered extra money for a wider range of new drugs on the NHS.

The NHS can also be improved by reducing the rate of gr0wth of demand. This can be brought about by moving to a system of controlled migration, cutting the extra numbers needing NHS cover. It can be assisted by a better designed way of invoicing anyone coming to the UK from a foreign country for non urgent health treatment, who currently often receive it free.

The NHS needs to be encouraged to be better at determining who needs hospital treatment. At present too many people go straight to hospital instead of going  through the process of GP evaluation. In hospital many elderly people are detained when there is little or nothing  that the doctors and  nurses can do. Sometimes they have to stay in because there is insufficient social care arranged to allow them back home or into the community. There needs to  be more care outside hospital and better access to it.

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New economic policy Roads and railways

The UK has a large  backlog of missing transport capacity to catch up with. Labour cut the roads programme heavily on assuming office in 1997, and cut the total capital investment programme more in response to the 2008 banking crash. The Coalition made slow progress in reinstating the capital cuts.

The last government did concentrate on several very large schemes. It largely completed Crossrail in London, which had been planned under its Labour predecessor. It backed HS2, an expensive project to install a new London to the north route. It made early moves in favour of Crossrail 2. It was almost ready to make up its mind on  new airport capacity, but the politics of the Mayoral election in London followed by the referendum vote dealt a body blow to good intentions to make a decision. It delivered the Olympics projects, continued with various public sector led schemes in the North, and began the conversion of hard shoulders into running lanes on busy motorways.

So what should the new government do? It  needs to up the pace and scale of its response to the chronic lack of commuter rail capacity and main road space. It needs to review road junctions and railway crossing points, to improve safety and cut congestion.

Commuter capacity into and out of the main cities should be a railway priority. Removing bottlenecks on tracks, providing more track bypasses to allow more fast trains to intersperse the rush hour stoppers, taking out level  crossings and other hazards, extending train lengths and platforms, improving braking and cutting train weight to improve  acceleration and stopping times could all add substantially in total to commuter capacity.

So should more freight train activity be a priority. That requires more single waggon marshalling and more branch lines and sidings in modern industrial parks. It also needs more track capacity. Improved signalling throughput the network can assist in providing more  freight and commuter capacity.

On the existing A and B road network the government needs to work with Councils and provide more money for improved junctions. More segregation of right turning traffic and of cycles can improve safety and speeds through junctions. Switching more traffic lights to roundabouts can also assist flows.

 

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House prices rise in July post Brexit

Another Project Fear forecast bites the dust. According to the Nationwide Index house prices rose 0.5% in July and 5.2% for the year, a slightly faster rate than pre Brexit!

All those looking for a bargain home in the wake of the vote, as promised by some  on the Remain side, have  been disappointed.

Would any any of the doom mongers writing in to this  site care to explain?

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A new economic policy Affordable homes for more

The new government seems as wedded to tackling the housing crisis as the outgoing one. They will readily take up the ambitions and schemes proposed in the 2015 Conservative Manifesto to bring home ownership to more people.

Part of what they have to do is to continue with the plans of before. The schemes designed to help people with deposits, to make new homes for first time buyers more affordable, and to expand the general supply are all good  news.

The second part of what needs to be done lies on the demand side. The last government got nowhere near delivering its target of a two thirds reduction in net immigration. This government is pledged to take us out of the EU, which will enable it to put in place a points based system for work permits which can cut the numbers of unskilled and low skilled jobs being filled by EU migrants.

Out of the EU we will also be able to introduce new limitations on newly arrived people claiming benefits.

That will be good news. The large number of people coming into our country are adding greatly to the upward pressures on rents and flat and house prices, as landlords take advantage of the extra demand.

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More good economic news turns voters to Brexit

So the second quarter saw good UK growth despite the gloom mongers, despite all the uncertainty about the vote, and despite the pro Brexit vote before the quarter end. Meanwhile a leading pharmaceutical company confirms a large UK investment programme to confound the scientific pundits who said we would lose that kind of thing.

The latest poll shows 43% for the pro Brexit Conservative party and 13 % for the pro Brexit UKIP party, a total of 56%. The Lib  Dems who have argued for a second referendum and staying in the EU languish on just 8 % and are not picking up votes from Labours current difficulties.

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A new economic policy – prosperity first.

As the new government sets out its aim to put prosperity first, and to spread higher incomes and wealth more widely around the country, it needs to alter energy policy.

Fundamental to faster growth and higher real incomes in the UK must be more and cheaper energy.

Scrapping VAT on domestic fuel as Vote Leave proposed would be a welcome start. People on lower incomes are particularly hard hit by fuel prices and taxes.

The decision to put Energy into a new Business department led by Greg Clarke is a good idea. It is important to understand the need for lower priced and more plentiful energy to business. The department needs to get to work on a new regulatory framework which will ensure more baseload gas combined cycle electricity generation. The UK also needs to tap into more of its reserves of oil and gas.

