What we missed by having an earlier election

My advice over the last 18 months to the PM and his advisers was to go for a late November election. I argued the government could over 2024 deliver much lower legal migration, benefit from the likely  big fall in inflation, see interest rates come down a bit and be on a falling trend, deliver some economic  growth, get more accurate NHS waiting list numbers and show decent falls in waits. Showing government could deliver all these things would strengthen the case for re election on a platform of more growth, lower tax rates, lower migration and better public services to come, building on the 2024 achievements.

The government did agree to change migration policy, putting in changes to cut numbers this January. I urged them to publish at least monthly figures showing the falls, and aim to get nine months published by an election. Instead we have seen one 3 month number showing falls. The government rightly wants to get numbers down from here.

Inflation did fall as expected and is almost back to target. It should fall further by year end.

Going early meant no interest rate cuts. There could well be two or three later this year after the election.

The government did get in 2 budgets with some tax cuts. It would have been good to have had 3 and to establish more growth for longer to underpin more tax cuts to come. The small VAT threshold increase could have been bigger. Getting rid of IR 35 would have boosted self employment more than the NI cut.

I was told  Ministers were working on all the double counting and misleading entries in the NHS waiting list numbers, but did not complete in time for an early election. Numbers nonetheless were coming down until last month and may well fall further later this year. People who say they need to see a Dr for a review in 6 months time say they are on a waiting list yet of course they do not need an appointment for 6 months. Some entries are double counted.Some no longer need treatment. Many are awaiting first diagnosis, not treatment.

The economy has grown this year though not every month. It will take the lower inflation and lower interest rates to come to boost it, and would benefit from further pro jobs and business tax cuts.

 

Too much debate about who might win

After months of being ignored the BBC invited me on to the World at One to discuss the vote split between Conservatives and Reform! I pointed out I have set out crucial topics like nationalised industry losses, Bank of England disastrous money policy, revealed the public sector productivity collapse, wrote about controlling independent bodies and much else crucial to how we can have lower taxes, a growth strategy and better public services. The BBC resolutely wallows in ignorance of these issues and opportunities. I reminded  them I am an economic and political analyst, not a pollster. I declined to play their game of creating a row between Conservative and Reform.

Their view as always mimics the Lib Dem‚Äôs. The country is festooned with their self serving lies with every poster that announces ‚ÄúWinning here‚ÄĚ. Past experience and current polls say they will lose in most of those places.The slogan is all about them and their ambitions. It tells us nothing about what they want for our country or how they would serve their electors. They often ally this to nasty personal ¬†attacks on their opponents as they are understandably reluctant to talk about their record in local government or their work in coalition government.

No-one knows how in 3 weeks time many past Conservative voters will vote because they have not yet decided what to do. Currently some say they will vote Conservative, some say Reform, and many say undecided. What the BBC should be encouraging is a fuller exploration of the issues like budget pressures, wasteful spending, public sector losses and the productivity collapse to provide some balance to the parade of left wing experts who all conclude tax rises are needed.

Candidates contesting the election are best advised to ignore opinion polls, which tell the big majority of them they will lose. Candidates need to talk more about the big issues facing us, what they think about them and how they want to serve us. Too many shelter behind party sound bites that close down or skate round debate. Labour’s endless repetition that they have a fully costed and funded programme is a silly way of trying to avoid big issues about affordability and value for money of public services.

Some propositions all should debate

Parties in the election say they want to promote growth and prosperity. Many of them want a bigger tax take to spend more on public sector activities, and to expand what the public sector does. To pay  for this they plead  growth then look around for people and businesses with money to tax more.

In order to break out of the UK’s slow growth boom bust progress of our years in the EEC/ EU under Labour, Labour/Liberal, Conservative and Conservative/ Liberal governments we need to change some stupid assumptions.

