The march of the makers?

Not so long ago George Osborne rallied the nation with a ringing cry for a new industrial revival. He summonsed the march of the makers. It was a bold and enticing vision.

Yesterday David Cameron told the country it is engaged in a mammoth struggle to become more competitive and successful in world markets. The background to his remarks was a year of falling industrial output. The most recent figures for exports showed a £9.8bn deficit for August on trade in goods. The quarterly goods exports figures were 3.1% down on the previous quarter.

The government rightly points out that the Eurozone crisis is depressing EU markets more than official forecasters expected. The official forecasters as so often have been far too optimistic and too neglectful about the obvious tensions and problems with the Euro scheme throughout its life. However, the worrying feature of the recent export statistics is exports outside the EU have been falling more rapidly than exports within the EU. The UK in recent months has been going backwards when it comes to selling to fast growing markets, as well as understandably losing sales in the Euro area.

The government needs to revisit its policies for encouraging more manufacture. There are three areas above the rest that need immediate action.

The first is finance. There is still a shortage of bank finance for business, despite all the varied schemes. The government does have to create some new banks out of the embers of RBS and get them into the marketplace as soon as possible. We need more, better financed banks, with capacity to lend.

The second is energy. The UK along with the EU has opted for dear energy. The UK has gold plated the dear energy policies of the EU, and is busily shutting down its coal plants that currently supply substantial amounts of electricity. The US and the emerging market manufacturers have a huge competitive advantage from cheaper energy. The UK needs to wake up and make price central to its energy policy, allowing a new dash for gas.

The third is talent. It will take time for educational reforms to work. These may yield more science and engineering graduates. In the meantime the government as chief educator needs to look at ways at accelerating the retraining of people with scientific backgrounds who would be interested in a career in industry, and to look at shorter courses for talented people who may need some basic training in engineering to be able to operate well in a manufacturing environment.

The decisions taken on corporation tax are helpful, those on CGT and Income Tax are unhelpful. The government has promised to cut the costs of regulation. If done wisely this could be very helpful. We do not want unsafe factories or low quality goods, but we could do with faster planning decisions and less box ticking.

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109 Comments

  1. Mr. Frost
    Posted October 11, 2012 at 5:30 am | Permalink

    The fourth is EU regulation and manufacturing standards, which British manufacturers are subject to even if the markets to which they are selling are not. Therefore, we become uncompetitive as we have to include many extras that are just not needed or appreciate by the ex. EU client market.

    • uanime5
      Posted October 11, 2012 at 6:30 pm | Permalink

      So you’re saying that the if it wasn’t for the EU standards the UK could produce substandard products. Definitely not a positive thing to say about the UK.

      Also some industries also have to obey US and Japanese standards, mainly because they sell their products all over the world.

      • lifelogic
        Posted October 12, 2012 at 4:21 pm | Permalink

        Not substandard just made for the customer’S needs not EU dictat.

    • Bazman
      Posted October 12, 2012 at 4:37 pm | Permalink

      Like excellence?

  2. Mike Stallard
    Posted October 11, 2012 at 5:39 am | Permalink

    Why bother?
    If you need permission to blow your nose, if the power is going to be turned off in a couple of years, if you cannot trust your own bank and if you have to be led by Harriet Harman’s views on equality double overridden by the EU you are starting at a huge disadvantage.
    Then you end up as a villain if you start making money and you lose all sorts of things in tax (like your pension (Mr Brown’s first act) or your house – sorry, mansion).
    Much easier to remain on the government payroll like 46% of us anyway, or, if you are that sort of person, to move to somewhere where you can make a of of money very safely and keep most of it permanently.
    Allow me to suggest Australia or Singapore.

    • lifelogic
      Posted October 11, 2012 at 6:14 am | Permalink

      Indeed the message is leave or get a comfortable job in the state sector, mainly inconveniencing the productive sector.

      • uanime5
        Posted October 11, 2012 at 6:31 pm | Permalink

        Do banks and financial companies count as the productive sector even though they don’t produce anything?

        • lifelogic
          Posted October 12, 2012 at 4:22 pm | Permalink

          They help greatly to produce thinks when run properly.

      • Bazman
        Posted October 12, 2012 at 4:38 pm | Permalink

        What about housing? How productive is that? Rental? Yeah right.

    • Mr. Frost
      Posted October 11, 2012 at 7:25 am | Permalink

      Australia taxes are extremely high and have just as much (in some areas, worse) regulation than us.

      Singapore is a good shout, as is Hong Kong, where I moved to a couple of years ago precisely for the reasons you raise.

      • Bazman
        Posted October 11, 2012 at 7:11 pm | Permalink

        Probably explains why Australia is one of the countries where you can have a good standard and quality of living as a tradesman. Singapore is good unless you have your own political ideas and are a native and not an ex-pat in this very undemocratic country.

        • lifelogic
          Posted October 12, 2012 at 4:23 pm | Permalink

          The UK is undemocratic as is the EU.

          • Bazman
            Posted October 13, 2012 at 8:02 am | Permalink

            You are comparing the UK political system and that of EU countries to that of Singapores Not worth going into except in a comical way, but I doubt you understand humour.

    • Disaffected
      Posted October 11, 2012 at 9:09 am | Permalink

      Canada will not entertain the green lobby rubbish about energy and the US has made a U turn in a dash fro Shale gas.

      Cameron forgot to mention that he has now pulled in millions more of squeezed middle income earners into the 40% income tax bracket- add the NI- and the state takes more of the salary than the person- this taxation should only be for the super rich and then the person should take more of their salary than the state.

      It cannot be right that the people Boris Johnson is talking about (£30-60,000 income) are taking home less than the government, the strivers, hard working etc that Cameron deceptively spoke about. The same people who will lose child benefit (not that they should not) but to make them pay more tax at the same time is a stupid strategy that only Osborne could dream up. The same people who are paying through the nose for fuel to get to work, the same people who have huge hikes in energy bills because the of the government’s obligation to the environment, or to you and me, subsidise useless wind farms on unproven science that are not efficient and will not produce enough energy full stop, let alone cheap competitive energy for industry- coalition madness when they claim the economy is the number one priority. Who could believe them? This is the same government who less than a few months ago gave welfare lifers a 5.2% pay rise against the strivers who stood still or got a pay reduction and pension reduction through changes in RPI to CPI. Once more, this escaped Cameron’s speech. Talk about the NHS, again, no mention of the millions of pound of taxpayer money being given away to foreigners who have not paid into the tax pot, no mention of the billions borrowed and given away in overseas aid, like the £18 million Mitchell gave (through away) to Rwanda of which £8 million given directly to the government against advice. This is the money of the strivers, the workers who deserve better from an incompetent government and should use THEIR money far more wisely.

