Faced with charges of a borrowing splurge on so called capital investment the Treasury says there will be guard rails. They will not borrow all they will be allowed to under their new laxer rules. It would be more convincing if they told us how they choose the investments,how they will control them and what the actual borrowing limit is going to be.
The sad truth is the nationalised industries have  a dreadful record of unproductive and unprofitable investment. A very expensive Post Office computer system sent honest employees to prison and landed taxpayers with a large compensation bill. The Post Office has presented  taxpayers with accumulated losses of £799 million despite or because of the bad investment. HS 2, a nationalised railway, has been unable to deliver an important project to time or anywhere near budget. The project has had to be slimmed down losing its main point of going to the North of England. There will not be enough extra revenue to make a profit or pay the interest. The rest of the nationalised railway spends on capital only to need more subsidy and state support.
All the time roads are nationalised and paid for out of road taxes that greatly exceed road costs there is a case for further expansion and improvement in the network on state borrowing. Unfortunately this government so far has announced cuts in new road spending. Roads are crucial to our economic success as service providers and on line parcel deliveries come by van, ambulances drive to hospitals and trucks supply our factories by road.
There is no need for government investment into most energy projects. Customers are made to pay high prices for U.K. energy. If the government let the private sector make the investments we need in replacing imported LNG and building some additional gas turbine capacity we could boost growth and help lower world CO 2.
October 26, 2024
Government of whatever colour, and their increeasingly politicised civil service are incapable of running the UK economy as a whole, or any individual capital investment project within it. All end in failure in their purpose and overrun in their cost. Usually their purpose melts away before completion, leaving a trail of damage in their wake. Cause, the majority of politicians and their civil service are neither trained nor capable of running anything. They are no better than pox doctors clerks empowered beyond their pay grade.
The one person who seems to have realised this, apart from Nigel Farage, is Kemi Badenoch. Her stated intention would seem to be to professionalise the whole rocky edefice, political and civil service. I wish her well in achieving the leadedship and necessary control. The process is long overdue. It would be an indulgent luxury to think the present circus of incompetence can continue.
October 26, 2024
Your last paragraph is wishful thinking. Again I ask why would any private company build gas turbines or explore or oil and gas when they are demonised by all shades of the uniparty.
Because we will eventually start having rolling power cuts open cycle gas turbines will be panic bought by the government emitting loads of CO2 per mwh rather than efficient Combined Cycle units
This will totally negate any savings by Miliprats renewables.
France is blackmailing no idea Kier electricity for fishing rights and some jokers are laying cables from Morocco to UK which will be totally insecure.
Comedians the lot of them
October 26, 2024
Badenoch appears to be a WEF-approved candidate. I predict, if she becomes Party Leader, she will dutifully aim to deliver the WEF’s agenda.
October 26, 2024
Governments are clueless about making investments, assessing risks and earning returns as your examples demonstrate. This Labour government promises to be the worst yet with its cavalier attitude to increasing debt and rush to spend our cash on sure fire losers (with Miliband leading the way). It is also evident that Starmer, in his struggle to define a “working person” could not care less about those who risk their time, effort and cash in investing in businesses. No wonder so many are watching and waiting the budget and whether to join those who have already voted with their feet and their wallets to move to more business friendly climes
October 26, 2024
Not so much clueless as they simply do not care what the âinvestmentsâ return. Not their money and not they who get the value from the spending.
JR says âA very expensive Post Office computer system sent honest employees to prison and landed taxpayers with a large compensation bill.â No it was incompetent and often dishonest top people at the Post Office, the software people, the DPP, judges, lawyersâŠnot an inanimate piece of software.
Talking of incompetent DPP, judges and lawyers. We have the clearly unsafe conviction of Lucy Letby (and denial of a right to appeal), the absurdly harsh tweet and âriotâ prosecutions, the two tier justice, the absurd political prosecution of the policeman with murder, the refusal of the judge to read out the statement from the Jury who correctly wanted to point out that he should never have been prosecuted. We even had the legsl âbanningâ of the New Yorker article about the clearly unsafe Letby conviction.
Meanwhile they release thousands of violent criminals and 100+ shoplifting offences get you a suspended sentence or more likely nothing.
October 26, 2024
The only running this government will be doing is running our country into the ground. Let’s hope we survive the next 5 years and voters wake up and elect a new competent government. Of course, in 5 years, we will be so overrun with imported commonwealth voters who believe reparations are justified we won’t ever be able to recover. Wealth redistribution championed by the UN will be going into overdrive. Not only can’t Starmer define what a woman is now he can’t even define who a worker is. Why does he keep going on about chequebooks? When was the last time anyone wrote a cheque? This man is deluded and completely out of touch but is a danger to all our futures.
