The governmentâs aim of getting the UK economy to grow faster than the rest of the G7 is both ambitious and achievable. I will explore in this and later pieces what it will require to bring about. We will need to look at dear energy, difficulties in affording your own home, the disastrous boom bust policy of the Bank of England, the wish to deindustrialise to hit net zero quicker, the public sector productivity collapse and others.
The task  is to match or exceed the US rate of growth which has  been considerably faster than the UK and the EU this century. The superior  US growth rate has greatly benefitted from  the supercharged growth of its leading large companies in technology.The UK needs to ask why it has been left behind in the digital revolution, along with the rest of Europe.
The US has nurtured a number of crucial technology companies. Their system of spin out from universities, their tolerance of small business, their venture capital and private equity markets have provided plenty of finance and back up to new idea have all helped. Their wish to run successes and grow them from billion dollar companies to trillion dollar companies has also been crucial, where in the UK a successful entrepreneur may sell out early when he or she has made enough money to cover the needs of the rest of their lives. Government has helped in keeping regulation proportionate and in setting lower tax rates.
The Republic of Ireland has shown how a European country can greatly benefit from US success. By setting its own corporation tax rate at a low level to act as a magnet to the large US digital companies, who have set up and channelled much of their European business through Ireland. If the UK set its own corporation tax rate at the Irish level it would attract much more of this US investment, given the talent pools and other advantages of the UK
The UK has allowed semiconductor investment to be mainly elsewhere, and allowed bidders to buy up any promising UK company in the area. The government needs to have a targeted strategy to bring more microprocessor manufacture to the UK, just as President  Biden has done in the USA through his Chips Act. The UK has plenty of data centre demand for sophisticated chips and needs general microprocessors in a range of items from defence to consumer electronics.
The UK has been too ready to follow the prescriptive regulatory approach of the EU to this important cutting edge sector, leading to tensions with the main US players and diverting innovation and investment away from such heavily regulated area. Most of the crimes we want to avoid through technology from theft and fraud to grooming and planning crimes are already serious criminal offences that can be detected and prosecuted in the usual way. There does not have to be a new range of regulatory and legal offences that overlap or duplicate with the underlying crimes people can use technology to assist.
The UK needs to improve the range of tax incentives for start ups, and create a much more welcoming environment for home grown and US tec businesses.
July 26, 2024
Good morning.
So Liz Truss was right in the end. I wonder how well the BoE will take the news that the Labour Party wish to pursue a ‘Right Wing’ economic policy ?
July 26, 2024
Perhaps the Labour party might gently change clothes with the old Conservative (policies)! It has been evident that the Conservatives of recent years had begun taking fashionable attire from Labour and others.
July 26, 2024
We read today how a new defence pact by Healy with EU has been signed! Why did Sunak not challenge that? Germany wanting a big new deal including movement of young people! Where is that in the news? Lammy wanting to include energy in new EU deal, how does this effect growth?
Lammy now returns to funding UN agency that helped attack on Israel! Starmer gave away another ÂŁ84 million new money to Africa last week today Reeves wants more taxes to waste! When did Sunak challenge this waste of our taxes?
July 26, 2024
Healey signed a pact with Germany not the EU. Furthermore, it is highly likely that all the negotiations and drafting of this pact was done by the Conservative Government. These things do not happen over the course of 3 or 4 weeks.
July 26, 2024
Hope: The free movement issue particularly for young people, for 18 to 30 yrs to live, work & study has been cropping up from time to time recently, favoured by the EU Commission ( and quickly supported by our London Mayor if I recall correctly ) with the suggestion of their being able to also be accompanied by their families. In the case of incoming to the UK a proposal to perhaps not have to pay our International study fees ( if here to study ) but our UK student rates, nor payment for the NHS surcharge normally applicable. I believe the proposal was for it to be perhaps a 4 year ‘project’ The EU as in the UK must have many additional thousands of this age group in recent years, not least through arrival of illegal / irregular migrants since having acquired UK/EU passports/citizenship. When this came up a few months ago, Mr Sunak / HMG rejected the proposals. How this fits in with our EU Citizens Settlement Scheme which is, apparently, not quite settled with a reported 137.000, the last time I saw something on this, outstanding cases connected with the Tories’ handling of the scheme still needing to be sorted out. The whole issue raises so many questions.
July 26, 2024
Starmer stated commitment to ECHR is absolute, Snake and his party saidâŠâŠ.nothing! Some opposition when it is central to illegal immigration!
July 26, 2024
Until we leave the EU properly and stop mirroring their rules we are destined to become an economic backwater.
Milipede will ensure that the government fails to create growth as he carpets the country in stupid windmills and solar panels.
Until we have cheap reliable energy growth will be an illusion.
July 26, 2024
Look above Ian. New deals already signed by Starmerâs govt in betrayal of our nation to leave the EU. Not a blip from Sunakâs socialists. Germany wanting to sign another deal to include movement of young people!
When France challenges UK, as it always does, will Tugenhadt be conflicted as he is half French with a French wife?
July 26, 2024
Stop On
July 26, 2024
Any fool chancellor can get GDP growth, just print, borrow and spend more money! What is needed is PRIVATE SECTOR growth (without inflation), but with Labour I expect we’ll see public sector spending and enlargement. Watch the the ratio of Public/Private share of GDP. National GDP is crude and manipulated measure. Tories knew that.
The rest of Sir J.’s ideas are sound, but not in keeping with socialism, so expect Sunak and PCP to sit quiet.
July 26, 2024
Nothing right wing or pro-growth about this Labour Government other than relaxing planning all the rest if very anti growth.
William Cobbett – “Nothing is so well calculated to produce a death-like torpor in the country as an extended system of taxation and a great national debt.”
Well that plus net harm lockdowns, vast low skilled and often criminal immigration levels, net harm “vaccines” and net zero lunacy is rather worse still as he might have added today.
But that is what Major, Blair, Brown, Cameron, May. Boris and Sunak left us with – and Starmer is even worse than Sunak. Tax as a % of GDP in Cobbett’s time circa 1800 was about 3% – recently circa 45% and for what?
July 26, 2024
Liz Truss was not right. She hadn’t a clue. She was just regurgitating stuff she’d picked up from Libertarians. We need to move on from Libertarianism to Entrepreuneuial / High Tech / Cultural Conservatism whilst avoiding wet One Nation Toryism too.
July 26, 2024
@ Mark N – Socialism causes the abandonment of Free Thought, the group think of orthodoxy. Truss saw through this, the cycle had to be broken and it would take a wreaking ball to do it. Those that climbed to the top of the dung hill saw what was coming, their jobs, one way or another the evolution of being at the top meant the need to work to do something and achieve. What we had instead was little men lost, felling threatened they had never contemplated getting results as part of the job. So like scared chickens they stuck with briefing against change, created a non-existent fear, a Brexit campaign all over once more.
The trouble is and it is now dawning on the Country at large – we have to change to survive. Yes Truss was right if you have an economy you can have ever-thing as there is money coming in. But you cant achieve an economy if your orthodoxy causes you to steal from those best placed to create wealth, and what little there is now is exported by clumsy laws.
July 27, 2024
@Mark B –
From the Telegraph, today
Liz Trussâs mini-Budget was only responsible for half of the sudden jump in government borrowing costs in September 2022, new research has suggested.
