Category: Uncategorized

So now we read confirmation the the EU wants us to accept freedom of movement for under 30 s.
They want to grab more of our fish for longer, demanding an extended and generous access for their trawlers and super trawlers to our waters.

They want to impose more of their  laws on us. They are offering no new and improved access to their market.

None of this makes any sense for the U.K.Still the U.K. government fails to ask for anything that we might need to make our lives better.

Although the U.K. establishment did its best to wreck Brexit and avoid taking advantage of the freedoms, we are saving £12 bn a year and putting that into the NHS, We have avoided a large Share of Euro 800 bn of extra EU borrowing they agreed as soon as we left, and do not have to impose hundreds of costly and unhelpful laws they have imposed since we left.

I was pleased to see the government now recognises the productivity collapse in the public sector. They say they wish to reduce the civil service by 10,000. That would be a modest start.

They need to be more ambitious. Applying a policy of natural wastage to avoid any redundancies should free more than 30,000 a year. As people retire or move to another job so you can slim the establishment and promote or transfer existing staff into the important jobs you need to keep. A speedier policy could augment this with a call for voluntary redundancies, though this requires suitable severance payments.

It is also important to widen this to include the enlarged administrative cadres of the wider public sector, especially the NHS.

We read a suggestion the government may find £1.5 bn of extra money to help buy ammunition in an EU scheme. If the Chancellor can find such a sum it should be given to our military and spent on munitions, equipment and personnel from the U.K.

Meanwhile the Metrology Bill is working its way through the Lords. This is a Bill to enable Ministers to lock us back into EU laws more easily. Why? Exporters need flexibility to follow US rules when selling to th3 Americas, Asian rules when selling to Asia and EU rules when selling to the EU. We must not be bound into the EU way of doing things.

The Chancellor failed to spell out what she wants from Brussels that would help growth. Our growth was very slow  this century when fully in the EU. Some say the U.K. needs relaxations to sell more milk, cheese, beef  into tge EU. What we need is better support for farmers to grow food for the domestic market. We import too much food with long food miles from the EU already.

U.K. productivity has been disappointing this century. The Chancellor and civil service call it a puzzle. The main reasons are obvious and need treating.

The public sector is the main cause. There has been no productivity gain all century so far. There has been huge spending on many more computers and digitalised services, and reductions in customer facing staff. At the same time there has been large scale recruitment, many promotions and much increase in the complexity of process and audit. There has been a proliferation of new public bodies and of EU and domestic regulation. Much of this has failed to make things safer and better.

The second cause is net zero high priced energy policies leading to accelerated run down or closure of highly productive sectors like oil and gas, steel, and other energy and capital intensive manufacture. There has been growth in labour intensive services instead. Even successful and internationally competitive sectors like banking  and business services have  had to recruit many more employees to implement waves of additional regulatory requirements.

The simplest way to lift overall U.K. Labour productivity is to reverse bans on energy using industry and go for lower energy prices.Essential to the task is also to effect a managerial revolution in public services. I will be writing more about this following yesterday’s headline agenda for change.

If anyone wishes to comment on Syria feel free to do so. The U.K. does not have any military commitment there and should leave it to Turkey, Lebanon, USA, Israel and Iran that do have military commitment to sort it out with the new Syrian transitional government and each other.

There are numerous ways to boost public sector productivity.

1. Recruitment freeze, forcing managers to promote or transfer existing staff into the important roles and eliminate other jobs as people leave or retire.

2. Regular review of old initiatives to wind  them up and transfer staff to better uses. Old initiatives in government often linger on long after the Ministerial impetus has gone.

3. Rule against both employing staff to do a job and employing consultants to do the work for them, Consultants  should only be used where the state lacks expertise and does not need permanent expertise of that kind.
4. Contract out more activities. Give staff the opportunity to buy out or be given their activity with an initial contract to supply the government.

5. Reduce office space for home working, with more hot desking.

6. Sell surplus assets.

7. De stock with more just in time delivery contracts for bought in goods.

8. Review energy use in public buildings, More insulation, better thermal controls.

9. Try to avoid heavy use of bought in contract Labour at higher pay than existing staff.

10. Identify overlap and excessive process by function to reduce duties of various departments and quangos.

Some briefing from the government suggests they are not willing  to agree further substantial increases in public spending as they did for 2025-6 in their first budget, or as the previous government did from the outbreak of the pandemic in 2020. Given the large cash and real increase in both health and welfare spending in the last five years attention should shift to getting value for money for all the increases agreed so far this decade.

I will update my thoughts on controlling public spending whilst improving core public services in a number of blogs. Today let us begin with the second and third largest increases in spending in recent years, Bank of England losses and debt interest.

