Author: johnredwood

We should be grateful to the voters of Uxbridge. They have posed the main parties some important questions about environmental policies – even though the one most in question was in pursuit of the admirable aim of cleaner air. Many voters objected strongly to imposing a heavy charge on the owners of older vehicles, trying to force them off the road at a time of cost of living pressures. It is not a good look to undermine the precarious budgets of those who need to use an older car or van to earn a living at a time of high inflation. By definition, they cannot afford the newer greener vehicles that the Mayor of London insists on, leaving him defending a policy of cars for the better off only.

This result will lead to a wider rethink of green issues. The Government does need to reconsider some of its policies undertaken in the name of net zero. It has listened to those of us who pointed out its former policy of leaving more of our domestic gas and oil in the ground will increase world CO2 output in a self-defeating zealotry.

And for as long as most people have gas boilers at home and industry fires its factories with fossil fuels, our choice is not to use less of them. It is: do we import more or produce more ourselves? Importing gas in LNG form generates more than twice as much CO 2 as piping our own gas to users, thanks to the energy it takes to liquify, ship and convert back. Some say that the cost can be several times as much CO 2. Far better then to pipe our own gas and spare the CO2. It also is far better in every other way. We get more better paid jobs at home, far more tax revenue from taxing the production and a big saving on the balance of payments. Another net zero idea which produces more CO2 is to spend UK grant money on stopping farmers in the UK growing food or rearing animals, only then to import the food instead. All those extra lorry miles and shipping routes burn more diesel in transport. And once again we lose the jobs, the investment and the tax revenues at home whilst adding to our balance of payments deficit. It is time to spend the grant money on investing in more automated and modern home food production instead.

The UK imposes the highest carbon tax and most penal emissions trading of the main economies. This makes such UK industries as steel and ceramics uncompetitive here. Government is then forced to hand some of the tax back as subsidy. Furthermore, there is the loss of more UK capacity, leading to more imports of high energy based products. This, too, can often increase total world CO2, given the extra fossil fuel consumed in long distance transport. We may also be importing from factories and furnaces abroad that generate more CO2 from their processes.

The way to net zero requires many more people to change their heating from gas to electricity, more electricity to come from renewables, more transport to be electric and more people to eat less meat. All this requires innovation and new products. Voters cannot afford some of the current green options, if they think they are inferior to what they already have.

So if the UK persists with the idea of banning new gas boilers as early as 2025, people will not be persuaded that heat pumps are cheap enough or good enough. They will make do with their old gas boiler. If the Government stops the sale of new petrol and diesel cars in the UK in 2030 before the other main car producing countries do, we will face early collapse of our car industry. Customers will want to buy nearly new imported petrol and diesel vehicles from countries that have not banned their sale.

The UK could help to find new products that work and are sensibly priced. Our innovative businesses, entrepreneurs and academics should be encouraged to do so. Government can use research grants, low business taxes and pro-innovation policies to resolve the difficulties. It makes little sense to plough on with taxes and bans that clobber our jobs and tax revenues whilst increasing world CO2 as we become ever more dependent on imports.

Government also needs to review its often speculative or poorly directed spending on net zero projects. Unresolved questions such as whether electric heating or hydrogen heating will prove more effective need answers that worldwide research and development can help determine. The Government should not think these can all be sorted by its grants and directions, given the scale and complexity of the task. It needs the best of large company research and entrepreneurial flair worldwide to drive a successful revolution. Government has not had to tax, ban and subsidise people into using mobile phones and laptops. Where is the iPad of the domestic heating world or the Beetle of the electric car ranges? That is the crucial consumer challenge on the road to net zero. More UK imports will make things worse, not better.

Every UK citizen  has a  right to a bank account here. Mr Farage praised the UK government today for its words and actions  over cancellation of accounts. The Nat West CEO has apologised for her conduct and left the job. I have not been involved in this issue but post this so people can comment on the matter if they wish. As usual contributions making personal attacks  and unsubstantiated allegations will not be posted.

There are pressures today to identify core public services and claim they need to  be nationalised again. The list is often strange. Water is on  but food is not. Rail travel is on but air or road travel is not. Electricity is on but broadband is not.

