I have been warning for months that state spending is too high, that taxes are at such high levels some are losing the Treasury income, that state productivity has fallen too far, that the Bank of England is losing too much money and that net zero policies are de industrialising us at an accelerating pace. The latest news reinforces these views. The August figures showed state spending up 9.2% on the year, borrowing at £18bn for the month well above budget forecasts, a new round of industrial plant closures, and in August CGT, Inheritance tax and self employed income tax receipts were down on last year.
There was one hint of better news. The Bank of England has at last seen some of the damage its bond sales are doing and announced a cut back in sales from £100 bn a year to £70 bn a year. More importantly they sneaked out that they would be selling far fewer long dated bonds where the losses are much greater than on the shorter dated bonds. Slowly they turn their policy without apologising for all the losses so far. They do now accept their sales can have a negative effect on the market, forcing the government to pay a higher rate for new borrowings.
The remedies for these obvious problems are not difficult. It does not requite the government to cut pensioner fuel allowances, remove payments from the disabled or cancel the triple lock on the pension. These policies anger the public and split the governing party in Parliament. Let’s take taxes. If the government avoided more increases and got the rates down on the ones that have done most damage to more jobs, more investment, and to business success they would have more revenue, not less. Everyone apart from a few egalitarians who do want to drive rich people out of the country would be happy. The better off would pay more tax as the economy grew faster.
When it comes to spending the key to the whole precarious economic policy framework is productivity. The latest figures show public sector productivity is still well below 2019 levels, with an 8.8% fall since then for the biggest public service, the NHS. The first year of this government saw Ministers award many groups in the public sector big pay awards without asking for any smarter working. Bonus schemes often pay out despite productivity falling or failing to rise. Many of the complaints leading to strikes in the state sector relate to conditions and terms of employment rather than pay, which better management could tackle by working with the Unions. The state sector usually records higher sickness rates than the private sector, which implies low morale and bad management as it is unlikely the public sector is permanently prone to more sickness. It requires some strong Ministerial leadership, by the PM, by the Cabinet Office and by each departmental Minister to improve this.
I am preparing a guide to show how Ministers and CEOs within the public sector can lift productivity substantially. AI may well in the future give us greater wins, but the immediate task must be to get back up to 2019 levels of efficiency and quality which was done with no AI at all.
September 20, 2025
Good morning.
On this I am inclined to disagree. From my experience working for a local council on a fixed term contract basis (6 months), I came across people who knew how to extract every last bit of benefits offered. Many knew exactly how many days sick they were allowed before management would be obliged to intervene, and so took this as additional holiday. And as for management themselves ? Never have I seen such people with an over-inflated view of themselves. Council workers, due to a combination of unions, bad management and the fact that they are insulated from the real world, are some of the worst people I have worked with. They are, in my experience, as unemployable in the real world as they are unbackable in theirs.
My solution ? Put most on PAYE or shorterm limited contracts through locums. Reduce the number of unionised employees. Impose strict pay and conditions on all management positions. And cut the largess to all State employee pension funds. We can’t afford it !
September 20, 2025
Unbackable – > Unsackable
September 20, 2025
I had some dealings with a council and witnessed the management encouraging their staff to take their sick “leave”.
September 20, 2025
Indeed circa 4 weeks of before it is even investigated often state sector workers regard this as extra holiday entitlement. One person I know was told this on her first day and that was 40 years back in the Civil Service so nothing new!
September 20, 2025
Correct Mark. My company provided plant ans manpower to load the wagons fir grittingthe roads.
Loading wasn’t allowed to commence until 4pm when the drivers finished their regular shift. Wagons could not be loaded in advance.
When they returned my men washed the vehicles down and the drivers were paid to watch. Then the truck was returned to the depot.
My men would get very frustrated at the snail pace workboat done and always on overtime.
September 20, 2025
Today we are Importing 14% of our electricity on a quiet Saturday morning
We are paying £98.58 per mwh for something that we can produce for circa £50 per mwh. This saves the CCGT operators paying carbon taxes, instead we pay them to France and Norway
Insane policies.
September 20, 2025
Insanity from the Ed Miliband and the dire Baroness Net Zero May!
