I have written to the Chancellor wishing her success in getting the U.K. economy to grow at the fastest pace of the G7 economies. As she says if we achieve that we can afford better public services and infrastructure. We should also boost the after tax incomes of the many and help business grow profitably.
The task is difficult but not impossible. The U.K. along with the other large European economies in the G7 have fallen way behind the USA in GDP per head, with a much slower growth rate this century. The US has raced ahead on the back of nurturing seven world beating digital giants, going for cheap fossil fuel energy produced domestically which it is also now exporting to Europe, and demonstrating leadership in many areas from pharmaceuticals to defence equipment. The U.K. has higher GDP per head than the EU, and has done relatively better at pharmaceuticals and digital technology than the continent.
I suggest the government look again at the control framework for the U.K. The US has twin targets of 2% inflation and growth in jobs and activity. The U.K. government could regard the 2% inflation target as binding on itself as well as the Bank, as government decisions on pricing public services and managed prices have a direct impact on inflation outturns. It could then complement that with a growth target. 2% would be an attainable improvement on the past. Maybe they would need to adopt 2.5% to give us a good chance of outgrowing the US in the years ahead from the lower base.
Of course government should consider OBR forecasts of debt and deficit, as both need to come down as a percentage of GDP. Relying  on their fifth year forecast is not such a good idea, as it is impossible to forecast accurately. If the OBR is too pessimistic it limits unduly choices to pay for a growth strategy.
July 18, 2024
Good morning.
The government seems to be pursuing opposing policies. On the one hand it wants growth, and then on the other it wants to make energy expensive which both affects growth and inflation.
The USA can achieve its targets for the reasons our kind host has given. It has a strong tech’ base and cheaper energy to support many of its industries and workforce. It is also a far larger economy built on the ‘American Dream’. That being people are admired and respected for going from nothing to something, whilst here in the UK and the continent there is nothing but envy for those that make wealth and the desire to pick their pockets.
I am hearing that the new Chancellor may well revisit an idea first mooted by Alexander Johnson. Apparently there is a great store of wealth in the pension industry (its investments) that can be tapped into. I am a bit sketchy on the details but expect another government prepared to steal other peoples tomorrows for their today’s.
July 18, 2024
She is toying with the idea of âraiding pension potsâ if taken before age 75.
ÂŁÂŁÂŁ2bn needed apparently
Or something along the lines of whipping what youâve saved for retirement.
(I tried to understand it in a panic last night having seen headlines)
How nice!
July 18, 2024
The narrative is that those who have means to do so are using pension pots which can be passed on free of inheritance tax, to dodge inheritance tax by using other savings and assets to generate income rather than use their pensions.
These pots can then be passed on free of inheritance tax thus avoiding the tax. An option only available to those who can afford it.
It will only raise ÂŁ200 million initially and we know that progressives hate anything that makes only a small impact when it is detrimental to their own audience so they should find this suggestion distasteful too.
Much more money to be saved by cutting spending.
July 18, 2024
Maybe the Labour Party re beginning to find out how many of âthe richâ are their own supporters. That will clip their wings.
July 18, 2024
Indeed so perhaps you leave it in to 75 if you can afford to but by then they will have other pensions tax in place to catch you. Starmer has his own act of parliament to protect his huge pension for perhaps he will escape? One law for you plebs another for us!
July 18, 2024
JR,
It is continuation of where Sunak left off. Nothing about national interest.
I thought the agenda set out in Kingâs speech is to give the OBR the power over the budget not govt? Does this not mean Reevesâ husband sets the budget in OBR not the chancellor?
More constitutional destruction. Starmer has already made a fool/liar of himself on the one hand saying more devolution and powers, but not allowing local people to object to planning!! He is carving up England for the EU.
No booby traps, no difficult issues for Starmer to reverse, it is like there is a Uni Party!
July 18, 2024
I prefer Liz Trussâs letter to useless bias Case about her coup and continuing the civil service false narrative. When is Bailey going to be investigated and sacked? Lammy needs to be sacked, he cannot represent our country on the international stage.
July 18, 2024
Indeed the dire Gordon Brown already destroyed private pensions when he was chancellor and sold the counties gold at the bottom of the market. Doubtless this dire Sunak continuation but even worse government will have a second bite. Why invest for a pension if the government will steal it before you draw it?
