The government is right that we need to invest more. There is room for disagreement about what we need to invest in, and how much of it should be paid for by taxpayers.
The governmentâs current plans include the expensive and wasteful ÂŁ20 bn for carbon capture and storage. They need to give greater priority to
New gas turbine electricity generators to keep the lights on and power new data centres
A fleet of smaller cheaper nuclear reactors
Several new reservoirs to ensure plentiful future supplies
New drainage pipes with more capacity
More domestic oil and gas to displace imports which produce more CO 2
More broadband and data processing capacity
More bypasses and dual carriageway strategic local roads
More motorway capacity
Digital signalling throughout the railway network to expand train capacity
Many of these projects can and should be privately financed.
The main problem with the Rachel Reeves idea that we can afford to borrow more in the public sector is it assumes the investments made by the state will produce income and profit and will be able to pay the interest and then repay the debt. Recent experience  says this is unlikely. HS2, a new nationalised railway is more than three times over budget, long delayed and little prospect of any revenue let alone profit anytime soon. The nationalised Post Office was given large sums to invest in new computers, only to send its innocent staff to prison and land taxpayers with a large compensation bill. The high spending nationalised railways as a whole lose large sums before subsidy and burden taxpayers with large debts.
Changing the way the debt control is calculated to allow more investment only works if all the investments make money after paying for the debt. If they turn out to be like the railways or the Post Office borrowing more means more debt, more burdens and higher taxes.
October 25, 2024
Since when did many Government “Investment” make money. Most just piss it down the drain, attempt to buy votes (Gordon Brown Baby Bonds for example), push it into the pockets of crony capitalists or it is siphoned of with corruption. Much of it actively inconveniences the productive sector too. It also mean less funds are available for most sensible private sector investments.
Some of the many mad “investments” HS2, carbon capture, net zero, Baire and other wars, soft loans for worthless degrees in often worthless subjects too (about 70% of them are), all the things listed in the the Blunders of our Governments book (which needs updating), the dire NHS, the road blocking, most train projects, absurd roundabouts and road “improvements” like the roundabout with 36 traffic lights for ÂŁ31.9m, nearly all government IT projects…
October 25, 2024
Some historic examples from the book.
There are a handful of cock-ups that we remember all too well, from the poll tax to the Millennium Dome. However, the list is longer than most of us realize â and itâs growing. With unrivalled political savvy and a keen sense of irony, distinguished political scientists Anthony King and Ivor Crewe open our eyes to the worst government horror stories and explain why the British political system is quite so prone to appalling mistakes. You will discover why:
⢠The government wasted up to ÂŁ20 billion pounds in a failed scheme to update Londonâs Underground system.
⢠Tens of thousands of single mothers were left in poverty without financial support from absent fathers.
⢠Tony Blair committed the NHS to the biggest civilian IT project the world has ever seen, despite knowing next to nothing about computing.
⢠The Assets Recovery Agency cost far more to run than it ever clawed back from the proceeds of organised crime.
October 25, 2024
I am a fan of the O2, it is an awe inspiring design, great tourist attraction and fantastic venue. An example of private business improving on public sector misstep
October 25, 2024
The sick joke of the two Queen Elizabeth-class aircraft carriers of the United Kingdom’s Royal Navy costing nearly 8 ÂŁ billion and they do not even work and not even any sensible aircraft for them. One seems to be for spare parts for the other and even then they cannot keep one functional. Decence procurement in the UK in general is appallingly run.
October 25, 2024
King & Creweâs book (âThe Blunders of our Governmentsâ, 2014) starts to be old. âFailed Stateâ by Sam Freedman (2024) is a very welcome update.
October 25, 2024
What I find so distressing is the thought of everything people in the past have been through for us to land up in this nightmare world.
It used to seem that we had arrived in a âmodernâ world where logic and wisdom were the order of the day.
Not so.
We had a brief interlude of civilisation and sanity. ( Probably only because the powers that be were catching their breath after two devastating yet nicely redistributive wars).
But it is all over now.
October 25, 2024
Why must the government invest in new gas turbine generation or oil and gas exploration
Typically these are the responsibilities of the power and oil companies
The only reason government feels it needs to pitch in is because net zero legislation has destroyed the private investment model.