      • zorro
        Posted October 11, 2012 at 12:42 pm | Permalink

        Indeed, the waste is quite substantial and far better attempts could be made at saving costs. The lack of progress so far does not bode well for the future. The real injustice is the increase for welfare lifers when everyone else takes the hit in various places and doesn’t have as much time to shop wisely and get things cheap where possible.

        zorro

        • lifelogic
          Posted October 11, 2012 at 2:12 pm | Permalink

          Or fix things for themselves or barter one service for another and do not need child care, have to travel to work or buy work clothing ………..

          • Bazman
            Posted October 11, 2012 at 5:11 pm | Permalink

            Obviously never spent much time out of work have we liflogic? Do you think that the unemployed live like English peasants churning bitter and drinking cider in their allotments?

      • Bazman
        Posted October 11, 2012 at 7:24 pm | Permalink

        Tax cuts for the rich funded by the rest of us on the basis that it is their money and somehow they will spend it wisely creating jobs and wealth for us all? Do you believe it? Graduates chasing after menial jobs normally filled by school drop outs and the uneducated masses. The welfare lifers apart from a few hardcore members are there because they cannot get a job that they can work enough hours in even when the wages are minimum, and somehow have to compete with people even more desperate than themselves. Is this the competition and what we should all compete for? Ram it. Many do.

        • Disaffected
          Posted October 12, 2012 at 1:01 pm | Permalink

          Tax is a necessary evil and should not be viewed as a right to take as much as the government can from ANYbody who works. Tax cuts for the rich funded by the rest of us, please give me a break from socialist drivel.

          • Bazman
            Posted October 12, 2012 at 4:41 pm | Permalink

            It may come as a surprise to you that the rich are often rich due to the infrastructure and the education of the population of this country. Hardly a socialist idea. You pay for the services you use.

  3. Caratacus
    Posted October 11, 2012 at 6:21 am | Permalink

    Message from a sole proprietor who could easily expand the business and take on 10-12 people..

    Earlier this year I decided to advertise for two drivers to get things under way. They have to be strong, fit, intelligent, literate and numerate, and have good manners. The post will pay considerably more than the minimum wage and the drivers who work best will be paid the most. The lady in the Jobcentre nearly fainted when I listed the parameters. When I said that I wouldn’t bother them any further and would advertise privately she warned me that I could be prosecuted if I did not alter the wording.

    Then I contacted my accountant to inform him of developments and he arranged an emergency meeting for later in the day to inform me of the tax implications. He implied that it would not be a short meeting, and it wasn’t. I tottered out of his office with a pile of literature to read that evening. Should have listened to the warning klaxon ..

    Got back to the office and started to get ready for my working day. Sorted out the schedule, loaded up the truck (by hand, 3 tonnes) and made a mental note that all the trucks would have to be fitted with tail-lifts for Health and Safety legislation .. more expense..

    Driving along the dual-carriageway, thinking about all the new things I was undertaking, when I was waved into a lay-by which had been taken over by VOSA (vehicle inspectors) and several policemen on expensive motorbikes. The languid pace at which they sauntered over to my truck did not augur well. Two hours later I was allowed to proceed. They had not been able to find a single thing wrong with my vehicle, my licences, paperwork (Hazchem) and were v. grumpy about it; no opportunity to impose a prohibition notice and fine, you see, the better to fill their coffers and justify their continuing existence. Stopped at my usual garage and filled up, nearly passed out when I saw the dials spinning away. Well, I wasn’t hungry anyway ..

    Got back to the office and started to call those people I hadn’t been able to get to that day. They were not impressed.

    Arrived home and was bitten by the dog because he didn’t recognise me.

    Do you know what? B*****ks, I don’t think I’ll bother. All those headaches and for what? An extra £10-15k p.a.? Methinks not, Mr Cameron.

    Here endeth a lesson for Mr. C. which neither he nor his acolytes will read and there’s the pity.

    • Richard
      Posted October 11, 2012 at 9:22 am | Permalink

      Caratacus
      An excellent post.
      I was small business owner for 30 years, I got to the point of employing nearly 50 staff and I could share with you many similar tales of daily hassle from the State which gradually destroys your ambition, energy and enthusiasm to grow and employ others.

      • zorro
        Posted October 11, 2012 at 12:46 pm | Permalink

        Indeed, life is too short for the lack of reward. But Cameron will not know because he has never had to face the state in all its guises to earn a living.

        zorro

      • lifelogic
        Posted October 11, 2012 at 2:15 pm | Permalink

        “Gradually destroys your ambition, energy and enthusiasm to grow and employ others”

        indeed that is the main problem. Why bother if the state is against you and just thinks you are there to be taxed, fined and harassed.

    • David John Wilson
      Posted October 11, 2012 at 10:13 am | Permalink

      Even more worrying is the fact that a government that promised to reduce red tape has done virtually nothing to to improve any of the problems that you listed.

      You are even more likely to be bitten by a dog than you were ten years ago.

      • zorro
        Posted October 11, 2012 at 12:49 pm | Permalink

        Oh they have introduced a heck of a lot more (a good proportion EU inspired) in the last two years…..What was their election slogan, one law/regulation in, two out or some such nonsense. Instead, they have been all in to stir up apathy.

        zorro

    • lifelogic
      Posted October 11, 2012 at 11:47 am | Permalink

      Indeed why bother with Cameron in charge and Miliband soon forget it.

    • Bazman
      Posted October 11, 2012 at 5:15 pm | Permalink

      I’d take that story with a bucket of salt. I work for a small company with a number of vehicles.

    • DrJohn_Galan
      Posted October 11, 2012 at 9:47 pm | Permalink

      Excellent post: my wife persuaded me seven years ago to retire early from running a small business and move abroad. Best decision I ever made – it’s not worth the hassle. As far as I can see, from the more detached position of a non-exec director, it’s getting worse)

  4. lifelogic
    Posted October 11, 2012 at 6:25 am | Permalink

    As you say: Finance and banking, cheap energy, education (a rather long term project), lower simpler taxes, easy hire and fire, fewer but better regulations, less or no EU.

    We all know what is needed but we also see that Cameron is not going to do any of it. So Miliband and Harman it will be in 2015.

    I learn from the BBC’s Newsnight that Miliband’s and Cameron’s speeches were both very good indeed. Which speeches were these? The ones I heard were both totally pathetic, lacking any vision and vacuous from beginning to end.

    • zorro
      Posted October 11, 2012 at 12:52 pm | Permalink

      Yes, John’s items are punchy and can be remembered. I’ve already forgotten what Cameron said except his reference to Paralympians and his son which, although sympathising with his message, I didn’t think was the right thing to mention in his conference speech.

      zorro

  5. A.Sedgwick
    Posted October 11, 2012 at 6:54 am | Permalink

    If someone has just awakened from a three year coma and listened to the highlights of the Cameron and Osborne speeches he could have assumed they were still in opposition. Whilst Blair and Brown are the grand masters of our accelerating downfall,
    the next dynamic duo have done nothing to arrest the situation and whinging about the mess we are in and evoking the blitz mentality to get us through hard times is pathetic. They have wasted half a parliament and are economic no hopers.

