Author: johnredwood

There is no doubting the ambition of the PM’s launch of more growth in and through AI. He urges public and private sectors to greatly expand their computing capacities, and to  use the extra for a wide range of new applications. He sets out a vision of many more datacentres. He expects AI to  improve healthcare diagnosis, tighten up on tax avoidance and boost GDP.

The paper the officials wrote is long on enthusiasm and on how important much more computing is. It is short on practical policies to bring it about. Here are some thoughts on what the government will need to ask itself to make some of this reality.

The paper envisages a bigger role for the public sector, with government putting in more of the investment and adopting more of the benefits. There is no mention of how much extra money will be available for this. They revive the  idea of supercomputers after cancelling the Bristol one the previous government backed. Where will the hew one be and how much will it cost?

When it comes to the private  sector they will find the US giants of AI and the digital world are central to success. Why not take our corporation tax rate down to Ireland’s to tempt more of the US digital investment in future here? Ireland gas attracted so much with a tax rate half ours.

The strategy needs plenty of datacentres  which need plenty of cheap electricity. Will the government adopt some of the ideas around for more and cheaper energy?

The Foreign Office establishment tried to persuade Conservative Ministers to give the Chagos islands to Mauritius. David Cameron would not give permission, after James Cleverly had allowed work to be done. Kier Starmer and David Lammy fell for the specious arguments about international law and are desperate to give the islands away.

The International Court gave an advisory opinion that the UK should  cede control to Mauritius. Some government advisers have we are told be warning they could take a case and find against the UK in a binding judgement if we do nothing. Last night on GB News I pointed out that the UK expressly ruled out being under the Court’s jurisdiction for any matter involving another Commonwealth country . The advisory opinion stemmed from a UN resolution of the General Assembly. Such resolutions   are not binding. The UK as a member of the Security Council has a veto on Security Council resolutions which would be binding.

Giving away Chagos would be a double disaster. President Trump wants the UK to remain the freeholder of its crucial Diego  Garcia base, not  pass it to pro China anti nuclear Mauritius. UK taxpayers cannot afford to meet the 100 years of payments Mauritius demands to lease back the base. We hear they want up front early payments of some future annual payments just as the Chancellor needs cuts in spending to reassure markets.

Politics is about choices and priorities. Taxing farmers and cutting benefits for pensioners in order to pay to rent back something we legally own is a very strange and unpopular choice.The Chancellor should say No to any such spending increase in the  middle of a spending crisis.

I was delighted when Jon Moynihan became  a peer. He has done much to foster more and better businesses in the UK and has much to offer to the debate on how the UK can grow faster and create greater prosperity and wealth for many. His often unfashionable views and clear analysis deserves the Lords as a platform.

He is this week launching the second volume of his important book on growth. This is a great book which all interested in the future of the UK and our prosperity should read. Its  main themes set out how to deliver the  faster growth we need and will be no surprise to readers of this site. He backs the lower taxes I have always campaigned for, and draws on Laffer’s work that higher rates can lead  to less revenue. He believes that smaller government is part of the answer, preferring competitive providers charging buyers and users directly. He  promotes free trade internationally. He chooses Adam Smith , not JM Keynes for economic guidance.

The book is a treasure trove of data and arguments to show how these three principles when applied work well. He shows how the more a state chooses government ownership and direction and the more it goes  for higher taxes the poorer it becomes. He wants more Singapore and less Venezuela  and North Korea in policy.

The disagreements I have relate to priorities and tactics as to how we could get the UK back to greater free enterprise, freedom and growth. Jon for example argued for doing away with pensioner fuel payments before Labour. I think that a bad idea to do in cold snap in winter when government is forcing our energy prices ever higher. We need to address  the  underlying problem of energy markets rigged against UK consumers. I would  start by dismantling the self defeating net zero energy bans, subsidies and adverse price fixing, not by mugging the pensioners.

Jon is also a vigorous free trader. Of course the world would be richer if all allowed tariff and obstacle free trade. We need however to survive in a world where many others play unfairly, so there are areas like food and defence equipment where we need to consider national security as well. It can sometimes  be better to be a multilateral rather than a unilateral dismantler of barriers.

