Answer to My Written Parliamentary Question on SCS1 civil servants

This reveals there has been a large increase in top posts at a time when productivity has fallen badly. You can have too many managers.

 

The Cabinet Office has provided the following answer to your written parliamentary question (2438):

Question:
To ask the Minister for the Cabinet Office, how many civil servants are employed at each grade above SCS1. (2438)

Tabled on: 20 November 2023

Answer:
John Glen:

The number of Senior Civil Servants by Director, Director General and Permanent Secretary paybands are shown in the table below.

This information is published each year by payband through the Government evidence to the Senior Salaries Review Board.

Table 1: Number of Senior Civil Servants by Director, Director General and Permanent Secretary paybands, as at 1 April 2023

Payband Number
Director (Payband 2) 1140
Director General (Payband 3) 180
Permanent Secretary 45

Source: SCS Database, Cabinet Office

Notes: Numbers are rounded to the nearest 5.

Numbers are provisional and subject to revision over time.

Numbers refer to the centrally managed ‘Senior Civil Service’ that does not include the Diplomatic Service and a number of civil servants that work at a senior level, for example some senior military officials and health professionals, and who are not part of the ‘Senior Civil Service’.

The answer was submitted on 28 Nov 2023 at 17:06.

Answer to My Written Parliamentary Question – Directors

The Cabinet Office has provided the following answer to your written parliamentary question (2437):

Question:
To ask the Minister for the Cabinet Office, how many (a) Directors and (b) Director Generals there are in his Department as of 20 November 2023. (2437)

Tabled on: 20 November 2023

Answer:
John Glen:

As at 31 October 2023, the Cabinet Office employs 74 people at Director level and 21 people at Director General level.

The number of Senior Civil Servants (SCS) stems from our coordinating role at the heart of Government. First, the professional experts who lead functional services across the whole of the Civil Service sit in Cabinet Office (the level of professional expertise required, often recruited from the private sector, means a high number of SCS roles). Second, the Cabinet Office also delivers secretariat functions which need to be led at a senior level given their national significance, including the National Security Secretariat and Joint Intelligence Organisation.

The answer was submitted on 28 Nov 2023 at 17:16.

My Intervention in the Autumn Statement Resolutions (2)

John Redwood (Wokingham) (Con):

 

Underneath the exchanges of words, I welcome the outbreak of agreement, given that the Labour party now strongly supports the idea of helping more people into work. I suspect that the Opposition will not vote against the main items in the autumn statement because they understand that the Government have had success in keeping so many people in work and promoting employment over the years, despite some extremely difficult situations. They also understand that that is an important thing for a responsible Government to do, and not just to get the benefit bill down. As Labour has eloquently said, life can be so much more worth while when people have suitable work, suitably supported, that gives them a sense of purpose and of contributing to their communities.

I wish to draw brief attention to the issue of getting inflation under control and the inadequacy of forecasts by the Office for Budget Responsibility and the Bank of England. It is extremely difficult for Ministers to conduct consistent policy when the forecasts are zinging around so much and giving different and often misleading ideas of what is feasible and what is not. I welcome the other place’s most recent report on the Bank of England, which highlights how the Bank has been unable to come up with realistic inflation reports over the last three years and has therefore taken inappropriate action. First, it loosened monetary policy in the covid recovery phase, and now its monetary policy is too tight as it seeks to adjust its past mistakes. I hope that the Bernanke review will get on with the important task of adjusting the Bank’s models and coming up with a better answer to help guide our counsels, and particularly those of our Ministers.
I find it odd that we have a Monetary Policy Committee that is not interested in money and credit. As the other place‚Äôs report suggests, perhaps it should look at putting money and credit into its thinking‚ÄĒmore diversity of thought is recommended‚ÄĒand into the models to try to get them to work. What is the point of the committee sitting around trying to make decisions if the main data it is using‚ÄĒnamely, what it thinks the inflation rate will be‚ÄĒcan be massively out? It thought that the inflation rate would stay at a pretty consistent 2%, when it was en route to 11%. That was why, for many months, the Monetary Policy Committee did not take appropriate action to rein in potential inflation. Now it is pretty sure that inflation will come under control, but it still has had difficulties and is constantly having to change its inflation forecasts in the meantime, as has the OBR.