1. The Bank of England and  Treasury  know what they are doing and will get it right without political direction.

They designed the disasters of Competition and  Credit Control (early 1979s boom/bust) ;European  Exchange  Rate Mechanism (early 1990s boom/ bust] ; Global banking with derivatives ( 2000 S boom/ bust) and Quantitative Easing and Tightening ( COVID great inflation). Labour invented the overspend, overborrow IMF  humiliation of the 1970 s and added to the 2008 banking crash its  own private finance and public sector borrowing excess.

2. The U.K. can solve global warming by deindustrialising, importing energy and goods that generate a lot of CO 2.

By keeping our own gas in the ground we lose many well paid jobs, much tax revenue, and increase world CO 2 by importing LNG .That helps no one.

3. High levels of migration are good for growth.

We need to look at per capita growth. The Treasury needs to account properly for all the extra capital and revenue costs to house and support a low wage or dependent migrant.

4. Rejoining the EU single market and adopting all its laws would boost growth.

It would do the opposite. Our growth rate slowed on completion  of the single market. It hit innovation and blocked trade with non EU.

5 Our public services would all suddenly work well if we put a few billions more in.

The NHS has enjoyed huge increases in money since 2020, way more than the Brexit bus promise. Productivity has fallen , staff relations have been poor so the money did not buy success.

Who will control these dangerous independent bodies?

I regularly advised senior Ministers to institute proper reporting and accountability for the host of  so called independent bodies that rule us. They usually agreed, yet they seem to struggle to impose the discipline or to find the time to do it.
As a result we have The Environment Agency and Ofwat  responsible for water often unable to stop floods and granting permissions for sewage discharges to rivers owing to a long term lack of investment in sufficient pipe capacity. The Environment Agency wanted wilding  instead of food growing and profitable forestry. The Bank of England charged with keeping inflation down gave us a peak inflation five and a half times target. The NHS England Board insulated the NHS from much ministerial involvement, then denied any responsibility for falling out with the staff or for the build up of waiting lists and the  drop in productivity. Border force was unable to propose and implement a policy to carry throughMinisterial wishes to end the small boats business across the Channel.

The role  of the Minister should encompass an annual budget meeting to review finance and use of resources, agree fee and charge levels and any Treasury payment to the body. It should include a meeting to agree the annual report and review the annual performance. There needs to be special meetings to agree changes of policy and guidance, to lead to Parliamentary statements so we know what is expected of the body. Chairmen and Chief Executives should get bonuses for outperformance, but should not be paid a bonus at all when performance is poor.

Esther Mc Vey was working from the Cabinet Office on improved accountability for these bodies when the election was suddenly called. That work needs to be revived by Ministers after the election.

 

The Opposition parties failed to oppose

Judging Labour, Lib Dem and SNP by how good they have been in opposition reveals how they badly let the country down. Instead of opposing the three worst policy errors of the last four years, they supported them and wanted more of them .

The three biggest errors were putting us into too comprehensive and long a lockdown in response to COVID, backing the Bank of England policy of a big inflation followed by a technical recession, and wanting to close down fossil fuel power stations before we have enough renewable power we can rely on.

Worse still their failure to understand these errors means going forward they want to reinforce the right of the Bank of England to go on getting it hopelessly wrong. They want faster moves to close our gas power stations we rely on, and switch us to even more import dependence.

The Opposition failed to vote with those of us who said the state should take measures to protect the elderly and vulnerable over COVID but allow more people to go to work to keep things going. They failed to vote with us to end the measures earlier. This came with a big bill to subsidise people and business when they were banned from working.

The Opposition missed the obvious way Bank of England excessive money creation and bond buying in 2021 would be inflationary. They probably cheered in private when destroying money by cutting its bonds and hiking rates led to a technical recession the following year. Why do they like these wild lurches of policy with predictably bad outcomes?

Worst of all Opposition parties want to shut down many of our power stations without solving our shortage of grid, resolving how to store renewable electricity when it is abundant, or how to offset the coming big fall in nuclear power as stations close.