September 20, 2025
The europeans looking out for themselves ….they must be laughing their heads off at us, an island full of coal, gas & oil, and yet we import it from them
September 21, 2025
The original plan of the EEC/EU was to make western European nations so interdependent for the essentials that we could never go to war against each other. That is still the objective: the UK is not allowed to be independent of the EU for its energy supply/security.
September 20, 2025
Yes sickness levels are high because they can get away with it.
September 20, 2025
Indeed. I worked for a local Council for a year after I retired from my proper job. I was shocked at the inept incompetence of management, lack of drive or customer focus!! Staff at their desks shopping on computers or just surfing the net with no consequences. Working from home, wink, wink. It was known that this was an excuse for home chores, shopping, walking the dog, gym, gardening. Half of the Council staff could be sacked and no one would notice. Wokery everywhere and little to no benefit to Council tax payers. How has it be allowed? The Senior leadership are over paid and don’t…………….care as there are no consequences and oversight by local politicians who are hoodwinked.
September 21, 2025
I was just about to type this same observation. Sick leave isn’t high because of low morale or bad management it is high because you can’t do anything about ‘sickies’ anymore, they are for an ever increasing range of problems from stress being classed as mental health leave to time off for period pain and menopause. The civil service is full of women who take the Mickey, I know a couple and just think thank goodness they don’t work for me. Any excuse and I mean any, once it goes down as mental health, bad back, female problems thats their manager stuffed (the most they can do is hope they move department and make the person another departments problem) and Rayner wants to bring all that into the private sector with their day 1 plans for sick pay and her preferred 80% of normal pay. It will result in many businesses just locking up. The left think that won’t happen and the bosses are too greedy. They’ve no idea how much people are wishing they’d sold up a couple of years ago. But it gets to the point there’ll be no-one to buy them and the doors will just get shut because you don’t want to throw good money after bad.
All of these silly games they’re playing won’t add anything to the growth and prosperity of the Country.
September 20, 2025
“I am preparing a guide to show how Ministers and CEOs within the public sector can lift productivity substantially.” But it is not their money often no incentive to even try to in these organisations it just make managers unpopular. Often they know what is needed but doing this gives them personally negative benefits.
Chapter one perhaps:- Stop doing all the things that do net harm:- Net Zero, Net Harm Covid Vaccines, Net harm vaccines, damaging red tape, the workers rights act, road blocking, subsidies for renewables, OTT building regulations, planning regulations, English Nature, the climate change committee, the failure to deter low skilled immigration. Fire all the people doing this damage and release them to get positive and productive jobs. Start with the most damaging person in the UK Zealot fool Ed Miliband!
September 20, 2025
Just watched the excellent video “EV mandates vs Freedom Mark P Mills Hillsdale College”
also Britain Is Headed For A Financial Meltdown – Allister Heath.
September 20, 2025
60mins and well worth watching, thanks lifelogic
September 20, 2025
I think you’re half right, half wrong overall (maybe 60% or so right).
I think the EV is going to take off in metropolitan areas: London, Tokyo – and Japanese and South Korean and Chinese cities in general, Australian seaside cities, Dutch and Scandinavian and German cities, Milan, California, New York, Montreal etc.
Small cities, towns, countryside, poorer countries are going to be more focused on non-EV and / or hybrid.
Chinese are going to be producing a lot of parts for these cars because of the rare mineral issues (the car battery itself is turning out to be less and less of an issue). But people will still want to buy traditional car brands such as BMW etc but that will become more and more EV / hybrid.
And then a few years further down the line, we’re going to have hybrids between EV cars and cars that fly – drones etc and other type of technology like this. All electric. A bit anyway.
EV is not just an environmental thing but also a COOL thing. It will be no longer cool to drive to the beach in California or Australia with your surfboard on the car and belching out smoke in a noisy car. You’re missing that point. But at the same time, there are challenges to EV as well (which is why I think you’re 50% to 60% correct)!
September 21, 2025
I am not against EVs but against government mandates, subsidies and market rigging such as large taxes on fuel unless it is electricity! Plus when fully considered with the manufacturing they save no or no sig. CO2. Keeping your old small petrol or diesel car gives far lower CO2 than causing a new EV to be constructed.