A Kings speech full of mad, anti-growth policies. Best to leave the country or live on benefits, battering and cash in hand it seems or off crime? That is what many will conclude.
July 18, 2024
Interesting to hear (from the recent David Starkey video Culture Forum) about Starmerâs special legal act just for his huge person state sector pension (so as to get round the limit imposed on mere plebs). One law for you lot another for us in the civil service or politicians, the Royal Family, Celebs & Kings. Private jets and helicopters for us, but for you just cycling in your 15 minute city prisons we are creating. With perhaps a week a year in Bognor if you behave.
July 18, 2024
@Lifelogic – you forgot he sold off the UK’s Nuclear power producing capability, the reason he gave was the UK would not need it. Or was it as some of us think, that his mate ‘Fred the Shred’ had a personal conversation with him saying Ooops I screwed up, help, please bail me out. Subsequently forcing a Financial crisis on the World and the taxpayer holding massive debts.
Honesty at the top would be telling everyone they are still in hock to Gordon Browns miss-management and will be for sometime to come
July 18, 2024
Indeed – see the excellent book Gordon is a Moron!
July 18, 2024
A more informed take on the UK nuclear industry can be found on
investmentmonitor.ai 25/05/2022 âA history of radioactive decay: who really messed up the UKâs nuclear industry?â
July 18, 2024
bartering rather!
July 18, 2024
Good to see Trump has now realised what a disaster the Covid Vaccines (and lockdowns were) and come out on this – so a climate realist and a Covid Vaccines realist too – what is not to like? Not senile either.
An excellent piece just now about 12.45 today by Dr Malhotra on Talk Radio on the appalling net harms done by the Covid Vaccines to circa 1/800 per shot. Note that the MHRA are 86% funded by big Pharma. When are the criminal investigations starting? Can someone at the NHRA perhaps explain why these vaccines were even pushed at people who had had Covid and young people never even at risk. Government expert gross incompetence or were they bought or other?
July 18, 2024
LL,
Charles warned not to go to US, his ears are too big a target!!
July 18, 2024
Well ears better than scull and brain!
July 18, 2024
Trump/Vance also want to defuse the war with Russia and China which we will definitely lose!
Starmer and Truss on the same page there.
Incidentally, the concept of blood on the right ear (Leviticus 8:22-24 and 14:28) serves as a visible mark of consecration, signifying that the person is dedicated to God’s service and has been set apart for a specific purpose. This act represents a physical and spiritual transformation, preparing the individual for their sacred role.
In Leviticus 8, the blood is applied to the right ear of Aaron and his sons, consecrating them as priests. This act sets them apart as mediators between God and the people.
July 18, 2024
Not however applied to the right ear by a riffle shot from 160 M away! Just 2cm to the left would have killed him.
July 18, 2024
Why don’t you try for Parliament?
Seriously. If people such as Ms Patel and Kemi are being touted as leader (and Ms Mordaunt and Shapps before the election) then about 5 million other Conservative people in the country would make a better leader (including yourself, educated at Cambridge with a lot of great commentary – although I don’t agree with everything you say). Even I might consider having a shot if things developed that way .. Why not?!
July 18, 2024
Well I would not want endless trawling through my businesses, comments, family and my life. Plus I could never join a party led by people like Major, Cameron, May, Boris, Sunak⊠I also do not like blatant lying which is a virtual requirement of the job of politician!
Any party I joined would have to accept the truth. Things like lockdowns and Covid Vaccines did huge net harm, the government is far to large for any real growth, the NHS is dire, large low skilled immigration makes us poorer and increases crime rates and that net zero is economic and environmental insanity. If they cannot even get the basics right what hope is there?
July 18, 2024
Plus I no longer live in the UK and could not really return for tax reasons.
July 21, 2024
I’m not having a go at you (I challenge you here and there but not having a go).
Seriously, there are lots of people who could do a way better job that most Tory MPs.
Tories need to throw the net out more to bring in more quality MPs.
July 18, 2024
They’re going to go after anyone who has assets …. their own home; savings; investments; BtLs and pensions. What’s yours is theirs.