Bank of England researchers found the problem was caused by liability-driven investments (LDI), the selling of risky products by pension funds in the wake of the mini-Budget and was responsible for the rise in bond yields.
LDI’s where identified as a problem tool many, many years ago(I think 2016 – guessing though). The FCA identified the problem, the man then in charge was supposed to address it, but didn’t. That man Andrew Bailey was then promoted to the BoE and by all accounts is the one that caused the briefings against Truss seemingly to cover his own back
Reply Wrong again. The QT programmed of the Bank was also responsible alongside LDI as set out here many times.
July 26, 2024
To accelerate growth, cutting the nation’s fossil fuel-inflated energy bill would be a good place to start
Contrary to the claim in the media and repeated yesterday by the Shadow Energy Minister, Sir Kier Starmer has NOT reneged on the Labour promise to reduce the nation’s energy bills by ÂŁ300
Yesterday Starmer confirmed that he stands by the figure from Labour’s manifesto:-
âYes I do â I stand by everything in my manifesto and one of the things I made clear in the election campaign is because I wouldnât make a single promise or commitment that I didnât think we could deliver in government and thatâs why we carefully costed and funded everything”
One observes that the right-wing media is miffed at the failure of it’s “project fear” election campaign – but for many who expect to be truthfully informed by the media, blatantly telling porkies may be a good reason to finally cancel the subscription
Reply So how will bills be cut by ÂŁ300? We need more back up gas fired capacity the more renewables on the system. They are having to offer higher power prices to attract more wind investment. They do not include the cost of the back up. One day this week with low summer demand renewables managed just 3% of our electricity. How do we keep the lights on in your renewable dreamworld?
July 26, 2024
@Sir John – reply
Good morning. Mrs Gold is busy writing a short piece on the need for balance between energy security and fossil fuel generation and renewables during the transition. The real issue is how to get the renewable electricity from where it is generated to where it is needed. I acknowlege that the grid needs additional “inertia” generation capacity
July 26, 2024
The Grid can cope admirably with that 3%. Just when will we be able to stop buying 20% of our needs via Interconnectors?
July 26, 2024
When there is no renewable energy to transfer how do you suggest we keep the lights on
EG on a windless, frosty winters night.
Deluded doesn’t even begin to cover it.
July 26, 2024
Solar is particularly bad in the UK as we really do not need much electricity in summer in the middle of the day. We need it mainly for the cold winter short days and long nights and it cannot be stored cost effectively. Electricity is best stored as a pile of Coal or Natural Gas.
July 26, 2024
Coal and gas and then generated only as needed. So lucky we have plenty of coal and natural gas provided for us under out feet in the UK. Alas the idiots in power do not want to use it – to get us through until we sort out practical cost effective controlled fusion energy – in circa 20-30 years I suspect. I might even live to see it with luck!
July 26, 2024
Health Secretary Wes Streeting says the Care Quality Commission (which inspects the NHS hospitals) is “not fit for purpose” following an independent review
The CQC said it accepted the full findings and was “working at pace” to “rebuild trust”
The usual political waffle.
Wes, most of the NHS is not remotely fit for purpose, nor is the MHRA not is Public Health England or Wales, nor were the Covid vaccines remotely safe, effective or fit for purpose!
July 26, 2024
That covers it all Ian, what a stupid legacy we are going to leave future generations!
Green Loons!
July 26, 2024
Indeed, if only more MPs had any basic grasp of physics, energy engineering, energy economics, logic, maths, entropy, electricity storage costs and the vast energy wasted in the process. Not that a bit more CO2 plant food is even a problem – it is a net good.
What % of MPs have any grasp of physics beyond O level? Though Starmer (Law Leeds) got a B at A level Physics as did Ed Miliband PPE Oxon (and Ed did Further Maths B too). So little excuse for pushing this total lunacy. They should know better even with only B grades. So do they know full well but are just lying or bought or are they totally deluded by their mad net zero CO2 devil gas religion or do they think it wins votes anyway and so do not care?
The laws of physics will win out, not deluded politicians or net zero religious nutters.
July 26, 2024
But doesn’t Climate Change mean we are shortly to have bright hot sunshine early morning ’til late for most of the year? That’s why we must build all these metal skeletons carrying high voltage electricity so our home solar panels can connect directly to the Grid.
July 26, 2024
Well getting “renewable” electricity from where it is to where it is needed is very expensive indeed often more expensive that it is worth! Far more expensive than connection up one large coal, gas or nuclear power station as so many locations often remote and at sea. Plus as renewables only give about 20% output so you need a 100% output link but 80% of its capacity is wasted on average!
July 26, 2024
How do we get faster growth? Easy cheap reliable on demand energy, fire the 50% of the state sector that does little of value or often does positive damage (release them to get productive jobs), cut taxes, relax planning, have a bonfire of red tape, abandon net zero, take only highly skilled high quality immigration and only at sensible levels. Get real and fair competition in energy, housing, education, healthcare.
Take real advantage of Brexit. Stop the wars on motorists, car users, the productiveâŠ
So almost the complete reverse of the Cameron, May, Boris, Sunak, Starmer agendas then.
July 26, 2024
Hi Lifelogic,
‘Easy cheap reliable on demand energy’ to a degree that is true but who are the capitalists who are going to benefit from this and how (Again, I accept some truth to what you say but not completely).
‘release them to get productive jobs’ – but there are loads of capitalists who are actually harmful to our economy (look at the banks that had to be bailed out or the the incompetent and greedy capitalists in the Post Office – and people like them from one degree to another in other companies). I am NOT advocating socialist! I am a capitalist! But that you need to be careful about idealising those who work in capitalism. Not forgetting a lot of people in the public sector are too useless to work in the private sector and then would be on the dole that would cost more to the tax-payer!
‘Abandon net zero’ – how? Lots of young Tories support Net Zero. And how do you defend this against those in the High Tech industry and in the Financial Sector who believe they can make lots of money from Net Zero. So lots of capitalists are NOT on your side here.
July 26, 2024
Good to see the tins of soup on painting people have been convicted. But why on earth has it taken two years for such an open and shut case? An earlier conviction would surely have deterred many other similar crimes!
People seems concerned about these new EU demanded tethered bottle tops. A bit irritating I agree but just use an old bottle and refill it saving nearly all the plastic needed – letâs have more public water fountains please as we used to have. Public dust bins and public loos rather useful too. Again we used to have these. Ever more taxes and ever fewer decent public services!
July 26, 2024
SG : âThe real issue is how to get the renewable electricity from where it is generated to where it is needed.â
This only improves energy supply when the wind is blowing. When the wind isnât blowing, which happens often and with chaotic intermittency, not only just over the whole of the UK but also over the whole of Northern Europe, improved distribution will not solve the lack of supply. As I write the UKâs 30 GW of installed wind power is providing just 3.5 GW, 12% of demand.
July 26, 2024
And that is 12% of a rather low summer demand. The demand on cold winter days if we all switch of heat pumps and EVs might peak as high as 30 times this level. The Ed Miliband/Starmer Agenda is economic vandalism – totally bonkers.
July 26, 2024
LL :
The Net Zero Strategy is designed to fail and cause a crisis. The latest 2024 NGESO FES for 2050 includes a plan for electricity storage using hydrogen which is 1/500th that recommednded by The Royal Society’s Large-Scale Electricity Storage report. So what is going to happen when Labour’s Red Ed copies the Conservative Party’s COP26 President and explosively demolishes our gas fuelled electricity generators to achieve decarbonisation by 2030?
