More state spending does not give us the growth we need

 

            If you call spending “infrastructure” or ” investment” it gives a   magic halo to it in the UK debate. Mr Brown was well aware of this. He called much government current spending “investment” as he sought to reassure people that his fast growing state financed by big increases in debt was sustainable and desirable.  If it was all “investment” it implied there would be  a pay back, that we need not worry about the debts.

            The difference between investment or capital spending and current spending is clear in many cases. Building new school buildings is capital spending, because those buildings will be available to the public sector for their educational purpose for many years after the money has been spent. Conversely paying the teachers’ salaries is current spending, because this month’s pay only buys this month’s teaching. Next year you will need to pay them next year’s pay. Mr Brown called teachers’ and lecturers pay an “investment” in the future of the young people they were teaching, which is true. That does make the spending capital or investment spending in the normal sense.

          In the private sector the difference between capital spending and current spending is central to the compilation of company accounts. There the difference is clearer. Capital or investment spending is different and necessary. It is spending on  the plant and equipment you need to make future goods. There is a profit or cash return on it. Successful investment allows you to make and sell more goods to people bringing in more cash and profit to your business.

                     Capital spending can be for growth. You add extra factory space and equipment because you need to make more. It can be for better efficiency. You replace obsolete plant with more modern, which allows you to produce goods that are better and cheaper. It can be replacement. Your old machines are worn out. These different reasons produce different answers in terms of how much extra cash and profit the investment will generate relative to its costs.

                    It can be different in the public sector. Much capital expenditure yields no extra revenue or profit. A new office building for the civil service is usually just an extra cost, though it may be desirable or necessary. A new High speed train will add more to the costs of the railway than it will add to the revenues, increasing the need for current subsidy. An extra or new school  may be welcome, but it too simply increases the costs of educational provision by the interest on the extra debt.

                 The problem with public capital provision is how you allocate capital between the different sectors in the absence of a popularity or profit test from the market. Free enterprise companies can decide easily to put more capital investment into supplying ipads than into supplying record players, because that is what the market demands. The car industry can decide to spend more capital on expanding production lines for popular cars and shutting down lines for the unpopular ones.  In government there is no accepted measurement of the relative popularity of a new road or railway line for potential users, and many other issues crowd in  to complicate such a decision.

                  The outgoing Labour government decided to slash public capital spending to start to get the deficit down. The Coalition only reinstated a modest proportion of the cuts.Now it is popular to say we need more public capital spending to stimulate the economy. We need to be careful about such slogans. White elephant public sector projects, borrowing huge sums for projects that are going to be very costly and not very popular with users, is not a good idea for a heavily indebted country to embark on. I will look in a later post  at what is sensible by way of a capital programme.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

183 Comments

  1. Leslie Singleton
    Posted September 4, 2012 at 5:34 am | Permalink

    You remind me of what used to be my favourite and immediate question when interviewing applicants for (junior!) accounting positions long ago viz, Is a Debit good or bad? All manner of answers came and it was always remarkably easy to discern who did or did not know what they were talking about. I always prefer the basic bookkeeping language to the blather spouted by economists and Brown either didn’t know the difference between an Asset and an Expense (or the B/S and the P/L) or he was simply being mendacious. Anyway, I commend the question to interviewers.

    • lifelogic
      Posted September 4, 2012 at 9:25 am | Permalink

      Too much “endogenous growth theory” pushed at him from Mr Balls perhaps? What did you consider the best answer to your question?

      • Leslie Singleton
        Posted September 4, 2012 at 9:44 am | Permalink

        Something like, “It depends of course. If it’s on the B/S it’s good but on the P/L it’s bad”, combined with a look of puzzlement and doubt whether he or she wanted to come and work for us any more. Amazing how many would guess one way or the other.

        • lifelogic
          Posted September 4, 2012 at 11:10 am | Permalink

          For some reason this reminds me of the man asking his stockbroker “should I buy or sell XYZ Plc what do you think”. “What do I care” he replies “the commission is just the same either way” in an uncharacteristic outburst of honestly.

          The same, alas, applies to much of the state sector, just as happy being paid to administer the grants for, say, the installation of wind farms as they will be administering the grants for removing them later for environmental reasons.

          • Richard
            Posted September 4, 2012 at 5:13 pm | Permalink

            lifelogic,
            Another incisive and perceptive post.
            It reminds me of one young new employee in our company who came up to the wages office on a Friday afternoon quite angry, complaining that he was not being paid what had been agreed.
            Looking at his wage slip I pointed out the deductions of income tax and national insurance leaving him with a correct but smaller than expected final net figure.
            I tried to explain to him that the NHS, social security, education, defence etc etc had to be paid for, and this is where the money came from.

            He replied..I thought the xxxxxxx Government paid for all that stuff…

          • Disaffected
            Posted September 4, 2012 at 7:08 pm | Permalink

            How about the country is broke and we need to cut back ASAP on departmental budgets, merge ministries and cut ministerial posts to show we are serious on the subject. For example, DFID needs to be scrapped and residual work passed to the Treasury, many others could also be cited.

            Jobs for the boys which Clegg was adamant to stop. Minister without a port folio Clark- for goodness sake he is seventy and falls asleep on duty. Retire him before he spouts more EU babble or is continued to be paid to sleep instead of work.

            What about Cameron’s comments following the MPs expense scandal and all the chat about this is the person I am, this is what I believe in??? Now he has Laws back in cabinet!! Mr Cameron must be aware that is judgement is considered very shaky by most voters. How about Mr Coulson being ennobled so he could go back in cabinet, or the same with Mrs Brooks, as yet they have not been found guilty of any wrong doing unlike Mr Laws. They are more savvy and in tune with the public.

            Why do MPs face internal discipline before it is decided whether there ought be a criminal investigation? Criminal investigations should always come before internal investigations. Mr Coulson would be in clear by now.

            Reshuffle will make no difference to the blog in question. Cosmetic rubbish to please the Westminster bubble. JR you might as well endorse that all the green agenda is actually astute economics and encourage the government to spend billions more to impoverish the public further through their energy bills. It will help your career prospects.

          • lifelogic
            Posted September 4, 2012 at 7:26 pm | Permalink

            Richard

            Indeed it shows the level of many peoples understanding and how easy it is for politicians to use the politics of envy and the imaginary money tree to win/buy votes from some voters.

      • Posted September 4, 2012 at 7:18 pm | Permalink

        As the SS Titantic was just beginning to list the band was brought in to play…

        • Bazman
          Posted September 5, 2012 at 5:59 pm | Permalink

          I would say as a fact that Pepsi if a far superior cola drink to Coca Cola and even Richard Bransons Virgin cola. Own brand colas by price do have something worthwhile in them and so do some premium local manufactures colas some of which even have 1-2% alcohol to make them more interesting. Pity it’s not cocaine as was in the very first colas. State interference even then stopped that.

  2. lifelogic
    Posted September 4, 2012 at 5:38 am | Permalink

    “White elephant public sector projects, borrowing huge sums for projects that are going to be very costly and not very popular with users, is not a good idea”.

    But are they not nearly all in this category? Even a new school building well designed and in the right place will make little difference to the education that results. Even then the payback if any is many years away. The Olympics, HS2, social housing, the Millennium Celebrations and Dome, the vastly expensive new parliament buildings in London, Cardiff, and Edinburgh, all the green tosh, railways, the soft “loans” to the pigis, the EU, nearly everything the government does is “white elephant” (often even worse just doing positive damage). Even when it is sensible it will usually be put in the wrong place or done in the wrong way for political reasons. Like the airports currently needed perhaps.

    Whenever the politicians talks of investment I just think of a large dustbin being filled with taxes that would have been far better left with the tax payer. An investment needs to produce cash to pay for itself and its running costs and depreciation in say 10-15 years at most. Leave the cash with the people who make it and let them choose the real investments. Rather than as now have to cancel them all for lack of cash, lack of bank lending and in order to pay their tax bills.

    • lifelogic
      Posted September 4, 2012 at 6:07 am | Permalink

      I see the green party much loved by the BBC has a new leader who sounds like she is aiming directly for the LibDem ground with her idiotic suggestions.

      The Green Party has elected Natalie Bennett, an Australian-born former journalist and United Nations advisor, as their new leader.

      “We need to not have the disastrous, economically illiterate cuts that we’re seeing now. What we need to have is investment in the future,”

      I assume she means investment in PV roof bling, wind farms and the like these never produces any real return. “Economically illiterate” talk about pot and kettle. Why on earth was she advising the united nations on anything? I see she has a Master’s degree in Mass Communication from the University of Leicester. So another green religion, TV evangelist I assume.

      • Posted September 4, 2012 at 7:35 am | Permalink

        I assume she will end up in the Lords like Lord Porritt or even with a Nobel Prize like Al Gore or Obama.

        Being proved wrong in nearly everything one preaches has never been much of a bar to entry to these areas. What matters is can you get many others to believe your nonsense, pay extra taxes and then to pray to the new rotating, bat and bird chomping, crucifixes.

      • Winston Smith
        Posted September 4, 2012 at 9:52 am | Permalink

        Your comment on the Green Party’s new leader’s speciality is important as it links to the running theme to most of JR’s issues. Communication.

        “she has a Master’s degree in Mass Communication”

        “Now it is popular to say we need more public capital spending to stimulate the economy”

        Why is it popular John? How does it get popular? Why do none of your intelligent, logical proposals ever get popular in the media?

        JR still does not get it. Its all about the message and manipulating the mass media. Most hacks are left-wing. The dominant broadcaster in tv, radio and the internet is institutionally left-wing. The marxist Green Party know it. What are the Tories going to do about it?

        Reply I recall that the Conservatives won more than 300 times the number of seats won by the GReens at the last election. I myself received many more votes than the GReen candidate in Wokingham

        • Mark W
          Posted September 4, 2012 at 10:57 am | Permalink

          Mr Redwood, I think your reply to Winston Smith rather misses the point. I’m going to find this difficult to not be too sycophantic, but you do talk more sense than most, and make points that are correct, to anyone with a reasoning mind and grasp of basic logic.