September 21, 2025
I skimmed through the article whose title you published (and it made a lot of sense so I have some sympathy with your argument! Although I don’t just base my views on one article).
But you missed the point I made, it’s more than just about CO2. Fossil fuel is seen as ‘UNCOOL’ / NOT ‘uber!’ (like smoking cigarettes) and also it’s about turning to clean, quiet transport in the cities (all of this mixed, with CO2).
(Although as your article argues, as I understood, EV is not actually going to really damage the fossil fuel industry. Relatively little. This is an important argument anti-Net-Zero people need to make, I think, to make their arguments more persuasive).
My focus is more on how we can make money out of this from a tech entrepreneurial POV. To a degree, the juggernaut of Net Zero can be stopped. But only to a degree. In the meantime, we don’t want to lose out on all the money that can be made from it. We want the UK to be a leader here (in Gren Tech and related Tech – not just Green Tech).
September 21, 2025
Spot on lifelogic, I’m not against anyone buying a slave made, co2 mining intensive materials, subsidised and made in the state of China …..I just don’t want the UK taxpayer to subsidise these imports and our government forcing us to buy them ….let the market & consumer decide
September 21, 2025
The price of Chinese EV cars is low. They are very smart cars for the money, businesses are incentivised to buy them rather than fossil fuel cars for now, whilst that is the case they will sell as the more expensive brands aren’t affordable for most. When they introduce mileage charging that incentive will disappear and it will knock sales back.
September 20, 2025
Well Reeves has set her idiotic Doom Loop anti-growth agenda while doing her Growth, Growth, Growth rain dance all her and Labour policies are anti-growth. She is in a fairly impossible position because labour MPs will not agree to sensible cuts and are driven by the politics of envy and a desire to waste as much tax payers money as they can grab before they are evicted in 3+ years time. Also to leave as larger mess as they can for the next lot!
September 20, 2025
+1.
A case of bad Chancellor troubles the figures.
September 20, 2025
No shortage of money:
https://tradingeconomics.com/united-kingdom/money-supply-m4
Now that it costs a bit more to use, perhaps Ms Reeves will be a bit more careful how it is deployed…. or perhaps not.
September 20, 2025
All sensible thought and observations Sir John as usual. Sadly the Public Sector have a fundamental issue that the unions and governments have built into the system which promotes inefficiency.
The issue is senior management is rewarded b the size of their department. That simple rule ensures there will always be a demand for ever bigger departments and efficiency will never improve. It is also why the Public Sector simply grows bigger every year despite methods and technology available to automate many of the past clerical activities that make up Public Sector activity.
The rules governing Public Sector pay scales has to be rewritten.
The other point driving ever greater need for government borrowing you didn’t mention, but needs to be constantly stated.
The energy policy in pursuit of Net Zero is destroying industry and revenue for the exchequer. It that one piece of legislation was repealed it would not harm any social objectives and would at a stroke drive more growth.
It is worth remembering Ed Milibands Climate Change Act 2008, was put in place to satisfy international ambitions of the EU and UN bureaucrats, focused on control. There is no data anywhere that supports the concept CO2 is the control knob of climate variation. The sooner the Western World wakes up to the truth, the sooner we can repair the damage inflicted on Western societies this past twenty years.
September 20, 2025
+1
September 20, 2025
“There is no data anywhere that supports the concept CO2 is the control knob of climate variation.” Of course not it is just one of millions of things that affect the climate – the main ones are solar activity, clouds, orbits… CO2 is not even the main “greenhouse” gas! The world has had ice ages with atmospheric CO2 levels several times higher than current!
September 21, 2025
You can tell they’re overstaffed that they don’t struggle with their sickness levels!
You can tell they’re overstaffed because we pay them to do so many ‘volunteer’ days, yes you read that right, their staff get days off paid to ‘volunteer’! What small private business can spare staff on full wages!
Pay a certain type of worker full sick pay and the extra four weeks off will do nicely thank you on top of the 8 weeks they already get.
A doctor’s appointment 1pm no problem, I’ll finish at lunch and not come back.