The loss of steel, aluminium, glass, ceramics, basic chemicals and other areas has reduced our industrial base. This has been speeded by dear energy.

With a background of very low interest rates and a plentiful supply of new bond finance, it should be possible to make faster progress with providing the new power stations and energy facilities we need. Out of the EU the department can review energy policy to ensure continuity of power supply, sufficient capacity, and more affordable prices. It was interesting that Theresa May reformulated the aims of energy policy in her economic speech just before becoming Leader. A new fleet of combined cycle gas stations may be the best way to offer industry the cheaper power it will need to expand, and to rebuild industrial opportunity across the country.

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Good and bad consultants

Much modern government depends on consultants. If a Council or the central government needs access to special knowledge or expertise on a temporary or one off basis, then consultants can be a good idea. There are some excellent lawyers, architects, surveyors, finance specialists and others that the state can hire to perform specific roles which it would not wish to employ full time at high salaries in a government department.

There can also be too many consultants. Consultants are bad value if they are hired to do regular work that could be undertaken by full time departmental staff more economically. They are bad value if they come in and seek to perpetuate themselves by making things more complicated than they need be, with a view  to creating a semi permanent role. I have come across this from time to time with transport and highway consultants. Many Councils today use these firms instead of having their own highway planners and engineers propose road schemes and then implement them. The consultants often wish to develop very expensive traffic models, then design schemes that can defy common sense. Sometimes these schemes get shot down by the democratic process before damage is done on the ground. Other times they are implemented, and can make the situation worse. Usually the consultants put in a traffic model  which then needs updating, offering them future work. If a Council does need a model then it should either create it itself, or buy it as a one off and update it itself.

There are rumours that a large number of very expensive lawyers and consultants are being hired to handle the Brexit negotiations. That is exactly what we do not want or need. There are MPs and think tanks who have studied and written extensively on EU matters who are happy to brief the officials being transferred into Brexit departments pro bono for free. I read that some of the consultants are busy working up the Norway option. Why?  The Leave campaign ruled that out at the beginning. There can be no compromise on freedom of movement. We just need to take back control – and soon.

 

During the many debates I did with the professional and business communities I was impressed by the lack of knowledge of the Treaties, the Directives and the institutional architecture of the EU shown by many of them. What is the point of having consultants if they have not read Lisbon or debated the Single European Act?

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Another rise in the FTSE 250

Today saw another strong rise in the FTSE 250 taking it back to near the year’s  high and the high level it reached on Referendum day.

When I pointed out how well the main large company Index the FTSE 100 did after the vote, the doom mongers said the FTSE 250 smaller companies was  a better guide to the future. so would they now like to write in and tell us why the FTSe 250 has done so well in July. Were they too pessimistic before?

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I see no recession

People who are out to talk us down and into recession should get out more.

On Saturday afternoon I took some time off to go to the Globe theatre. I walked along the south bank to get there on a sunny day. It was extremely difficult doing so, as the generous walkway was crowded with people. At each of the attractions, like the London Eye, there were long queues to pay and visit.  The numerous cafes and restaurants were packed, even though I was not passing at a peak mealtime. When I and my friends did buy lunch it was a good job I had booked well in advance as the place was completely full.

The London I walked through is still a forest of construction cranes. A large building of very expensive new flats was  opening for occupation. I was told 80% of them are already sold, with the small starter unit costing an eye popping £800,000. That must be foreign  buyers still coming.  The tube is regularly overloaded, and not just at peak hours.

In Wokingham local  businesses tell me their turnovers are fine, and employment remains at very high levels. Estate Agents report a  brisk trade with many viewings and offers for properties at or around asking prices. The Wokingham traffic is as bad as ever, implying plenty of activity. Some of  commercial property funds which gated following an early rush for the exit, are now facing inflows from buyers and having to adjust their pricing upwards to take this into account.

With employment up, real wages up, interest rates down and money and credit expanding a recession is unlikely. Government borrowing rates have just got much lower, the FTSE 100 is up over the last month, and there is plenty of activity in the commercial property market. One company has just reported letting some remaining space in a City building at £100 a square foot.

 

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We do not want a 7 year transition for freedom of movement!

The UK did not recently vote for a slightly beefed up version of Mr Cameron’s attempted renegotiation with the EU. We voted to leave, to take back control of our laws, our money and our borders. Those phrases were repeated throughout the Leave campaign, heard and understood by many, and approved by the majority of voters.

The rest of the EU is missing the point. There should  be no negotiation over taking back control of these important matters.  When the Conservatives lost the 2005 election – partly based on Labour’s lie of no more boom and bust – we did not try to overturn the election result, take them to court, or demand a re run! We accepted the verdict of the UK voters.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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