          However there’s no doubt that when collagues of yours use idiotic terms like “nasty party”, they are playing the game of the Antonio Gramsci inspired cultural revolution that has shifted popular opinion to the left whilst appearing to have managed to have stopped thought altogther outside of a narrow sphere of acceptable opinion.

          Tiny minorites with unhinged ideas like the Greens get too much air time. I find them as ridiculous as the BNP, but at least we don’t have to suffer too much of the BNP in our living rooms on the BBC.

          • Jerry
            Posted September 4, 2012 at 1:40 pm | Permalink

            I don’t mind how much broadcast-time any political group gets, more the better, as long as it is ‘in the raw’ (and not sanitised before being broadcast), because so many of these minority and protest groups once given a stage and enough rope…

        • lifelogic
          Posted September 4, 2012 at 11:01 am | Permalink

          The people in Wokingham clearly have more sense than those in Brighton.

          But Cameron is, alas, also infected by the green virus or at least he claims to be and thinks, I assume, there is political advantage in making the right noises for the “BBC think” people and paying out for lots of tax payers money in pointless grants for silly house Bling and wind turbines. Did he ever get as much as £20 of electricity from his in Notting Hill toy wind mill I wonder?

        • Winston Smith
          Posted September 4, 2012 at 2:24 pm | Permalink

          Yes. and you would have won an outright victory if the Party was not so incompetent with its communication and organisation under Cameron (the PR man). 10 yrs as an activist taught me that. You would definitely have won if the BBC had not been consistantly anti-Tory since the late 80s. 70% of digested news comes from the BBC in the UK.

          The public is generally right of centre. Pereceived right-wing newspapers sell 4 times as many editions as left-wing papers. The most popular blogs are right-wing. However, a very small liberal, media elite in London enclaves have far too much influence. The only way to break this is to embrace populism.

          • lifelogic
            Posted September 4, 2012 at 4:28 pm | Permalink

            So what does Cameron do become a pro EU, fake green, socialist lose the sitting duck election and appoint Lord Patten to the BBC.

            The good news I read (in the Telegraph) is that if they do the sensible U turn on Heathrow/Heathwick the party will be rid of Zak Goldsmith as he will resign – alas he seems to have rather less sense than his Father or does he live on the flight path perhaps. I wonder how many air miles he has flown in the last few years.

          • APL
            Posted September 4, 2012 at 9:51 pm | Permalink

            lifelogic: ” be rid of Zak Goldsmith as he will resign ”

            He will simply ‘cross the floor’ and become the second ‘Green’ member of Parliament.

            Hopefully it would encourage Ken Clarke to ‘cross the floor’ and join the Lib Dumbs.

            Good riddence, if you ask me.

      • A different Simon
        Posted September 4, 2012 at 12:54 pm | Permalink

        The Australians are only paying us back for sending them Julia Gillard .

        • lifelogic
          Posted September 4, 2012 at 2:11 pm | Permalink

          I think we got the better deal – at least Natalie Bennett will not ever be in power nor probably even in parliament.

          • A different Simon
            Posted September 4, 2012 at 10:23 pm | Permalink

            Maybe she’s going to re-empower the Unions , show Bob Crow how it is really done :-

            – ” nobody wants a concrete pour stopped half way through do they ? “

  3. alan jutson
    Posted September 4, 2012 at 5:48 am | Permalink

    Yes, Mr Brown was very good at hiding debt, on the books, off the books, it did not seem to matter, just borrow more to fund whatever he wanted, and call it all investment.

    We had investment in training, investment in youth, investment in the Health Service, investment in Banks, investment in Railways, investment in jobs, etc.

    A couple of words that were never used.

    Return on Capital Employed, and the percentage gained in efficiency for all of this spending.

    We also lacked any sort of timescale on the returns for all of this investment.

    Yes clearly the Country needs to spend money on infrastructure, in order keep the Country moving in an efficient manner.

    Yes of course office buildings and schools need to be fit for purpose, again for efficiency, but far more important is what actually what happens inside these shells.

    The quality, numbers of staff and working methods that are used in these buildings also need to be up to scratch, otherwise there is no point in spending vast sums of money just to replicate what went on before.

    • lifelogic
      Posted September 4, 2012 at 9:50 am | Permalink

      Indeed and the ability to (cheaply) fire the useless staff too is important so they do not let thousands of pupils down.

      • Muddyman
        Posted September 4, 2012 at 1:17 pm | Permalink

        Indeed, together with the ability to cull the overpaid and inefficient in civil service positions nationally and locally.
        The supernumerary ‘Chief Executives’ (Town Clerks) who appear to override the elected representatives are growing in number.

  4. Gary
    Posted September 4, 2012 at 6:00 am | Permalink

    What you have described is the Problem of Economic Calculation, and the Austrian School contends that outside of a free market this cannot be done. Instead of investment you get malinvestment that later has to be written off or restructured.

    • lifelogic
      Posted September 4, 2012 at 9:16 am | Permalink

      “Malinvestment” Definition:- a euphemism for chucking tax payers money in the directions of friends, contacts, relatives, companies that pay good lobby fees, buying votes, indoctrination of voters or simply down the drain very often.

      • Mark W
        Posted September 4, 2012 at 11:19 am | Permalink

        For throwing Tax Payers money away, I’d like to see a public listing of what gets given by governemnt to charities, what percentage of income it is to these charities, then how these charities lobby the government to do things that has little electoral appeal, but the government happily gives in to. Almost like it wanted to.

        • lifelogic
          Posted September 4, 2012 at 12:47 pm | Permalink

          Indeed many charities are funded by government and are almost just another arm of government and vehicle for the usual government propaganda and BBC think.

  5. Kevin R. Lohse
    Posted September 4, 2012 at 6:30 am | Permalink

    It’s a great shame that you won’t be waiting for the phone to ring this morning, John. Some of your gritty realism is the tonic the Treasury benches need.

    • outsider
      Posted September 4, 2012 at 2:02 pm | Permalink

      How right you are Mr Lohse. A Cabinet reshuffle that does not involve the Treasury or the Board of Trade leaves the big picture unchanged.

  6. Pete the Bike
    Posted September 4, 2012 at 6:56 am | Permalink

    I take issue with you Mr Redwood on any government spending being an investment.
    Your example of spending on schools is particularly relevant. State directed education fails it’s pupils on so many levels it’s hard to know where to start but I’ll give it a go. It is badly directed, unresponsive to change in the economy, rigid, not adaptable to suit individuals, horrifically expensive, politically biased and produces many, many unprepared, ignorant drones suitable only for working in the public sector.
    If government had been in charge of the electronics industry we would be unable to read your post because we’d all still be using Amstrad CPC464 computers and the internet would consist of government propaganda websites. Same thing with education, it has been retarded and stunted by state control and if we could see what it would have been like without that control we’d realise the damage that has been done.
    Government spending is NEVER an investment but only a loss to us all.

    • lifelogic
      Posted September 4, 2012 at 9:18 am | Permalink

      Much truth in that – if government expenditure just does little harm we are getting of quite lightly.

  7. Nick
    Posted September 4, 2012 at 7:13 am | Permalink

    Investment either provides a return or savings in spending.

    That’s how you want to push the cuts.

    All those investments by Brown are now paying off. They are producing savings greater than the borrowing plus the cost of interest.

    Or is it that Labour is lying through its back teeth?

  8. Alan Wheatley
    Posted September 4, 2012 at 7:23 am | Permalink

    Good coverage of the issues.

    The government does have a difficult task; for instance most would agree there should be some spend, capital and current, on things that could be classified as a public (or social) good, but the “return” on expenditure can be near impossible to quantify, and so judge value.

    Also, just because a cause is clearly meritorious it does not necessarily mean that expenditure is justified: with limited resources there may be a more deserving cause that should take priority. Or it may simply be there is no money, and to increase the debt would actually make the overall situation worse.

    I look forward to what is likely to be an interesting and lively debate.

  9. Posted September 4, 2012 at 7:48 am | Permalink

    I think you mean “but that does not make the spending capital or investment spending in the normal sense.”

  10. Posted September 4, 2012 at 7:52 am | Permalink

    Isn’t there a case for no new public construction of anything until we’ve started paying off the national debt? We can patch-up what we already have and encourage growth through tax-cuts. No family that was deeply in debt would sensibly consider a loft-extension until the repayments were under control.

    • norman
      Posted September 4, 2012 at 10:54 am | Permalink

      But David Cameron, showing us clearlyb his grasp of economics, has already assured us that he’s ‘paid off the credit card’.

      Along with his buddy Nick Clegg, equally gifted in economics, they recently gave a speech in the rose garden in which they stated that they have ‘tackled the debt’.

      George Osborne (we all know his economic prowess) also continually talks about ‘paying down the debt’.

      So why not go on a splurge? When you’re prepared to lie to the electorate as openly as these bunch of charlatans you’re capable of anything even if it means giving those not yet born or paying taxes a terrible burden to bear, one that won’t be shared by those who imposed it on them, natch.

  11. Mike Stallard
    Posted September 4, 2012 at 8:03 am | Permalink

    This is all so true,and carefully explained.
    My question is this: when the Coalition started off, it was making all the right noises about restoring the economy by slashing the debt. The Labour Party led by Mr Balls crowed about this.
    So why are they not doing what we elected them for?
    I suggest there are three reasons.
    I wonder what other people think.

  12. Posted September 4, 2012 at 8:10 am | Permalink

    Over in education Michael Gove seems to be on the way to spending £1bn on just the legal fees associated with giving our state schools’ land and buildings to his friends. That’s aside from all the costs associated with rebranding which would probably equal that and the damage to education created by schools focusing on his initiatives rather than education. These are direct costs and take not account of the vast assets which are being moved, for free, into the hands of Gove’s friends through his ability to call in his darling unaccountable Ofsted and have schools put into special measures if they do not agree to being academies.

    And the benefit to the taxpayer of all this that Gove is ensuring that his ludicrously ignorant belief that if you atomise state education (rather than planning coherently for efficient integrated services as is happening in Scotland for example) it will all be amazing and efficient is imposed on society for the next 125 years.