These are tactical arguments born of a wish to see more the recommendations in Jon’s book adopted. The overall case is a strong one, well researched and argued. Back this book.This is the best book on how to remodel our economy for growth available. It should be compulsory reading in government.

General guidance

This site seeks to provide incisive and original analysis of public policy. I forecast current trends in UK and global economies and examine major themes like net zero, welfare and work, running the public sector, and the digital revolution. Anyone with good ideas or sensible criticisms is welcome.

I highlight big issues that the BBC and traditional media ignore. I have exposed the planned £240 bn losses by the Bank of England, the £20 bn plus productivity back hole in the UK budget, the disastrous impact of extreme net zero policies on UK industry, growth and tax revenue, and the way mass migration creates strains on housing, public services and the national budget.

This is not a political party site. It is not a site to pursue individual UK politicians or influencers for their alleged misdeeds. It is not a site for over the top partisan rhetoric for any political party

I do not usually publish anything which seeks to compare today’s elected governments with Hitler, the Nazis or fascism.Generalised abuse of parties and institutions is discouraged.  I allow  contributors to advance factually incorrect or bizarre or self serving arguments for their causes and parties , but pall of letting them repeat these on too many occasions. I am not their fact checker and often disagree with the points submitted. I do not have the time to correct or counter argue in most cases.

The two I never publish

As they break my rules, why not find a site that is more to their liking. They are wasting more of their own time than mine.

The UK like many countries is prone to floods and to water shortages.

When we had a fully nationalised water industry in my youth we faced water rationing in summers with hosepipe bans and in some cases standpipe water. Since then we have had a large increase in population with regulated private monopolies not building additional reservoir capacity. They say they could not charge enough to pay for expansion. The Regulator never told them to expand capacity. Cutting UK CO 2 will have no impact on all the extra  demand a fast growing population creates. The government needs to tell the Regulators to require an expansion of capacity.

Our flooding matters more now than in the past because governments and Councils have allowed and encouraged too much building on flood plains. The Planning regulators have failed to put in sufficient drainage capacity. The Environment Agency has failed  to dredge rivers and expand capacity of ditches and culverts to get water away from buildings. Cutting migration numbers would help. A concerted programme of water diversion is essential Again decarbonising the UK will not stop floods on floodplains.

Sea defences need improving where spending can protect towns and cities. We should be working on a new London barrage further down the estuary.

Does Mr Miliband ever worry that his policies lead to black outs and energy shortages? We are living through a colder snap. We hear endlessly about it on the news as if it was unusual. It’s called winter and has happened most years. We have lived through far longer and colder spells in some past years than this December/January.

Despite this being a not so long or cold spell so far we find ourselves with wind and solar generating as little as 6% of our electricity, and regularly less than 15%. That means more than 90% and as much as 98% of our total energy comes from things other than wind or solar. Most comes from oil and gas.

This government has stopped any new oil and gas exploration or development at home and put  up oil and gas taxes even higher to try to force early closure of what is still producing. They think CO 2 heavier imported oil and gas better than home sourced. Why?

They are not rushing to put in more gas storage to make us more European. Why not? We had low levels  of gas storage capacity because our gas storage was our own productive  gas field reservoirs.  If we can’t produce our own we need much more storage, otherwise as now we have to pay much inflated prices to import when gas is short .

Why are we not putting in more gas fired generation? We need plants that work when there is no sun or wind. Instead again we are forced to pay sky high prices for imports when electricity is short in Europe as well.

UK policy has been to keep on putting in more pipes  and cables to the continent whilst closing down much our own power provision. They close  oil and gas, blow up all coal power stations, retire gas stations and decommission al but one of our nuclear plants. It is a policy to make us hopelessly dependent on imports from a Europe short of energy. It increases the shortages for Europe as well as ourselves.

Please Mr Miliband do something. Don’t be the Minister who presides over power cuts. Please Sir Kier don’t follow your removal of pensioner fuel allowances with policies designed to make gas and electricity even dearer.

Facts4eu sent out a good note highlighting the productivity collapse in the public sector. Productivity is now 8.5% down on six years ago. The government needs to reverse this quickly, as it is making public services unaffordable to taxpayers.

As someone who has led parts of the public sector as a Councillor with Council Executive responsibilities and as a Minister I know the need to work with the staff and system to get better performance. As a former Chairman of two international industrial businesses I know what you can achieve with the right approach and key staff.