As a friend remarked to me “I work to live not live to work, you must be mad when I went straight back to work after lunch.”
September 20, 2025
It is good to see the US get to grips with the problems caused by the Indian outsourcing movement
https://www.theregister.com/2025/09/20/visa_h1b_reform/
Why does the UK not do the same with intra company transfer visas?
Why are our main opposition politicians still saying “as yes but immigration by IT people is needed” when it is clearly not. The Conservative spokespeople on immigration, even this week, have been saying yes immigration is too high, but we need more IT skills imported, showing a complete lack of understanding.
Why are the main stream press in the UK not covering this?
September 20, 2025
Off Topic…but to the delight of LL?
A key US vaccine advisory committee has voted to stop recommending all adults get the Covid-19 vaccine, which has until now been officially approved for most Americans annually since the pandemic. The Advisory Committee on Immunization Practices (Acip) also narrowly voted against advocating prescriptions for the Covid vaccine.
In two days of meetings, Acip changed its recommendations on the combined measles, mumps, rubella, varicella (MMRV) vaccine, and delayed plans for a vote on the hepatitis B vaccine.
Health Secretary Robert F Kennedy Jr, a vaccine sceptic, fired all 17 members of the committee in June and handpicked their successors, sparking uproar in the medical community. The panel spent Friday debating the Covid-19 vaccine, which has for the past several years been a routine recommendation, like the yearly flu jab.
Acip voted to abandon broad support for recommending the jab, including for high-risk populations like people aged over 65.
Instead it decided they could make their own decision after talking with a medical professional.
Was that medical advice provided by you LL?
September 20, 2025
Indeed, now the Bank of England acts such that “Slowly they turn their policy without apologising for all the losses so far”. But you have borne witness and we have registered the Bank’s perfidy so the judgement of history is in, the Bank has hazarded its reputation for ever.
September 20, 2025
Why aim for 2019 levels of public sector efficiency? It wasn’t efficient then, just a little better than it is now.
In the NHS, which you specifically mention, the disputes are all about money. The (largely imported) workforce of doctors and nurses can effectively blackmail the Government and they have no compunction about doing it since they know the Government is desperate to get the waiting lists down.
In the ’70s, it was the militant industrial unions which almost brought the country to its knees. Now the most militant unions are found in the public sector and use their muscles to try and stop the country from functioning at all (train drivers, tube drivers, NHS being most recent examples).
Perhaps it’s time to make a “No Strike” clause in their contracts, like the police.
September 20, 2025
Substitute the right to strike with a right to suspend the minister’s salary.
They might get the issue resolved more quickly then.
September 21, 2025
No. All the Minister will then do is shovel more money at them, more quickly.
September 21, 2025
but they seem well able to strike peaceful protesters!
September 20, 2025
Well, it’s a relief that the Bank is only going to waste 70% of taxpayer’s money on bond sales. What’s happening about paying banks interest that other central banks don’t pay?
Reply Fed and ECB do pay deposit interest. Try reading my blogs on this topic
September 20, 2025
I am undertaking quite a big build. Mixed use, 2 shops and 4 apartments. It s few years since my last building effort.
The control and micromanagement by the State is off the charts. The amount of the investment consumed by red tape before ever a brick is laid is mind numbing.
In addition it transpires that over 50 years ago the numbers allocated to the properties on this high street were duplicated. 3 share the number ‘92’, Yes State employees can’t even number properties sequentially, but worse, they can’t correct the error even when it is defined for them in 2025.
Wait until they are asked to operate AI!
As far as I can see the only way you can live in Britain now is if you do nothing at all. Absolutely nothing. No wonder productivity is down the drain.
September 20, 2025
Sir John
The Socialist mind set can’t yet fathom that spending from something that hasn’t been earnt destroys. It can’t fathom that remove money from the economy, Taxes, blocks the economy expanding. It can’t fathom that changing direction at great cost, NetZero, without a viable alternative and by destroying the means to earn for pay for a new direction. All add up to accelerated decline.
This new entitlement Cabal hasn’t figured that, things have to be paid for, that means the Country as a whole has to earn, that means export goods and services being produced that other need. They haven’t figured out that spending is a ‘seed-corn’ that requires a return to fund a future, spending, for spendings sake is regressive it accelerates decline.