    Could anyone explain the logic of that for me please?

    • Posted September 4, 2012 at 8:45 am | Permalink

      How can David Cameron still be so ignorant that he actually thinks this Gove is a good idea? This has been going on for two years. Is he completely blind?

      There is no coherent or logical justification for it. The evidence contradicts it. It’s just hell.

      • Mark
        Posted September 4, 2012 at 4:52 pm | Permalink

        I suggest you try boring Mr. Laws.

    • Posted September 4, 2012 at 9:13 am | Permalink

      Let’s just be clear about the arguments for the atomisation of state education.

      1. There exist no coherent argument to suggest that the atomisation of planning is beneficial either for student learning or for economic efficiency in a fully developed system of education with a responsibility to the most vulnerable. In fact the work of Gove’s favourite ‘experts’ such as E.G.West concludes that the opposite is true.

      Thus there is no validation of Gove’s policies for academies and free schools.

      2. The international evidence is very clear that improvements in both the quality and economic efficiency of complete systems of education come when there is coherent planning at local levels.

      Thus there is no verification of Gove’s policies for academies and free schools.

      This is complete and utter madness. Why do you think I post and answer questions? Because I enjoy the organised abuse I get for doing so? Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaarrrrrrrrrrrrrrrrrrrrggggggggghhhhh. *Scream of pain.*

      And that’s aside from all the other ways in which his ignorant hubris is creating abysmal policies in education and his repulsive penchant for creating imaginary baddies and then destroying the real people who happen to stand where he perceives his demons to be.

      • Winston Smith
        Posted September 4, 2012 at 9:56 am | Permalink

        Any wonder why educationalists are perceived to be ranting (lefties-ed)? Thank Christ, you won’t get anywhere near my kids.

        • Posted September 4, 2012 at 10:31 am | Permalink

          Just to be clear Winston, I’m a Liberal Democrat and on the committee of the LDEA and this is the kind of thing I do when I work with children:
          http://mathseducationandallthat.blogspot.co.uk/2011/05/how-do-chinese-do-it-more-insights-and.html

          I do understand that there is a point of view that education should be in the hands of people who care only about the pursuit of money for personal gain and that Gove and many Tories shares this view with James Maxwell. Please could you explain to me why you want your kids to be educated by such people rather than by experienced teachers like me who who care about children and education? I’m genuinely interested.

          • backofanenvelope
            Posted September 4, 2012 at 1:24 pm | Permalink

            Perhaps, outside the LibDem party, there are people who not only want to make money out of education, but also to provide good education for children.

          • Adam5x5
            Posted September 4, 2012 at 2:06 pm | Permalink

            I do understand that there is a point of view that education should be in the hands of people who care only about the pursuit of money for personal gain

            And how would you make money for personal gain from an education system?
            By ensuring that your standard of education (by whatever metric you desire) is higher than the competition. As long as the little ….. darlings are getting educated to a high standard, does it really matter if someone is making money from the process?

            Surely the main goal here is to get the children to learn and become able to think independently. Everything else is incidental. Or do you have some ideological opposition to someone making money off education?

          • Winston Smith
            Posted September 4, 2012 at 2:34 pm | Permalink

            Because I attended a school in the 70s/80s in london that was run by people like you. No discipline, no competitive sports, a constant feed of far-left rhetoric (several teachers were unashamed communists). It was not he kids you cared about, it was the image you wanted to feed them. The upwardly mobile parents moved their kids away and teh school became the worst in the area. I want better for my kids.

            How can you want the best for the pupils when your comments are so full of hatred for policies that give freedom and choice?

          • alan jutson
            Posted September 4, 2012 at 3:28 pm | Permalink

            Rebecca

            Given your passion for education and improving standards.

            Can I ask your thoughts on Private schools where parents pay for their children to be educated, and thus select the school for their children.

            Should such parents get a rebate on their tax contribution to State schools, given they choose not to use them ?

            Just for info:
            I did not go to a Private School, and neither did my children.

          • Posted September 4, 2012 at 6:38 pm | Permalink

            I’m not against people making a profit from education provided the case for the benefits of that happening is honestly and clearly argued and consulted until –
            1. the anticipated benefits
            2. the costs and
            3. the practical means by which those benefits will be achieved
            are clearly established.

            Bypassing all three of those is unacceptable.

            Winston I’m a successful and respected head of maths who has been subject to up to seven external inspections a year without ever receiving any criticism and only receiving praise for my work. I’m sorry you had bad experiences in the past.

          • Posted September 4, 2012 at 9:52 pm | Permalink

            Alan – no because we can’t afford that kind of change at the minute. But if we stopped allowing Michael Gove to spend in the order of £1bn on the costs associated with giving all our state schools to his friends perhaps we could. However things like rebuilding the prestressed concrete multi-story schools which are becoming dangerous would be higher on my list.

          • Jerry
            Posted September 5, 2012 at 9:03 am | Permalink

            @Rebecca Hanson: “Winston I’m a successful and respected head of maths who has been subject to up to seven external inspections a year without ever receiving any criticism and only receiving praise for my work.

            But are you good enough to teach in one of Mr Gove’s new Free Schools, are you good enough to be employed by a Private school? The standards within the State education system are now so poor, as evident from the recent row over exam marking (were teachers have basically admitted to teaching to the exam rather than teaching the subject) or the fact that many FE colleges, Universities and even employers are now having to engage on remedial education for new intake, many people -parents and employers- do not hold any faith in Ofsted, Ofqual and the examination bodies etc. so I wouldn’t make to much of being ‘inspected’ and passed fit if I were you…

          • Posted September 5, 2012 at 7:33 pm | Permalink

            @ Jerry,
            A-levels: Maths (A – a year early), Further Maths (A), Chemistry (A), Biology (A), Math and Management at Cambridge (2-i), PGCE, MEd, Very sound career teaching in four schools with excellent residuals, happy and successful lecturer in education including lecturing on the MEC conversion course by teaching maths up to first year university level while exemplifying best teaching practice, inspected many, many times (up to 7 time a year) with no criticisms and teaching being rated outstanding. Head of Maths in a school in special measures with maths being a stated cause – responsible for turning maths results around as part of bringing the school out of special measures. Four externally examined year groups as HoD – all surpassing FFTDs at every grade boundary. Internationally respected manager of maths education discussion forums headhunted by the US dept ed to work with them on developing mass online discussion to support education. FRSA for mass online discussion.

            Here’s an original PhD proposal I wrote for maths education but instead of researching it I orchestrated online discussions on the topic which brought together the best international brains on the topic and are rewriting wikipedia on this topic to a higher standard than I could have researching in 5 years.
            http://mathseducationandallthat.blogspot.co.uk/2011/04/scaling-in-multiplication-and-division.html

            Here’s the first part of my 10 part blog on the research I’ve done into the possibilities created by emerging technologies which can efficiently and effectively combine formative and summative assessment.

            What are the qualifications for teaching maths in a free school or a private school?

      • Bob
        Posted September 4, 2012 at 11:47 am | Permalink

        @Rebecca

        I thought that Michael Gove was one of the good guys.
        Surely setting schools free from government interference is a good thing?

        • Posted September 4, 2012 at 6:34 pm | Permalink

          Er – do you call the SoS for Education calling in Ofsted to put schools into special measures if they don’t immediately become academies when he wants ‘Michael Gove being a good guy’ and ‘setting schools free from government interference’ Bob?

          I suppose when Michael Gove wrote in the press that he was a good guy and that he was setting schools free from government interference you believed him rather than looking at the evidence?

          • Jerry
            Posted September 5, 2012 at 9:08 am | Permalink

            If the school is not fit for purpose then yes they should be put into special measures, no ifs and no buts, and quite frankly any teacher who argue differently is not fit for purpose themselves as they are obviously think more about their careers than the kids they are meant to be teaching. Sorry.

          • Posted September 5, 2012 at 7:34 pm | Permalink

            Jerry do you consider that schools which do not wish to become academies are not fit for purpose?

        • Jerry
          Posted September 6, 2012 at 8:14 am | Permalink

          @Rebecca Hanson: Yes as they obviously do not want to do better for the children, the comprehensive schooling system has failed, the only people who still believe in it are teachers and far left politicos.

          I also seem to recall that many grammar schools were not given any choice when they were told to convert comprehensives, so is this socialist/union double standards?…

          • Posted September 6, 2012 at 12:13 pm | Permalink

            Comprehensive education has sometimes failed but has often succeeded. What are you proposing Jerry? Leaving the kids disadvantaged backgrounds uneducated?

            If you read what I write you’ll find I’m not particularly against grammars. My main concern is where a sudden move towards grammars would lead to very damaging effects for the whole population of students.

      • Richard
        Posted September 4, 2012 at 1:01 pm | Permalink

        Rebecca,
        I search the contents of your many lengthy posts as to what you actually want to happen in education instead of Mr Gove’s current policies.
        All I can run my highlighter pen over is “coherant planning at local levels”
        I don’t think this is going to get the UK’s educational results up to the top of world rankings where we need to be to prosper as a trading nation.

        • Posted September 4, 2012 at 6:42 pm | Permalink

          Richard.

          1. I actually want all these promises of professional freedom to mean something and for that to happen state schools need the same rights to hold their regulator accountable as all other organisations have instead of having none.

          2. I’d love to see emerging technologies being properly applied to support better teaching.

          3. I hate deeply ignorant, clearly counterproductive and unconsulted policy. Policy has to be consulted if it is to achieve what it is intended to achieve. I don’t see why state education should be a playground for Tory politicians with no relevant experience or established personal skills in management and seriously disturbing personality traits.

          Reply How does the private sector hold the various business regulators accountable?

          • Posted September 4, 2012 at 9:27 pm | Permalink

            The private sector can use the Legislative and Regulatory Reform Act (2006) which allows them to take legal action to overturn the actions of their regulator if the actions of that regulator are not transparent and consistent, and if the consequences of judgements by their regulator are not proportionate to the nature of the issues identified.