They are fully on-board with the “you will own nothing” objective of the WEF.
July 18, 2024
In true socialist fashion going after anyone who’s made provision for their retirement publi sector excluded.
China busy gearing up to manufacture the wind turbine pre cast and steel fabricated bases for UK windmills, solar panel manufacturers working overtime to make the panels for the vast array of uk solar farms.
The good jobs in green energy are materialising but alas in China and Denmark.
Italy has just banned solar panels on agricultural land and lab grown meat.
Oh to have a government governing for the benefit of the population.
July 18, 2024
I fervently hope they don’t come after pensions, but if another aim of such a grab would be in order to make the population ever more reliant on the state, I can see why they might pursue such action.
My daughter asked me last week if she should put her annual bonus into her pension. I said yes, good idea. I’m starting to regret having said that! What hope is there for our children?
July 18, 2024
Starmer stated clearly that any preference would only be given to public sector employees so the only conclusion is that the rest of us are merely cash cows who they will thieve from.
But how was the result with a Conservative government any different? – they didn’t reverse the government thievery of the prievious government. Was it dogma, cowardice or an ego centric attitude?
July 18, 2024
Come on John, let’s be serious. The OBR is today a political organisation. Its output is politically motivated which explains why its output is always wrong and designed with one intent, to undermine Brexit and prepare for our eventual reentry back into the EU.
This month Reeves will legislate to strengthen the grip of the OBR for reasons she’d rather not publicly state though she will talk the usual manure infested verbiage about accountability and fiscal stability.
In effect the OBR will in future have the power to veto any Chancellor’s plans it finds ideologically and political inconvenient ie anyone other than Labour and a pro-EU Chancellor
Why John even endorses the OBR is beyond me when one considers how it conspired with the economic establishment to bring down Truss who I believe sidelined the OBR when Kwarteng delivered his budget plans. The EU don’t like income tax cuts, preferring income tax equalisation
The OBR should be abolished and its employees packed off to do something useful like stacking shelves at Tesco or cleaning up duck faeces in the local park
Reply I have been a leading critic of the OBR. Most MPs regard it as untouchable. I deal with the world as it is. You can imagine a totally different world and get angry.
July 18, 2024
I agree. Blair’s mission was to hobble any future Conservative Government from being able to implement policies which the Left didn’t endorse.
Starmer is going to continue with that mission and make it impossible ….. without that Government first having to implement a Great Repeal Bill.
July 18, 2024
The OBR was created by the other great leftie Chancellor, George Osborne. He who increased tax while increasing spending until the guise of austerity.
July 18, 2024
And the non-existent austerity is being quoted as a reason for inadequate planning for pandemics now.
How convenient.
The only austerity was experienced by taxpayers and child benefit recipients.
July 18, 2024
what categories missed austerity? Oh of course – the wealthy via offshore and other smart interventions, Non-dom etc.
July 18, 2024
Reply to reply
Well in all honestyâŠ
We HAD a totally different world and it has been POINTLESSLY trashed.
It was good.
And now it lies in ruins.
Not really likely to make us overjoyed!
July 18, 2024
reply to reply….the matter of ending the OBR should be informed simply by accuracy or otherwise of forecasts, given the apparent nonsensical importance given to them. If these are important, accuracy is really key, if not they are akin to whether a spider walks up the wall, or down it, then the OBR stays or goes.
Our host has regularly criticised performance which has been so poor.
July 18, 2024
Dealing with the world as it is? Rather rare in a politician, 95%+ of MPs want to waste ÂŁ trillions billions doing vast damage with net zero – so mad are they!
July 18, 2024
Agree the OBR should be abolished
July 18, 2024
Talk of the government going after pension fund cash to fund its own projects is dangerous. If it happened, by legislative/regulatory action, it would indeed be theft. In those circumstances I would hope that pensioners and their trustees would use every tool available to oppose such theft of their savings by the government. As it is, I suspect a substantial part of such investments is already invested in gilts to meet liabilities as they fall due. I have read that UK equities represent a relatively small share of their portfolios because the returns are so poor.
July 18, 2024
DA.