Just simply sending money out of the Country to prop up other tax regimes and political entities, when it should be spent in our home market is accelerating decline.
But, then that’s how Socialism works, the mindset says no one pays everyone is entitled.
September 20, 2025
I’m not surprised public sector morale is low. Due to constant increases in the minimum wage, pay progression has been virtually eroded. In the Civil Service, the lowest pay band as an AA has gone completely; the now lowest band of AO has no pay progression, so a new entrant is paid the same as an experienced worker, the lowest management grade of EO only gets a pay rise of between £58 and £124 a week. The mythical gold-plated pension went years ago. The 2023 figures show that for women, the average CS pension is £7,502 per year, and for men, it is £13,513. Due to contracting out, these workers don’t even qualify for a full state pension.
Until governments make work pay, this country will continue with the sorry state our public sector has become.
September 21, 2025
Even their new pension is much better than anyone in the private sector can buy. To buy it defined contribution would cost and employee/employer combined would contribute 30%. It’s huge and not understood. I think it’s time they went into NEST and had the extra pay today (most of it would be taken right back in tax, NI, student loan, reduced child benefit and for some removal of the personal allowance, then everyone is in line when comparisons are made.
September 20, 2025
AI does whatever its programmer decides it should do. Imagine Starmer’s Gang boosted by AI. It would nuke Britain.
September 20, 2025
Correct, AI doesn’t, as yet exist, its just a fast smart database computer program
September 20, 2025
Everything you say is correct, but we have a PM, a Chancellor and a majority of Labour MPs who won’t face reality.
What does it say about our education system, from nursery to University, that most of our MPs in all parties have not a clue about how to run a modern economy?
A fish rots from the head down, and this government is a perfect example of that!
September 20, 2025
You get a red pen and put a red line through foreign aid, contributions to the UN & EU, and subsidy to net-zero …and write 50% reduction to DEI actiity, immigration, all bonus, and foreign/nation networking etc etc and get rid of regional mayors and police commissioners
September 21, 2025
An article in the Guardian said Ed Milliband and Labour had pledged £11.6 billion in overseas climate aid (but let’s not forget it was Boris who pledged it). These people don’t seem to have UK constituencies, they’re more worried about overseas nations as also referenced by the capitulation on Chagos, 11 billion here, 30 billion there who is counting, 3 billion each year to Ukraine because we’re doing so well….. oh…
September 20, 2025
1072 criminals were illicitly shipped, into the UK yesterday on the 19th September from France…1072 in 13 ships; now that’s an invasion
September 21, 2025
What’s with the negative vibes Glen? Three were sent back …. including an Indian man who we could have deported directly to India ourselves if the Government had wanted to. Two-Tier is furious about the trafficking gangs and has assured us his “plan” is working 🙂
September 21, 2025
I’ll work on my ‘tone’
September 20, 2025
It is deliberate. The Chancellor knows that she is destroying the country.
September 21, 2025
I agree. They’ll say “only rejoining the EU will save us”
September 20, 2025
I see that Reform are now pushing “stablecoin” cryptocurrency. I suspect they need to do a lot more research on the potential hazards of such a move, notwithstanding their argument that when users purchase stablecoin supposedly the offset could be an investment in gilts, thus helping to finance government. As we have seen, gilts aren’t necessarily a sound investment for widows and orphans. It’s far from clear that there wouldn’t be considerable volatility in value: I referred to some of the work by Geanakoplos at Yale on these issues recently. At least they are against a Central Bank controlled digital currency with all that implies.
September 20, 2025
Bad figures? I don’t think so. The PM and Chancellor and a majority of Parliament will see the economy is performing as they intended. They are socialists and socialism depends upon making and keeping people poor. Hence high wasteful spending to justify high taxation is key, whilst at the same time reducing consumption to assist with their Net Zero goal. The only growth required is that of the number of people who work for the state so the need for additional quangos and regulators etc. and for the productivity of the Civil Service to fall. And of course for the growth of the population through immigration, whether it is “regular” or “irregular” doesn’t matter. The race is on to de-industrialise as much as possible ahead of the introduction of CBAM on 01/01/2027. However, since the EU begins its CBAM year earlier on 01/01/2026 we could expect the PM to agree with the EU to bring ours forward to the EU’s start date any time soon. Perhaps at the next budget. Electricity is included in CBAM. I don’t know how it will be known/calculated which electrons are green and which are not.