            Private and public schools have the same protection from Ofsted but state schools do not. They have no legal protection and Ofsted can do whatever it likes to them so long as Michael Gove approves. It’s horrific. It’s a system which was set up with the assumption that those in charge of it were wise and capable of understanding their own limitations….
            More details here:
            http://mathseducationandallthat.blogspot.co.uk/2012/06/ofsted-clarifying-state-of-affairs.html

          • Richard
            Posted September 4, 2012 at 10:02 pm | Permalink

            Hi Rebecca,
            This particular blog is really about spending by Govt. so I will try to be brief commenting on your reply to me.
            Ref your point No 1
            It seems to me the best chance a teacher has of achieving some professional freedom is either to work in the private school sector or in the recently introduced acadamies and “free” schools which are at least not under LEA control.
            Ref No 2
            Yes I agree, we need more IT and modern communication and learning processes- more the better.
            Ref No 3
            Oh dear, you have lapsed into your more usual, I hate Mr Gove rant again!

          • Jerry
            Posted September 5, 2012 at 9:17 am | Permalink

            @Rebecca: If the private sector can hold their regulating body to account, as you claim, then surely the solution is to convert all state schools into private/public schools and then give each child a voucher (that parents might then choose to top-up) towards the cost of the compulsory part of their state funded education?! 🙂

          • Posted September 5, 2012 at 9:58 am | Permalink

            Ref No3.

            Ofsted was set up with tremendous powers which were designed to allow them to use the process of special measures to force a heavily unionised and unmanageable group of teachers in a school to leave or comply with the leadership of a new head. It also came with money and a level of credibility as a process which helped change the public perception of a school which was particularly helpful in turning round a severe sink school.

            For this process to be appropriate you need very weak or unmanageable teacher and a good head and/or a severe sink school with a bad reputation. It was never intended to be used in other situations and the assumption was that those with the power to use it would have the wisdom to understand that.

            I’m aware of situations where it is currently being used on good and respected schools for political reasons and the consequences are absolutely horrific.

          • Posted September 5, 2012 at 7:43 pm | Permalink

            @Richard (I replied before but it hasn’t appeared so here goes again).

            point 3. It’s unacceptable for anybody to use special measures as a tool to force political change. Special measures is a very brutal process which usually changes intelligent and reflective staff into people who do whatever they’re told without discussion. It should be used with extreme care and respect for how counter-productive and damaging it is in the best of circumstances, let alone when a good head leading a good and dedicated staff is replaced with someone substantially less able who uses severe bullying as their style of management. If you think that’s not what’s happening then get out and talk to some teachers.

            @Jerry.
            Vouchers have been considered and dismissed many times because of the way house prices have evolved to fit the quality of schools available. This means that some high earners send their children to private schools while others by expensive houses where there are good state schools. You’d have to give the vouchers to the second group, because they’ve spent their money so they need them, but you’d also have to give them to the first group and the cost becomes prohibitive.

            However vouchers are an appropriate tool for an evolving system of education which has not yet acquired these problems.

      • Lindsay McDougall
        Posted September 6, 2012 at 3:12 pm | Permalink

        Rebecca,

        Are you using a lot of big words to say that the bog standard comprehensive is your ideal and that nothing can better it?

        • Posted September 6, 2012 at 5:21 pm | Permalink

          No.

          I’m pointing out that Gove is leaching money at a huge rate funding his pet projects which are clearly deeply flawed and have not been consulted or developed until they are any where near being fit for purpose.

          My purpose in pointing this out is to draw attention to the fact that lining lawyers pockets with in the order of £1billion is possibly one of the worst things we could be doing with state money at the minute.

          I’m also responding to the questions people are asking and the points them make in response to my comment.

    • Adam5x5
      Posted September 4, 2012 at 12:07 pm | Permalink

      Over in education Michael Gove seems to be on the way to spending £1bn on just the legal fees associated with giving our state schools’ land and buildings to his friends.

      That’s almost an allegation of corruption…
      Do you have a supporting link/evidence?

      his ability to call in his darling unaccountable Ofsted and have schools put into special measures if they do not agree to being academies.
      Evidence?

      The international evidence is very clear that improvements in both the quality and economic efficiency of complete systems of education come when there is coherent planning at local levels.competition
      Fixed.

      • Posted September 4, 2012 at 6:54 pm | Permalink

        A rough ballpark calculation would be £40k per school and 24,000 schools. If you’d like to get involved in more detailed discussion I suggest you join in the analysis going on in the views section of the Local Schools Network. I’m prepared to believe it’s less – ‘Ricky Tarr’ is suggesting that it’s as low as £25k for some schools but that still horrifying.

        Re evidence. It was repeatedly alleged that Gove was behind the inspectors suddenly arriving in Downhills school to put it into special measures. An inspectorate should be entirely independent from government interference. Is this the evidence you are looking for?
        Re: Para 3. Here’s just some of the evidence relating to the original paragraph: http://www.oecd.org/edu/preschoolandschool/equityandqualityineducation-supportingdisadvantagedstudentsandschools.htm
        Where’s yours?

        • Posted September 6, 2012 at 12:28 pm | Permalink

          Can you let this post above through please John?

        • Posted September 10, 2012 at 12:18 pm | Permalink

          Er – why has the link to the freedom of information request which shows what Michael Gove has been doing disappeared?

      • uanime5
        Posted September 4, 2012 at 8:34 pm | Permalink

        Do you have any evidence that competition is good for schools? Given that you’ve demanded evidence so many times you should be prepared to provide it for your points.

        • Jerry
          Posted September 5, 2012 at 9:24 am | Permalink

          @uanime5: I would suggest that the examination results from schools such as Charterhouse School, Eton College, Harrow School, Merchant Taylors’ School, Rugby School, Shrewsbury School, St Paul’s School, Westminster School and Winchester College, Cheltenham Ladies College, Marlborough College etc. etc. (to list a few…) is evidence enough!

          • Posted September 5, 2012 at 7:46 pm | Permalink

            Findings from selective entry schools cannot be cross applied to schools with a required duty of care to the most vulnerable in society.

          • Jerry
            Posted September 6, 2012 at 8:20 am | Permalink

            Of course they can be Rebecca, that is why socialists and unions so dislike the private education sector as they clearly show that education can be better. Oh and by ‘selective’ you actually mean parental choice…

          • Posted September 6, 2012 at 12:19 pm | Permalink

            I generally like private education but I’m not in favour of sudden moves towards private education which cause collapses in nearby state education such as happened during the subsidised places schemes of the 1980s. I was actually at on the the pernicious sink schools which was created by that scheme and it was hell – with very little teaching and learning going on at all and the good teachers sending their classes home early so that those kids could avoid getting beaten up as they left school.

            But in general I’m not against private education or choice, although I feel that the provision of a good primary place for every child is more important than choice.

          • Posted September 6, 2012 at 5:41 pm | Permalink

            “Of course they can be Rebecca”

            Indeed they can – if you have significant control of the media, a position of tremendous power, a system of extreme bullying in place which can remove anyone who thinks independently from the sector and a red guard of an inspectorate which brutalises whoever you tell it to brutalise to help you get what you want whatever the consequences. Oh yes and it helps if you have a paranoid personality which allows you to mentally compartmentalise anyone who raised concerns as being a nutter who must be ignored.

            Things can be done no matter how damaging or wrong they are Jerry. Well spotted.

        • Adam5x5
          Posted September 5, 2012 at 3:17 pm | Permalink

          http://rer.sagepub.com/content/72/2/279.short

          http://www.bristol.ac.uk/cmpo/publications/other/choice.pdf

          http://siteresources.worldbank.org/EDUCATION/Resources/278200-1099079877269/547664-1099079934475/547667-1135281504040/Returns_Quality_Education.pdf

          “Evidence on the importance of inter-school competition for students is limited, but
          suggests that additional competition improves outcomes for students. For instance Hoxby
          (1994a) shows that the presence of private schools in an area appears to improve the
          efficiency of nearby public schools that must compete for students from the same area.

          (Quote from the latter)

          I got those from a quick search – I also did a quick search for the topics that were mentioned previously, but didn’t find much to support it in the press…

          • Bazman
            Posted September 5, 2012 at 5:48 pm | Permalink

            Competition might be good for takeaways, but not schools or hospitals.

          • Posted September 5, 2012 at 7:51 pm | Permalink

            Adam you should actually read the references you publish:

            This is your first one:

            “The positive gains from competition are modest in scope with respect to realistic changes in levels of competition. The review also notes several methodological challenges and recommends caution in reasoning from point estimates to public policy.”

            Are you capable of reading what’s in front of you or do your prior conclusions prevent you from doing that?

          • Posted September 5, 2012 at 7:53 pm | Permalink

            The reason Bazman’s comment is true is because of the requirement to provide for all including the most vulnerable and the restrictions of geography.

            Competition can be beneficial in some circumstances but it must not be assumed that it will always be so. Each circumstance must be carefully considered and consulted.

          • Jerry
            Posted September 6, 2012 at 8:37 am | Permalink

            But Rebecca that is why competition is good, it makes professional people like you consider and consult on each and every child and their circumstance carefully (otherwise the school risks loosing funding, either private or state), rather than just take the lazy approach whilst teaching to the exam and hoping for the best.

          • Posted September 6, 2012 at 12:21 pm | Permalink

            I have always considered and consulted on each and every child and their circumstance carefully with every ounce of energy I can muster, including phoning homes during the holidays where that’s been productive to do and I find your suggestion that I have ever done otherwise or that I need to be forced to do that extremely offensive.

      • Jerry
        Posted September 5, 2012 at 6:47 pm | Permalink

        “[Bazman] Competition might be good for takeaways, but not schools or hospitals.

        Why would that be, because it makes sure that they keep to minimum standards….

        ….rather than encouraging schools to exceed them?

        I can see how that would appeal to a Socialist, after all it seems the way, to dumb down rather than to allow kids to excel.

        • Posted September 6, 2012 at 12:22 pm | Permalink

          Because the issues of having to provide for the most vulnerable and the challenges of geography chance the fundamental dynamics of the economics involved.