    • lifelogic
      Posted October 11, 2012 at 8:07 am | Permalink

      Indeed half way through and they cannot point to anything much positive.

      I see as positive.

      HIP packs (not quite gone alas), the loss of the M4 bus lane, new squatting laws, and the final honesty over Hillsborough disaster. Not much else.

      The negatives are far to many to list. The gender insurance laws, Lord Patten and gifts to the PIGIS being the most absurd.

      • Posted October 11, 2012 at 11:05 am | Permalink

        There’s also the welcome ability to inherit a spouse’s unused IHT allowance. IHT is still however the unfairest and most demotivating tax of all. Having earned all the money I need I have quit the rat race. If I could build my estate further without the state taking about two-thirds of all I earn and then 45% of what I save, I would work to enrich my daughters and hoped-for grandchildren. This must be true of many business-people at the peak of their wealth-generating abilities.

        As to the shortage of finance, that’s entirely in the Government’s hands as it’s hogging the available credit. If it stops borrowing with its AAA rating, lenders will have to find private sector customers. Criticising the banks (for this at least) is classic scapegoating. One might hope for better from even a partly-Conservative government.

        • Denis Cooper
          Posted October 11, 2012 at 2:13 pm | Permalink

          Apart from very short term borrowing, by far the greater part of the government’s borrowing is indirectly from the Bank of England.

          True, initially the Treasury borrows from (predominantly private) gilts investors, but in parallel to buying new gilts from the Treasury much the same set of investors are selling some of their holdings of previously issued gilts to the Bank of England’s Asset Purchase Facility or APF at much the same rate.

          It’s quite easy to establish that the APF now owns gilts valued at about £363 billion, making it by far the largest creditor to the government:

          http://www.bankofengland.co.uk/markets/Pages/apf/results.aspx

          Those gilts have been acquired since March 2009, using newly created money to fund the purchases.

          It’s not quite so easy to compare that £363 billion or so which the Treasury now owes to the Bank of England with the overall increase in the stock of gilts in issue, but the net increase in the government’s indebtedness to normal gilts investors will be relatively small.

          It would be much simpler if the government borrowed directly from the Bank rather than using gilts investors as intermediaries, but not only would that be too transparent it would also breach Article 123 TFEU in the EU treaties.

          The ECB is having the same problem with Article 123 TFEU, which is why it doesn’t buy bonds directly from the governments of the distressed eurozone states but instead goes around the houses to acquire the bonds indirectly through various intermediaries.

          Reply: Indeed. It means that UK state debt (the gilt part of it) is much less than usually quoted, as almost 40% of it is owed by the government to itself, and could simply be cancelled.

          • Mark
            Posted October 11, 2012 at 7:43 pm | Permalink

            Cancellation of gilts would surely lead to an immediate sterling crisis. It would be an announcement of intent never to pay for deficit spending.

          • Denis Cooper
            Posted October 12, 2012 at 8:25 am | Permalink

            More precisely, about 40% of that debt is internal to the UK state, owed by one part of the state apparatus – the Treasury – to another part – the Bank of England.

            But that debt couldn’t simply be cancelled without leaving a massive hole in the Bank’s balance sheet, as the gilts it owns will be an asset roughly counterbalancing the liability of the new money it issued to buy them.

            As that new money, now about £363 billion, has been put into circulation and almost all of it is out of the hands of the state it couldn’t simply be cancelled to match the cancellation of the gilts and keep the Bank’s books balanced.

            Doing that would mean, for example, that pensioners who have been receiving some of the QE money as part of their state pensions – about a quarter of the pension payments in 2009, now perhaps more like a fifth – would have to be told that it was to be cancelled and struck from the balances of their personal bank accounts, and clearly that would not be feasible even if it was ethical.

            As the new money couldn’t be cancelled while it was still in circulation, it would have to be recovered through taxation (mainly) and then the Bank could cancel it – ie the Treasury would have to continue to pay the Bank what it was owed on the gilts until maturity, or alternatively buy them back early, just as with any other holder of gilts.

        • lifelogic
          Posted October 12, 2012 at 4:30 pm | Permalink

          Labour did the IHT improvements tories “promised” £1M each cast iron I assume.

      • zorro
        Posted October 11, 2012 at 12:55 pm | Permalink

        The squatting laws are long overdue and good, but this nonsense about not knowing it was so bad….Crying out loud, John has been screaming this from the rooftops for ages in his economic role, they seem to have a very limited attention span……

        zorro

        • Bazman
          Posted October 11, 2012 at 5:18 pm | Permalink

          Lets see of free expensive prison accommodation stops squatting?

  6. alan jutson
    Posted October 11, 2012 at 7:18 am | Permalink

    Well Mr Camerons speech, sounded Ok, even though it missed out completely the farce of EU Membership.

    But

    Words are fine, it is action that is needed, and that seems rather too little too late.

    We can all talk a good game, well most anyway, it takes but a few hours of preperation.

    Action requires much more homework, and needs weeks and months and years of constant thought, preperation, action, reaction. passion, and above all work to drive it through in order to get results.

    Thus the civil service has to change, or be forced to change, as so much seems to get stuck in the logjam of paperwork and system delay.

    Mr Cameron rightly points out we have the talent in the UK, what he fails to recognise is that government actions are often suffocating it with ever more regulations, overheads, complicated tax systems and laws which make no sense and policies which often contradict each other.

    Example: Banks must lend, but also increase their reserves.

    The one thing I was pleased about, was the blame to be soundly and firmly put on Labour for years of borrow, spend, and waste.
    For without their crass financial incompetence, such urgent measures would not be needed, and perhaps we could have moved forward in a rather more controlled manner.
    But yet again, would we have moved forward at all, if there was no crisis ?.

    Reply: He did refer to the EU, pointing out that he imposed a veto on the Fiscal Treaty – something the two federalist UK parties would not have done.

    • lifelogic
      Posted October 11, 2012 at 11:42 am | Permalink

      “a veto on the Fiscal Treaty” well not really in practise.

    • zorro
      Posted October 11, 2012 at 12:57 pm | Permalink

      Reply to reply – something which they ignored and went about setting up amongst themselves. He didn’t stop their aim, it just slightly inconvenienced them with not much gain for us I guess.

      zorro

    • Disaffected
      Posted October 11, 2012 at 6:51 pm | Permalink

      When is going to implement the second part of his stated action by refusing to allow them to use EU institutions? Have I missed that part? How about the one he was going to stop funding the build in the EU but relented because it would upset the French. How about the contribution increase, did he stop it. By the language he used anyone would think he did. Lots of successes, but the taxpayer is out of pocket and paying more, you know, the strivers, hard workers.