Manifesto time

¬† ¬† ¬† The Lib Dems tell us we need to re enter the EU single market. Do they read nothing? Have they not seen the data of how our growth rate slowed after we joined the EEC, and slowed again after 1992 when they ‚Äúcompleted‚ÄĚ the single market?
When we entered the EEC customs Union in 1972 they took tariffs off their successful goods exports to us, but did not take barriers down for our service sector exports to them. Predictably our balance of trade with Europe plunged into the red and stayed there. The rules, tariffs and taxes helped their exports to us much more than our exports to them. We had to ditch trade with Australia, New Zealand and others as they made us impose tariffs on the food they sold us,to substitute Euro food instead.
They then bamboozled a weak U.K. establishment into eventually joining the Exchange Rate Mechanism. A few of us pointed out the damage this would do. It predictably gave us an inflationary boomlet followed by a bad bust. Needless EU economic damage.
The EU all the time we were in failed to agree a trade deal with our biggest overseas country market , the USA . It failed to enter the important TPP Pacific trade area which we have now joined once  out of the EU.

             The EU used the excuse of the single market to make us adopt all too many new and additional laws, burdening business with over the top costs. These laws often impeded innovation and made you do something as the EU leading company did it.

As Single  market Minister my main task was to stop, delay or dilute needless and undesirable laws. As a result of their inward looking protectionist  anti innovation approach EU per capita GDP is just half the US level. Locking us into that again is a very bad idea. Lib Dem’s are neither liberal nor democratic. They want to deny us the result of the Brexit referendum. They want more and more laws and taxes to restrict entrepreneurial and business freedom.

Great Western Railway

On Friday I inflicted a journey by rail to Cardiff and back on myself.

GWR spent a fortune on designing and buying very uncomfortable seats. They have little padding and a severe back angle. They quickly give you back ache. The HS 120 seats they replaced were more comfortable .

I had a pre booked seat on my ticket. Once again the seat booking system was not working on the outbound train. Fortunately there were some seats. The train had been cut back to just five coaches. It did run to time which was an important  bonus.

On the way home they  cancelled one train. My train arrived late and was crowded thanks to the cancellation which had left many people waiting on the platform.The train continued to run late.

Car parking was expensive at Reading. Getting a taxi back to Cardiff Station required making an advance payment to a taxi firm, a new hazard. Fortunately the taxi did turn up to honour the contract. Overall it was an expensive way of travelling with plenty of car and taxi diesel as well as the electricity for the train on a day of little renewable power. Far from green.

The lack of flexibility with the ticket meant I had to get the train specified even though I could have made an earlier one which would have had more space.

The train controllers in Whitehall need to relax their controls more, or take a more intelligent  interest in why potential users of the railway have poor experiences. Uncomfortable   trains  can be remedied . Inflexible ticketing  can be changed, Poor timetabling to manage demand can be optimised without cancellations. Much more thought needs to be given to how a person travels to and from the stations.This link and cost is an integral part of a so called train journey and often falls foul of anti taxi/car schemes in the centres of cities and towns near stations. It adds to delays and frustrations.

I could have been better off driving by motorway to Cardiff, avoiding the centre and urban area of Cardiff with the station altogether. I went to a venue close to a motorway exit.

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The Conservative Manifesto and drivers

We are told to expect action to make it more difficult for Councils to introduce low traffic neighbourhoods and 20 mph zones. We are promised the end of the much disliked ULEZ zone in outer London.

There have been big strides to tax and regulate drivers off the roads in Wales and London in recent years, and in other  parts of England with anti driver Councils. Getting the right balance between local   needs for clean air and safety, and combined local and national needs for a good road system that get people to work and goods to market is not easy.Here are some thoughts of how to get a better balance.

1. National highways should be for road vehicles. They are our safest and fastest roads. The network needs completing to at least 4 lane dual carriageway standard, preferably with grade separated junctions. These are U.K. government controlled.