July 26, 2024
and the highest sun factor we ever get! The rest of the year really low!
July 26, 2024
SG : âThe real issue is how to get the renewable electricity from where it is generated to where it is needed.â
So we spend ÂŁ220bn [National Grid’s figure] on infrastructure to distribute wind energy when the wind is blowing , but no decrease in price because it is fixed by the CfD contracts, and which is not required when the wind is not blowing and there is no energy to distribute. Never forgetting that the National Gridâs plans for electricity storage are 1/500ths of that recommended by The Royal Societyâs âlarge-Scale Electricityâ report.
July 26, 2024
According to the Daily Mail, Starmer said Labour would âtackle the root causes of the cost of living crisis and help families save up to ÂŁ300 off their energy billsâ. And the Environment Secretary (Steve Reed), said the plans would âcut bills by an average of ÂŁ300 a year every yearâ – note the introduction of the word “average”.
BTW transferring the ÂŁ300 to other costs doesn’t count as a reduction.
Conveniently, this ÂŁ300 goal was not in the manifesto and Milliband is already refusing to guarantee reductions over this next year and saying things will take a long time.
Sounds like a “ÂŁ300 on the side of a banana” fiasco is looming.
July 26, 2024
The easy way for Labour to honour its promise to cut bills by ÂŁ300 is to remove the current surcharges from electricity bills and add them to gas, which will, from their point of view, encourage people to switch from gas to electricity. It is complete fantasy to believe overall bills will come down whilst Miliband continues in his delusions to promote Net Zero.
July 26, 2024
Realistically, where would that money come from considering Labour’s stated commitments on energy production. Moving the funding stream somewhere else that comes back to hit the consumer with other rising costs is not a reduction.
Labour kept claiming their projected expenditure was fully funded, so where are the funds for the ÂŁ300 saving?
PS Expect a ramping up of excuses from Labour where they claim to have found shocking financial black holes.
July 26, 2024
Why would you want to switch people from gas (about 1/3 of the cost of electricity) to electricity? Especially when much of this electricity is generated from gas wasting about half of the energy at the power station? Electricity that cannot, cost effectively, be stored – unlike gas.
July 26, 2024
Rely to reply
How? The fanatics will spend billions we don’t have and to commit to higher energy prices to double the capacity. Then on days like you say they will achieve 6 percent at a much higher price. On TV last night Farage put this very thing to a Nut Zero fan and he said it only occurs for a week in February – so that’s alright then, we can shut up shop and live in the dark when it happens. Your example proves him wrong, it can happen anytime, even at low demand it cannot cope consistently. It is shown here regularly that renewables produce very low output many times every month. They confuse capacity with actual output and will ruin us all in this madcap scheme.
July 26, 2024
@ Sakara Gold
“To accelerate growth, cutting the nationâs fossil fuel-inflated energy bill would be a good place to start” what planet are you on? We have some of the most expensive energy in the world rendering the UK very uncompetitive.
This completely the reverse of what is needed it for growth, it puts up energy prices, gives intermittent unreliable energy and costs a fortune. The war against CO2 plant, tree and crop food will cost ÂŁtrillions for a negative outcome.
I have nothing against rolling out renewables where they work and make commercial sense but without market rigging or subsidies and when accounting for back up and storage costs. This, with current technology is not very often at all. About 90 of all UK human used energy is fossil fuel derived. This even after many high energy industries have been exported. Please get real.
Rolling out duff tech. with subsidies and market rigging just gives you duff tech all over the place that we need to be replaced all too soon.
Please study some physics and energy engineering, the cost of backup, connections and some energy economics. You have it completely wrong as have eco loons and hypocrites King Charles, Kier Starmer, Ed Miliband, Partick Valance, the Committee for Climate Change…
Peter Lilley has it about right in the Telegraph today but even he understates the against case. He read nat sci and later economics at Clare Cambridge.
If you do the maths on the huge cold winter weeks total electricity demand with all on heat pumps and powered by intermittent renewables you will see why it will never work with current tech/
July 26, 2024
They live in cloud Cookoo land, It is noticeable that non of those pushing the nonsense have a technical background or even a minimum of intelligence!
July 26, 2024
If we all switch to heat-pumps and EV vehicles. The peak winter demand in the very cold periods may well be as high as 10 times current average demand. So to go to net zero you may need a grid of well over 10 times capacity (as with renewables grid capacity often cannot be fully used) then you will need nearly 100% gas or coal back up for when there is no sun or wind – and these would have to be carbon capture which wastes much of the energy so perhaps 140% in fact. Then about 80% of this generating and grid capacity will be wasted for most of the year.
The proposal is absurd, vastly expensive, impractical and gives zero in fact negative benefit anyway. A bit more CO2 is a net good the World is in a dearth of CO2 in historical terms.
July 26, 2024
Starmer and Milliband – assuming they do actually understand the economics of renewables – are âlyingâ in the proper sense of that word. Ie They are saying things which they must know to be untrue. It is obvious that backup is needed for wind and solar and obvious also that any proper assessment of the cost of renewables would include this. Prof Dieter Helm, a noted expert in the field, makes this point – as Peter Lilley reminds us today. But Labour choose not to include this cost, so bogus numbers can be circulated from official sources and credulous supporters can parrot them. This is a much more serious lie than for example whether or not there was a cake in a meeting during lockdown.
July 26, 2024
Both actually have B ‘s in Physics A levels & so have little excuse for their net zero and energy lunacy – though they did law and PPE after.
Ed Miliband, Secretary of State for Energy Security and Net Zero an Oxymoron and a moron too perhaps!
July 26, 2024
Net zero and cheap reliable energy and net zero and significant growth is extremely unlikely too. Until we get better nuclear or fusion.
July 26, 2024
SG : âContrary to the claim in the media and repeated yesterday by the Shadow Energy Minister, Sir Kier Starmer has NOT reneged on the Labour promise to reduce the nationâs energy bills by ÂŁ300.â
This will be quite easy as the Government has full control over energy prices and renewable subsidies can be transferred to general taxation via GB Energy. Note also that politicians often confuse âenergyâ with âelectricityâ and one way to reduce electricity bills is to increase the prices on gas as suggested in Chris Skidmoreâs Mission Zero (P78/79) and in the 2024 NGESO FES (P74).
July 26, 2024
@Reply
I agree to a degree.
Problem is you have extremists on both sides. The Net Zero extremists. And the anti-Net-Zero extremists.
The reality is that we can’t just give up fossil fuels that quickly. But at same time we have to make the effort as it is now becoming a cultural necessity (all my niece’s Tory friends at posh Exeter University or all greenies – and if Exeter is like this then you can be sure it’s like that across young Tories in general). Plus there is a tonne of money to be made out of the new technology that has a green slant to it (and from the technology and services related to this).
Lastly, the parents of these posh, young Tories who are now greenies are turning more green themselves. So it’s essentially the older generation of Tories who are the most strongly anti Net Zero. The older Tories have to swing with the times otherwise they’re going to become irrelevant (plus we could be missing out on lots of money that can be made on this new tech).
July 26, 2024
So whereâs my ÂŁ300 then ?