No CEO is going to authorise new gas and oil drilling with no capital expenditure tax relief and 78% tax on eventual profits. Same with the power companies when you are told your generators are public enemy No.1.
No John, Harbour energy, the biggest company in the North Sea has just pulled all investment out to concentrate elsewhere and the idiots in Downing St are rubbing their hands.
You couldn’t make it up.
Reply Of course the investment should be private sector which is what I said. However the government needs to approve new oil,gas and gas turbine investment which it currently bans.
October 25, 2024
Almost every single thing pushed by the Tories was 14 years wasted vast sums. The Starmer agenda is even worse still they have everything thing particularly Net Zero wrong.
So had the foolish Sunak (the appalling Chancellor (who borrowed ÂŁ billions for the net harm lockdowns and net harm Covid Vaccines, caused the Truss economic fiasco) not pathetically thrown in the towel six months early we might have been having an election in about 4 weeks time. All he had to do was some deal on seat with Reform, stop the boats, ditch the net zero insanity and start to say thing more like the reform agenda (as Jenrick is now doing). But the daft as a brush PPE graduate thought he know best. Has he corrected his Covid vaccine safely lie to Parliament yet?
October 25, 2024
I have no expectation of the current government, or for that matter a re-empowered opposition government ever seriously encouraging investment in the private sector. The only place such investment is likely to make a profit. To do so it would be necessary to offset the investment against tax. Anathema to most in Parliament, who cannot see that such investment would be aimed at increasing productivity and world market share. Ultimately increasing tax take for government. Would be investors will increasingly realise that there are more investment friendly places to put down roots. Nobody owes us a living, we have to earn it. Those of talent and enterprise in the UK are world mobile, though current government are suffering an antenae failure.
I think we should ask ourselves whether railways are the best ways to move people and goods around the UK. Currently they are in malignant union control with matching weak management. When said unions also control current government’s political finances it does not bode well. In fact somewhat redolent of Red Robbo and Longbridge management for those old enough to remember.
If the Chancellor is allowed a damacene visonary moment via her first budget, all’s well and good for productive profitable investment. However the antithesis is more likely. Not long to wait and analyse the reality.
October 25, 2024
Even if she does have a volte face moment, it will do no good. The party won’t let her change direction.
My question is, how long will it take for poor tax returns and high borrowing to push up gilt yields to the point where confidence in the pound is destroyed?
Reply The 10 year yield is about the same as under Truss.
October 25, 2024
So King Charles’s long flight to Samoa was not entirely wasted:- He wisely tells us that “none of us can change the past” what a brilliant philosopher he truly is – if only we had all realised this sooner!
Still some good news – betting odds suggest Trump has about twice the change of winning as Kamala. I assume due to his sensible climate realism and his general endearing modesty. So the dire Lammy (and hopefully the mad zealot Ed Miliband will be gone very soon
October 25, 2024
If this government is prepared to renege on manifesto commitments and fiddle the debt limit promises at the BEGINNING of their term to find more money, just imagine what they’ll do by the end of 5 years.
Just wait to see ‘slavery reparations’ being classified as ‘investments.’
No wonder higher tax payers are on their way out the door; we’re on a slippery slope to ‘failed economy’.
October 25, 2024
Even wondered the bond market isn’t flashing red on these higher debt announcements by Reeves? Yields this week on 10 year bonds are around 4.25%. When Truss announced her cut in income tax rates yields spiked to 4.22% and so called ‘crashed the economy’ (that’s even with Bailey’s fiscal engineering the bond and LDI meltdown). (Words left out Ed) this trash narrative is a farce. The Europhile establishment in Britain loathe lower tax rates because that contravenes the EU’s tax rates equivalence message across EU member states. So Bailey and his gang tried to nobble Truss’s tax cutting budgets.
Etc Ed
October 25, 2024
Yes. I had wondered.
Most of the bizarre policies can be traced to strange, set in stone beliefs/ideologies/instructions from on high.
They usually have their own language and mantras.
Like âLower for Longerâetc.
And is the bottom line a kind of universal redistribution.
From us to them?
October 25, 2024
Good morning
Ahhh ! That dreaded word of all Chancellors since Gordon Brown – INVESTMENT. What she really means of course is spending. She intends to spend her way to growth. You know, just like all the other idiot Chancellor’s before her. What they do not tell us is that, all this spending will be to further enlarge the State and their client base.