As I was pointing out yesterday there are very few monopoly provided services using state employees and equipment and offering a free service. We could not afford many of them given the large tax costs they entail. Prices that people have to pay provide a necessary curb on excessive demand in many cases and send signals about scarcities. Whilst the UK has made clear it has no wish to ration health care by price when people are in need of  care and help, it is generally agreed that for most things in life charging makes sense. To make sure people can afford enough of the  basics like water and energy all parties believe in income support, minimum pay and other means to ensure people can afford what they need. Offering free power or water  to the family that can afford the heated swimming pool or the six bedroom mansion would not be a good idea.

So the case for nationalisation is the case to restore public monopolies that have powers to charge people for energy, water or whatever they produce. When we had public monopolies for water, energy, and some transport modes in the 1960s and 1970s  there were constant problems. These bodies did not do a good job in keeping prices down. There was no competitive threat to keep them honest or to press them to greater productivity. Rail fares, water and power bills often went up too much and there was little anyone could do about it. There was  no opportunity to switch provider.

Nationalisation was bad for innovation and investment. Our telecoms system fell way behind the USA in terms of technology and efficiency, sticking with electro mechanical systems when the US was going electronic. Our electricity industry stuck with inefficient and dirty coal stations. Our water industry carried on running a pipe system that was creaking from age and inadequacy. They rationed access to a phone making people wait for a line or sharing a line with the neighbours. Water was often rationed in a dry summer with hose pipe bans or worse. The nationalised industries were always at the back of the queue for extra money to invest behind key services like the NHS and education. All their capital had to  be approved and formed part of the state  budget.

Service levels were often disappointing. The water industry regularly fouled our beaches . Trains were often late or cancelled. The telephone system limited the devices you could add to the network and could not provide good quality data lines for business in some cases.

Were the UK to want to renationalise it would  be a monumental waste of taxpayer money. The UK could not confiscate the privatised assets like some communist autocracy, needing to respect international laws of ownership and trade rules. The money spent on buying the existing assets would balloon state debt without adding a penny to the amount the industries could invest. No prudent Chancellor would want to find big sums for additional utility investment on top of the other many budget demands.  There would be no guarantee that prices were lower or service better than the current privatised levels. Indeed, history suggest they would likely to worse, as the absence of competition blunts achievement.

We were prisoners of nationalised monopolies when we had them. Taxpayers had to bail them out and pay their losses. Customers were treated badly, faced rationing and poor service

The crude public sector good private sector bad which dominates much opposition party thinking is no reflection of the reality of life.

Some years ago I wrote about how we could better characterise and assess public services. I proposed assessing each with three main questions:

Are they competitive or monopolies?

Are they owned and run by the state or by private individuals and companies?

Do they charge customers for their service or are they offered free to users?

These questions reveal that there is more to life than an all public or  an all private service.

The two types that get closest to what the public v private thinkers have in mind are

1. A public sector provided monopoly service provided free to users using public sector employees and equipment    Defence is the nearest to this model
2. A private sector competitive service delivered  by many, charging customers for their use and using private sector employees and equipment.. This is the most common model of public service covering things like food supply and mobile phone services

There are then the following

A private monopoly  provided free to users  – a free local newspaper, a local radio station

Private competitive services provided free to users   Much social media, independent tv

Public monopolies charging customers  – Planning services, much licensing activity like passports and driving licences

Public near monopolies using substantial private sector competitive contractors – the NHS buys in all its drugs and contracts out various hotel services to private sector staff

Competitive services delivered in part by public sector owned institutions – Council leisure services that charge, Public sector transport

“Free” competitive services provided by state organisations and financed from taxes   BBC,  state museums

You could add to this analysis the provision of services by the third or charitable sector, where their provision may be free to users or may be subsidised competition to the private sector as with charity shops and leisure offerings.

 

In the private sector attention is centred on what service or good the company provides. If I go to shop I do not want to be told how much the shop spends on buying and selling things and managing itself. I would not regard a shop that cost £1m to run each year as intrinsically better than one which cost £900,000. I go to the shops that offer the  best prices and service quality, concentrating on what I as a customer receive and the value it represents. Shops can win more custom by cutting their costs of managing themselves to lower their prices. Discount food retailers have done well out of stripping down costs of display, property  and support staff, When the private sector delivers poor service or bad goods it usually apologises, takes the blame and where necessary offers compensation.