Even a Labour Government are unlikely to actually steal your pension or pension fund, as that would be too obvious, but perhaps be prepared for taxation on any sort of withdrawal, (present tax free lump sum) possible inheritance tax inclusion, loss of any other sort of tax breaks, and perhaps more complicated rules.
This Government needs lots of money for its big Government plans, so raiding the little people for funds is on the cards, simply by extending the taxation system into areas which have so far remain untouched.
Once again the strivers and workers of this Country will pay for everything.
July 18, 2024
I think they’ll include pensions in the IHT calculations. Can’t have people passing on any wealth they may have accrued to their own families.
July 18, 2024
Up to now in most cases lump sum death benefits from a pension scheme are IHT free. This is because, unlike other investments, a pension plan is not (normally) part of your taxable estate. Generally a SIPP is passed tax-free if the owner dies before 75. After 75 the heir(s) have to see with the SIPP provider to get the best solution given their own HMRC situation.
It should be (relatively) easy to check with the relevant pension scheme/SIPP provider.
gov.uk âTax on a private pension you inheritâ.
July 18, 2024
We might go from stealth taxation to slap-in-the-face theft.
July 18, 2024
M T
Always possible. !
But they will give it a new name, like re-investment, re-distribution, or something similar.
Perhaps people will be forced to contribute to a Patriotic Fund.
They are already talking about having to have 20% of your Pension Fund invested in UK company shares.
July 18, 2024
In 1992 UK quoted shares were making 32.4 % of pension funds. Already in 2008 it had gone down to 12.8 %. By 2022 it was 1.6 %. The main reasons for this decrease were 1/ Companies expecting much better returns on overseas shares, and 2/ changes in pension regulations.
Some of these changes were encouraging pension and insurance funds to transfer into corporate and government bonds and to look for better returns (ie, more likely to be on offer from the US stock market).
Given the long term underperformance of UK stocks, it is not surprising that pension and insurance companies (with the fiduciary duty to protect their membersâ savings) had moved away from UK shares.
It is doubtful that UK shares are suddenly to reevaluate. It will be âinterestingâ to see what happens in the coming months, whether the new Governmentâs investment in/support of UK business and infrastructure will change the picture.
ons.gov.uk 21/03/2024 âFunded occupational pension schemes in the UK: April to September 2023â.
July 18, 2024
Perhaps after ‘donating’ 20% of our pensions, we will be awarded a Star of the Empire, like Mother Russia awarded women (I wish to be careful here, this includes males with having wombs) multiple births?
July 18, 2024
Since 2000 the FTSE has gown 4.8% pa on average.
A good return.
Perhaps pension funds are not so well managed as you suggest hefner.
July 18, 2024
We might go from Brexit to rejoining the EU
July 18, 2024
The ‘Plan’ as I understand it, and I could be wrong, is to ‘encourage’ pension funds to ‘invest’ in government projects etc.
July 18, 2024
Interesting to see Liz Truss’s response to the OBR’s character assassination of Truss this week. The OBR set up by little Georgie boy is now openly and unashamedly biased.
More interesting is Truss’s reference to Trump this week as ‘President Trump’. The ex-PM of the UK appears convinced that the last POTUS election may not be as secure as some believe. (Liz Truss@trussliz.
Jul 15. Great to be at @RNC.in Milwaukee seeing President Trump get nominated. The leadership the West needs.’)
‘unuff from me and apologies for hogging the board
July 18, 2024
What on earth do you mean?
Enough from you indeed!
Keep them comingâŠ(I thought youâd gone a bit quiet)
I really enjoy your comments!!
July 18, 2024
+1
July 18, 2024
ALL ex-Presidents are still referred to by convention as “President”. There’s no conspiracy theory there.
July 18, 2024
Next youâll be saying that the lizard people arenât real
July 18, 2024
+1 Biden should be the exception. We will find all sorts of documents and fact released shortly, prob]bing that dead people canât vote in elections.
July 18, 2024
American presidents tend to retain the job title for life.
July 18, 2024
The OBR is not only political, it is serially wrong.
July 18, 2024
You sound optimistic today. It is a collection of ifs, but I do not see it enduring five years in Labour’s hands, and carrying the nation with it.