July 26, 2024
We’ve just been told by OVO to expect an increase in charges in the autumn quarter!
July 26, 2024
Everything you highlight is possible, we could create a Singapore of Europe. We have the human elements for innovation. The basis of US success is the developement and commercialisation of many UK and European creations. The jet engine, the computer, the human genome, and the world wide webb.
The failure of the UK to take advantage of it’s creativty is to a large extent political. The vast swathe of UK politicians lack the technical expertise or the commercial acumen to even understand what they are dealing with. They are backed by a civil service that is equally bereft. Irrespective of party, politicians have aims that are largely fed by spending money rather than creating wealth.
Take seed corn, if it is not nurtured and developed, but derives annually from the bulk crop, it will deteriorate and become more vulnerable as years pass. That is the essence of the way political UK treats enterprise and innovation. Put another way, we over milk the cow while starving it of good grass.
I contend that whatever your political beliefs, communism to capitalism, they can only succeed long term if backed by a thriving unhindered economy.
You SJR have been at the coalface of both industry, banking and politics, and give every indication of understanding the problem. Equally the leadership of Reform have been there too. This is why I find intelligent logic in most of which they espouse. I hope that similarly minded elements of what is left of the conservative party will see sense in joining them. They would only be following their electoral support in the country.
For what you want and the country at large needs we require a gigantic reset of politics in the UK. Currently it is not fit as a marketable product so needs changing while staying within the parameters of an expanding democracy. Like the NHS it is good in essence, but there are proven better ways of doing it. For it and business success, politics, UK style, is the roadblock.
July 26, 2024
an excellent contribution.
July 26, 2024
I believe Agricola should be PM
July 26, 2024
@ agricola “The failure of the UK to take advantage of itâs creativty is to a large extent political. “ – and to an even larger extent cultural, meaning obtaining the desired change will be all the more difficult.
We have very few leading business figures of a standing that means they are household names, contrasting to the United States, and when we do identify them they go uncelebrated typically, in further contrast. Enterprise is not lauded in our culture and so it is denied some of the boost it enjoys in America.
Moreover, as Sir John states “in the UK a successful entrepreneur may sell out early when he or she has made enough money to cover the needs of the rest of their lives”, contrasting to American entrepreneurs who short of billionaire status are denied a feeling of having made it.
July 26, 2024
”thriving unhindered economy” YES
July 26, 2024
I agree with your points on the semiconductor sector, we need foundries but also a critical mass of the full stack including education, design and applications. Engagement and support of other technology and engineering fields and industries also have to become a focus if any growth is to succeed and be sustainable. Revitalise the aerospace industries perhaps – space, satellites and autonomous systems/robotics.
Whichever industries and commerce are revitalised this can only be sustainable if ownership, control and employment stays in this country. This will require significant commitment and investment, public and private.
The attitudes of complacency, arrogance and “managed decline” that are obvious at all levels that pervades central and government have no place in a country that aspires to succeed.
Question – How could UK industries be encouraged to invest in technologies, especially in light of the disparities in labour costs in competing nations.
July 26, 2024
We know the answer to this question.
Note this fact. Microsoft started with an initial capital investment of no more than less $10k. Today it’s worth around $3.1tr. Amazon was set up with around the same investment of $10k from a garage. Today, Amazon is worth around $2tr. Google, initial investment of around $100k. Today, Google is worth around $1.9tr. That’s $4.7tr of market value from a capital start up across all three companies of less than $120k. The UK GDP is around $3.5tr.
Note another fact. Political leaders and bureaucrats are responsible for the destruction of huge amounts of economic value. It is the private sector that keeps our nation afloat not these political and bureaucratic halfwits who purport to act on our behalf but in fact destroy everything they touch.
Miliband. The man is a buffoon and now he’s in charge of a budget that is beyond eye watering. Give me strength. These dickheads are elected into power to destroy a nation. I am convinced that the IQ of your average voter is less than a peanut
The dog’s are bored and barking
As an aside. Religious sectarianism will destroy our country. Blame politicians for turning a blind eye and bureaucrats for aiding and abetting it.
July 26, 2024
I would liken the ability of the average voter to a dementia sufferer. What happened yesterday is forgotten as if it never occurred. Often memories from the long past will be strikingly clear. The old politics of parent’s opinions and Party lies are vivid. Fast forward many decades – Conservative for the comfortably off, Labour for the downtrodden workers. Not too difficult to hoodwink briefly for the cross on the paper.
July 26, 2024
The Tory party is a twitching corpse that is yet to realise it’s been executed.
It was up to its neck in the ruination of our country. Once our economy collapses we may see a good many lose their pensions (or at least any practical value in them.)
One can but hope.
Things are so bad that forfeiture of pensions would seem a reasonable demand from Tory voters.
July 26, 2024
Look no further than Ed Milibandâs article in yesterdayâs Guardian to see how lacking in understanding he and his boss are of how real economic growth is achieved. If it hadnât been written by a Minister of State, with such serious and disastrous implications, it would be truly laughable.
July 26, 2024
Indeed to anyone who knows anything about this topic the agenda is totally insane.
July 26, 2024
Miliband is a terrible appointment by Starmer and he will pay a big political price for it when the rolling blackouts start. I can only assume he’s made this blunder because as is common with the vast majority of our politicians neither of them has the slightest knowledge or education in science and engineering and so they have to rely on self-interested lobbyists for their “facts”. It was the same with Covid – I bet the inquiry doesn’t identify the scientific illiteracy of the Government members as a problem because of course the QCs running the inquiry are similarly afflicted.
July 26, 2024
RG :
The greenest politicians and activists are always also the reddest.
July 26, 2024
The green movement is essentially a Marxist anti-capitalist movement who are using Net Zero merely as a means to an end. It is why the Corbynite outcasts from Labour have joined the Greens who are now aLeo interested in Gaza and a raft of other far left policies.
July 26, 2024
Maybe instead if churning out what America do well, you conveniently miss out government pump priming trillions by running a massive deficit, (bidens green policies?) you should move above the what and investigate the why.
America massive resources, young country, a population of immigrants driven by both economic need and opportunity, culturally in terms of enterprise and attitude to risk as opposite to the majority in the U.K as different chalk and cheese.
Politicians in the UK have created and expanded the safety net of welfare and we have the NHS. Americans have had to be more self sufficient and if you drill down to the person in the street they are individually less risk averse.
In my Business Angel phase I could dine out on conversations wishing that raising risk capital was as easy as in the US.
To bring this closer to home, look at different communities and their achievements or otherwise. Chinese, Indian, Polish, more recently Nepalese stand out as considerably more successful than others, all having the sane environment when they arrived.
Why because they are culturally more entrepreneurial. They support each other and are hungry for education and are prepared to work hard.
Yes HMG could do more but until people like you are more prepared to stress the need for individual responsibility nothing will change. How many economically inactive (low output) people has your government allowed/supported.
Millions. Precisely!
Reply I do not have a government. I was kept out of the last one who usually ignored my main economic advice.
July 26, 2024
reply to reply …and didn’t we keep pointing out you could do things about it! And still could!