  7. Greg Tingey
    Posted October 11, 2012 at 7:37 am | Permalink

    Plenty of Science & Engineering graduates right now.
    I got my Engineering M.Sc. @ age 46, anf NEVER USED IT, no-one was even interested in employing me (I’m now 66) and there is this “Shortage of trained staff”.
    Let me tell you, the CBI & the IoD &/or any politician who says the quote above is either a liar, or stupid.

    As for “makers”, I was suprised, since that word now often applies to 3-D printer-bots – te next industrial revolution, upon us in the next 5 years, since it has already started…..

    As for power, well:
    Nuclear, nuclear, nuclear – GET ON WITH IT!
    (My first degree is in Physics)

    • Gary
      Posted October 11, 2012 at 9:03 am | Permalink

      I agree that we produce produce more than enough engineering graduates already. Research by Professor Emma Smith shows that a quarter of engineering graduates take unskilled jobs abd only about half get an engineering job (and this problem pre-dates our current depression):
      http://www.bbc.co.uk/news/education-14823042

      There is no supply side problem just a lack of demand and a lack of engineering firms willing to give graduates training and experience. Maybe the push for apprenticeships (that works so well in Germany) will reduce this waste of talent.

      The government’s Migration Advisory Committee is currently advising the government on introducing lower salary requirements in our tier 2 skilled migrant category to make it easier (cheaper) for businesses to bring in non-EEA nationals who do not have the skills but are “promising” and can be trained. It seems madness when our own recent graduates can’t get onto the first rung on the professional employment ladder.

      • forthurst
        Posted October 11, 2012 at 11:37 am | Permalink

        “The government’s Migration Advisory Committee is currently advising the government on introducing lower salary requirements in our tier 2 skilled migrant category to make it easier (cheaper) for businesses to bring in non-EEA nationals who do not have the skills but are “promising” and can be trained.”

        The government could and should save money by shutting down this department for looking for any excuse whatsoever for continuing to import people we don’t need and don’t want from the subcontinent and elsewhere.

        Importing unskilled people to skill up is pretty well scraping the barrel when our own skilled people can’t all find work. By what token are foreign ‘unskilled’ people more ‘trainable’ than those already here?

        • A different Simon
          Posted October 13, 2012 at 10:11 am | Permalink

          Nothing short of criminal . Do these people have children of their own ?

          We need to replace the fifth columnists with patriots .

          Reinstate the death penalty for treason to send out the right message .

      • zorro
        Posted October 11, 2012 at 1:15 pm | Permalink

        Indeed, this will not help the resident workforce or the government’s attempt to reduce net migration based on past performance.

        zorro

    • JimS
      Posted October 11, 2012 at 9:08 am | Permalink

      I obtained an engineering MSc, aged 38, via a government ‘boost technology’ initiative.

      “Come back when you have more experience” was the cry of all the potential employers, so ditto, another ‘unused’ degree.

      Government should stop interfering, telling people how to run their business. It can’t manage its own activities so it is no expert.

      An example: Fuel costs for the local bus operator represent 14% of costs. Fuel prices are rising and the subsidy is being reduced. An experimental bus running on ‘bio-fuel’ suffered engine death after 17 months and gave improved fuel economy of 5% when run on ‘real’ diesel. This fuel is now being adulterated with ‘bio-fuel’ and damage is being found across the fleet. Raising fare prices has not increased revenue as passenger numbers decline. The next ‘big’ idea from government, remove the over-60+ subsidy? Why run a bus at all? One arm of government hands out subsidies and another hobbles any activity.

      • a-tracy
        Posted October 11, 2012 at 4:06 pm | Permalink

        Some bus companies are very inefficient though and can only do this because of the subsidies they get from the taxpayer. Our local service runs a double decker for a couple of passengers throughout the day Monday to Saturday!

    • Sebastian Weetabix
      Posted October 11, 2012 at 12:18 pm | Permalink

      It rather depends what your engineering MSc is in, doesn’t it?

      • Greg Tingey
        Posted October 11, 2012 at 6:10 pm | Permalink

        ENGINEERING

        And, of course, the trained mind-set that goes with it + the first degree …..

        And, of course, and inability to tolerate fools like you!

      • outsider
        Posted October 11, 2012 at 9:13 pm | Permalink

        Absolutely. The only one in demand was financial engineering.

  8. Richard
    Posted October 11, 2012 at 7:55 am | Permalink

    Governments send out mixed messages to business owners.
    One day we are wicked top hatted bosses, exploiting the workers , who need to be taxed more and regulated more, the next day we are desperately needed captains of industry who need to do their utmost to create wealth and employment for the nation.
    Its about risk versus reward and for many I know like me, the overall reward is not great enough to create new businesses or expand existing ones and employ others.
    As well as the things you have mentioned in your article Mr Redwood, administering and collecting your taxes, rapidly increasing red tape, legal hassles, rising security costs and rising insurance costs etc all take the fun out of working harder and expanding.

    • alan jutson
      Posted October 11, 2012 at 8:18 am | Permalink

      Richard

      Risk verses Reward

      You are absolutely right, this is the key to any new business venture or indeed the retention and continuing/expansion of an existing business.

      At the moment in my view, in many cases the reward simply does not reflect the risk.

      Thousands of small business owners often work very long hours for small rewards.
      Rewards which are getting smaller and smaller as the years move on, with the costs and risks of running that business getting larger and larger.

      Governments want people to be self employed and start new businesses, but at the same time they think they are a cash cow which is to be milked/plundered at regular intervals, with tax demands, regulation compliance, employment laws, health a safety issues (risk assessments method statements) and a huge amount of paperwork which has to be completed under threat of automatic fines.
      Thus this very action holds back expansion, as there is less cash to re-invest in that business.

      • a-tracy
        Posted October 11, 2012 at 9:28 am | Permalink

        Funny you should write than Alan, I’ve just received an e-mail about RTI – real time transfer of wage information for all PAYE employees. HMRC are urging all business to prepare now for the April 2013 switchover. You have to send PAYE records in real time each week or month that you pay. There has been no financial assistance to SME’s to pay for this. We have had a payroll upgrade software package costing £342 + VAT and half a day away from the office, to train on how to do this £150 + VAT plus the time and loss of effort from the Director away from the business to do this training for the government’s requirements it is not something to help the business!

        • lifelogic
          Posted October 11, 2012 at 11:43 am | Permalink

          Indeed more hitting over the head for small business from government – why bother.

        • zorro
          Posted October 11, 2012 at 1:17 pm | Permalink

          Plus ca change….government wants more money from you and wants you to pay for the training to do it!

          zorro

        • sm
          Posted October 11, 2012 at 4:25 pm | Permalink

          Why dont HMRC or a division thereof offer to fund a payroll service to new business for the 1st year. Cloud based perhaps?

          Real time info is needed otherwise taxcredits and benefits can end up being under/overpaid. So much better to resolve errors earlier as someone owing money if they are on a low income is not good to manage.