Under pining everything is the cost of energy which in the UK is three times that of the USA. The millipede is down from Ararat with his tablet of stone and is now praying at the altar of nett zero. The nett effect is to scorn our energy independence and subject us to the instability of World prices, increased CO2 in getting it to us, and intermittent delivery from wind and solar, that of necessity has to be backed by fossil fuel sources. The millipede is intent on giving us a sea anchor to Reeve’s aspirations for a growth economy. This is the bergshrundt into which Labour’s plans will fall. A view of their King’s speach suggests it is not the only cravasse they have created for themselves, so I do not share your limited optimism.
Their rush to the bossum of mother EU’s dried up offerings, their fantasy offerings on immigration, their less than adequate housing solutions, et al, add to a rapid deterioration in their relationship with the meager 35% of the electorate who voted for them. It is that 35% who will most feel the effect of failure in the above areas. Hence my verdict that they are on very thin ice.
July 18, 2024
Agreed, but they’ll try everything to survive. Lammy already back-peddling frantically on Trump. They’ll end up in a couple of years pretending they were always best friends with Trump and just wittering away with excuses for their far poorer performance on all fronts. Don’t underrate how long these leftists can cling on.
July 18, 2024
@agricola +1
How else do you get to off-shore UK Industry – the malicious punishment of the people is a go.
Mother EU is all inviting, all they ask is you obey the Laws of thier bureaucrats, don’t compete and hand over what you have that they want and they might throw you a bone.
The UK has made by political force its self a minnow, its industry and defence industries handed to the EU, its energy production handed to the EU, its fishing handed to the EU. Then we have government taxing the life out of the People to subsidies the hand overs
July 18, 2024
Who wants growth?
Why is it imperative?
Why canât people just live lives?
After all, politicians do âŠand we are the collateral damage of their ego-driven existences.
July 18, 2024
Your optimism in writing to Rachel Reeves is admirable, but at the heart of this government there is I believe a fundamental insecurity and fear of accountability. This is reflected in the elevation of the OBR, and the creation of new quangos deemed responsible for meeting new targets – all to âprotectâ newly appointed Ministers who are devoid of relevant experience for their roles. Take Tulip Siddiq – to say the least itâs difficult to see anything in her CV which supports her appointment as City Minister. Her exclusively public sector and party political background make it unlikely sheâll advocate less regulation to bolster the City of London, to put it mildly. People in the commercial world wishing to change career invariably have to lower their sights in terms of salary and status in order to do so. Lack of relevant experience is deemed a virtue by this PM it seems.
Itâs only a matter of time before âeventsâ reveal the vacuum in expertise within this government.
July 18, 2024
ActuallyâŠoh lol lol
I canât WAIT to read ( if poss) the reply.
Or am I just being nasty?
I mean the stuttering, âitâs a fair cop gov.â rubbish from Tory ministers was amusing enough
July 18, 2024
Reeves is listening to the IMF/WEF/Treasury and OBR ….. all singing from the same left-wing, Globalist hymn sheet. She’s not listening to you Sir John and I expect your letter has already gone into the spherical file in the corner.
The only growth Labour is going to generate is growth in bureaucrats; regulations; micro-managing our lives; the number of foreigners sponging off of British taxpayers; the destruction of our environment; and growth in the taxes to pay for it all.
And – as Starmer recognised yesterday – that will lead to a growth in “populism” because Labour only got 20% of the available votes and has no real mandate for anything he does. We’re told to “be patient” as he and the rest of the lefty Establishment systematically destroy what’s left of our country.
Our patience ran out on 4 July.
July 18, 2024
âSpherical fileâ
Lovely.
When wokery was in its despicable infancy
I encountered a woman who ran a large establishment
Her first move was to do away with all office furniture including files.
She did ( I kid you not) her paperworkâŠ
ON THE FLOOR!
July 18, 2024
âSpherical fileâ, more likely a cylindrical one âŠ
July 18, 2024
or very often a box shape.
July 18, 2024
I agree, Donna. As long as the government remains committed to high energy prices thanks to its customer-funded energy policy subsidies, we cannot have real economic growth. As SJR has frequently pointed out, US growth has been greatly helped by lower energy prices than in Europe. While the Green ideologists control Labour, our situation won’t change. Economic growth will only become possible with real political change, as offered by Reform UK. It needs to get its 5-year campaign strategy into gear asap.