        • Adam5x5
          Posted September 6, 2012 at 1:37 pm | Permalink

          @ Rebecca
          While the gains may be modest, they are there.
          A modest gain is surely better than no gain?

          Also, recommending caution when changing a system is surely a sensible thing? Rather than just changes being made ad hoc, careful planning and system tests should be carried out to ensure that errors and failures are kept to a minimum.

          @Bazman
          could you explain why competition is not good for schools and hospitals?

          • Posted September 6, 2012 at 5:36 pm | Permalink

            But Adam it’s like saying if you pay teachers more then there have been shown to be some modest gains in results in some circumstances and using that evidence to pay all teachers everywhere 20x as much without any further thought or consultation.

            Policy has to be properly worked through so it has clear agreed objectives, clear routes by which those objectives will be achieved (and establishing those routes has to involve thinking through reality rather than just sitting in a room with bright you things/disciples who tell you what you want to hear), costings and a rationale for why the other options have been rejected.

            Would you let Michael Gove run your business? If so please go ahead and take him off to do that for you.

          • Bazman
            Posted September 8, 2012 at 8:27 am | Permalink

            All Schools and hospitals should compete to stay in business by cutting each others throats? Did that work in banking? You can bet private healthcare where money is no expense and I don’t mean your daft insurance scheme based, ones do not operate like that. Tom Cruise has insisted that his children are born in the most competitive hospital in the world? Ram it.

          • APL
            Posted September 12, 2012 at 8:08 am | Permalink

            Bazman: “Did that work in banking?”

            Actually banking illustrates the evil of state intervention. The regulatory system put in place by Brown failed, coupled with the incestious relationship of the top bankers with the top politicians ensured that the banking disaster was inevitable.

            Now look at education, standards are falling, to the extent that universities and employers have to provide remedial education to have any use whatsoever of their new employees.

            Now the common denominator? Politicians, they have little else to do but continuously meddle in businesses they have no idea about.

            Previously it was ‘the commanding heights of the economy’, mining, auto production (Leyland and BMC) now utterly ruined, the steel industry, now utterly ruined in this country, ship building, now utterly ruined in this country, the list of industries where politicians have meddled is a long as the list of ruined industries.

        • Bazman
          Posted September 6, 2012 at 5:32 pm | Permalink

          Aw no! Favourite hospital closed due to low standards hygiene. Ah! Me mate Dave says that one just down the street is good and has five stars for hygiene the sticker says on on the window. Ram it.

        • Bazman
          Posted September 7, 2012 at 5:10 pm | Permalink

          I don’t want surgeons competing who can do the best job or the most work. I just want them to do the job correctly. They are not in a race and the letting their egos ‘compete’ is not good. Nor is competing on cost and quality. Being the best is a by product of the process of good work not competing for a trophy.

          • APL
            Posted September 12, 2012 at 8:27 am | Permalink

            Bazman: “I just want them to do the job correctly.”

            But how do you know the surgeon you are allocated to perform you operation is merely competent or the best in his field?

            Once you know that, which would you choose to perform you life saving operation?

            And without metrics and an element of competition, how would you ever have the opportunity to find out?

            Bazman: “Being the best is a by product of the process of good work not competing for a trophy.”

            Yes, but being the best is also motivational and encourages better work, which improves the product and service to the benefit of the customer.

            By the way, just launching a product and claiming it is the best, doesn’t mean it is, it has to compete in the market place and in the end it is the consumers who decide based on cost and quality, depending on which is most important to them.

            For example, the British consumer has by and large chosen low cost and quality in clothing compared to high quality, high cost at the expense of our own indigenous clothing industry.

    • uanime5
      Posted September 4, 2012 at 8:30 pm | Permalink

      Don’t forget about all the repairs and new building for state schools that were cancelled, along with playing fields being sold off, to pay for his pet projects.

      • Jerry
        Posted September 5, 2012 at 9:27 am | Permalink

        @uanime5: You expect the Minister of State to micro-manage each and every school in the country, what you cite is basically miss management by either the school or LEA surely?

        • Posted September 5, 2012 at 7:55 pm | Permalink

          No it isn’t Jerry.

          Individual schools and LAs do not have the funding for complete rebuilds. This has to come from central government. Were multi-storey building are clearly failing desperate measures such as selling playing fields have to be taken. This is happening where Michael Gove cancelled promised rebuilds so that he could use the money to fund his pet projects instead.

          • Jerry
            Posted September 6, 2012 at 8:49 am | Permalink

            Most of these schools don’t (didn’t) need complete rebuilds Rebecca, they just need(ed) repairs. Buildings don’t go from fit for purpose to failing down, it’s a gradual process of decay so if any building is literally failing down then questions should be asked about the prior management of the school or LEA.

          • Posted September 6, 2012 at 12:27 pm | Permalink

            “Most of these schools don’t (didn’t) need complete rebuilds Rebecca, they just need(ed) repairs. ”
            You clearly know very little about mult-story prestressed concrete structures Jerry.

            Indeed, prestressed concrete multi-storey structures are monitored and schools know their buildings are failing and will soon become unsafe, leading them to having to move their children to random office blocks in emergency situations so that children are all over town and teachers are having to drive all over the place between classes.

            So LAs and headteachers are aware that these situations are coming and do everything they can to avoid them despite the cancellation of hard won, promised and consulted rebuilds, like selling off playing fields to get the essential rebuilds or making inappropriate mergers of schools to gain an academy rebuild for a school which couldn’t otherwise get it (under the last government – when academies got rebuilds).

          • APL
            Posted September 12, 2012 at 8:43 am | Permalink

            Jerry: “it’s a gradual process of decay so if any building is literally failing down then questions should be asked about the prior management of the school or LEA.”

            I agree with Jerry, there should be a maintenance budget sufficient to cover the wear and tear on a building, a lot of old schools were built at the turn of the previous century and lasted well into the end of the last century and with proper maintance could still have been perfectly serviceable.

            Now in the event of the school being overcrowded, well, we are probably back to our old friend immigration! The population of the UK is in decline, and the ’67 abortion act has exacerbated the trend. If our schools and indeed our infrastructure in general is overcrowded (water supplies etc ) it is because of our political classes have sought to make it so.

          • APL
            Posted September 12, 2012 at 8:47 am | Permalink

            Rebecca Hanson: “Indeed, prestressed concrete multi-storey structures are monitored and schools know their buildings are failing and will soon become unsafe, ”

            Prestressed concrete structures may well have a maximum design life, but I am thinking of the old school buildings that were built during the beginning of the last century, have already lasted a hundred years or so but are often demolished and replaced with the structures you ( appear to ) dislike.

            Now that may be an unholy alliance between the local planning authority, the construction industry and politicians – the pretext to destroy perfectly adaquate old school buildings is that they have become overcrowded. Gee, with a declining birth rate, why would that be??

  13. Andrew Fletcher
    Posted September 4, 2012 at 8:14 am | Permalink

    Perceptive as ever: thank you. But maybe invest in a proof reader?

    • lifelogic
      Posted September 4, 2012 at 9:28 am | Permalink

      Especially for my posts.

      • Bazman
        Posted September 5, 2012 at 5:47 pm | Permalink

        They need proof reading for sense.

  14. Matthew
    Posted September 4, 2012 at 8:39 am | Permalink

    You’re correct to draw attention to this.
    In the private sector, where companies have a balance sheet the distinction is clear. Any capital investment goes straight to balance sheet assets, but the expenditure has to be reciprocated by increases in the P&L account over three years or more or however long payback is agreed.
    In the public sector investment and consumption are woolly terms
    If Mr Osborne has the intention of boosting some infrastructure spending with yet more borrowed money, part of the economy will feel better for a while. Then the hangover will set in again.
    I would have thought that these routes had been tried and tested in the past and failed.
    If banks would lend again in a competitive banking market, small and medium sized companies would slowly start to expand.

    • lifelogic
      Posted September 4, 2012 at 9:35 am | Permalink

      “In the private sector, where companies have a balance sheet the distinction is clear”. Well not alway – when you look at many of the banks, Insurance companies, Enron and Equitable Life the clever accounting and duff accounting rules have so much to answer for.

    • norman
      Posted September 4, 2012 at 11:02 am | Permalink

      In the private sector economic decisions tend to be made by people with knowledge of economics, or the life of the company is short lived.

      Carry on spending!

  15. Acorn
    Posted September 4, 2012 at 8:41 am | Permalink

    Reminds me of that Kevin Costner film, Field of Dreams. “Build It and They Will Come”. The mantra of the “supply siders”. We don’t have a supply problem we have a “demand siders” debt problem, particularly in the household department. Until the latter have the cash and the confidence to start spending again we are not going to use up the capacity gap that allegedly exists in FU-UK. The longer the coalition leaves it, two years and counting; the potential capacity of the economy, will shrink down to meet the current actual output.

    On our local industrial estates, there are firms who have been treading water for over a year now. Some are now burning cash and showing signs of giving up when the leases come up for renewal. In the “… They Will Come” bit above, substitute “Customers” for “They”; and the customers AIN’T coming. Start with a big VAT reduction and anything that directly increases the purchasing power of Joe Public.

    • A different Simon
      Posted September 4, 2012 at 1:24 pm | Permalink

      Acorn ,

      Yep , if there is anything private enterprise excels at it is getting the supply side right .

      This is one reason I’m so annoyed with DECC and OFGEM who are basing the whole countries future on high energy prices due to shortages .

      I was looking at the ONS figures for inflation .

      From Jul 2007 to Sept 2012 RPI was supposed to be 17.47% and CPI 17.34% .

      Everyone’s experience is that Food and energy have gone up much more than this , of the order of 40-60% and it got me wondering why the official rate of inflation is so low ?

      The reason appears to be because the figures include mortgage interest payments which have of course gone down due to ZIRP .

      This is cherry picking though because the headline figures do not include the correspondingly much greater amount which you need to save for old age due to low growth and low annuity rates .

      The bottom line seems to be that people are already spending their retirement money before they even reach retirement just to make ends meet .

      All that future demand has already been brought forward and used and won’t be available when today’s workers retire .

      Saga holidays in future will just almost entirely made up of ex public sector workers .