Many people in the public services concentrate on the inputs rather than the outputs. Much of the debate is about how much extra money is put in, about many extra people are appointed to provide the service. To some political parties extra or additional or “new” money is all important and to them has magical powers which the base budget or the “old” money does not possess. This is strange misconception. The base budget is always the dominant part of the money, and more attention needs to be given to how that is spent each year with a constant thirst for improvement. When the public services  deliver poor service they normally say they were “underfunded”. They say  remedy for poor service is more cash and people. Rarely do they say they got it wrong, will do better and misspent or failed to direct  the resources they had available.

Of course there are times when we do need more doctors and nurses or more teachers. If we keep expanding the population we need to recruit and retain more qualified people to provide extra service. You can also have too many managers or administrators. You can fail to harness new technology to cut costs. Managers in some public services multiply and impose an increasing burden on the front line workers who get diverted by management from their main task of teaching or nursing.

Good management is about supporting the front line staff. It is about keeping the costs and intrusion of management down. It is best with few layers and clear responsibility for specified and measurable tasks. A well managed organisation has low rates of staff turnover, low rates of absence , high staff morale and unity of purpose in serving the public to a high standard. Some parts of the public esrvices fall down on these criteria. Their senior managers need to be challenged as to why, and asked to improve the way they treat the staff, spend the money and achieve results.

Too many Councils and some officials  in government want to price, ban and regulate the driver off the road. They spend large sums of driver taxation to thwart the driver, to delay the car, and to prevent the use of certain roads. The road authorities under provide road space on the grounds that if they supplied more motorists would dare to use it. There have always been people in government wanting to do this. The numbers have intensified now that cars are seen as one of the main  causes of CO 2 emissions.

The car is one of the great liberating inventions of the twentieth century. In the age of the horse you needed to be rich to afford a horse and carriage let alone a bigger carriage with several horses. Even keeping a horse for riding or a horse for work purposes was a difficult financial commitment beyond the means of many. As the twentieth century advanced the arrival of the Beetle, the Mini and other cheaper small cars empowered the many with the personal transport privileges of the few.

Most seventeen year olds want to pass their driving test and many aspire to own their first car. It is the way to personal freedom, no longer having to plead  with a parent to be given a lift to a social or sporting event. A vehicle is the foundation of many small businesses, allowing them to get the person with tools, equipment, goods and materials to any home in the country to carry out some work and earn a living. For the retired and elderly the cars and vans of modern UK are a supply line, bringing food and goods to the door,  helping family and friends to visit and offering taxi rides to  special events . Those who want to ban or inconvenience the car are trying to frustrate much of modern life.

Those who do it in the name of greenery may be undermining their own aims. More traffic jams bring much higher fuel consumption with delay. More traffic lights bring stop start with further fuel burn. Taxing new cars too much impedes moving more vehicles onto the low emissions standards of the modern car over the older one. Promoting electric vehicles with a high CO 2 emission to make them can also be counter productive when the person has to charge them from a  grid mainly delivering fossil fuel based electricity.

Over time fuel efficiency and fuel types will evolve, and CO 2 will continue downwards. Taking more road space away from vehicles with every traffic management change, making junctions more difficult to get through, and having more traffic lights than roundabouts will frustrate the motorist, create congestion and put government at loggerheads with the many who see the car as a crucial part of their lifestyle and freedoms.

 

The Chancellor gave an important lecture recently on the need to raise public sector productivity. He drew attention to the decline in public service productivity by 5.7% compared to pre pandemic, whilst private services had shown a productivity improvement of 1.7% over the same time period.

He raised the issue of the “10,000 public workers in equality, diversity and inclusion” wondering if this was too many. I would add why did the NHS recruit more than 3,500 additional managers over the last three years? How did their appointment coincide with a major decline in productivity and what are they doing about it? How many new forms and requirements have these additional managers imposed on the front line staff? Why do we have duplicate or triplicate  management, with management at NHS England levels, management at regional NHS quango level and management at hospital or GP Trust level? Why is there a cadre of senior NHS managers in the Department of Health and another corps of senior managers in  NHS England? How many requirements on NHS trusts do these bodies send out each year?