July 26, 2024
I agree with a lot of what you say. I spend a couple of months in the US every year and it is a very different beast from the UK. Their debt is nearly $35 trillion, and food prices, homelessness and crime are very high. They have less of a nanny and welfare state. The similarities regarding different cultures are striking with those of European, Chinese and Indian descent outperforming others. I put this down to family values and treating women as equals. The UK is following a dangerous path with the cultures it is allowing into our country; many have no respect for our values and will follow religious sectarian extremism.
The banking system is also very different with many small local banks supporting local businesses. This is set to change as the big banks swallow up the little banks and force them out of business. There have been 569 USA bank failures so far this century (sic Forbes). The current economic climate is very different from the times when the big USA companies were established.
July 26, 2024
USA debt per capita is half that of the UK. So very different as you say.
July 26, 2024
A focus on policies that create wealth, instead of policies that create indolence is a good place to begin reinvigoration of UK economic growth.
Perhaps also look at the level of public sector workforce numbers and asking if the balance between those numbers are the actual tax payers, i.e. the private sector, are in the right place?
The Romans did not invent technology or mechanisation because they had plenty of cheap labour in the form of slaves to do all the work. There is a lesson there I think.
July 26, 2024
I suggest you google “Roman Engineering”.
July 26, 2024
They even produced mortar that has lasted 2 thou years, while ours can be crumbly crap in a decade.
July 26, 2024
Profit stimulates growth.
Profit = Revenue – Costs
Revenue increases with demand
Cost increases due to tax and interest
Risk is the ratio of Revenue to Cost.
July 26, 2024
@Javelin +1 – yup revenue, real revenue, is what happens when there is an economy. Governments, the UniParty unfortunately believe more tax is revenue, the more they tax the more they seem to receive. What they haven’t yet seen is the pot is shrinking it doesn’t have the resources to replenish its self – it went to pay the tax bill
July 26, 2024
The UK has been too ready to follow the prescriptive regulatory approach of the EU to this important cutting edge sector, leading to tensions with the main US players and diverting innovation and investment away from such heavily regulated area. Most of the crimes we want to avoid through technology from theft and fraud to grooming and planning crimes are already serious criminal offences that can be detected and prosecuted in the usual way.
Government interference in our lives through a desire to legislate about the minutiae of life is overwhelming. It will only get worse under Labour who have not encountered an issue that cannot be solved by more government.
There are plenty of laws on the statute books use them or lose them but don’t give us more. Perhaps start by reducing the tax code instead of increasing it.
July 26, 2024
NS,
Yes we have far too many laws and too many laws for things that are already a criminal offence.
Take Mr Starmer’s announcement yesterday to make spiking a specific offence… It’s been an offence since 1861.
July 26, 2024
Itâs a red flag that it just doesnât work. We have more legislation than any country
July 26, 2024
Yes. Ireland has actually thrived in the Semiconductor and Medtech sectors without the strong universities and weight of people that we have here. So we have a relatively easier job to do.
-identify key areas of competence already in the UK. Aerospace, aeronautics, pharma, nuclear, AI, 3D printing would be a good start.
-reduce corporation tax to encourage inward real investment in real trading businesses rather than in buying up London property
-gear up universities to supply graduates in these areas and close down noddy courses
-use the existing Advanced Manufacturing centres in Rugby, Sheffield etc. to bridge universities with industry.
-free up commercial space at reasonable rates-the US and Chinese don’t pay London/Oxford prices as start-ups. Even Ireland is half ours. Free up employment red tape up to 50 people. Stop business rates.
-BES schemes instead of the rather feeble SEIS EIS to get cash into start-ups
All the stuff the Tories did in the 80s but haven’t done since.
Not quite old Labour though, is it?
July 26, 2024
Plus the other juicy incentive is 50% plant & equipment grants which Irish employ. A Eur 300K machine or 3 are way out of reach when you’re starting out but critical to growth. Bridge the gap by planting such in Unis and AMCs and almost giving away machine time to startups.
July 26, 2024
Sir John, you omit to mention a major reason why the USA has been able to achieve strong economic growth over recent years. US firms enjoy much lower energy costs. Successive British government policies of making consumers pay for huge subsidies to ‘renewable’ energy sources have made this country less competitive. China also has low energy costs as it has ample coal-fired power stations and hydroelectric power to supply its industry’s needs.
I think you needed to suggest a way this country could have access to cheaper, reliable energy which would not require massive subsidies. That way, we could achieve economic growth without needing to outcompete other economies which already possess technological advantages we are unlikely to equal.
July 26, 2024
@Hat man +1
July 26, 2024
And in other news, a report into the Care Quality Commission started by the previous government shows how utterly unfit it is putting umpteen lives at stake.
The previous head resigned just before the election after six years. Who was responsible (Minister?) for his performance management over that period and how widespread is such appalling management across the public/health sector?
I suggest any discussion about growth should get our house in order, more efficiency should equal less tax etc.
July 26, 2024
Faster growth will not occur unless policies on taxation, savings and investment are conducive towards it. It is obvious from an examination of the LSE’s Alternative Investment Market (AIM), the place for listed start ups, that it is in decline. This is evident from its overall valuation, down c20% from its post COVID peak and the flow of funds out of the market, measured in tens of billions. It is also evident in the poor returns earned by many companies. The situation will get even worse when Labour imposes yet higher taxes on wealth and savings as widely forecast. Add to that the higher energy costs caused by the net zero addiction it is easy to understand why so many businesses and CEOs are cashing out while they can.
July 26, 2024
Since the Not-a-Conservative-Party refused to LEAVE the EU we are still attached to, and significantly controlled by, the sclerotic, under-performing and increasingly dis-united EU …. because “we don’t compete with friends.”
Labour intends to weaken the Brexit terms still further and is focusing on policy areas which will cost a fortune and will not deliver growth. They are in full-on “Soviet Tractor Production” mode and are increasing the number of unaccountable Apparatchiks needed to monitor it.
Since it appears to be Official Establishment policy that “we don’t compete with friends” and we allow the EU to dictate how our economy is allowed to function and how we govern the country the chances of achieving the highest growth in the G7 won’t be possible. Unless, of course, they continue to import millions of “new British” to massage GDP.
July 26, 2024
It is trite to say that mass immigration, high tax and big spend increase GDP but do little to increase wealth but it is still surprisingly necessary to say it because so few politicians understand it.
July 26, 2024
GB Energy is trumpeted as an âengine for growthâ.
Labour is btw usually tax and spend and leaves a God Almighty economic mess behind.
Capitalistic growth is not in its dnaâŠit is more about command and control, tax and spend.
Good old GB Energy will fund things that the City and Wall Street have deemed uneconomic and unprofitable
So whereâs the growth? In the pockets of recipients of subsidies for windmills?
Accounting smoke and mirrors.
July 26, 2024
It will give us crony capitalism, waste, corruption and rip off intermittent energy.
July 26, 2024
+++
It certainly will!
July 26, 2024
But the City cannot be trusted to fund things that are of benefit to our economy or people, only themselves and their mostly foreign backers.
July 26, 2024
Nobody is claiming that the City can be trusted.
Thatâs not the point.
Which is that the City is financially motivated and successful.
One can scarcely argue with that!
July 27, 2024
Not always successful – the bailout of banks for example.
And where does all the money go, many of these wheelers & dealers are foreign.
BTW A sole focus on profit is what has landed Thames Water with humongous debts thanks to a foreign bank that is likely going to play the same game with some UK gas assets.