  16. oldtimer
    Posted September 4, 2012 at 8:50 am | Permalink

    Another very clear description of the reinterpretation of the meaning of words by Mr Brown and the corruption of the national accounts. It makes the case for minimising government control of, and intervention in, activities which properly belong in the private sector where they can be subject to competition. It is unfortunate, in the extreme, that the supply of energy continues to be subject to misguided government interference.

  17. Vanessa
    Posted September 4, 2012 at 9:13 am | Permalink

    Politicians have never been known to be good at accounting !!

    • lifelogic
      Posted September 4, 2012 at 9:36 am | Permalink

      Better at spin, religions, buying votes with your money and broken promises.

    • norman
      Posted September 4, 2012 at 11:04 am | Permalink

      Which is why we should give them as little of our money as possible in the first place.

    • outsider
      Posted September 4, 2012 at 8:13 pm | Permalink

      Dear Vanessa,
      In my experience, they are often extremely good at “creatives accounting”.

  18. JimS
    Posted September 4, 2012 at 9:16 am | Permalink

    You could also have mentioned that public sector capital spending can be converted into current spending by accountancy scams such as PFI.

    Public sector accounting should be simple; this is the money we were given and this is how we spent it.

    The introduction of commercial accounting methods helps nobody except the spin merchants.

  19. oldtimer
    Posted September 4, 2012 at 9:48 am | Permalink

    A good place to start a through review of state, and state induced, spending is to follow the recommendations of Mr Peter Lilley MP in his report on the Stern Review to be found here:
    http://www.thegwpf.org/wp-content/uploads/2012/09/Lilley-Stern_Rebuttal.pdf

    It is devastating stuff.

    • forthurst
      Posted September 4, 2012 at 12:43 pm | Permalink

      Sadly the CAGW movement is seriously undermined by those within its ranks who have conspired to trash the West whilst charging it for the privilege. That is why everything they utter is unmitigated tripe. Most of the rest are innumerate airheads who will climb on the next available eco-loon bandwagon to nowhere.

  20. Posted September 4, 2012 at 10:20 am | Permalink

    Completely agree about the dishonest way some politicians call current spending “investment”. It may not be a totally simple difference but they should be called on it and asked to retract every time.

    Building schools may count as investment but if, like the average public sector construction programme, they cost at least 8 times what they should (I have perviously proven this ratio in regard to the Dome, Crossrail, new London sewage outlet and new Forth crossing) then they are still a bad deal. The best investment would be to find out where 7/8ths of the money goes (probably more into state parasitism than outright theft but I may be wrong) and stop it.

  21. merlin
    Posted September 4, 2012 at 11:29 am | Permalink

    The virtual business would be my suggestion for running government, you can run virtual business from an i phone, words like micro-managing spring to mind. Many people work from home and there is video conferencing. Why spend billions on huge expensive buildings when you can do everything using modern technology? Government is too big and there needs to be less of it and I mean by that, fewer buildings and fewer people, this would save the overburdended taxpayer many millions of pounds. Security is probably the biggest worry but I’m sure the technocrats would sove that one. The virtual office exists so does the virtual classroom how about the virtual government or the virtual parliament, it will happen anyway-the sooner the better.

    • Jerry
      Posted September 4, 2012 at 2:59 pm | Permalink

      Whilst I agree, and few would argue, that government is to large I would suggest that your idea is a non runner not only because it is inherently insecure (on a number of levels) but also likely to end up costing as much! Technology is the biggest worry, not only does it fail (a government needs to be 24/7/364, come what may, war, flood, plague) but is always obsolete by the time it is installed and thus would need constant updates at vast costs due to the need to be 110% secure [1]. Not only that but many companies who have used virtual meetings/officies have realised that personal meetings (were body language etc. is a lot clearer to interpret) are not only necessary but essential.

      Also, don’t forget that many of the financial crises over the last 25 years have been caused by either unauthorised electronic trading, under supervised electronic trading or simply because of electronic trading.

      [1] it could make any current government IT over-spend look like lost pocket-money…

  22. merlin
    Posted September 4, 2012 at 11:35 am | Permalink

    I worked for a very large company in the past with massive buildings, offices etc and we moved from a small ofice to a very large modern building stuffed with technology, rows of computers and desks. When it came down to it you actually worked with a very small number of people and it was those people who were important not all the office equipment scattered everywhere and it was the interactions with the individual people that really mattered and helped to achieve objectives and create business.

  23. merlin
    Posted September 4, 2012 at 11:41 am | Permalink

    The atomisation of state education, great idea. Children/students are sent to state schools to mix with other children that they do not neessarily like, I would call it enforced socialisation. Why shouldn’t children have the option to be taught at home by using the virtual classroom and not be made to interact with children they don’t like. As adults we are not forced to mix with people we don’t like , we choose our friends very carefully. Eventually we will probably all work from home anyway.

    • uanime5
      Posted September 4, 2012 at 8:38 pm | Permalink

      Adults get paid to work so they have an incentive to work. Children are not paid to learn so they’re likely to ignore the virtual classroom and play video games instead.

      • Jerry
        Posted September 5, 2012 at 9:37 am | Permalink

        @uanime5: Surely that is were parental supervision should come in…

      • Richard
        Posted September 5, 2012 at 2:14 pm | Permalink

        Uanime5,
        Its quite easy to ensure students who study at home for part or all of their course actually do some work.
        All log on and log off events can be recorded and monitored in real time by the school or college.
        Teachers can set tasks to complete, tests can be set and can have deadlines for completion.
        Students can also interact with other students via the web/intranet system.
        It is already happening at Uni and FE level and is being used increasingly by schools with lessons and lectures appearing on line.

        The very best tutors in the country could teach all the nations students rather than just 30 at a time.

  24. Mike Wilson
    Posted September 4, 2012 at 11:47 am | Permalink

    Regarding the shuffle of cabinet posts – it strikes me Mr. Redwood knows a lot more about the economy than Mr. Osborne – I wonder why the Conservative Party does not make use of its talents.

    • alan jutson
      Posted September 4, 2012 at 3:34 pm | Permalink

      Mike

      Sadly I think JR would not find it easy to fit in, he talks too much common sense too often, and actually has a good deal of Banking and Business experience to go with it.
      Not really an asset when you are trying to spin a story of constant good news.

  25. AndyC71
    Posted September 4, 2012 at 11:49 am | Permalink

    It was on this issue that I first realised there was something amiss with Mr Cameron. It was one of the TV debates in 2010, and Gordon Brown started spouting his nonsense, equating debt-financed public spending with economic growth, and equating tax cuts with taking money out of the economy. Now, Mrs T would have pulled him up on all that, told him he was wrong, and demonstrated to the audience why he was wrong. Mr Cameron just sort of looked puzzled. I get the impression he means well, but lacks the intellectual rigour to drive anything through. Same with Europe.

  26. Adam5x5
    Posted September 4, 2012 at 11:59 am | Permalink

    An extra or new school may be welcome, but it too simply increases the costs of educational provision by the interest on the extra debt.

    This sentence leapt out at me as being the source of all the government’s financial problems.

    Why borrow, surely a country with one of the largest economies in the world could afford to build a school for cash?
    Admittedly it may put a small delay in the project, but given how long these projects tend to take in the public sector, it would only be a small proportion.

    The government should not borrow unless absolutely necessary (some borrowing is obviously required to cover the temporal gap between expenditure and tax receipt). If the government can’t afford to pay outright, it shouldn’t borrow.

  27. Alte Fritz
    Posted September 4, 2012 at 12:21 pm | Permalink

    It is very worthwhile to remind us of Gordon Brown’s interesting understanding of investment which was reminiscent of those advertisements which urged one to invest in the football pools.

    The dilemma of defining public investment is in part a function of a state which does so much. There will always be someone who argues that any public spending is a waste; Victorian public health proposals faced the argument, but we now have a state which comes close to wanting to do or regulate everything. That ends up legitimising every project irrespective of merit.

  28. Lindsay McDougall
    Posted September 4, 2012 at 12:23 pm | Permalink

    I agree 100%. Since you give examples of transport infrastructure, let us focus on that. There are a limited number of good investments available.

    Speeds on many of our motorways have fallen and there is a case for spending money on widening them, with toll road finance an option. Motorists clearly wish this to happen. This are also a number of relatively low cost junction capacity improvements that would be worthwhile. No matter how sophisticated modern appraisal methods are, the main motivation will be saving drivers’ time.

    Improving links to the ports is a good idea if we are to have an export led recovery. For those who favour rail freight, try finding a port that would be willing to run a rail link right to the quayside.

    London clearly needs more airport capacity and it is a good idea to proceed with a second runway at Gatwick right now, so that it can open in 2019.

    • Jerry
      Posted September 4, 2012 at 3:21 pm | Permalink

      The M6 toll road is under used, there is little or no evidence that toll roads (unless there is no other route) actually work in the UK, as for Gatwick, that process can’t even start until 2019, yes the physical plans could be drawn up but that is about it, no building work could start before 2019 even if any the planning enquiry could happen before. Any attempt would land up in the high court quicker than Usain Bolt took to run a 100m…

      Oh and by the way, most rail linked container ports do already have rail links as you suggest, the problem is not at the railheads but the bit in between – hence why I have said in the past that it makes more sense to improve North/South, East/West rail freight links than spend money on HS2.

      • lifelogic
        Posted September 4, 2012 at 7:42 pm | Permalink

        It is hardly surprising the M6 toll is under used as there is free, unfairly subsidised competition running alongside, the only reason to use it is to save a few minutes and it is longer too I think so more fuel.

        • Jerry
          Posted September 5, 2012 at 9:48 am | Permalink

          There is also a national A road alongside the national Motorway, your point being what?

          lifelogic, you seem to be making a case for road pricing and those GPS location reporting cards that were dubbed as a “Spy on the Windscreen” when last suggested, I thought you were in favour of libertarian Conservatism, not a Junta!

          • lifelogic
            Posted September 5, 2012 at 8:58 pm | Permalink

            Clearly protections are needed as with mobile phone which already track you.