September 20, 2025
More than 1,000 people crossed the English Channel in small boats on Friday, on the same day the government confirmed two men had been deported as part of its deal to return migrants to France.
Ministers are hoping their “one-in-one-out” plan will in time provide a deterrent for would-be asylum seekers if they believe they risk being quickly sent back.
But 1,072 people crossed the Channel in 13 boats on a day of warm and sunny September weather, marking the third time this year the 1,000 figure has been surpassed in a single day.
It takes the number of people to have made the crossing so far in 2025 to 32,103, a record for this point in a year.
September 20, 2025
“public sector can lift productivity substantially”
The main impediment is that those working in the Public Sector have already said it would be wrong to use AI. Their hesitation comes from a report issued by Microsoft that suggests that AI has increased their power usage by 25%. As a result those that should use these systems are using NetZero as the reason for resisting.
Microsoft has a 5 year supply contract with the UK State.
If anyone believes the State workers reasoning, they need their head testing. Then again the Government….
September 20, 2025
“British students lack the “drive” and “vigour” of their American peers, the Business Secretary has said.”
“Peter Kyle told investors Britain lacks the “entrepreneurial drive” of the US during an event in central London hosted by AI giant Nvidia on Thursday.”
“He was there to mark the firm’s £2 billion investment in the UK’s AI sector, which was announced earlier on Thursday.”
https://www.telegraph.co.uk/news/2025/09/19/british-students-lack-drive-of-american-peers-peter-kyle/?recomm_id=b5c0d970-a185-4224-868a-f81a2d2cb95d
Yet UCL turned out the people that created the AI that Google and Microsoft use, that is why the AI for those companies they have a big presents in London. The bit that is true is the lack of opportunity afforded the young in the UK the first thing the UK Government and their education system does is sap the energy and drive from those that wish to stand on their own 2 feet, – it is the UK Government is the impediment.
This Minster must know Alex Gerko, the man that in 2023 alone paid £665m in personal tax. Following this Governments cancellation in March of this year of the education projects to improve Maths in the UK, ‘the national maths academy’ ( I guess maths is another not needed Labour expense, just look how they spend money). Now Alex Gorko has taken it upon himself to organise, provide and fill this gap in the UK’s Maths Education, he is funding the teaching the Government doesn’t want. He is quoted as saying said: “If [the] UK Government was infiltrated by foreign agents willing to bring the country down, there would have been few ways to do a better job.”
“British students lack the “drive” and “vigour” – that is a UK Minister talking to Foreign Investors? Where do we find these people
September 21, 2025
Thanks Ian for bringing this to my attention.
What an appalling business secretary. He needs to quiz current entrepreneurs about what their children are doing and why so many aren’t going into business!
This government hates entrepreneurs and business people, farmers and creators, hates them. As much as Phillipson hates private schools that save this Country a fortune in education fees from rich free riders who could afford to pay.
September 21, 2025
One more point. America loves risk takers, entrepreneurs, investors, other than those democrat states that chasing businesses away! Peter Kyle should think on that. In this Country his government and MPs hate on James Dyson, the vitriol on wealthy job creators is disgusting.
Do Labour actually ever ask the Heads of successful companies that were created by them and grown through their personal drive and ambition what drove you? What is putting them off passing it on, what is putting them off the UK, if they were given the choice and were in their twenties again would they start up the business again in the UK or would they go somewhere else?
If someone asked would you do it again, knowing what Labour are doing now at the end of the process, would people risk everything, work so hard, push, our generation really did all believe Thatcher that they supported small business because they embodied freedom and independence as are the roots of a free society, people didn’t need a degree to succeed, it was long hours, hard work, night school, sell, sell, sell. Everyone really did believe they could better themselves and lots did after leaving school at 16 or 18.