The City only focuses on what is good for themselves, no-one else, especially the plebs.
July 26, 2024
The UK does have some success stories in university spin-offs: Surrey Satellite Technology and Cranfield Aerospace to name just two that I have have had a hand in. What Sir John seems to be looking for is a technology in which the UK becomes the world leader in commercialising to earn mega bucks. That is a very different thing and UK has never been particularly good at it. It depends on many factors, mostly cultural. Several factors militate against innovation in UK, not least is its low investment in human capital. Universities churn out millions of people with useless degrees just so that they can have BA or BSc after their names. Its Skills Shortage Categories are an incentive to recruit from overseas rather than invest in training Brits in the skills industry needs.
Sir John is right to point out the low financial incentives for investing in commercial innovation. But his suggestion that the government needs to have a targeted strategy to bring more microprocessor manufacture to the UK, smacks of picking winners. Governments picking winners is invariably doomed to failure. That is not the purpose of the US Chips Act, which is a defensive strategy to counter the Chinese threat to Taiwan. US armaments are critically dependent on this supply which must be brought back to the homeland even if it results in higher costs. The more appropriate parallel with UK is far more basic: it is horribly vulnerable to its energy supplies being cut off.
Ireland is a good example of a better tax environment but it is not just corporation tax, Sir John will know from his own experience that is but one factor.
Surveys of industry to find out what is holding them back and which are appropriate for government to act on generally show a mix of general and sector specific factors. General include things like stable and internationally competitive taxation combined with facilitation of training, research and development and innovation, a flexible and home grown labour market, an education and training system that is tuned to the needs of employers, availability of investment capital, light regulation. Sector specific is generally unwise for governments to get involved in and may well divert reources into commercial dead ends.
July 26, 2024
The world is using more coal than ever before.
The use of fossil fuels in the world is expanding.
Is that growth?
The antis should all go and protest elsewhere! ( Where they love lovely coal, both home mined and imported)
Their immediate demise will not be a pleasant experience!!
Our stupid tokenism is nothing but gross self indulgence.
July 26, 2024
But coal was historically used for home heating and large scale industrial processes ( and to produce steam for the railway engines). In recent times the industrial processes reduce to a few geographic places, and steam not used for rail. However it is burnt to produce electricity, and oil a similar source.
July 26, 2024
And�
July 26, 2024
If you missed the message, coal is used to produce electricity now, nothing else much.
July 26, 2024
For the economy to grow people need to up their purchasing of imported consumer goods.
All made with cheap ( lovely coal) energy.
This country is a Potemkin village.
Fake, fake ,fake.
Our low carbon economy is one great fat illusion!!
July 26, 2024
Yes, and there are some enabling steps like planning reform that are needed to support this. The question is whether the necessary steps are more likely to be taken under a Conservative or Labour government ? Absolutely all the evidence suggests that it is the latter – after the brief reign of Liz Truss, Sunak and the One Nation bunch made sure all of her growth proposals were reversed – massive rise in corporation tax, junking of planning reforms etc. etc. Labour may well fail but at least they are nominally in favour of growth not opposed to it.
July 26, 2024
@Roy Grainger +1 – Hunt/Sunak made a big thing about inflation – but they were the ones that caused costs to rise, removed money from the economy, then the rise in interest rates and then blamed every one else when growth went missing. They were the problem and as such showed they were not the solution. Now we have an a party in opposition that are only offering more of the same a continuity leader.
July 26, 2024
The government wants growth.
Small businesses could grow, except the government wants to intimidate them with bureaucracy and legislation because all employers are as evil as Ernst Blofeld.
Businesses could employ more people, except the government wants to tax employment like it’s some kind of social evil that needs to be eradicated.
UK business could be globally competitive, except the government delights in high cost of living, particularly by permitting wealthy people and businesses, some from overseas tax havens, to speculate on UK residential property.
UK business could invest, except the government wants to tax away the money UK businesses need for that purpose.
UK business needs low energy costs, except the government wants to make it expensive with environmental charges.
The government may want growth, but its behaviour is for the opposite.
July 26, 2024
@Dave Andrews +1
UK Government wants to do all these things themselves on a day-to-day basis, in the dream it may work and it will help their ego – of course as and when it fails they have the bank-of-taxpayer to bail then personally out.
July 26, 2024
EU regulations are, apparently, so offputting that Intel are building a new manufacturing plant in Germany (they looked at the UK and decided “no”), are creating a new R&D site in France, and are setting up a new assembly/test facility in Poland.
July 26, 2024
Maybe the Government didn’t have a spare $11B (ÂŁ8.6B) to bribe Intel to build their new factory here in UK Peter?
The new chip facility is costing $33B to build but a third of that being funded by the German Government.
July 26, 2024
Politico.eu,4/7/24:-
“Intel shelves French,Italian chip investments.The chipmaker’s losses have forced it to pause research investments in Europe that could have bolstered region’s semiconductor plans.”
July 26, 2024
Maybe the UK government had already spent whatever money was available in persuading Nissan not to quit Sunderland?
Back in 2021, Intel’s CEO also cited Brexit as a reason not to choose the UK.
July 26, 2024
Only because the security of chip fabs in Taiwan is under very real military threat. In fact rumours suggest forces are ready to destroy the technology and sites to prevent invader control.
July 26, 2024
Maybe the 9 billion euro subsidy given by the German government helped their decision Peter.
July 26, 2024
MiB, IT, Yours are pathetic comments. You appear to be singing the small state mantra so religiously you cannot think of the UK with an industrial strategy looking prospectively at what could be the next technological/industrial developments.
ÂŁ8 bn in the UK annual budget of -ÂŁ1 tn is less than 1%.
As Ian B points out below it was a huge error to let ARM first go Japanese (SoftBank) then US (NVidia). And what about Cobham, UltraElectronics and Meggit, now more or less parts of the US private equity Advent International Corporation.
Given that âŹ10 bn must be about the 1% equivalent for Germany and France it is not surprising these countries welcome Intel. And for France Intel in Saclay/Orsay will be next to a number of âGrandes Ecolesâ (Ecole Polytechnique, Centrale/SupElec) so can expect âla creme de la cremeâ of French STEM students at their doors.
And to think there were times when the UK Government had not only a Policy and a Delivery Units but also a Strategy one.
July 27, 2024
Touched a nerve there hefner.
How can a fact be pathetic.
I see you desperately trying to claim a 9 billion subsidy to one company to get it to set up in Europe is loose change
Are you so pro EU you refuse to accept truth.?
July 26, 2024
Sir John
You pose a question that its answers have numerous nuances some of which are contradictory.
The starting place needs to be Government and the State âbutting outâ of enterprises as they have a record of failure on, i.e. anything productive that is hands on day-to-day, should have Government Fail labelled at the outset. Government creates a framework for other but should never be involved in the doing.
Great British Energy, does it remind anyone of anything? British Leyland, British Steel, Coal mining â all Labour Party success stories. The you get the Conservatives with âOne Webâ and so on. All now defunct not because of the market but because of centralized one size fits all control and ego destroyed them.
July 26, 2024
In terms of why does the US do it better? Central Government is facilitating not controlling. The US incentivized the economy it doesnât export it. The US IRA act offered funds for home-based industry to move forward, the main premise was that the money went around, circulated and trickled down with in its own economy, then came back in taxes.