            If you have two similar quality roads and one is free due to tax subsidy and the other has to be paid for then the only real reason to use the paid one is fairly bad congestion on the other. It is just unfair competition just like the BBC is.

        • Bazman
          Posted September 5, 2012 at 5:46 pm | Permalink

          The toll road was built when the M6 was already there. You cannot start charging to even things up. It was built as a faster alternative if you are willing to pay extra. They found out that most are not willing to pay extra. This was the financial gamble and now you expect them to be bailed out?

          • lifelogic
            Posted September 5, 2012 at 9:01 pm | Permalink

            I never suggested that they should be bailed out, just explained why many do not use it namely unfair, tax subsidised, competition. But they knew that when they took the contract.

          • Bazman
            Posted September 6, 2012 at 5:34 pm | Permalink

            You then propose toll roads as the system that should be used by default.

      • Lindsay McDougall
        Posted September 5, 2012 at 12:27 am | Permalink

        The M6 toll road is under used because it is over priced. I’m not quite sure why. On most toll roads, total revenue is fairly flat aroung the optimum toll level, so nothing dire would happen if they experimented by reducing the toll by 10% or 20%.

        • Jerry
          Posted September 5, 2012 at 10:04 am | Permalink

          It’s underused because it is over priced by a factor of 100%, why would anyone (other than in very exceptional circumstances) choose to pay to use a road when a free pre-paid alternative exists?!

          As I said to “lifelogic” even if a section of the M6 was made into a toll road there is are alternate A roads, if those are unsuitable then there is the A1(M) to the east and so on. Why do you think that the M25 around the west of London is so busy, it’s not just because of the M4 and M40 interchanges, it’s because people choose to travel via the western side to avoid the Dartford toll, on the other hand the Severn tolls work because there isn’t really an alternate route.

          • Lindsay McDougall
            Posted September 6, 2012 at 3:25 pm | Permalink

            I will tell you why. Because they are businessmen or sales reps in a hurry and the police sometimes turn a blind eye to people travelling at 115 miles per hour on M6 toll.

          • APL
            Posted September 9, 2012 at 3:51 pm | Permalink

            Jerry: “why would anyone [snip] choose to pay to use a road when a free pre-paid alternative exists?!”

            Why indeed?

            Neatly illustrating the concept of the state sector ‘crowding out’ private initiatives.

      • Lindsay McDougall
        Posted September 5, 2012 at 12:31 am | Permalink

        I’d settle for the Gatwick design, Orders and Public Inquiry being complete by 2019. Mustn’t be greedy.

        • lifelogic
          Posted September 5, 2012 at 9:02 pm | Permalink

          So Cameron will be working for the EU by then I assume.

    • Martyn
      Posted September 4, 2012 at 6:06 pm | Permalink

      Lindsay,
      “Improving links to the ports is a good idea if we are to have an export led recovery. For those who favour rail freight, try finding a port that would be willing to run a rail link right to the quayside”. Many years ago it was proposed to turn Didcot Parkway into a designated inland container port. That fell by the wayside, can’t recall why though there was talk at the time of Union objections amongst other factors. However, what you suggest already exists and there is an interesting paper on the subject here (Apologies, John, but this link is right on topic):

      http://www.southamptonvts.co.uk/admin/content/files/Capital%20Projects/17F2%20Rail%20Traffic%20Oct2011.pdf

  29. RDM
    Posted September 4, 2012 at 12:26 pm | Permalink

    Well said that Man! We need to start generating wealth.

    Regards,

    RDM.

    • Jerry
      Posted September 4, 2012 at 3:24 pm | Permalink

      Unfortunately both the current Chancellor and Business Secretary are still in their posts….

      • lifelogic
        Posted September 4, 2012 at 7:49 pm | Permalink

        Mr “morally repugnant” and the anti business secretary.

        After all people are seldom more innocently employed than when they are, honestly employed, in stopping the government grabbing and wasting all their money.

  30. Simon George
    Posted September 4, 2012 at 1:18 pm | Permalink

    Since you are considering an effective programme for capital expenditure I would like to make a suggestion. Capital expenditure on a Dutch-style segregated cycling infrastructure system would inevitably inrease cycle use and reduce the problems of congestion, noise and pollution which tyrannise our communities through over-reliance on motorised transport. It would result in significant health benefits and lead to considerably reduced NHS costs through illness and injury. It would save lives and improve life for everyone.

    • Iain Gill
      Posted September 4, 2012 at 2:39 pm | Permalink

      If this was true Milton Keynes NHS would be spending significantly less on “illness and injury”, it isnt, so this is nonsense I am afraid.

      • Simon George
        Posted September 4, 2012 at 4:07 pm | Permalink

        Milton Keynes is not the template for cycle planning I was referring to. I am referring to the Dutch model and that found in Copenhagen and other European cities.
        The British Medical Assocation has published a 103-page report calling on the Government to curb car use, if it wants to improve the nation’s health. ‘Healthy transport = Healthy lives’ stresses the social and economic case for reducing car use, and getting more people to walk and cycle. If you think this is “nonsense” I suggest you take it up with them. http://www.bikehub.co.uk/news/sustainability/curb-car-use-urges-bma/

    • Jerry
      Posted September 4, 2012 at 3:29 pm | Permalink

      You still promote this without any mention as to how it would be funded, would you be prepared to pay a yearly “BED” (Bicycle Excise Duty) tax or would you wish cyclists to carry on free balling off the motorist and road hauliers…

      • Simon George
        Posted September 5, 2012 at 7:06 am | Permalink

        It would be funded in the same way that the roads are funded. Motorists do not pay for the roads.They pay a vehicle emissions duty if applicable which is obviously not the case with bicycles. Roads are paid for out of general taxation and council tax and of course motorists do not pay the full costs of motoring when the externalities of health issues and horrific accident costs are taken into account.

        • Jerry
          Posted September 5, 2012 at 2:15 pm | Permalink

          @Simon George: Sorry but motorists do pay for roads, that is what the VED is all about, what fuel duty is all about, what those taxes are not is ring fenced -meaning that the income goes into general taxation receipts- which might explain your miss-conceptions.

          • Simon George
            Posted September 5, 2012 at 7:26 pm | Permalink

            Yes, VED goes into general taxation receipts and the roads are paid out of general taxation. So a non-driver who pays council tax and income tax also pays into general taxation and pays towards the roads, possibly far more than a lower earning car driver. Tax paying non-drivers also pay towards motorways. Car drivers do not pay for the roads and need a licence to use them unlike cyclists who do so by right.

          • Jerry
            Posted September 6, 2012 at 9:04 am | Permalink

            Simon, please feel free to read up the history of motoring taxation, rather than just quote from the angry cyclist magazines editorials, motorists pay for the roads and a lot more besides… This is one reason why the Treasury is so against scrapping VED. Non drivers pay nothing towards the roads as they do not pay VED nor fuel tax.

    • Mark
      Posted September 4, 2012 at 4:26 pm | Permalink

      I can promise you that cycling does little to reduce congestion in Holland. In fact, it’s often designed to CAUSE congestion through traffic priorities.

      • Simon George
        Posted September 5, 2012 at 7:09 am | Permalink

        By prioritising pedestrians and cyclists the attractiveness of driving is reduced. This results in drivers turning to cycling where appropriate and congestion is eased with all the other resultant benefits as well.

  31. BobE
    Posted September 4, 2012 at 1:20 pm | Permalink

    Only 2 years and 7 months until the next Labour government folks.

    • Jerry
      Posted September 4, 2012 at 3:31 pm | Permalink

      It will be if people who normally vote Tory spite their own pockets (never mind noses) and vote UKIP!

  32. REPay
    Posted September 4, 2012 at 1:36 pm | Permalink

    This Orwellian use of “investment” for all state spending was prevalent under Brown. The idea of the perils of “savage cuts” as experienced in the UK (ho, ho) has just been mobilized by my NPR (National Public Radio) the BBC’s equivalent in the US as a reason to be very worried by Romney/Ryan even though Ryan’s planned “cuts” will not reduce the deficit until 2050…

    I am very worried by the fact that the west cannot break its addiction to borrowing to live – and that our commentators seem to assume this is business as usual. That is not investment! I’m off to invest in a capuccino.

  33. Mark
    Posted September 4, 2012 at 1:38 pm | Permalink
  34. merlin
    Posted September 4, 2012 at 2:32 pm | Permalink

    @ Pete the BIke

    I couldn’t have put it better myself absolutley spot on, just to follow, any nationalized entity usually fails and I think it was Ronald Reagan who said Governements should keep out of everything and the the cathchphrase ” I’m from the Government and I’m here to help” Nationalisation is a catastrophe regarding virtually all aspects of life. Apart from private armies why not privatise everything, at least it would be run efficiently. I love to know where this complete myth came from that somehow Governments are good at running things. I absolutley agree that state education, especially comprehensive education is a total failure and is political brainwashing through left wing teacher unions.

    • Iain Gill
      Posted September 4, 2012 at 3:10 pm | Permalink

      yes but state education prior to comprehensives was rubbish too

      • Jerry
        Posted September 5, 2012 at 2:21 pm | Permalink

        Unfair might be a better description, age 10 or 11 was far to young to stream kids into their futures.

  35. merlin
    Posted September 4, 2012 at 3:32 pm | Permalink

    @ jerry

    Appreciate your comment and what you say is perfectly reasonable, and yes the history of technology and government is not a good one, there have been many examples of Government failure with modern technology, paying child maintenance springs to mind. Regarding floods, earthquakes and Governments. The people who are at the scene are the ones who do most of the helping and saving, in other words local people and local services. after the event has happened. Governments use the the disaster to show how great they were in that terrible event and proceed to make political capital out of it. Then the money suddenly appears and the Government says it is going to do this and that and we all know what usually happens-absolutley nothing at all. The history of all governments is littered with example of this globally. People on the ground make a difference in other words ordinary people, individual people make all the difference and not Governments. Big Government should be broken up and become more localised and run along the lines of a virtual business. The n government would probably be more accessible to the average Joe Soap.