July 18, 2024
I agree with Sir John especially with ‘the after-tax incomes’ suggestion as consumer spending represents about 65% of UK GDP and thus is a key driver of overall economic growth.
UK Salaries (ie regular pay, inflation-adjusted) stalled in March 2008 and is still yet to recover (eg average weekly earnings (regular pay, inflation-adjusted) was GBP 473 / week in March 2008 and it increased to only GBP 483 / week in March 2024. By comparison, under the Thatcher, Major and Blair administrations it grew significantly and that transmitted to healthy economic growth rates.
Why did it stall from March 2008 onwards? There is one standout reason why: the size of the labour force increased so much it compressed everyone’s wages in low-paid industries (ie the bulk of the population). The ONS have identified this: ‘…an increase in the relative number of employees in low-paying industries would cause average earnings to fall.’ (quoted from the ‘Composition of the workforce’ section of their Average Weekly Earnings segment).
The reason why the UK labour force increased so much was due to the unprecedented high levels of immigration. If that had not occurred lower-paid salaries would have been substantially throughout the last 16 years and that would have transmitted to higher consumer spending and economic growth. It would appear therefore that adding some economic growth through high immigration came at the expense of compressing economic growth amongst the low paid. It was a big economic mistake to flood the country with cheap foreign labour and I hope the new administration addresses it.
July 18, 2024
“just more big state with the assumption that government can create wealth”.
The above from Farage
âWe will work with the Governmentâ
The above from Sunak
âWe must ensure the next Conservative Leaders sticks to the policies of âOne Nationâ â
The above from the first candidate to throw their hat in the ring to become a Tory Leaders
July 18, 2024
There is understanding everywhere but were it matters
John OâConnell, chief executive of the TaxPayersâ Alliance, says âtaxpayers will be deeply disappointed by a legislative programme that fiddles with everything while fixing nothing⊠the agenda is dominated by low-priority issues and nakedly disastrous proposals, from a race equality bill to banning smoking, a football regulator and VAT on private schools.â
Institute of Economic Affairs Executive Director Tom Clougherty welcomes planning changes but warns âpro-growth measures risk being held back by new red tape and risky âmission-ledâ central planning.â He targets the North Sea oil and gas ban and a stack of new regulations, which will âreduce flexibility and increase structural unemploymentâ while nationalisations are âfraught with the risks of wasted taxpayer money, trade union dominance, and cronyism.â
July 18, 2024
Sir John asked the other day where the Opposition would come from.
I think he, and we, have just had the answer.
July 18, 2024
I hope you will not feel bound to regard the Chancellor’s reply as confidential.
July 18, 2024
ha ha.
July 18, 2024
I donât know what âeconomic growthâ the Chancellor has in mind but with the Governmentâs Net Zero Strategy it will not include any increasing living standards.
The Net Zero Strategy requires massive de-industrialisation and reduced consumption. The latest National Grid ESO FES 2024 launch video calls for âpublic acceptanceâ and âcustomer engagementâ for a âbig demand reductionâ in order to achieve net zero CO2 emissions by 2050 because there is no technically viable let alone economic solution. This means less food, particularly meat, less heating and less travelling and the big âinvestmentsâ need to be made within the next two years.
It is instructive to see in this video the co-chair of the UK Hydrogen Delivery Council, Jane Toogood, has not only not read or understood the Royal Societyâs âLarge-Scale Electricity Storageâ report which suggest using hydrogen for electricity storage but more importantly doesnât even know the difference between energy and power.
July 18, 2024
PS :
Fortunately, CAGW caused by burning hydrocarbon fuels is a hoax/scam because there is already sufficient CO2 in the atmosphere to absorb all the IR radiation emitted by the planet as defined by its IR bands and the Earthâs IR Planck radiation curve. So adding more CO2 adds a negligible increase it the GHG effect, a phenomenon known as saturation, which even the Royal Society admits exists.
July 18, 2024
….and still the sea’s aren’t rising in line with UN predictions …they’re not rising enough to affect ‘humans’ for centuries to come …they may not be rising at all ?