          Citizen income/negative income tax and simpler flatter tax comes to mind, minimal tax deductions.

          • a-tracy
            Posted October 11, 2012 at 6:08 pm | Permalink

            I understand the reason SM, taxing people properly with multiple jobs, better ability to check that new and very small businesses are paying and taxing properly with improved immediate reporting, the cost fully falling on business at a time when we’re counting every pound is annoying.
            The course threatened get this wrong fine, get that wrong fine, and the fact that if a payroll bureau files incorrectly the fine still remains with the small firm.
            These new payroll systems aren’t allowed to automatically send future NEST deductions, apparently the business has to re-key all the information in?! I just hope all the ONS office paperwork will stop once we go live.
            We were also told that the HMRC program where you can calculate up to four employees for free will end, is that accurate Mr Redwood? If so you need to write to all small enterprises using that system sooner rather than later.

    • a-tracy
      Posted October 11, 2012 at 8:54 am | Permalink

      Richard I absolutely agree.

      • Richard
        Posted October 11, 2012 at 9:11 am | Permalink

        Thank you Alan and a-tracey, I used to employ nearly 50 people but now I just employ myself.
        I made a decision a few years ago to stop and pack it all in, after many many experiences of hassle similar to the excellent post by Caratacus at 6.21am.
        My health and happiness and quality of life is much better, even if I have had to accept a somewhat lower standard of living.
        Unions need to realise its not just the workers who can go on strike.

        • zorro
          Posted October 11, 2012 at 1:18 pm | Permalink

          ‘Richard Shrugged’….it seems

          zorro

        • alan jutson
          Posted October 11, 2012 at 8:37 pm | Permalink

          Richard

          “I packed it all in”

          I did the same about 18 months ago.

          Running a smallish business was simply not worth the hastle any more.

          More Risk than Reward, and more time spent filling in Government forms of all sorts.
          Contractors monthly tax returns.
          Quarterly VAT returns.
          VAT inspections.
          CITB training levy forms.
          Risk assesments.
          Method statements,
          Complianace with Health and Safety,
          Toxic waste licences,
          Local authority skip hire agreements (when placed on a road). Planning applications,
          Planning appeals.
          Building regulation submissions.
          Building regulation inspections.
          Trade membership compliance.
          Trade membership inspections.
          Liability insurance.
          Money laundering regulations.
          Companies house tax returns.
          Annual Audit
          Annual Accounts

          I could go on, but sure you and others get the message and know what its like.

          And after all of the above, as a Director you find that you are personally held legally responsible for all of the above.

          Most politicians (I exclude our host) do not have a clue what goes on.

          Yes my income has reduced given my wonderful private pension arrangements have been bu….ed by low annuity rates.

          Those in the Civil Service/Public sector (who I paid for out of my tax deductions) do not know how lucky they are.

          But the day is now my own, to do what I want to do, and if the money runs out, then it runs out.

          At least it will save my daughters from paying Inheritance tax !.

          • alan jutson
            Posted October 11, 2012 at 11:19 pm | Permalink

            OH

            Forgot monthly PAYE Returns

            That would have been another fine !!

  9. stred
    Posted October 11, 2012 at 8:11 am | Permalink

    Listening to DC’s radio interview, in which he told us that the deficit had been reduced, and his conference speech, I was left wondering whether he really believes the words he is speaking. He certainly is a very talented talker and managed to take the remains of the party faithful with him. Perhaps, because he has never had a proper job, he has no idea of the effects of his policies and the increased regulation and taxation. Sadly, we will have another out of touch boggler in charge soon, but this time controlled by the unions.

  10. oldtimer
    Posted October 11, 2012 at 8:23 am | Permalink

    I see that Mr Cameron remains addicted to his absurd Carbon Plan (also signed by Clegg and Huhne and enthusiastically supported by Davey),. Very soon word will get ourt that not only are we required to subsidise yet more windfarms, we shall also be required to subsidise high energy using businesses to discourage them from leaving these shores! I guess this is the modernised equivalent of digging holes so that some one else can come along to fill them up again. The PPE graduates strike again.

    PS I am unable to delete characters if I make a spelling or punctuation mistake. Is this a feature built into the application which runs your blog. It does not seem to be a problem on other blog comments.

    • oldtimer
      Posted October 11, 2012 at 9:13 am | Permalink

      http://m.spiegel.de/international/germany/a-860481.html
      offers a sobering account of the mess in Germany caused by its planned (?) transition to a future based on green energy.

    • David John Wilson
      Posted October 11, 2012 at 10:00 am | Permalink

      One of the major problems with the coutries balance of payments is the cost of oil and gas imports. If subsidising alternative energy can improve this situation it should be welcomed for that reason alone. Any environmental issues are secondary in these days of economic woes.

      • Mark
        Posted October 11, 2012 at 12:54 pm | Permalink

        The best way to reduce the import bill is to take advantage of the shale gas resources we have, and to stop persecuting refineries into closure with green taxes and excessive environmental costs, leaving us paying for expensive imported products rather than refining our own oil.

        • sm
          Posted October 11, 2012 at 4:44 pm | Permalink

          Or we could just stop arbitarily closing coal plant just because the EU hours limit has been reached.

          Its rather silly, particularly if elsewhere in Europe and the World they are building more?

          Gas should be used to backup wind/renewables/ and nuclear baseload until viable storage is commercially available.

          It wont be far off.

          Search for Highview or liquid air. For it to be most effective (70%) it work best near a source of waste heat.

          In the meantime, a few more fast hydro pump storage etc could be built – infrastructure (Wales,England,NI) . I hesitate with Scotland as why pay to build it and then have them confiscated or seized.

          Now that would be spend with a log term payback rather than just QE the banks bets and plays on other asset classes.

    • zorro
      Posted October 11, 2012 at 1:20 pm | Permalink

      Yes, there’s some new solar farm being built in Hampshire which is the size of 90 football pitches. I dread to think what the subsidies are for it, but doubtless it will power a few kettles…..

      zorro

  11. Matthew
    Posted October 11, 2012 at 9:22 am | Permalink

    The conference speeches – all parties – mean little.

    The leader spouts off about certain core beliefs – that drives the audience to their feet – only for these beliefs to never surface again.

    If the UK is to compete as an industrial power then the criterion that you’ve identified need to be addressed as a matter of priority. Some of the best graduates need to be entering industry.

    We can compete in certain fields, but compared to Germany and France we’re well down the industrial league table – we don’t have the strength and depth of middle ranking industrial companies.

    Look no further than our balance of payments.