The first thing for the  public sector to grasp is quality and productivity are two sides of the same coin. An efficiency drive must not be cost cutting above quality of service. It must be better and smarter working, mindful of the needs and views of staff.

Put in a quality system. Get things right first time  to save duplication of effort and more complaints. Fix things that go wrong as soon as they are identified. Manage error out by changing approach when a series of errors emerges. Keep service design and delivery straightforward and easy to understand. Reward staff that do well. Make managers experience what staff have to do. Dont put off serving a user. That means you need more than one contact, a holding reply followed by the reply or action. Don’t allow backlogs to build.

As Chairman I always asked to see the complaints. They present opportunities . They reveal what is wrong that needs fixing. Remedy something well for someone you have messed up can create a more loyal customer. They see they matter. Listen to customers or service users, as it is their needs that give you a job. Design a service they want, not one that is convenient for the provider.

I would be happy to help the public sector be better for both employees and users. Like productivity and quality they go together to create success.

It is unusual for the Treasury to comment on market changes. Yesterday they did as  the 10 year yield soared to 4.8% and the pound fell another cent against the dollar, now down 6% from the last year high. Today the rate is up again and the pound down more. It is a bad sign that the pound is falling as our longer term interest rates go up. It confirms the lack of confidence shown in the surveys and shows how a high tax low growth strategy puts off investors in government bonds.

I warned yesterday that the Chancellor has to avoid putting up taxes,  crushing  growth, cutting tax revenues and then seeing government borrowing rising too far. She should see that doing that in her ill judged budget meant  interest rates rise, state borrowing costs rise and government finances are in a doom loop. Rachel Reeves must be regretting saying 4.38% rates for a day in 2022 meant  crashing the economy now she has helped put them up and keep them up higher for longer.

A rethink of the budget is urgently needed. The spending round will now collide with a Labour party  that wants to spend more when Treasury advice will be to cut the burgeoning deficit. The Chancellor ruled out higher taxes again, and they would make the situation worse. The trouble is Labour Ministers and backbenchers will not want to cut spending. Pity Rachel   Reeves ignores the easy cuts I have suggested to Bank of England losses, productivity losses and net zero excesses like carbon capture.

When the cost of ten year borrowing for the government hit 4,38% for a very brief spike in September 2022 Rachel Reeves claimed Liz Truss had crashed the economy as this would put up interest rates. At the same time as a budget which announced a bigger deficit the Bank of England was putting up base rate, threatening more rate rises, announced a huge sales programme of government bonds and watched as the pension funds geared bond investment plunged causing another big wave of selling. The  Bank quickly reversed the bond market fall by buying up some bonds, The ten year rate was down to 3.1% by November. A change of Chancellor cut the deficit a bit.The Bank after the event agreed its actions were mainly responsible for a lower  the bond market

The ten year rate is now 4.68%.No hint from the Chancellor she has crashed the economy or upped the mortgage rate. This time you cannot blame the Bank for much of the fall as it is easing short rates down and is not going to up its sales.Nor can you blame pension funds and LDI as those have been reined in. This is about the impact of the budget which increased borrowing, hit confidence and undermined the growth rate.

Now the Chancellor is in a bind. Interest  charges will now be higher on state debt, so her leeway in hitting spending and borrowing targets has gone.If the economy stays slow growing the government will need more tax rises and or spending cuts. More austerity will keep growth low.

Most people agree with our constitutional theory. We are all beneath the law. The law should be evenly enforced. The more severe crimes of violence against  people should be given priority by the services set up to prevent  crime, to investigate crime and to prosecute suspects.
Punishments should be related to the severity of the crime. Long periods in prison should be used for those who did most harm to most people, to protect the public and act as a Deterrent.

The law against racial abuse should be enforced. It should not be used as an excuse not to prosecute or investigate a suspect. If a suspect is from a minority group others should  not generalise from the conduct of a criminal from that group. All racial groups contain small criminal minorities.

Many people are shocked by what has emerged over grooming and rape gangs. The call for a further enquiry is frustration that the previous enquiry did not go into the full extent of these horrors or propose suitable  remedies. There is a feeling successive governments and Crown  Prosecutors have let people down over a wave of serious crimes. The government needs to come up with a stronger response.