July 18, 2024
GC :
According to the Australian ABC, despite the ravages of global warming, most tropical coral islands in the Pacific Ocean which were investigated by the University of Auckland are maintaining their size or growing larger.
July 18, 2024
But the endless ships transporting oil, goods, food, weapons continue to flush waste out into the oceans and are probably the cause of all sorts of sonar damage to sea creatures.
July 19, 2024
thats not co2 climate change ….thats environmental damage
July 18, 2024
Not quite âallâ but almost all, see the Prof. William Happer video – Elimination of CO2 is a suicide pact. A bit more CO2 and even a bit warmer is a net good anyway.
July 18, 2024
South Korea doing a lot of good work on hydrogen generation and storage from intermittent wind and solar sources. Maybe concentrate on this rather than carbon capture.
July 18, 2024
It wasts about 60% of the power and turns expensive electricity into a combustible gas worth perhaps one third of the value!
July 18, 2024
You mention the BoE’s target to have 2% inflation. You don’t mention the second explicit target the Conservatives gave it to facilitate the UK achieving Net Zero by 2050. That is a massive drag on growth and no amount of tinkering with other targets will overcome that one.
July 18, 2024
As pointed out previously:
http://johnredwoodsdiary.com/2024/07/06/labour-sets-out-to-get-the-u-k-to-grow-the-fastest-in-the-g7/#comment-1462722
we used to have a trend growth rate of 2.3% a year for per capita GDP.
That long running trend ended in 2008 with the global financial crash. Not with the EU referendum, or with the pandemic, or with Brexit, or with the war in Ukrane, or even Liz Truss, but with the global financial crash.
The curve to which I linked in that earlier comment is very very clear, that was when the break occurred, and we need to work out why it has had such an enduring deleterious effect on our economic growth potential.
July 18, 2024
@ Denis Cooper “…we need to work out why it has had such an enduring deleterious effect…” – unabsorbed debt of crushing proportions very likely.
Bernanke’s wish to avoid a horrible end by recognizing unsustainable debt and proceeding with write offs could not avoid the endless horror of zombie institutions trapped in low growth loops as they struggle with carrying costs of borrowings, even with artificially low interest rates.
July 19, 2024
It could be that, but is it not surprising that the effect has lasted so long?
July 18, 2024
Setting targets for growth is laudable, however itâs the policies to achieve those targets which is important; consider the targets of net-zero
Labour â cancel all fossil fuel development, ban the internal combustion engine & impose high travel & environmental taxes, import energy & goods
Tory â cancel all fossil fuel development, ban the internal combustion engine & impose high travel & environmental taxes, import energy & goods
Reform â plant more trees, clean our rivers, stop immigration growth and fast track nuclear energy
July 18, 2024
Off topic, but the following article (if Sir John kindly permits) explains the lies which underpin the phenomenally expensive and pointless attempt to “decarbonise” our economy.
“The word âsustainableâ was hijacked decades ago, and it is now deceptively used to advance the agendas of mega-corporate-communist interests who couldnât care less about the environment. The aim is to catapult humanity into the âfake-sustainableâ totalitarian arms of UN Agenda 2030 and other clever marketing plans entirely designed by the so-called elites of the corporate WEF Davos group.”
https://countrysquire.co.uk/2024/07/17/driving-an-electric-car-is-fake-environmentalism/
July 18, 2024
@ Donna – interesting, thank you. Keenan treads an increasingly well-worn path.
July 18, 2024
I’m not sure the new Chancellor will take any notice of good suggestion, in the same way that the last Tory Chancellor ignored wise advice, to ruin the economy.
The King’s speech was full of doom and gloom – nothing to look forward to expect more oppressive laws to reduce freedoms, especially in protesting against HMG.
We all know that labour is a party economically illiterate. They have proved that too many times – Brown told us that there would be no more boom and bust, but what he really meant is no more boom – Starmer will demonstrate that.
July 18, 2024
Another thing which will drive up everyday staple prices is successive governmentsâ attacks on farming. A Cornish farmer on youtube explained how the govt is currently trying to bribe farmers not to produce food for three years. Manufactured food shortages will become a reality if they get their way.