  36. waramess
    Posted September 4, 2012 at 5:55 pm | Permalink

    The “socialists must laugh their heads off at how the right wing of the Conservative party has adopted their hair brained schemes; for what else would the government need to spend capital on, other than defence of the realm?

    40 years ago we were told that only the government was competent to own “essential services” such as water, electricity, gas, coal and anything else they could think of.

    A young lady with a handbag quickly saw off those charlatans and privatised the lot.

    Now we are told that the Conservative model for health, education, social housing and even roads is better than the socialist model. Does this mean that the Conservatives are better at socialism than the Socialists?

    Profitability and competition ensure the most economic use of capital and they are both chronically absent from all types of government capital spending.

    It would explain why most forms of government investment eventually go wrong and explains why the running of hospitals, schools, railways and other government provided “services” are managed so badly.

    We know they are in a mess, even the socialists agree, and we know the state is not capable of changing its ways when it refuses to adopt the disciplines of competition and profitability.

    The private sector shows the way with education and health so why do we struggle to maintain the nonsense of a state controlled system when the state is demonstrably incapable of providing an adequate service.

    Privatising all the things that government “does”, other than defence, and restricting them to raising taxes for current spending alone must be the aim. Do we really need to wait for another lady with a handbag to do the job for which the right wing ought to be fighting?

    • Bazman
      Posted September 4, 2012 at 8:37 pm | Permalink

      Competition ensures the most economic use of capital. It would explain why most forms of government investment eventually go wrong and explains why the running of hospitals, schools, railways and other government provided “services” are managed so badly. That will be like the utilities then? Silly fantasy by a silly fantasist. 80 year old Idiot no doubt?

      • waramess
        Posted September 5, 2012 at 2:22 pm | Permalink

        Actually PROFITABILITY and competition ensure the most economic use of capital.

        You are clearly not complaining about the quality the private sector delivers but only the price.

        I agree with you that, particularly in the case of utilities, where there is no competition or where there is only competition between retailers with one dominant producer then government should be setting a maximum dividend rate that can be paid by the producer to its shareholders, which of course will have the effect of keeping prices down.

        No government since privatisation has properly addressed this issue other than appiont a regulator and, as we all know, the first and most important job of any regulated industry is to corrupt the regulator

        • Jerry
          Posted September 6, 2012 at 9:15 am | Permalink

          There is a case for state control or at least very effective regulation of the utilities were monopolies or cartel like practice can exist. As for share dividends, that is a fails herring as it doesn’t control directors pay or other corporate expenditure.

          • waramess
            Posted September 6, 2012 at 11:23 am | Permalink

            Not a red herring at all. Directors pay and expenses will be no more than a pimple on an elephants backside and it will be up to shareholders to control how big the pimple becomes/

        • Bazman
          Posted September 8, 2012 at 8:45 am | Permalink

          Let me set you straight on competition between utility companies. There is none. There is only competition between billing companies. Instead of the customer benefiting, the shareholders do and sometimes in the case of banking no one except the managers do. They are not directors. They are managers as they face only having their bonus cut to six figures instead of seven for incompetence, or the sack with a massive pay off. The directors of the banks nearly brought the system down. Where were the shareholders then? Oh! to much regulation? The main problem? Ha! Ha! The banks are state owned or bailed out and any collapse of the power system would see the same. Would the energy companies pay for a nuclear clean up? In your dreams. At the moment we see trains running with empty carriages and a fare fiasco on par with electricity tariffs due to imaginary competition Don’t bore us with your silly right wing fantasies that have no bearing to past and present realities.

    • uanime5
      Posted September 4, 2012 at 8:49 pm | Permalink

      Given how expensive the rail, water, and energy industries it’s clear that the private sector isn’t better than the public sector and is often much worse. I have no doubt that the cost of healthcare and education would rapidly increase if these areas were privatised.

      The belief that the private sector is always better is a right wing fantasy that has been repeated disproven.

      • Jerry
        Posted September 5, 2012 at 2:36 pm | Permalink

        Attaining their true price might be a better description, most nationalised utilities and transport sectors were subsidised in the 1960s and ’70s. Those that were not, such as the telephone network, was so underfunded that new customers and new homes often had to be on a waiting list to get even a ‘party-line’, there were ways to get a phone line quicker but (from what I can remember) your order needed to come via your employer/business.

        Yes there are abuses, no one (other than those in receipt of dividends) would argue otherwise I suspect, but the service tends to be a lot better. If Health provision is ever fully privatised then one thing will be for sure, like with telephones, there won’t be a waiting list…

      • Bazman
        Posted September 5, 2012 at 5:41 pm | Permalink

        Posts like these are heresy you are clearly deluded or insane could you please stop trolling with such outlandish and ridiculous comments such as these. The reason they are more expensive is that competition is not fully realised. If it where made so if you did not have any money you could not receive these services and where there was no demand they did not exist then they would be cheaper for some and more expensive for others. Such is life. Where this was the case new companies would fill the gap providing services at the right price. If you can still not afford them then you should make your own provision or get together with your neighbour or local church and this is clearly what would happen. Some generous employers may even provide the services or money at preferred rates for loyal employees who do not make trouble or question anything such as wages or health and safety. Ram it.

      • waramess
        Posted September 6, 2012 at 11:29 am | Permalink

        uanime5, the private sector will always charge as much as it can get away with and this will normally be regulated by the competition. Don’t confuse the private sector with honest trading for at the first possible opportunity it will resort to dishonest trading.

        Government must ensure there are no monopolies, and if there are they must control their pricing, otherwise competition will ensure a fair price to the public.

        Remember your own preference of public ownership is void of the independent control of competition.

        • Bazman
          Posted September 6, 2012 at 5:39 pm | Permalink

          Public ownership is void of the independent control of competition? There does not seem to be much competition in any of the privately owned public services except takeaways.

  37. merlin
    Posted September 4, 2012 at 9:13 pm | Permalink

    @ Iain Gill

    state education prior to comprehensives was rubbish too

    I’m afraid I have to disagree by stating that before the disastrous introduction of comprehensive education, pupils went to school and actually learnt things. Before the 1944 Butler Education Act when education was nationalised students left school actually able to read and write, students and parents had to make a small contribution to their education as many local schoosl were run by the church or charities, only if they could afford it, of course.
    After 1944 we then had the grammar school, secondary modern system where you had to pass the 11+ to go to grammar school. Many successful future leaders were created by this system, and, in fact, the grammar schools were more successful than the public schools at the time.
    Today if you are an ordinary student from an unpriviliged background, in general, you have 2 choices you either go to your local comp or your parents sacrifice everything to educate you privately. This sytem works against ordinary students, who, before Labour stopped it, from benefitting from a grammar school education and all its benefits.
    I am totally in favour of private education, but every town and city in the UK should have a grammar school, interestingly one of the policies of UKIP, by the way.

  38. sm
    Posted September 4, 2012 at 11:20 pm | Permalink

    Given our population and density is increasing 216k plus each year via direct immigration , capital spending on public infrastructure is inevitable as is revenue spending. e Unless we wish to replicate a 3rd world country, they have improved (20 years ago).

    What gives?

    • waramess
      Posted September 6, 2012 at 11:19 am | Permalink

      Why should infrastructure be public?

  39. derekemery
    Posted September 5, 2012 at 12:13 pm | Permalink

    I cannot understand the point of HS2 as like all rail it has to be a loss leader. Why spend so much money on a project that only benefits a tiny minority. I bet less that 1% (600,000) of the UK population will benefit and that includes passengers and rail company and rail manufacturing company staff. However the other 99% will be paying for this for decades in taxation to keep it running. I doubt there will ever be a return on capital just an ongoing loss.

    Technologically it is likely to be the wrong decision completely. The reason is simple. Far more research and development will take place worldwide in car van and planes simply because these are massive markets with intense competition. Already self driving cars are being developed. Who knows what advances in batteries and other technologies will be made over the next 20 years? I suspect there will be even more changes than in the last 20 years. See http://singularityhub.com/2012/09/04/can-high-speed-rail-compete-with-self-driven-cars-and-all-the-technology-of-the-future.

    I would put money on the costs associated with cars vans planes etc dropping noticeably even before the HS2 is completed.and it won’t stop there. Politicians seem to make the poorest choices once technology is involved. Vans that drive themselves will really reduce costs.

    What will they do with HS2 when it is much dearer than the alternatives and the lose passengers? I suspect they will increase the government grants to keep the white elephant running.

  40. David Langley
    Posted September 5, 2012 at 1:28 pm | Permalink

    Its called “Payback” Mr Redwood. How long before the government is paid back for the capital investment it makes year in and year out with our tax money? As you say what does payback mean? If it means the Public will be paid back for the capital investment it has made, surely the policies of the government approved of course and stimulated in the first instance by the majority of the countries constituents will be in line with what most of the populace require.
    The things that get in the way of that as you say are many and varied. One of these is the lack of delivery that your Mr Cameron keeps banging on about but keeps kicking into the long grass of enquiries and yet more consultations. The countries balance sheet should of course by now include an infrastructure that is world class and better. After all we have the finest minds in the world sat 24/7 worrying about delivering what we want. At least 600 in the House of Commons and god knows how many in the other place. At fantastic expense we seem to be in the economic doldrums, I dont think we are getting value for our money. My idea of payback and yours is vastly different. The asset register for Great Britain seems to list vast amounts of clapped out schools and roads, Hospitals in debt and not fit for purpose. Not enough jails and social housing. Supporting vast numbers of people who are probably not citizens of the UK but some other country. I think we do not need over a thousand directors and hundreds of thousands of jobsworths to spend our investments wisely as they have proved in the main to be unfit for that role having little idea of what payback we should have. Its time for a change and get your civvy job ready as this person feels the need to appoint a whole new set of directors.

  41. Bickers
    Posted September 5, 2012 at 5:19 pm | Permalink

    It’s obvious that the biggest threat to our well being and prosperity is Government.

    Government (local, quango’s, national, EU & UN) are smothering citizens and undermining/distorting capitalism. Until we get Government out of our lives (and that of business), for all but the absolute essentials, we’re doomed.

  • 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.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page