Author: johnredwood

It was not just the big productivity loss that boosted the deficit and lay behind higher taxes in the last Parliament. I spent time throughout giving Prime Ministers, Chancellors and Chief Secretaries who came and went many ideas of how to save money in bloated state budgets.

There were the large sums being spent on energy subsidies as they intervened heavily to switch from coal and gas generated electricity to solar and wind. There were the over the top domestic energy subsidies for the better off as well as for those on low incomes. The Truss plan gave double subsidy to most MPs, as  anyone with two homes qualified for two subsidies. There were the large loans to Councils to let them buy up property investment empires. There were the grants to Councils to take road capacity out. There was overseas aid for bad schemes and for some developing economies with their own budget capacity. There was the large expenditure on housing for illegal migrants, and the big cost of housing and public service provision for low income and no income legal migrants. There was the wasteful HS 2 project and the escalating losses of the nationalised railway.

By the last year I was hammering my big 3. The annual  £20 bn plus of lost public sector productivity. The £20 bn of avoidable annual bond losses  incurred by bad policies at the Bank of England. The £10 bn to £20 bn of overall cost and lost tax revenue from high levels of economic inactivity amongst people of working age after the pandemic. The government tried to do something about the first and third of these, but the benefits were neatly put forward into years after the election in the main by officials who did not see the urgency of implementing the necessary changes. . They would not budge on the easiest cut of all, to stop selling the bonds at a loss.

The Covid lockdowns were too long and too extreme. I worked with the Mark Harper group of Conservative MPs to challenge the policy and propose less damaging ways of keeping people safe from the virus, with limited success.

I then watched in horror at the extreme volatility of output, employment and incomes that resulted, and at the colossal public sector costs to offset the collapse of many business activities.

It became clear that whilst  many private sector activities rebounded quickly on the ending of lockdowns, public sector productivity did not.  It took a massive 7.5% hit according to ONS figures looking at Labour productivity. I drew Ministers attention to this and persuaded them that they needed to review with their officials how this big loss could rapidly be repaired, The loss was great in the NHS where much non Covid work had been abandoned owing to the decision to put Covid cases into District General hospitals, creating cross infection control difficulties. Not enough use was made of the private sector hospital capacity the taxpayers were paying for and practically  no use of the Nightingale special hospitals.

Ministers were told that the coming of AI did present useful opportunities to raise productivity but it would take substantial investment,and many months t9 draw up the specifications for procurement and to see where AI could go. I countered by pointing out we did not need to wait for any investment in AI to get back up to 2019 levels of productivity, because there was no AI in 2019 and yet the government did hit higher levels of productivity then. Eventually Ministers settled for a possible £20 bn of productivity gains spread over a long period with the need to spend to save. The actual loss on the original ONS figures was more like £30 bn. Official figures were subsequently altered, as we were living through a period of experimentation  and change with all sorts of official figures to make it difficult to see consistent series and to effect comparisons over time. The balance of trade figures were changed substantially as well as productivity numbers.

I suggested a simple device to get the lost productivity back a bit quicker. I proposed a complete staff freeze on external recruitment for non front line staff. Each time someone retired or left employment the post should be reviewed  to see if it was one to abolish , amalgamate or fill from an existing staff member. Ministers ended up agreeing a one in one out approach to stop further rapid expansion of numbers such as we saw across the Covid period, with a few exceptions like Steve  Barclay at DEFRA who did go for a freeze.

The state recruited far too many extra administrators and policy advisers over the last five years. This big bulge in recruitment led to a plunge in productivity. There is also the issue of working from home. Some of us for some of the time can be more productive at home , often giving travel time to the job as well. However it is important to go into the  office regularly and to attend important meetings in person. Staff need to interact, to mentor, assist and socialise their ideas which are all easier in an office environment.Quite a lot of jobs require daily attendance at a workplace to serve the  public, supervise the machinery and train and direct staff.

In 2020-21 The Taxpayers alliance published a league table of MPs by how much in total it cost taxpayers to employ their staff, run their offices and pay the MP’s permitted travel and accommodation costs.  The dearest MP claimed £280,000. The average MP claimed £203,000. I claimed £106,000 as the second lowest cost MP.  My costs remained low by MP standards throughout the Parliament.

I always thought MPs should try to set an example and provide great service at sensible cost. During my time as an MP I saw allowances  for staff and office costs go up a lot with many MPs expecting more staff to do things for them. I did my own research and made my own speeches. My two staff members helped me with constituency cases and keeping up with the voluminous email correspondence. I triaged cases and set out my views in response to new issues or problems. My staff took great trouble to follow up cases and seek a good outcome from public bodies for constituents. We set ourselves the target of replying by the next day to any email.