  12. Gary
    Posted October 11, 2012 at 9:53 am | Permalink

    It’s worth reading the oral evidence given to the Science and Technology Committee (Commons) on the “Valley of Death” (the commercialisation of innovation and research). You can see how perverse our system is:
    a) small, growing, innovative companies aim to grow to £20million then sell out to multinationals as there is no support for them to grow further
    b) there is no support for them to comply with expensive regulations (unlike Germany)
    c) the patents system only works for large companies and SMEs cannot protect and benefit from their intellectual property
    b) UKTI gives extensive help and advice to foreign/multinational companies to invest in the UK i.e. buy our current and future winners

    http://www.publications.parliament.uk/pa/cm201213/cmselect/cmsctech/uc348-iii/uc34801.htm
    http://www.publications.parliament.uk/pa/cm201213/cmselect/cmsctech/uc348-iv/uc34801.htm

    I don’t know how true or widespread it is but I have heard stories of small growing UK businesses with innovative products being taken over by multinationals. The jobs go offshore to cut costs, and the intelectual property ownership and profits and taxes move to lower tax countries.

  13. David John Wilson
    Posted October 11, 2012 at 9:57 am | Permalink

    It is very questionable whether the reduction in corporartion tax was a correct decision. The same effect of reducing the cost of doing business in the UK could have been acheived by reducing employers’ NI contributions. This has the added possible advantages of:
    1) Increasing employment levels.
    2) Improving the cash flow particularly of small companies.
    3) Reducing the costs of exports
    4) Increasing the benefit of home produced products against imports

    • peter davies
      Posted October 11, 2012 at 12:54 pm | Permalink

      They could be clever about this and apply the reduction of NI to the industries they want to target for growth, i.e manufacturing companies

    • alan jutson
      Posted October 11, 2012 at 11:21 pm | Permalink

      David

      Remember you have to make a profit to get an advantage of Corporation tax reduction.

      Many businesses are just about existing so its no benefit for them at all.
      But it means government have not given away much at all.

      Reduce national insurance and the Government gives away a lot, so would need to tax something else to make up for it.

  14. merlin
    Posted October 11, 2012 at 10:31 am | Permalink

    Governments universally are virtually all the same in that it’s always going to better in the future, and the speeches party leaders make are always the same, so much so that the majority of the intelligent public do not even bother to listen to them. If you want to know what this great future that awaits us is like all you have to do is look at the past, a part of time politicians never like to talk about. So how is it now and how has it been for say arbitrarily the last 10 ten years summarising:

    1) More government than ever before

    2) More laws than ever before

    3) More taxes than ever before

    4) More regulation than ever before

    My opinion about the future is not about politicians trying to see who is the best orator or speechmaker is, but about the way it is now, 1 to 4 is the way it is now and this will continue and increase as time goes on. We are at the early stages of totalitarianism and most people do not even realise it. There has to be a change and the only party that can do this is UKIP.

    No government ever voluntarily reduces itself in size. Government programmes, once launched never disappear. Actually, a government agency is the nearest thing to eternal life we’ll ever see on earth.

  15. JoolsB
    Posted October 11, 2012 at 10:38 am | Permalink

    Both Cameron and Osborne’s speeches were impressive – they even sounded like Conservatives for a change. Obviously both were pandering to the grass roots for a change instead of the Lib Dums. What a pity neither mentioned the EU referendum or the English Question even though they are fully aware that most of what they said on education, the NHS, etc. only applies to England. They are fooling no-one and no matter how impressed this lifelong Tory may have been, until they address both these issues, it’s UKIP for me.

  16. Neil Craig
    Posted October 11, 2012 at 10:42 am | Permalink

    The problem is that the theme Cameron was running was about Britain ceasing to be a developed country because the rerst of the world is growinmg past us. But this is the very problem he is not addressing. Non-EU world growth is about 6% and ours is about 0%. The deficit is a symptom not the primary cause of low growth. The cause of low growth is the windmillery, technological Luddism and the EU membership Cameron is, apparently unbreakably, committed to.

    If he actually cared about the fast comparative decline of Britain he would resign and ask Nigel Farage, or yourself or Lord Monckton to become PM & Tory leader.

    • Denis Cooper
      Posted October 11, 2012 at 1:00 pm | Permalink

      Britain’s relative decline in the world actually started in the last quarter of the 19th century. Britain was clearly not on the rise during the 20th century, as Cameron glibly claimed, and at present there’s no particular reason to expect us to be on the rise during this century. However that doesn’t mean that we have to accept rapid decline into nothingness.

  17. Lindsay McDougall
    Posted October 11, 2012 at 10:43 am | Permalink

    “There is still a shortage of bank finance for business.” If banks were allowed lower capital retention ratios and if they payed interest rates at least equal to inflation, they would have more finance to provide. It is regulators, led by the EU, and the Bank of England, effectively if no longer nominally under the control of the Chancellor of the Exchequer, who can do something about this. As usual, government is the problem, not the solution.

    However, finance for business can also be equity finance. The recently retired elderly would be a good source of this type of finance, if only they were not bullied into buying annuities, which are dreadful value for money.

    Let me tell you just how difficult it was to avoid buying an annuity when I approached 65 over a year ago. I had money purchase pension from various employments with three organisations – Aviva, Legal & General and Black Rock. I wanted to organise a SIPP with draw down. Black Rock did not offer this so I researched on the internet the past performance of various funds managed by Aviva and Legal & General and other funds that they had access to. I then tried to select Aviva to provide my SIPP. They said they would not deal with me directly but only with my “independent, FSA approved” financial advisor. Legal & General said the same.

    So I had to appoint an “independent, FSA approved, financial advisor” at an intial cost of 3% of my pension pot plus 0.5% per annum thereafter. Worse, they were not independent. They received commission from the large insurers on annuity business and the FSA was perfectly happy with that, provided only that they informed me, which I did. They three times tried to interest me in an annuity – a standard annuity, an “impared life” annuity (obesity) and a large annuity via Black Rock with their portion of my pension pot. I had to shout from the roof tops that I did not want and would not accept an annuity, whereupon I got my own way and a SIPP was created for me – I was somewhat sniffily referrred to as an “insistent investor”. I made sure that neither Aviva nor Legal & General got the business – they couldn’t be allowed to play Pontious Pilate.

    So who was responsible for having an independent financial advisor forced on me against my will and for giving me the very bad advice to buy an annuity? The FSA, that’s who, and therefore ultimately HM government.

    It is no use for politicians to regret the lack of finance available to business when institutions of government are actively preventing it happening.

    The next battles I have to fight are to avoid purchasing an annuity at age 75 and to be allowed to end my own life early, at a time of my own choosing, should I wish to do so. Perhaps by then a more enlightened body politic will be on my side.

    Reply: The rules of pensions are now complex, and as you say you need to be tenacious if you wish to retain some control, as the presumption is that you buy professional advice and follow it.