When staff morale is low as it has been in the NHS with strikes and disputes over working conditions as well as about pay it implies the senior management have  not listened and led in the way they should. It took senior management a very long time to come up with a manpower plan. Given the dominance of the NHS in the UK health area it is important the NHS does enough to stimulate sufficient education and training of our future health practitioners. That will take time and is not enough by way of response to current troubles. The senior management need to rework rotas, shifts, working practices and conditions with their medical teams to win back the loyalty and support of the staff. There is the danger of losing too many experienced and good people over  conditions and job gradings.

 

Knowing some  of you will want to talk about the by elections, here is your opportunity. Each of the three parties won one. They showed continuing poor support for Conservatives, no love for a Labour replacement, and anger at Mayor Kahn’s anti motorist policies. They show Lib Dem’s with very low national poll figures can pull off the odd  by election win. A highly subsidised investment in the West country did not impress voters there.

In an age of digital investment, artificial intelligence, smart phone activity and other leaps forward in productivity from technology, you would expect the UK public services to have had a good 25 years achieving more from its workforce thanks to investment and modernisation. Instead the Office of National Statistics reports that public sector productivity by the end of last year was lower than 25 years ago, at a time when the private sector had continued to show reasonable annual growth. In the whole period 1997-2019 the one fifth of the UK economy that is public services managed growth of just 3.7% in productivity. In 2020 productivity fell 13.3% thanks to lockdowns. In the following two years when the private sector made a full recovery from covid the public sector showed a rise of 7.3% in productivity in 2021 and of 1.9% in 2022, leaving it 5.2% below 2019 levels, and 1.7% below 1997.

UK public services are very labour intensive. We all want plenty of great teachers, good doctors and nurses and well trained uniformed police and defence  personnel to take care of us and protect us. Behind them lie large back offices with people giving the front line professionals support. In these areas more can be done by computer and by organising workloads and shifts well. Back up staff can keep more of the records and handle more of the administration to get the best out of the public facing staff. In too many areas management imposes a wide range of duties, checks and forms on staff which can get in the way of undertaking the day job instead of supporting its better performance.

The Chief Secretary to the Treasury has been put in charge of trying to cut through the complexities and overhead costs to deliver just that amount of administrative support and good planning that a successful service needs. He needs to do a lot to improve management performance especially in the NHS where huge sums of additional spending have been released without a proportionate increase in output. Your thoughts on how this can be achieved would be of interest.

Yesterday I met some experts on energy and supply chains. They told me that the official figures implying there would be twice as much CO 2 if we import LNG in place of domestic North Sea gas down a pipe was a big underestimate by the government. If you take into account the different levels of emissions in extracting the gas, in compressing it, in transporting it as a cold liquid and then converting it back it could as much as seven times as much CO 2 is produced by all these processes. Those who argue we must keep our own gas in the ground to speed net zero are wrong – it would delay our road as we would have to import the gas we did mot produce for the rest of this decade at least. There is no way we will have enough people with electric heating or electric cars by 2030 or nearly enough grid capacity to power them to do without much of the oil and gas we currently need to stay warm and to get about.

The investment task to replace all the current oil and gas based activities and put in enough reliable electrical power is colossal. People wanting to put in new windfarms are  being told there is a queue into the next decade to get access to grid to carry extra renewable power to users at the times when renewable would be available. The Grid is only just considering how to expand, which it would need to do by a factor of 5 or more by 2050 to take out our current dependence on gas heating, gas industrial processes, and petrol, diesel and  aviation  spirit for transport. It would also need much enhanced electrical cable capacity under every street to provide enough power to each electrically heated home with an electric car to recharge.

The UK needs to improve our energy security and self sufficiency. Being reliant on imports by pipe and wire from a continent short of energy and recovering from the need to end its dependence on Russian fossil fuels, we could run out of energy at crucial times. We always used to be self sufficient. We have a good mixture of natural resources to provide  more oil and gas, wind power, nuclear and the rest we will need. To have a successful economy with well paid ,jobs we need more reliable and affordable power. Letting the market work with less interruption would help bring this about mainly with private sector investment capital.