2 A strategic network of major local roads. Whilst under the control of local Highways authorities they should have national limits placed on how far they can go in restricting them . Government could lead cross Authority larger improvement schemes. These roads would normally be a minimum of 30 mph in urban areas and faster permitted speeds elsewhere.

3. Other roads under local control. Residential  roads should be regulated against excess speed and inappropriate parking.

4. It is a good idea to promote more walking and cycling. This should be done by installing better footpaths, greenways and cycle ways apart from main roads. We need more and safer capacity, not cycleways carved out of an inadequate main road adding to tensions and conflicts between different types of road user.

5. Review extent of pavement capacity in London where  it is in places excessive. I walk a lot in London. Along the Embankment and in the City pavement space is well above our needs whilst east-west road capacity has been strangled.

Drivers are being taxed and regulated off the roads by Lib Dem , Green and Labour Councils

In Wokingham a Lib Dem led Borough Council embarked on a £5.5 m waste of money to worsen a crucial roundabout junction of two important  B roads in Finchampstead. The junction also gave access to a public car park and retail car parks for local shops and a garage. The aim was to narrow the roads, replace normal pavements with Lib Dem yellow brick ones which quickly discolour and become uneven, and to persuade more people to shop and take children to the local school on foot or by bike.

The long period of works and road closures has slashed shop and garage turnover badly. It has driven vehicles into adjacent residential roads seeking rat runs. The Council has littered the area with road closure and diversion signs and bollards to narrow these routes. I had to travel 5 miles yesterday to complete a one mile journey. The alternative route also included a closure of half that main road with three way lights and four minute waiting time. Locals have been up in arms about the disruption and cost. Lib Dems lost all 3 of the local seats in the village as a result of this crazy scheme in the May election. They tried to blame the previous Council who refused to vote the scheme through, realising what bad value it was and how unpopular it would be. There has been no compensation to the shops and garage for lost turnover.

Flushed with their success in making the lives of those of us who drive to work, drive to the shops or to drop off children such a misery, the Lib Dems now want to repeat this anti driver policy in other parts of the Borough and send taxpayers the bill. They are about to embark on the battle of the Woosehill roundabout. This is one of Wokingham’s best junctions. It is crucial to all who live on Woosehill as it is the main route in and out of this delightful residential area. Anyone needing to drive to work, to the Wokingham shops and to local schools needs to rely on this usually free flowing roundabout. The Lib Dems want to make that very difficult during prolonged roadworks. They want to reduce the carriageways for vehicles and create traffic jams where none exist. The California Crossroads experience should make them think again, but they are motivated by a wish to hit the drivers.

Interest rates

The Bank of England is independent when it comes to forecasting inflation and the economy. It has the sole right to fix the Base rate, the crucial short term interest rate that affects the returns of savers and the costs of borrowers,

All the time I was an MP I respected their Base rate power and did not advise on changes. I was critical of their forecasts of inflation when they were obviously wrong.

Now I can write and speak as I like about interest rates. The European Central Bank and the US Fed made similar mistakes to the Bank of England delivering inflations several times target level in 2022. The Japanese, Swiss and Chinese Central Banks did not make the same mistakes and their inflation  stayed low, showing the inflation was not the result of lockdowns and the Ukraine war.

Over the last year the ECB has followed a better policy to correct past mistakes than the Bank of England. This week they rightly cut interest rates recognising sluggish growth and tight money and credit. The Bank of England should do the same.

The Bank will probably hold rates claiming it should not move them in an election period. That implies it suspends its own independence. The Bank needs to be seen to be independent on rates. Otherwise not cutting them now will be seen as pro Labour and cutting them now seen as pro Conservative . I think most people do believe the Bank is the independent setter of rates and I have not seen any Conservative government pressures on the Bank over rates.

The U.K. economy has been badly slowed by the Bank’s very tough money policy 2023-4. Inflation will come down as a result. The Bank should cut,especially given its obstinate refusal to change its very damaging policy of over the top bond sales.