In the UK the Conservative Government went in the opposite direction they exported the economy of the UK as such they exported its taxes. Just in the last couple of years they exported billions of our taxpayerâs money to India and China with free-bee handouts, the money leaves the country never to return â result loss of jobs and facilities no longer needed.
Then you add in the Conservative Stupid NetZero Laws, they were contrived not to advance the UK but to export UK Production and Jobs. Not a single thought went into where was the replacement tax required to fund our basic structures to come from. Parliament could address this situation its their Laws our Competitors don’t have them, they could bring us into line with the World – but will they?
July 26, 2024
The UK has done well on the technology front, the problem is our governments tend to enforce its ejection and ownership from our shores. From the BBC Acorn computer what got ARM the technology that is now in 85% of the digital world. Our government allowed it to be exported.
The UK was a World leader in graphic chip design. The Graphics chip is the real driver behind AI, as AI requires a different computation route, think NVIDIA, a graphics base now World dominant in AI. The UK Government allowed these UK facilities to be sold to the Chinese Government.
As for size, the Netherlands is now the World controller of Chip Production the USA even China canât advance without the Dutch Company ASML. Would the Dutch government let alone the EU Commission allow there sale?
Noting wrong as such with companies being sold off, that is part of the evolution of business. What is wrong is when the buyer is protected in their home market from similar happening to them. The other miss-adventure is selling companies to remove market place competition.
July 26, 2024
I’m intrigued by John’s silence on Labour’s plan to take the UK back into the EU, which they will do, BY STEALTH AND CREEP
Not one single Tory MP including John before the GE warned the voter that Labour intended to the UK back into the EU. Oafish Sunak knew Labour’s EU rejoin plan and chose to remain silent
July 26, 2024
@DOM – a plan supported by the new One Nation Conservative opposition. They are opposition in name only. As for the EU the Conservative in Parliament never wanted to leave that is why they kept fighting the People. Just think, a UK Government that didn’t take orders from those beyond it jurisdiction, instead listen to those that empowered and paid them. Politics has become a club to hang out in rather than do anything.
July 26, 2024
Dom, going by the leadership candidates as at midday, the centre/left tories are also happy to reunite with the EU
July 26, 2024
There is nothing centre about them! They are far left wingers of the New Labour variety. Centrist is to deceive the public of their true position.
July 26, 2024
I guess some of the contributors to this blog should have lived in other countries. To say that some in the UK CP are far-left is utterly bonkers. What would you say if you were living in France where the group who got the most MPs in the French National Assembly (192 out of 575) on 07/07 is made of people from the Greens, the Socialist Party, the Communist Party, and the radical left France Unbowed? Would they be far-far-far-far-far left?
Have you ever thought you might not be centre right but rather farther on the fringe?
Thatâs the effect of FPTP, âbroad churchesâ including people who have very little in common with each other in both main parties and unable to figure where they would sit in a circular Parliament.
July 27, 2024
You are very sensitive today hefner.
It is not OK to say far left, but OK to say far right.
Far left being anyone who has opinions different to you it seems.
July 26, 2024
– in my view, the UK’s strategic positioning should be to focus on commercialising HardTech rather than Tech, and to focus on that HardTech which can bring step change improvement in productivity globally.
– the UK is very short of people with experience of building early stage HardTech businesses into significant businesses. It is happening, so that talent pool will grow and enable the process to accelerate subject to access to the necessary funding.
– it has been known for years that the UK is very short of patient capital – it is also short of institutional investors which are familiar with the process of growing an early stage HardTech business into a significant business. In my view, the quickest and most efficient way to deal with this would be to reduce Capital Gains Tax to nil on investments subscribing capital into companies and which are held for more than five years. One of the attractions is no upfront cost to the Government – it would also be difficult for tax advisers to manipulate!
July 26, 2024
You need to do both foundation and “Hard” tech else you become a hostage to China, USA, France etc.
And there would have to be measures to prevent the good stuff being stripped off to some other country, encouragement or handcuffs or a mix, whatever.
July 26, 2024
We’ve had many opportunities in this area Charles, with companies such as ARM and Cobham coming immediately to mind. They had no support from Government in terms of the UKs long term strategic interests. ARM in particular is a very sad tale of allowing a key technology company be lost to us. The new Government is ploughing ahead with wind and solar but where is it’s commitment to small nuclear? RR has great potential in this field and you would think a Government concerned about carbon emmisions would be willing to invest in this technology. I’d much prefer my taxes going into British (e.g. Rolls Royce) SNRs, rather than into the nonsensical GB Energy!
July 26, 2024
The government led by Edward Heath had a dash for growth too that failed. Are we in for a repeat outcome now?
July 26, 2024
Let’s face it, high taxation is in the blood of socialists – they want to squeeze anyone who has something so that they are equally poor.
HMG will fail in it’s attempt to rejuvenate the economy simply because, apart from being mixed up and incompetent, they cannot wean themselves off the ideas that the middle classes are the enemy and taxes should be higher to get a more uniform society. Socialist heaven requires that everyone is the same and has the same.
Our taxation system requires not just a major change, it needs a total rebuild from the bottom up. A realistic revamped taxation system, where the majority of taxes came from purchases, would do wonders for the economy, but only if the waste and excessive privileges given to those in public services was pushed back to make the services effective and of good value.
July 26, 2024
There is no desire or plan for the growth of wealth or GDP/capita. Net Zero requires that we de-growth, de-industrialise, use less energy, import more and grow less food. There will only be growth in population and government spending, employment and control.
Net Zero is not only designed to make us energy and economically insecure but also militarily insecure:
De-industrialisation so we cannot make steel and weapons and rely upon China, a nation described by our security services as âhostileâ for our energy infrastructure.
Electrification transitions us to impractical devices and puts all our energy eggs into a single basket that can be easily attacked by hacking.
Building a low energy density energy system that is so large, covering hundreds of square miles and using hundreds of miles of overland and undersea cabling, that it is not capable of being defended by our depleted armed forces.
July 26, 2024
Its quite simple, just reduce corporate tax, remove business rates, remove /merge NI with PAYE, replace VAT with purchase tax ….and stop government subsidy, intervention and social engineering ie net-zero etc
July 26, 2024
Mr Jenrick has emerged as a frontrunner for the Tory leadership among party members, according to a new poll.
Who’s Polls? obviously just his campaign manager and the DT
The Telegraph Poll itself has him a distant 2nd behind Kemi Badenoch
The Conservative Post Poll of actual party members has him 3rd on one third of the votes shown for Suella Braverman again behind Kemi Badenoch
Personally I don’t believe any of them should be on the ballot. Early days conspiracy is that the ‘one nation’ Tory wets, will ensure the final ballot excludes Conservatives. Meaning the Party will have a choice between a ConSocialsist or a UniParty laggard. The Rishi continuity candidate becomes favourite, the Conservative Party destruction becomes finalised
I believe the only real Conservative Candidate would have come from the so-called Red Wall intake. The cycle of bad and worse has to be broken, Cameron, May, Johnson, Sunak.