The review rightly points out that when looking at money and credit in the economy, we need to look at the experience elsewhere in the world. Of the five most important central banks of the world, including the Bank of England, those in Asia have lived through exactly the same big escalation in food and energy prices as a result of the dreadful war in Ukraine. The two major central bank economies in Asia are very vulnerable, because they import a lot of food and energy, but their inflation stayed around 2%, whereas the three western central banks, including the Bank of England, took much more aggressive monetary action, printing a lot of money and buying an awful lot of bonds, and experienced the inflation rate going up to around 10%. They should pause and ask why.

The review also rightly says that the Bank of England should be more accountable to Parliament‚ÄĒnot to the Government, in any way to prejudice its independence‚ÄĒbecause it is in the process of losing us the most colossal sums of money. Successive Chancellors have guaranteed the Bank of England against all losses from their bond buying programmes, which started under Labour at the end of the first decade of the century and were escalated by the current Government in response to covid. We are now looking at a possible loss of ¬£170 billion, based on the latest figures that it has revealed. Every penny of that has to be paid by the Treasury on behalf of taxpayers as and when it is incurred.

There is absolutely no need for the Bank of England to make those losses bigger and more immediate by wading into the markets at the moment and selling those bonds in a hurry, at very depressed prices‚ÄĒprices that the Bank has deliberately depressed in order to get interest rates higher. It could follow the European Central Bank, which wisely is not selling its bonds at a loss in the market but is awaiting their retirement when they fall due for repayment, when the losses will be less but it can still shrink the balance sheet, which is the main thing it wishes to do.

I hope the Government will look at that, because it has always been a dual-controlled policy: the bond buying required the signatures of successive Chancellors of the Exchequer. It is a matter of legitimate concern for this House when the losses are so colossal, and there is a direct impact on all public expenditure figures, public borrowing and so forth, excluding the Bank of England. As many in the debate will know, we look at the figures both cum the Bank the England and ex the Bank of England. The ex the Bank of England figures look very poor indeed.
I welcome measures in the autumn statement to promote more growth, which is crucial. The way to get inflation down faster is to promote more capacity, so any measure that gets us more capacity is welcome. That is why I am particularly keen that we be much kinder to the self-employed and small businesses. They can do more work immediately, but some of the tax penalties still weigh on them, preventing them from getting self-employed status or winning contracts, or preventing small businesses from growing quickly enough. I repeat my urging for Ministers to look at that: more capacity would be the best way to get inflation down.

I will put in one final plea to Ministers to find some money to cut the taxes on energy. They are making us extremely uncompetitive and are keeping inflation higher for longer. It would be a win-win to get some of the taxes on energy down.

My Intervention in the Autumn Statement Resolutions (1)

John Redwood (Wokingham) (Con):

Noting the good words from the Chancellor in favour of self-employment, and noting the national insurance measures to help, are there things that the Department for Work and Pensions is doing, or can do, so that self-employment is an option for people who are currently without work but who may have a lot to offer?

Mel Stride:

My right hon. Friend is right to draw attention to the self-employed and to the national insurance changes that my right hon. Friend the Chancellor announced in his autumn statement. Of course, my Department does a huge amount to support the self-employed. Many of our programmes are open to self-employed people to ensure that we are there to support them with the wages that they are able to bring home in self-employment, and we will continue to do exactly that.

 

My Intervention in the Autumn Statement Resolutions (3)

John Redwood:

Does my right hon. Friend agree that the problem is that the OBR’s forecasting never gives any credit for cutting a tax rate in order to get more revenue? This could be a good example of where that would work.

Mr Ellwood:

My right hon. Friend is absolutely right. The Centre for Economics and Business Research suggests that there is £10 billion to be made in lost GDP at the moment, as we are not attracting overseas visitors because our taxes are higher than those of our continental counterparts.

