John Redwood's Diary
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Controlling immigration

Today we are promised a paper from the Home Secretary to reduce migration. She has the advantage that last year the Conservative government raised the amount you needed to earn to get a work permit and cut back on student dependents.

The two largest categories of migrants remain people getting work permits and students. The numbers get swollen by allowing dependents,  by granting students a transfer to a work visa, and. y people failing to return home when their visa runs out.

We hear the government might ask for a degree level qualification, cutting out lower pay and lower skilled jobs. There might be an A level requirement for English. These changes are unlikely to make much difference to numbers. Las t year brought a net increase of 728,000. It would be good to get net numbers down to near zero to relieve pressures on homes and public services. It is going to take tougher controls than are likely from this Home Secretary.

Brexit did not lose us trade or GDP

I am fed up with the idiot soundbite that says the  UK lost 4% of GDP thanks to Brexit. This is based on a long term Remain forecast that said the  UK might lose trade with the EU after Brexit which in turn over the longer term could mean 4% less productivity gain than otherwise.

This was always wrong. We now know our trade with  the EU has risen since 2016,not fallen.We know our GDP has followed a similar  path to the EU, hit by covid lockdowns. It has not fallen 4% more. We have not been allowed many of the gains we can now make if we use our freedom to run a more pro growth policy than the EU does.

The idea that productivity would underperform was based on the idea that as trade fell so there would be less international competition to drive cheaper and better. This was based on a wrong view we would not be able to trade more with non EU, which of course we are doing. Trade Agreements with the TPP and now India will help, but trade anyway is growing faster with non EU and is the majority of our trade as it was prior to the referendum. 

So wrong on all counts. Brexit did not reduce GDP. Trade with EU has not fallen, Trade with non EU has continued to grow faster. There is plenty of competition.

Meanwhile UK public sector productivity has slumped through bad management. Government has been busy banning or forcing out of business highly productive  sectors like oil, gas, oil refining and ICE cars which have been big exports to the EU.

We are promised a new migration policy

Far too many more people come to live in the UK every year. It is the main reason we are short of homes, and leaves us struggling to provide enough NHS appointments, large enough waste water pipes, sufficient roadspace for all the cars. Most of them come legally.

It is quite  easy to cut the numbers. The last government tightened rules last year. They need to be tightened further.The government should say to get a work visa the pay should be at least £50,000 , cutting out most jobs. We need to make more efforts to get the large numbers of people not working into jobs.

Student visas should only  be available for reputable Colleges offering approved  courses. Students should not be able to stay on after the end of the course. They should not bring in dependents.

The government needs to do much more to stop illegals. They should not be put  in hotels. They should be questioned about how they got here and who they paid. The boat drivers should be arrested and prosecuted. They should not be allowed to start a claim to stay here if they have entered illegally.There are plenty of legal routes to claim asylum.They should need to show their passport or other ID document.

Brexit wins with two more trade deals

There were three wrong propositions behind the Remain  campaign :

1. The EU was primarily a free trade club which we had to belong to to trade with them.

2. Trading on most favoured nation terms with countries under World Trade rules did not allow much trade.

3. Their gravity model forecasts assumed you could only  trade extensively and successfully with near  neighbours. They still use false forecasts from this system instead of now using the outturn data which was so much better.

The EU was and is a European union gaining ever greater powers and controls over all aspects of member states governments. It is a currency union, has a common foreign and security policy, shared frontiers, integrated transport systems, mandatory environment policy and much else. It is not a free trade area. It is a highly regulated customs Union.

Trading onWTO terms has produced big increases in trade between WTO members as barriers and tariffs were brought down. Our trade with the US has grown well with no Free Trade Agreement to supplement WTO membership.

Trade has expanded greatly with faster growing economies on the other side of the world, as with China.

Over the last week the UK has been able post Brexit to negotiate a Freer Trade Agreement with India and a trade deal with the US. Since leaving we have rolled over all the EU trade deals with third countries and gained improvements in some. We have joined the big and important TPP .

Since 2016 our trade has expanded well. The fastest growth has been in services and in the larger share of our trade which is with non EU countries.

The impact on growth and GDP is assessed at just an extra 0.1% from the Indian Agreement next decade. The US deal abates the damage done by higher US tariffs on our exports but still leaves us with a negative on growth this year.