  18. merlin
    Posted October 11, 2012 at 11:53 am | Permalink

    What you must realise is there is very little difference between Cameron, Clegg and Millipede on the the important issues, they are basically all the same. A typical example is the EU, all 3 party leaders believe that the future is the EUSSR and that there is no alternative. So. pity the poor unfortunate voter when it comes to the election, whoever he or she votes for there will be no change in the major direction this country is taking, which is directly headed for totalitarianism and at that point there will be no democracy and no choice and it will be too late. Then the voters will look back and think maybe I should have voted for an alternative future.
    Finally just to show you the levels of government we now have
    Local Councils
    District Councils
    Metropolitan Councils
    Parish Councils
    Scottish parliament
    Welsh Assembly
    Irish Assembly
    Uk Parliament
    EU
    Not to mention all the quangos that Cameron says he has removed, there are still quite a few.

  19. waramess
    Posted October 11, 2012 at 11:57 am | Permalink

    No growth? Hardly a surprise and all the reasons staring them in the eyes. No point in repeating them all for they have all been discussed on this site previously.

    Real growth begins in garages and spare rooms where the likes of Apple, Microsoft and Dyson began.

    Suffice it to say that until the government, of whichever colour, stops growing the state sector for starters and then permits an orderly liquidation of the banks, starting with those currently owned by the state, an economic contraction will be the order of the day.

    Banking licences neeed to be more easily obtained and government must stop insuring retail depositors: there is a perfectly good insurance sector for that.

    Government fears that the lack of insurance on a particular bank would precipitate a run on that bank should not be an issue. Lack of insurance protection on a particuar bank would be a good reason for it to fail and would be an excellent discipline for those remaining.

    All the fears of Armageddon should be put aside and in its place our political masters should remember that for every loser there is a winner. What we need in the banking industry are a lot of winners who would have the capacity to fund a growing economy not the bunch of losers we have at the moment.

    • Denis Cooper
      Posted October 11, 2012 at 2:37 pm | Permalink

      “there is a perfectly good insurance sector for that”

      I agree, but which insurance company will offer me a quote to insure my savings with Nationwide Building Society?

      And as there are millions of other savers with Nationwide, and the risk insured in each of those millions of cases would be the same risk, ie the risk that Nationwide would go bust and couldn’t give us our money back, wouldn’t it make more sense for Nationwide to take out the insurance on behalf of all its savers?

      • alan jutson
        Posted October 11, 2012 at 11:24 pm | Permalink

        At the moment the taxpayer guarantees deposits up to £85,000 per customer per Bank licence, so why do they need insurance at all.

        • Denis Cooper
          Posted October 12, 2012 at 8:37 am | Permalink

          The first line of defence is the industry deposit protection scheme, which is funded by levies on all deposit takers not by the taxpayer.

          A defect of that scheme is that the levy doesn’t reflect the level of risk in the way a bank or building society is managing its business, and those which are well-managed have to pay for those that mess up; it would be better if each of them had its own insurance with its premiums set according to its assessed level of risk.

  20. JimF
    Posted October 11, 2012 at 12:28 pm | Permalink

    The decisions taken on corporation tax are helpful, those on CGT and Income Tax are unhelpful.

    The decision on the NEST tax is dreadful
    To keep taking business rates proportional to space and people employed disicentivises manufacturing which needs space versus services needing a person and his laptop.

    The government has promised to cut the costs of regulation.
    Promises are clearly as cheap as Chinese tat. There will be no deregulation with this government.

  21. Bert Young
    Posted October 11, 2012 at 12:48 pm | Permalink

    Those companies and organisations who produce revenue from overseas , should be given a tax incentive . Once this is put in place , the message is ” Get on your bikes and go and sell “.

  22. peter davies
    Posted October 11, 2012 at 12:51 pm | Permalink

    Clearly energy is the big one here – there is an obvious flaw sinking so much into wind power to get so little back with highly questionable environmental data used to justify it.

    We all know that Nuclear power is far better and safer than it was providing stations are not based on geographic fault lines (earthquakes) so why not just get on with it and build more? We have an abundance of coal so we should be looking at building new coal power stations with carbon capture technology, another benefit of course would be that some of the coal pits that were closed in the 80s could re open thus getting many of the Jeremy Kyle classes of benefits and into doing something useful with their lives…

    • Mark
      Posted October 11, 2012 at 7:12 pm | Permalink

      Carbon capture technology is completely uneconomic. That’s why Davey, Huhne and Miliband all insisted on it as Energy Secretary.

  23. Mark
    Posted October 11, 2012 at 1:04 pm | Permalink

    You can’t force business to borrow when they see no rational case to invest. Several contributors make that point with their own anecdotal experiences. That means that addressing the burden of regulation, excessive energy costs and the like is a necessary precondition to securing investment.

    Businesses are becoming increasingly suspicious about even being on government contracts, or in protected subsidised activities such as running windfarms or French designed nuclear reactors. A government that overspends will eventually be forced to cut such wasteful spending.

    Businesses also know that borrowing from banks that aren’t sound is very risky. They will remain reluctant to borrow while banks retain unsustainable mortgage books that in any case crowd out funds available to the productive economy. £80bn to prop up the housing market is a very bad investment indeed.

    • uanime5
      Posted October 11, 2012 at 7:00 pm | Permalink

      Given that the largest businesses have several hundred billion is cash reserves it seems unlikely that the largest companies need additional finance.

  24. Brian Tomkinson
    Posted October 11, 2012 at 1:20 pm | Permalink

    I must admit to not listening to much of any of the three party conferences but what parts I heard confirmed me in my belief that not one of them is worth voting for. The party tribalists will no doubt feel re-energised but fail to recognise that there is no real leader capable of resolving the economic mess to be seen amongst the tawdry lot of them.

  25. Denis Cooper
    Posted October 11, 2012 at 1:41 pm | Permalink

    If the aim is to get the economy moving ASAP, as it should be, won’t it take too long to get new commercial banks set up from scratch and lending to businesses?

    It may also be too late for this now, but back in 2009 I was suggesting that rather than using “quantitative easing” to fund the government’s budget deficit, as it has been now to the extent of about £363 billion:

    http://www.bankofengland.co.uk/markets/Pages/apf/results.aspx

    – and without a single vote in the House of Commons to approve the creation of those vast sums of new money – perhaps a better use for newly created money would be to fund a state-owned “Resolution Bank” to cleanse the dodgy assets from the balance sheets of the commercial banks:

    http://johnredwoodsdiary.com/2009/03/09/christians-socialists-and-the-culture-of-blame-for-the-credit-crunch/

    “A not-for-profit, state-owned, Resolution Bank, established by Act of Parliament, would:

    1. Be owned by the Treasury.

    2. Have an account with the Bank of England.

    3. Be capitalised by a one trillion pound overdraft from the Bank of England – a PROPER use of “Quantitative Easing”.

    4. Have senior managers appointed by the Treasury, in consultation with the Bank and the FSA.

    5. Have other staff seconded from and paid by its clients, the commercial banks, in each case to clear up the mess the client has created.

    6. Have a very closely worded contract with each of its clients, the commercial banks which have got themselves into trouble through their own stupidity.