July 26, 2024
Firstly I would draw attention to this article in the Daily Telegraph on July 22:
https://www.telegraph.co.uk/business/2024/07/22/why-starmer-herculean-task-britain-top-g7-growth/
“Why Starmer faces a Herculean task to get Britain to top the G7 growth league”
and point out that it is full of illogicalities – the first being that the proper comparison is not between the current state of our economy and the current state of the economies of other countries but between the current state of our economy and the previous state of our economy, prior to the global financial crisis – as acknowledged later:
“Britainâs big problem is the collapse in productivity growth since the financial crisis, which averaged 2.3pc per year in the three decades before 2007 but has slumped to around 0.4pc per year since then.”
Other illogicalities being someone who was previously on the Monetary Policy Committee claiming that nothing the government had ever done had significantly affected our economic growth rate when clearly something did happen around 2008 which has reduced it, and the OBR worrying that if the growth rate did increase the Bank of England would have to take action to slow it back down – why? Because we are still stuck with the EU system of monetary control that Gordon Brown brought in to prepare us for joining the euro?
July 26, 2024
DC : 2Other illogicalities being someone who was previously on the Monetary Policy Committee claiming that nothing the government had ever done had significantly affected our economic growth rate when clearly something did happen around 2008 which has reduced it,….”
The Climate Change Act was passed in 2008 which requires de-growth, de-industrialisation and a reduction in energy use and living standards.
July 26, 2024
I agree with your comments, but Labour will ignore them as the Conservatives did. But please keep fighting the battle. It is not difficult to know how to grow the economy, but it seems the last Government and this new one have not got a clue. Remember they raised corporation tax to 25%, taking no notice of what Ireland did!
Hunt now says voters did not trust them to reduce taxes!!! Since they did nothing but increase them, why is he surprised?
The ÂŁ300 promise to reduce energy bills from Labour is complete nonsense. While they pursue the nonsense of GW/CC and Net Zero the price of energy will go up!
Off Topic – Is’nt it interesting that of all those putting themselves forward for the leadership of the Conservative
Party, not one has suggested a survey of Conservative members or even the CPF groups to ask what you think we did wrong. Arrogance and pride are personified, and we ignore the members as we have since 2010 under the arrogant Mr Cameron.
July 26, 2024
Secondly I would recall that I have previously commented on the dramatic reduction in our trend growth rate since the global financial crisis, most recently here:
http://johnredwoodsdiary.com/2024/07/18/letter-to-the-chancellor/#comment-1465163
“… 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… “
July 26, 2024
Exactly so. The GFC did not see a cleaning of the stables through massive debt write offs rather that short, sharp shock was deliberately avoided in favour of massive new debt creation by governments in a bid to replace lost demand, allowing zombie businesses to stagger on under the lessened if ultimately still crushing weight of too much debt. In such conditions, low growth and poor productivity were to be expected in a long, numbing consternation.
July 26, 2024
Thirdly I have a letter in the Maidenhead Advertiser today headed “Driving with handbrake on for past 16 years”:
“Keir Starmer hopes to “take the brakes off Britain” to boost our economy.
I hope he realises that the most commonly cited impediments to growth – Brexit, the pandemic, the war in Ukraine – are like brief applications of the footbrake, and the real problem is that since 2008 the UK government has been driving with the handbrake on.
That was when the global financial crisis hit, and the last Labour government suddenly found that it was having to borrow a quarter of all the money it was spending, and could only do that by getting the Bank of England to rig the market in its bonds, gilts.
Whether it was that so-called “quantitative easing” which directly damaged our economic growth potential, or some other factor(s), the outcome has been to dramatically cut our trend rate of growth of per capita GDP from the previous 2.3 per cent a year.
Nobody needs to take my word on that; they can just put the title “Decline is everywhere after 24 years of poor policy choices” into google and look at the chart of per capita GDP back to 1955 reproduced in that article, with its clear break point in 2008.
There are some grounds for believing that Starmer knows this and is only emphasising the marginal economic effects of Brexit to keep his eurofederalist colleagues on side; in one interview he actually argued that many of our problems pre-dated Brexit.”
That crucial chart is here:
https://globalbritain.co.uk/wp-content/uploads/2024/06/Ewen-Stewart-Chart-1-UK-GDP-per-capita.jpg
July 26, 2024
Sir John
âare already serious criminal offencesâ. There is an âhoweverâ to this situation, the government is preoccupied with monitoring the people in the form of what is sometimes called âfishing tripsâ – no suspicion of crime, but being a minion a puppet of the State you must be doing something wrong at some time â the soft target. I would liken it to the Post Office situation, everyone was guilty even without any money or anything else going missing.
As such the Government has kept the doors open âjust in caseâ, denying proper security to all, forgetting that in doing so the allowed foreign agents the real enemies of the Country the same access.
The Worlds biggest (even including China) State monitoring of people movements database is in the UK, controlled by what is termed the authorities. No suspicion attached just the State monitoring it people. It is said to be bigger than all the other Worlds State monitoring databases combined. Is the UK a safer place for it?
July 26, 2024
It would help if the Tories didn’t promote drooling idiots like Theresa May and Philip Hammond to run the country who then allowed a Japanese Hedge Fund to buy ARM Holdings which is now owned by the USA less some patents which the Japs sold of to the Chinese who we are frequently told is now are now our number one mortal enemy and conspiring with Russia to take over the world which is rightly the property of the USA and its satrapies.
How much time did that pair of morons spend discussing with brainy people in Cambridge the implications of the change in ownership of ARM Holdings? Meanwhile the Tories spent billions on military technology which is entirely obsolete.
July 26, 2024
Taiwan is a thriving entrepot state living with a high degree of existential risk.
Surely there are opportunites to encourage Taiwanese semi-conductor companies to ameliorate their risk and serve the Western European markets from the UK.
July 26, 2024
SMEs are struggling to grow because your government put in so many employment laws, hours restrictions, and flexible working rights in April 2024 from day 1. So people apply for a job with all the hours and conditions discussed, agree to it, then want to immediately change it, business have had 10% per year NMW hikes (nearly 40% in the last 4 years); you took control of SMEs and then gave the self-employed workarounds to save tax and lower rates and thus compete with SMEs whose growth is then stalled. Labour are going to make hiring people even more nightmarish. You made making money less attractive when Hunt put in a 31% increase to UK corporation tax, doing Labour’s dirty deed for them; why when he knew election year was coming? Entrepreneurs are vilified by the left, just look at X to read comments about James Dyson a man still working and paying taxes in his 70s, its ridiculous how much condemnation he receives for being successful.
Zero-hour contracts aren’t exploitive; they have rights to holiday pay, one day for every 9 days worked, and they have rights to sick pay if, on average, over 8 weeks, they have earned over ÂŁ125 (11 hours at minimum wage). No one is forced to do them; they can get a full-time contract. Governments have conspired to ruin paid workers’ rights to do as they choose but left the self-employed to less tax, more offsets to tax and more right to self-determination.
Your government chose to slow everyone down on UK roads, 50mph on most motorways; 20mph tests were allowed in Wales, London and other Cities of choice how does that help commerce to flow with restricted driving hours? Your government put in new bridge tolls; how does that help an extra to expand and grow when it cuts them off or costs more to do business there?
July 28, 2024
John, apologies for this rant on reflection the number of times I refer to âyouâ when I meant the last conservative government was an error. I realise that you didnât support most of the exhausting chains on business, which thanks to Sunak are about to get much worse. I know two business owners who sold up last year and one that simply closed down on reflection I bet many more wished they had now.