Growing up under the long shadow of world war

My first memories of the impact of the war as a pre school child growing up in Canterbury were of a  bomb site. The city had been badly damaged in a Baedeker raid. By the time I was born  the shopping centre area by the Eastgate had been completely rebuilt. It was only one day when my mother walked me past a large piece of wasteland beyond the city walls that I asked about it. Why full of weeds, and why were there remains of low brick walls?  My mother was reluctant to answer, told me it was a bomb site and wanted to change the topic. Understanding nothing I asked more and got out of her that some people were so nasty they blew buildings up , dropping bombs out of aircraft. As I tried again a worse truth was half peeking out. These people were so nasty they blew them up with people still inside them. I could not fathom why anyone would want to do that. A fear gripped me. Could it happen now?

As I went to primary school grown ups would share a bit more with me about the war that had dominated their young adult lives for five long years. They were still talking to each other about it as they sought to digest what had happened to them.  I was shown the ration books they had to rely on, told of the shortages and the limited meals.

My grandparents and father grew food in their gardens as if still part of Dig for victory. They would say careless talk costs lives. Waste not, want not was a favourite phrase, encouraging thrift and careful use of limited resources. My grandmother still had her black out sheets that were used to stop the light at the wartime window. My father told of his evacuee experiences  being sent to Stafford from Ramsgate and  how he enlisted in the navy as soon as he could. My mother showed me photos of herself as a young woman in Wren’s uniform.

When I did my junior school local history project I heard how the great cathedral had been saved from  the fire bombs and saw the work still going on to restore all the precious medieval glass.

( for more childhood memories see What do boys want?)

 

 

What a new Council should do

On day 1 the Leader and Executive Councillors should impose a staff freeze on all new external recruitment excepting teachers and qualified medical personnel. Officers should have to make a case to appoint from outside based on shortage of crucial skills. Councillors  also need to ban all new external contracts for bought in services without prior Councillor approval to avoid the easiest way around the freeze.

They should ask each Head of department to draw up a list of posts that can be removed or merged, to implement as people leave employment. Employees will be told that as most recruitment is from within they have enhanced chances of promotion. There will be no redundancies without staff agreement.

The Leader should require each Executive Councillor to produce a schedule of functions/ activities they wish to end within three weeks, and timetables and staffing plans to exit them within two months.

There should be a review of all grants and payments to outside bodies in the first month with a view to reductions.

There should be a value for money audit of the Council identifying scope to boost productivity, raise quality and lower costs in delivering main services.

DOGE is not a good model for public sector reform

DOGE has not been a success. Elon Musk proposed $2 trillion off spending before the election. He scaled that back to $1 trillion on getting the job, The DOGE website claims $160 bn so far but most people think that is a big exaggeration.

It is true federal spending has gone down a bit. For four months there has been no money or military aid sent to Ukraine, after a lot in the last 3 months of President Biden. As it appears President Trump cannot create a peace it looks as if military spend on Ukraine will be reinstated.  There have been cuts to overseas aid and there could be more to come. The UK Labour government has already identified this as an easy  target for big cuts.

In practice cutting  overheads, redirecting staff away from woke projects and getting staff into the office more all require strong Cabinet level leadership backed up by senior officials who buy into the aims and undertake the detailed implementation. It takes more than a few Elon Musk interviews and speeches, more than highlighting a few particularly silly items of spend in a so called audit.

In the case of a UK Council it will take the Leader of the Council and the Executive Councillors to set out what needs changing. They need to get buy in from the senior permanent staff, and need to persuade most of  their employees that this is the way to go. Making threatening general statements about job losses makes the task more difficult.It puts  the staff offside and more determined to resist.  Dealing in generalities about cutting DEI or net zero work needs to be backed up by numbers, plans and budgets and agreed line by line in each individual Council.

I will in a later blog talk more about how I with JohnHatch launched the idea of value for money audits in the public sector. Just sending in a regular additional auditor will not help much. To get gains the specialist needs to be part auditor part management adviser. The questions of a regular audit, what was spent, how was it categorised, was it properly incurred spending  do not get you a more efficient organisation. You need to ask how could I do that better and cheaper? Do I need to do that at all?

The strategic question of what does a Council no longer need to do should  have been answered by the political parties in the election. A new Leader and ruling group needs to say at their first meeting  with officers on taking over what they intend  to close down.