There was no pressure to contain costs or seek better value, until an MP approached the generous maximum allowed. IPSA did bring in rules about travel costs and provided standard form employment contracts for staff with salary bands. The only time I remember opposition parties taking an interest in my costs was to complain I did not claim enough of the allowances. They could  not point to how the service I provided was inadequate owing to too few staff, as we clearly turned emails round much more promptly than the average MP and I delivered more campaigns and content through this website and frequent Parliamentary speeches than many MP s managed.

MP offices do offer better value and higher productivity than a lot of public sector administrative   activity. That is the result of some cash limits for specified purposes on what an MP can spend. It also reflects  the much closer scrutiny of detailed spending of these small offices compared to the disinterest in exposing waste and inappropriate spending in many government and local Council departments. It  still leaves open the idea some have that they need to spend the full allowance, and can mean the MP does not do enough of the job for themselves. The more the MP does the better the MP usually is. There is nothing like reading all the emails and feedback and taking a personal interest in the cases where things are going wrong for people.

I am going to write a few blogs about getting better value from the public sector. I thought it provided a background to show that in my little bit of the public sector I was able to do what I preached, running my office for a little over half the average and for just over one third of the dearest. Most of the government departments I dealt with over the years did not manage the money and personnel well, and did not regard boosting  productivity as a key objective.

I supported a Conservative policy of reducing from 650 to 600 MPs at the next boundary review, which the government then failed to implement. I proposed a 10% cut in Mp numbers down to 585, as I often represented a constituency that had considerably more constituents than the Parliamentary average without finding it difficult to give them a decent service. It would also be quite possible to cut the maximum allowance total by 25% and still allow an MP to spend  50% more than I did.

When the railways were privatised there was a period of good growth in rail travel, and a more positive management enthusiasm for promoting rail travel and identifying growth opportunities. One obvious example was to add a short spur line to Heathrow airport. This  large centre for people on the move had been ignored by the nationalised industry.

The nationalised business usually followed a policy of shrink and sack. They wanted trainload traffic for freight, not individual waggon loads. They allowed or encouraged the closing of sidings and links into industrial premises. They watched as business shifted to industrial parks near motorway junctions in place of the older Trafford Park style based around rail links. They  ceased to actively promote U.K. holiday and events travel in the way the pre war railways  had.

Today there are opportunities for growth. To recapture more of the going to work trade they need flexible fares and tickets to attract and retain the 2 or 3 day a week commuter. To recapture lost freight and get many more Lorries off the road they need to actively promote waggon loads with more direct access into industrial sites and estates.  Single waggon marshalling and freight train assembly should be easier in a digital and containerised age.

They need to be more customer friendly in moving large numbers of people to and from events. A large concert or sporting contest struggles to provide adequate affordable parking and road access, and many people attending want to drink alcohol so they cannot drive. There need to be enough special trains.

The railway could work more closely with holiday resorts and other popular destinations. The railway did respond to the rise of Bicester Village as a shopping destination as an example of what can be done.

The railway can expand its capacity by introducing digital signalling on all routes. This allows central control and individual train visibility of all that is on the track, so more trains an hour can be run safely. As most track is one way only and as trains can only leave a track if points are changed it should be a very safe method of travel. Modern technology should eliminate crashes between trains on the same track,

The net zero policies followed by successive Labour, Coalition , Conservative and now Labour governments have left us dangerously short of electricity. The favourite option has been installing more and more inter connectors  with European countries, leaving us very dependent on imports when the weather lets us down with renewables.This is especially dangerous as Europe is very short of energy and may not have the power to send when the wind does not blow and the sun does not shine. French old nuclear  plants are  becoming unreliable and even Norways hydro system can struggle for want of rain.

The U.K. needs to install a new fleet of gas power stations. These should draw on more U.K. domestic gas as outlined in the oil and gas industry blog, as well as importing from Norway Qatar and the USA. There needs to be more gas storage to build our resilience. Old  reservoirs can be adapted for this purpose. Gas generated power at present gas prices is the most economic way of covering demand when looking at pre tax costs of capital and running costs.

The U.K. should replace the nuclear capacity it will lose this decade with new nuclear, and if possible add to the 4.8 GW that disappears. It is likely the cheapest and best way to do this will be to agree  to build a number of 300-450 MW generators to a proven design, pre fabricating  as much as possible to speed site build times. Designs should not be varied. Past nuclear sites are obvious locations with a settled community  and local workforce used to nuclear activity.

The U.K. with other leading renewable countries need to come to a determination about how best to store renewable energy when it is plentiful.Is this more  pump storage, or big battery or hydrogen conversion? It is expensive stopping wind turbines when the wind is blowing because there is insufficient demand or a shortage of grid.

All the parties say they want to end the small boat voyages from France. All regret the loss of life and want to root out the business organisers. There are more varied thoughts over those migrants themselves that are illegals wishing to buy their way into the U.K. Some want to offer them safe routes and the right to come, others wish to say they do not qualify.