There is no need to restate the detail of how the Bank’s losses could be slashed if they stopped selling bonds in the market at much lower prices than they paid for them and if they adopted the European Central Bank approach to paying interest on commercial bank reserve deposits.

When it comes  to debt interest the numbers surged 2022-4 thanks to the Bank losing control of inflation. The U.K. has issued substantial indexed  debt. It then charges to public spending the increase in repayment value of the debt as it occurs, though the Treasury does not make these cash payments. On maturity the government borrows the enhanced cash cost of repayment to meet the extra  bill.

As the Bank cannot be trusted to keep inflation low it would make sense to stop issuing indexed debt or greatly reduce its quantity, to avoid any future surge in these accounting costs. To control the rest of the debt interest programme the government needs to reduce the build up of  borrowings. Bringing spending and tax revenues into line is the obvious way to do this but governments find this difficult.

In order to speed transition to less borrowing government should in the short term have more recourse to selling assets it does not need to own. It can get on with the sale of Nat West, Channel 4, investments held in the U.K. Infrastructure and British Business banks, surplus property, local government investment holdings, and other assets.
The aim of lower borrowing should be to get the average interest rate down. The last budget put the 10 year rate and some related mortgage costs up. With a lower deficit and better spending controls it would be possible to lower the average borrowing rate by say a quarter which over time would bring down borrowing costs from current elevated levels.

This week I took a train from London to Ipswich and back.

There were two plus points. There was good service frequency, giving me plenty of  choice of trains. The out bound train ran to time so I could get to my appointment.

There were plenty of bad points. The seats were in the modern way exceptionally hard and uncomfortable. Tickets were checked both at entry and exit on stations and on board the train, requiring more revenue staff.

For my return I got to the station 40 minutes early. There were two earlier trains I could have caught. Both had very few occupied seats. The ticket office told me the charge would be 260% of the original ticket price to switch trains as I had bought my original ticket in advance. This is silly. I would have paid a modest handling charge with some extra net revenue for the train company  in return for the convenience of an earlier train. It would have been extra revenue for them. Why so unfriendly to customers?

The train back left on time  but had to run slow through East London owing to “ congestion”. A timetable based system should work better than that. More passing places for faster trains would help.

As a taxpayer no doubt I have to pay more for that trip to cover the subsidy as the trains had such low passenger occupancy. The company was running very long trains for not many passengers , meaning it was wasting a lot of energy taking too many unneeded coaches with it.

As always with train journeys there was considerable extra cost and complication getting to and from the station by other means. Central town and city stations are difficult to access, apart from London where you can use the tube.

Electric trains often need gas power stations to supply the energy. When calculating the  CO  2 production you should calculate it for the whole journey, not just the train ride part. Last year the railways needed £33 bn of taxpayer subsidy and capital spending for well under 10 % of U.K. travel.

I agree with Keir Starmer that spending £100 m on a bat tunnel over a small section of HS2 is a bad idea. The issue is what is he doing about it?

I do not recall him previously intervening over the crazily escalating costs of the project. He is not this time identifying excess costs in HS 2 that he can control.

HS2 is a crucial example of state investment failure. It has been completely nationalised for its whole life, and has been given unbelievably large sums of money as it runs through any budget or spending buffer its highly paid executives get Ministers to approve.

I voted against it when Parliament decided to go ahead. The original business case was poor, depending as it did on taking passengers away from the existing routes. Now costs have more than trebled the business plan is one of ruinous losses.

The PM implied the very favourable treatment of bats in the planning process will be downgraded, yet when a Minister was asked to explain how  and when there was no answer. The PM needs to do more than express public anger late in the  day about one detail of a badly failing nationalised industry. As its custodian with power to change the management and change the project he needs to tell us exactly how he will put it right. This is about more than a bat tunnel or £100 m. It is about a £100 bn dud nationalised railway, greatly delayed and cancelling planned services to Northern cities.

So just five months in the government dumps its most attractive and exciting promise to make the U.K. the fastest growing G7 economy. They want to perpetuate this century’s experience of falling further and further behind the US, clinging to EU style slow growth, high taxes and bad regulation and cosying  up for more of it.

Their excuse is they want a target that relates to how we feel and lead our lives. Boosting people’s spending power is fine, but of course it  would have happened with the faster growth they offered us for the election. Difficult to achieve without faster growth.

It makes many other Labour policies unhelpful. Most people who can afford it want to buy a petrol or diesel car. Labour will ban them soon.

Most people think U.K. energy prices are too high, cutting our real incomes. Labour put them up and want to close down more of our cheaper power generators.

Most people think their cars are the best way to get to work and the shops. Labour try to make driving dearer and more difficult.

Most people think taxes are too high and there are too many taxes. Labour puts them up on an industrial scale.

Many find it difficult to contact and deal with government who want people to deal with computers under threat of punishment if they make a mistake.Labour serves the civil servants not the public.