October 26, 2024
Will âthe marketsâ be willing to lend even more than the ÂŁ5,000 every second currently being borrowed by the government?
Iâm wondering whether to âfixâ some of my savings – as everyone (politicians, the BoE and the media) seems obsessed with getting interest rates much lower.
What is the relationship (generally) between the â10 year yieldâ on currently issued government debt and the BoE base rate?
October 26, 2024
I believe our host supports Jenrick for leadership of the party. I presume most contributors here are members of the Conservative Party – who do you support? I ask because I saw a poll of members yesterday which had Badenoch winning easily.
October 26, 2024
Sadly Mike I do not believe either of them or their competitors in the race who have already been knocked out.
True Jenrick did resign on an immigration principle of sorts, and Badenoch has spoken out about her feelings at the time, but they all went along with the lunacy of net Zero, higher taxes, a useless civil service, and failed in their own departments.
Conservative politicians used to be the people who owned and ran businesses, industry, engineering, construction, and banking.
Labour politicians used to serve their time also working in industry, or services with many in trade unions.
Nowadays few have worked in anything before becoming career politicians, and so know nothing about working conditions, profit, loss, return on capital employed, efficiency, people management, stock control. purchasing, sales, design, development, construction etc etc.
We are governed by theorists, with no practical experience, and no skin in the game, no wonder they are all failing.
October 26, 2024
Good morning
Don’t worry Sir John it is only money from the Private Sector that will pat for it. You know, the numerous small and medium firms. The ones less likely to be unionised and vote Labour.
October 26, 2024
It’s not investment; investment provides a useful end-product which will generate profits or facilitate the generation of profits.
What we’re getting is the usual tax, print, borrow and squander from the Westminster Uni-Party in order to promote the economy-wrecking policies of the UN and WEF.
If you “play the game” according to the language and rules of the left-wing Establishment, you will never win.
Change the language.
October 26, 2024
Is there anywhere to be found a business plan for HS2?
If anyone know of such a document would they please let me know how to find it because I have been asking for years to see such.
The cost of HS2 construction is just part of the cost of the project. The unrecorded costs to road infrastructure and disruption of normal travel on our road systems is massive and ignored.
When will the first paying passengers travel on the line now being constructed? What date will it become self funding? Baring in mind the current rail systems are not self funding and can’t even maintain their own overhead/running costs. They only exist by state support i,e. supported by tax payers contributions constantly paid to cover the running cost shortfall.
Who in Gordon Brown’s government that signed off the HS2 white elephant, thought arriving ten minutes faster in Birmingham was a great idea that warranted ongoing state funding off ÂŁbillions every year?
Reply Yes there was a business plan which was sufficiently bad for me to vote against the project when Parliament decided to go ahead. The hue delays and cost overruns have made it much worse.
October 26, 2024
I completely agree. I am always concerned when I hear of any government embarking on big capital expenditure projects. The situation is made even worse when that money is borrowed. As Sir John identifies, it’s not like the government have a good track record in investing anyway so to borrow for bad investment is an especially awful outcome.
Government should acknowledge it is usually a bad investor and its projects to stimulate growth have often been very inefficient. Government can however stimulate growth very efficiently if it reduces the burdens on the participants in the economy (ie individuals and companies). If we want the government to stimulate growth efficiently / at all then we urgently need lower taxes and less bureaucracy right now.
As well as this we need sound leadership from a government and a PM we feel good about. Then people can spend without concern (a huge economic growth stimulant) and private businesses can invest (efficient economic growth stimulant). Alas I do not see any of this happening until Robert Jenrick becomes Prime Minister.
October 26, 2024
The only reason Governments need to ‘Invest’ in what would otherwise be commercial activities, is because the Government sees them as being good for us, but there is no commercial demand for them. This Government has indicated it will take steps to ensure (direct) money is invested by pension funds into projects it considers desirable, but if they were really promising, investing institutions would be clamouring to get a share without any prompting from above.
Arguably there are certain things such as health, prisons, defence to name a few, that the state needs to manage, but in this country, all of these are in chaos due to the incompetence of the politicians and public servants when trying to manage anything. Therefor any Government’s priority should be to get these things working properly before it sticks its nose into commercial projects.
I am afraid though, there is little chance of that happening.