    7. Have the remit of buying the “toxic assets” from each of its clients, at the minimum price compatible with the survival of the client as a fully functioning commercial bank, and in each case then allowing the seconded staff to gradually sort through their employer’s mess, in some cases no doubt their own personal mess, and dispose of the “toxic assets” for the best prices they can obtain.

    8. Return to each client any surplus over the price the Resolution Bank paid for its toxic assets, less costs.

    9. And/or, claim back from that client any shortfall, plus costs, to be paid over a period of some years if necessary, with interest.

    10. Be wound up when its job had been completed, and it had cleared its overdraft from the Bank of England, down to the last pound.”

  26. Atlas
    Posted October 11, 2012 at 4:28 pm | Permalink

    As a one time science graduate, who is also married to a science graduate – both no longer working (not by choice either) – I had to smile at the Cameroon spin about wanting more science graduates. I note that neither he nor his Chancellor – nor probably any of his Cabinet – are science graduates. So it is a case of “do whay I say, but not what I do”. Presumably Cameron wants all these science graduates to work hard to carry the overhead that is the likes of his little circle.

    • Bazman
      Posted October 11, 2012 at 5:26 pm | Permalink

      If you don’t work then how do you support yourselves? Not by benefits I presume if you are both science graduates?

  27. Steven Granger
    Posted October 11, 2012 at 4:35 pm | Permalink

    If you’d had the guts to vote against the climate change act that you claim to oppose then you might be taken more seriously when you pontificate on the costs that this suicidal legislation is now imposing on us.

    Reply: I refused to vote for it. It was bound to be a landslide in favour as all three main parties whipped their MPs to support it. If there had been a chance of defeating it I would have voted against.

    • Pleb
      Posted October 11, 2012 at 6:28 pm | Permalink

      The whip is the true cause of the loss of democracy. It shifts power to the few PPI graduates that form the elite. The whip should be abandoned.
      Pleb

    • Brian Tomkinson
      Posted October 11, 2012 at 8:00 pm | Permalink

      Reply to reply
      What is the point of electing MPs if they are just lobby fodder? I presume you abstained but you should have voted against as that was what you really believed. Do you wonder why we don’t think any of you are worth voting for?

  28. uanime5
    Posted October 11, 2012 at 7:03 pm | Permalink

    Regarding energy judging by the large profits energy companies keep making I’d have to say the high cost is due to the lack of competition, rather than green energy. As long as there’s a lack of competition prices will be high without or without green energy.

    The coal power plants are shutting down because they’ve reached the end of their industrial lives and no amount of complaining will change this. The UK need new power plants, rather than continuing to use the old ones until they collapse.

    Perhaps if scientific roles in manufacturing paid a decent salary more people would be willing to study science. Until companies realise that to get the best employees they need to offer good salaries and a lot of training they will continue to find it difficult to get suitable employees.

    While lowering the 40% tax rate was detrimental the 50% tax rate had little effect since the vast majority of the people in manufacture don’t earn over £150,000.

    • Mark
      Posted October 12, 2012 at 9:27 am | Permalink

      I agree that the structure now in place to support the green energy industry is uncompetitive. The coal stations being shut down have not, however, reached the end of their normal lives: they are being shut simply because legislation demands they be shut with an arbitrary cut off date. That actually increases costs, because the assets have to be written down: imagine if you were forced to scrap your car when it was say five years old.

      • uanime5
        Posted October 12, 2012 at 9:20 pm | Permalink

        The coal plants are being shut down because they’ve reached the end of their productive lives and no new coal plants are being built because of legislation. If the coal plants were being shut down because of legalisation then they would all be shutting down on the same day, not years apart.

        At present of the 14 coal power plants in the UK only 5 are shutting down by 2015. Of these 5 Ironbridge was commissioned in 1929, Didcot A in 1968, Ferrybridge A in 1927, Ferrybridge B in 1957, Kingsnorth in 1973, and Tilbury B 1967. So it’s clear that they’re being shut down because they’re old, not because of an arbitrary cut off date.

        Reply: You live in a dreamworld! They are closing to allow owners to comply with an EU Directive. Old plants can be updated and can continue for many years.

  29. Electro-Kevin
    Posted October 11, 2012 at 8:40 pm | Permalink

    Of the educational reforms.

    I’ve had some thoughts on the issue of grammar schools.

    What is the point of preparing people very well for a debased exam, limited university opportunities and even more limited graduate job opportunities ?

    We are probably better getting the RRRs right – enabling those of a practical bent to study for appropriate qualifications. Tailor our education system for what this country needs.

    Above all else we must segregate the disruptive from classrooms.

  30. Jon
    Posted October 11, 2012 at 9:01 pm | Permalink

    John your paragraph starting
    The third is talent….
    I find interesting. In financial services outside of very limited jobs in say derivatives, actuarial and maybe some parts of accountancy the math required is very basic. Due to some of the salaries it acts as a brain drain for engineering.

    Having myself years ago enroled and studied engineering for just interest I found it vastly more interesting than financial services.

    I have spent years working with people with their pure maths degree and they don’t get to use it in financial services on the whole but its a job and it can pay.

    You are correct the talent is out there and not all in the right place.

  31. Terry
    Posted October 12, 2012 at 9:00 am | Permalink

    As usual, sound ideas and sound argument, John. Common sense answers to particular problems that would be solved with little capital outlay.
    However, the real problem is not you nor your ideas it’s that you are sat too far back on the Government benches for Dave to hear you.

    Move you to the front? Now, that would be a great idea and Dave would certainly gain from the expertise but are you too Right for him and his current policies?

  32. Dennis
    Posted October 12, 2012 at 11:43 am | Permalink

    Again no mention of how much environment/oil/gas /agricultural land all this economic growth is going to take – relying on techno fixes could probably suffice but would they be welcomed?

    As a picture, example, not a possible prediction, if we used up all our oxygen we could survive on manufactured oxygen but have to lug it around on our backs – a good prospect? So tech fixes could enable us to live on but would they be desirable?

    Look at the fixes we are already having to put up with to enable to get round self inflicted greed (because of massive UK population – could be fairly greedy if a small population) – tinier houses, parking nightmares, constant vigilance on energy consumption etc. etc.

    Mr Redwood never connects growth with the available resources – no numbers. Also growth means we will treat the rest of the world even more unfairly, using up more of their resources, which he never mentions.

    Reply: I support the idea of a smaller population through better control on inward migration. The choice is whether we burn energy here to produce what we need, or rely on imports so the energy is burned somewhere else.

    • A different Simon
      Posted October 13, 2012 at 10:26 am | Permalink

      Dennis ,

      So called “carbon capture and storage” is actually “oxygen capture and storage” .

      The carbon would find it’s way back underground anyway as a result of photosynthesis .

      Thanks to trees fossil fuels are carbon neutral in the longer term .

      There is a lot of oxygen in the atmosphere but it seems a bad idea to pump it underground as CO2CS aims to to do .

  • About John Redwood


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

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