Also âA Norfolk pig farmer has been paid ÂŁ1.5 million to stop rearing 2,000 pigs in a scheme to tackle river pollution. The scheme, a joint venture between Norfolk councils and Anglian Water, will create nutrient ‘credits’ to be sold to construction companies in a nutrient offset scheme.”
Harry’s Farm on youtube shows how shocking it is, how much land is being taken out of use via these schemes.
July 18, 2024
oh for a return to the days of food and drink mountains!
July 18, 2024
The immediacy ought to be for lower personal and small business and trade taxes, and regulations. People will want to spend it and joiners will like to do jobs for it.
All the big talk on big gov. organisations is of no interest to ‘the man in the street’, but it’s ‘nice’ for economic academics and high level debaters who no longer have any idea about how things are done. Nothing there will change much for people.
July 18, 2024
The “fake” Conservatives paid the price of treating their supporters with contempt over the last 14 years. They did nothing to deal with Immigration despite the promise in the 2010, 2015, 2017, and 2019 manifestos. Equally, we had no bonfire of the Quangos; instead, new ones were set up, and existing ones were allowed to grow. The COVID lockdowns and absurd financial support were way over the top and uncontrolled by the then Chancellor, Rishi Sunak. That alone should have disqualified him to be PM. He is not a leader, has no charisma, no ability to relate to ordinary people, and, as shown by his decision to go for a GE on July 4th, has no wisdom and no judgment. I am staggered that losing 20,000 plus majorities in by-elections rang no alarm bells for conservative MPs. As for growth, the new Labour Government has not a clue, as the King’s speech showed.
The conservatives need a good hard look at themselves and need to rediscover conservative values and policies
to even have half a chance at the next GE. Then they need to ruthlessly cut Civil Service numbers, shut down 90% of the Quangos, control government spending and seriously reduce taxes. Labour will fail miserably as they always do, but will the conservatives be ready to offer a different approach?
July 18, 2024
Everhopeful
Government needs growth to increase its tax take. More tax rather than more taxes, gets down the deficit, provides more for social services, could, properly handled, actually reduce taxes. However I have no expectation of current politicians doing this. They will be quietly inventing the next Dome.
July 18, 2024
I see the border force after rescuing illegal migrants in the channel has returned them to France today. So it is possible! Why is this suddenly possible under a Labour government when the Conservatives were telling us it was impossible for the last number of years?
July 18, 2024
O/T – you must surely be asking as do I myself Sir John “what has happened to our country these last 24 hours?”
First Border Force returns migrants to France and next a judge sentences a Just Stop Oiler to five years! Scenes we never thought we would see in our lifetimes!
July 18, 2024
Actual policing is still possible? Amazing.
July 18, 2024
Nice article in the DT Mr Redwood. Keep it up Sir, Starmer and those wet Tories need to be exposed in their aim to take the UK back into the EU
July 18, 2024
…but its happening before our very eyes …nothing can stop Starmer (nobody in the tory parliamentary party wants to stop Starmer …thats why the tories didn’t repeal the EU laws)
July 18, 2024
Dear Sir John,
Goodhart’s Law – that any targeted variable will become distorted – was first applied to monetary matters but has wide application. It certainly applies to economic growth. The most obvious way is by promoting or allowing mass immigration, because the targeted variable is GDP and not GDP per head, which tends to become increasingly disconnected.
That is one of the reasons why the Treasury and governments in general back strong immigration. It was explicitly built in to the medium term growth targets/forecasts drawn up by Ed Balls halfway through the last Labour Government.
The best way governments can boost economic growth is to maintain stability in prices and taxes and to help smoothe cyclical fluctuations in output and employment via offsetting fiscal balances. Using the inflation target for indexation of it own spending, charging and pay could, as you suggest, be a powerful tool.
The more direct way government can achieve a one-off rise in living standards is to boost its own capital investment. But this only works if there is slack in the system, if it is otherwise tax-funded to reduce short-term consumption pro rata and if the state investment is in addition to private investment rather than replacing it.
For instance, if Great British Energy increases total energy capacity, eg by building nuclear, it can raise growth. But if it merely replaces North Sea oil/gas or if the renewables would be built privately anyway, it does not.
P