Nothing about reducing the deficit and the National Debt. But hey, that is, as always, someone else’s problem.
October 25, 2024
She possibly believes it is investment given her lack of expertise. I see Guido has unearthed evidence that she never was an economist, as she claims, but in fact had various unimportant admin roles at the BoE and other financial institutions. Another politician being “economical with the truth”.
In the private sector, she’d be fired from her job for that innacuracy in her cv.
October 25, 2024
Indeed. “Government investment” is arguably an oxymoron in every instance of its usage.
I invest; you subsidise; he squanders.
October 25, 2024
I saw the clip of Reeve’s trying to “justify” raising 50 billion more debt. It sounded like a stream of non sequiturs such as x or y says the UK needed more “infrastructure investment” but without them specifying what investment or how the cash should be raised – such as cutting out other costs or growing the economy. The implied assumption was that 50 billion could safely be raised simply by a stroke of the pen by rewriting the “rules” regardless of the squander bug character of her proposed investments. This is a mistaken belief. UK government debt is far too high. The UK tax and regulatory burden is far too high. UK growth in GDP per capital is in decline. Next week’s budget will add to tax and regulatory costs, make financing business even more difficult and will add to the government debt and interest burden. It is a disaster in waiting.
October 25, 2024
We’ve already seen what this government means by investment. They’ve raised salaries for the public sector with no productivity agreement.
October 25, 2024
A lot to agree with there. My only disagreement would be that central government doesn’t decide on where to build new dual carriageway roads in the places they’re needed. Local authorities do, and they get their funding from developers. So their planning decisions are restricted to what they can get developers to pay for. Just to take Wokingham Borough as an example – its local plan has a dual carriageway bridge over the M4, but then no upgrade to dual carriageway of the main road that bridge will serve. As long as an LA can only deal with the infrastructure need created by previous housebuilding, by agreeing to lots of further house-building, the planning system will remain a mess.
Reply Government can influence and finance local strategic roads
October 25, 2024
This has all been brought to us by the people who said that education, manners and morals did not matter.
And that absolute truth was of no importance.
Many stood by and allowed it all to happen in the mistaken belief that it made them look good and âtolerantâ.
Well âŚwe are reaping as we sowed.
October 25, 2024
It is striking that a private company like Amazon is even able to consider buying small modular nuclear reactors in USA for its own use. That would never ever be allowed in UK, imagine the blizzard of planning impositions and lawfare challenges and regulations and challenges based on national security. That position would be at least tolerable if the government themselves were going to invest in such reactors but they aren’t – the Treasury don’t like nuclear and have ensured it has been kicked into the long grass. When the lights go out it will be too late to change course.
October 25, 2024
The lesson here is that government does best when it does least.
Very few items on your list Sir John will actually create revenue. Extra reservoirs for instance will not produce more billables it will just make the water system better. The water companies should be investing in this as part of customer service. Same for reactors, the amount of electricity sold will not increase and indeed the price per unit will probably decrease. Again it is customer service and security of supply.
Tax breaks on investment and regulation to ensure that these virtual monopolies have to provide the infrastructure to service their customers is the best approach not more government spending on infrastructure.
I would agree with more and better roads provided by our VED.
October 25, 2024
The general tone on here seems to be that government shouldnât do anything. To take but one example – Iâm glad the government spent money and built motorways. I like living in a country with roads, schools, electricity, gas, clean water etc.
But they were all built or commissioned in âthe old daysâ. Government has become progressively more costly and sclerotic. HS2 is now the classic example of the failure of government in this country.
October 25, 2024
A good source of Investment is via Pension and Insurance Funds, i.e. those saving for a future. However, this Government taking its lead from the previous one sees all investment as spare money that could and should have been taken as tax. If individuals and enterprises budget for a future that is money Governments knows how to spend so needs to be removed.
Tax borrowing and spending is good when central controlled by ideologues, bad when it releases others to become less dependent on central handouts.
WEF Socialism of the âGreat Resetâ fully embraced by the Uniparty
October 25, 2024
“A fleet of smaller cheaper nuclear reactors” Red Ed and along his mentor and sponsor Dale Vince have continued the Gordon Brown and Labour mantra and already openly declared there is no future for Nuclear in the UK. The future is renewables.