VE celebration

Most of us celebrating VE day this week were born well after the war. We can only imagine the joy and relief that after years of death, injury and privation for our fighting forces,after years of blackouts, bombing raids and the terror of V weapons at home people could at last relax and celebrate the end of fear.

Imagine every night worrying that you might be bombed in your bed and need to rush to the garden shelter. Imagine life on rations as the Germans tried to destroy our food supply to starve civilians to death. Imagine like my mother taking night time turns to mind the roof of an important building  in case of fire bombs. Imagine as a teenage boy thinking about where you would be sent to put your life at risk.

We owe the wartime generations a huge debt. They were prepared to suffer to liberate Europe and the Far East from German and Japanese cruelty and tyranny. They then rightly helped Germany and Japan begin again as democratic law abiding nations, so we might live in peace in a more prosperous world.

We can learn much from those who won the war. They developed crucial new technologies, expanded industry at an incredible pace, farmed far more land to grow more food at home, mined more coal to provide our energy. They helped invent and develop radar, the jet engine, the floating harbour and temporary bridges, better radio communications and much else. They stayed strong allies of the US whose industrial and military might was important to victory.

I will have in my thoughts my Dad who saw action off Norway and in support of our forces in the Med on the cruiser Royalist. I will remember my Mum moving from fire watching in Reading to the Wrens in Portsmouth supplying and supporting naval vessels.

The true state of a Council’s finances

Wokingham’s Liberal Democrat led Council always claims it gets a very low grant from the government and is left to struggle , forcing it to make cuts in spending.

This was not what the independent IFS thought in their review. Looking at the 2022/23 budget figures they concluded that “No local government in England receives more funding to carry out its services relative to needs than Wokingham Borough Council. ” They calculated from comparisons that Wokingham got £261 per head more in grants than its needs.

Core spending power per head  is the highest of all Berkshire Councils apart from Slough, and is up 63% since 2019. So there should be no excuse  for poor services and no reason to claim they are underfunded.

Nor does the Councillor pleading of poverty reflect what the Council does, as it is making large increases in spending, specialising in wasteful projects and unwanted and risky investments in energy and property.

When the former  Leader of the Council Mr Jones said the “government has reduced funding for Wokingham Borough Council by £ 1m” it is difficult to see this figure in the accounts, and it is a very small figure in relation to total spending and total grants.  He also thought social care took up 60% of the Council’s allocation. He seems to have missed out schools and education in its entirety to get to this odd figure.

 

Wokingham has not filed accounts for 2024/5 yet. The 2023/4 annual figures showed total spending of £427 m , up by £53 m or 12.5% on the previous year. Total grants came to £198.7m or 46% of expenditure. There was an additional £93 m of direct government funding of Academies in the area. Schools at 28% of the budget  or £120 m was the biggest single spending area, with a Schools grant of £90 m. The Council had £84 m of S 106 developer contribution payments at its disposal. It was “investing” £36.5m within a capital programme costing £73 m.

The Lib Dem Councillors should read the accounts and seek to manage the money better. Their public statements imply they either do not understand the large sums they are handling, or wish to suppress wider knowledge of just how much they spend. I will look at how all this money could be better managed in future postings. I have highlighted before the kind of waste they go in for. There was the £5.5m changes to a roundabout, strenuously opposed  by local residents, that entailed painting coloured leaves  all over the road.  There is the “investment” in a solar farm.

Around the country there is a  lack of informed debate about the huge sums Councils control and spend, what they get for all that money and how they could spare the taxpayers some of their large demands upon them.Instead we are told every year there are cuts, when the budgets keep ballooning and the Council tax soars.

 

 

The Council elections

It was wrong that so many Council elections were cancelled. It js clear from the elections that were permitted that many people are unhappy with the government and want change.

The Conservatives and Reform combined polled very well, with Reform getting excellent results in the Runcorn by election, several of the  Councils and the Greater Lincs Mayoral race. In a Council like Northumberland where the Conservatives won most seats but Reform were a close second it is important the two parties  come to an agreement to provide good local services and leadership.Reform now has a chance to show what it can achieve where it has strong majorities.

The two parties in Councils need to concentrate on providing good quality core services led by schools and social care. They need to cut overheads, stop the anti driver agendas, stop so called investments in property and energy which have jeopardised some Council’s finances, and get the Council tax down.

As always much of the local election debate was about things Councils do not control. Labour and Lib Dem candidates usually avoided talking about local bad management, waste of money, high taxes and excessive borrowings.