The public is deeply disappointed that these trips have not been stopped by now. The U.K. and French state have great power and resource. They can see the boats get onto the beaches through aerial surveillance. They can trace the money. They can intercept the buses taking migrants to the beaches. They could damage the  boats before they leave France. They could arrest the boat organisers to stop them leaving . These traffickers are breaking rules over boat safety and passenger numbers, over seaworthiness and launch arrangements, over paying tax on profits, over assisting people to commit border offences and much else. Worst of all they put migrant lives at risk, and can put the rescuers in danger when the small boats get into trouble. Why isn’t more action taken?

Can’t the authorities do more mystery shopping for places on the boats? Intercept deliveries of the boats?  Listen in to the chatter of the organisers? Spot the  large sums of money when they move in or out of the banking system?

Many law abiding voters know they will be caught and penalised if they exceed a speed limit, park in the wrong place or travel on a restricted road. Why they ask can’t the surveillance that polices these more minor offences tackle the small boat organisers who put  people’s lives at risk and make a mockery of tax and anti money laundering rules?

When I was policy adviser to Margaret Thatcher we sought economic growth per capita as we wanted U.K. people to better off. We did not welcome the model of inviting in many people to do low paid jobs to boost GDP at the  expense of GDP per head. We sought to keep net migration to a maximum of  50,000 per year, itself a high figure requiring extra homes and public services. There were some obligations to take workers under EEC rules, which were greatly expanded into full freedom of movement for all EU citizens introduced by the Treaty of Maastricht of 1992  and the subsequent EU legislation under John Major and Tony Blair.

There does need to be clarification from the government on what it thinks an acceptable level of migration is, as most of it is legal migration requiring visa permits from the U.K. government. They need to clarify their view of what minimum income should apply for someone needing a work visa, and what planning has gone into providing sufficient extra  homes, NHS capacity, school places and  utilities provision to ensure new arrivals can have a decent income and living  standard without causing shortages for people already legally settled  here.  Treasury accounting which assumes GDP growth from new arrivals assumes they get a job, ignoring dependents, and overlooks the drop in GDP per head if many take low wage employment. Above all they surprisingly ignore  the large public expenditure and taxpayer cost of providing subsidised accommodation and free public services for many.

So far the only category of overseas migrant we know the government wishes to cut sharply are the foreign multi millionaires who wish to pay tax on non U.K. wealth  and income elsewhere whilst paying full U.K. tax on all they did here. It will mean a net loss of tax revenue and of investment in jobs and companies here, without reducing numbers of people much.

If the government truly wants to grow the economy faster and increase average prosperity it needs to welcome people coming to invest and create jobs whilst cutting back sharply on numbers wanting low paid jobs or state support. The U.K. response to the drivers shortage showed how putting pay up and increasing training could recruit many people from those already settled here. Where business is short of employees there needs to be a mixture of higher pay and measures for higher productivity and training to ease the shortage.

I do not have original ideas or proposed different policies to enforce the law. I rarely write about it for that reason.
Today it cannot be ignored. As part of my series on growth the first priority is clearly to enforce the law.

Rioting and looting destroy commerce and harm the  lives of the many. Who will invest in a business that might be torched, or toil in a shop where looters help themselves?

A lax approach to shoplifting can lead to the outrage of people helping themselves on an industrial scale. It is worse when people are assaulted or made to live in fear.

The so called protests that have seen violence against the police and property and the so called counter protests of gangs who want to fight the others both need stopping, with even handed action by the authorities.

The government also needs to update us on how it is getting on enforcing the law against illegal people trafficking. Controlling our borders is a demand of many people. The government promised better control from more resources. Has it appointed another Commander? Has it got further collaboration from the French authorities? How will its improved Border intelligence and management work given all the resource and effort the last government put into it?

Law enforcement has to treat profiting from illegal migration as a serious crime as well as looting a shop or breaking windows of a hotel.

There are three main kinds of roads.

There is the national network of motorways and trunk roads. These should be vehicles only. There has been some expansion of capacity by adding lanes and improving some junctions. More needs to be done as these are much used and crucial to our economy. Their capacity could be helped if Rail freight could be be boosted by more sidings , single waggon marshalling and other ways to make it a more practical and viable option.

There are the local strategic roads, usually A designated. These should primarily be for vehicles. They should have mainly roundabout not traffic light junctions as these are better for flows. Road schemes which seek to remove capacity by narrowing, putting in exclusive use lanes , more lights and partial barriers should be discouraged. Junctions often need improving by increasing capacity . Lights need automatic sensors to switch to green where vehicles are waiting when they are no vehicles using the green that is available.

There are local roads which will often be mixed use. Here there may need to be further schemes to allow safe use by a variety of users, or to restrict parking where that creates obstacles to use.

The big change that is needed is to understand we need more capacity, and to see that making it easier to get through junctions on large roads  is a way to improve safety and reduce driver error. If the government wants economic  growth it needs to increase capacity of the national routes and the strategic local networks , issuing new guidance on junctions and budgets to get rid of bottlenecks, inadequate junctions and capacity shortages.