 

The Elgin marbles

 The British Museum bought the marbles from Lord Elgin and is the custodian of them. They will need to make decisions about their future.  The Prime Minister does not control the future of these statues.

           When considering their future the Museum has researched how the marbles were obtained. Evidence suggests that Lord Elgin got the permission of the Turkish authorities who controlled Athens at the time to erect scaffolding and carefully remove some of the statues. The Parthenon was in serious decay and remained at risk. Some fragments were resting beneath the building where they had fallen off.  It had suffered from Turkish and Venetian military activity.  It would not have been possible to have spent all the time and trouble on removal, transport to the docks and loading onto a ship  without the agreement of the authorities. Removing them helped ensure their preservation which was less assured given the negligence at the site. These were large heavy objects that needed careful handling and could not have been stolen or smuggled out.

          Athens displays the marbles it owns  in a museum and does not wish to put them back on the building. Athens has copies of the marbles that are held in the British Museum and other overseas displays as part of its display of what the frieze would have looked like.  So to say it is like cutting up the Mona Lisa is not true. Half of the statues are permanently missing or destroyed from the local wars and lack of maintenance in the past. The other half including fragments are split between Athens, London, Paris, Copenhagen, Munich and Wurzburg . No-one thinks the full frieze exists, nor can it  be restored to the building. The British Museum has made clear over the years that these sculptures are an important part of its world collection, properly come by. Athens rightly displays all it can close to the Parthenon along with copies  to give visitors there an experience of what the Parthenon looked like before the wars and the lack of care gravely damaged it.

 

 

 

My Telegraph Article on growth

I am publishing this today as it contains unfinished business on  monetary and fiscal policy.  It appeared in the Telegraph before the Autumn Statement. My schedule got too crowded to fit it in ahead of the Autumn Statement, but the issues deserve a further airing, particularly on bond sales and public spending.

 

 

The official advice in the run up to the Autumn Statement has been well leaked. It all seems designed to stop as many tax cuts as possible, at a time when the public and the Conservative Party are desperate to turn the tide of rising taxes and unleash some growth.

There is the doctrine of headroom. We are told based on OBR forecasts of deficits that are likely to prove as overstated as the past that there is little or no headroom for tax cuts. They never comment that there is no headroom for spending increases, which continue week after week with inflation of costs, plunging productivity and Ministerial announcements.

There is the doctrine that tax cuts cause inflation. Apparently from media accounts of this thinking a cut in Inheritance Tax is not inflationary because the money goes to someone rich enough not to need it or spend it. Any tax cut that goes to someone who does need it and spends it is automatically assumed to be inflationary. Then the same must be true of increases in benefits. I think we can afford some better news for the many with tax cuts that help get inflation down

The official view  is all very bad economics. Money and credit play an important part in inflation. The Uk public sector refuses to apologise for an independent Bank creating huge quantities of money and the state borrowing large sums at near zero interest to spend. Surely these lie at the heart of the inflation we are living through. Japan and China facing the same price rises  of energy and food on the back of the Ukraine war did not have the same inflation we and the  EU had. Their Central banks did not step up the money printing and bond buying.

If the state borrows to spend more on services than it collects in taxes that is not necessarily inflationary. Borrowing the money to pay the bills takes that money away from the person or company that has the savings so they cannot spend it. It is if the banks are  awash with Bank of England created  money and then lend it out as they did for property and other asset purchases that you get inflation. They do not warn us that borrowing more money to spend on state services or benefits is inflationary yet that must be true if tax cuts are inflationary. The aim of state spending is to give employees and benefit recipients more money to spend.

What I want to see is the end to the aggressive selling of bonds by the Bank sending huge bills for the losses to the taxpayer. That drives rates including mortgage rates still higher and flattens the economy more.  I want the bank to be able to cut rates a bit to price mortgages back for people who want to buy a home and to lend to companies that want to expand.

To do so we need lower inflation. So Chancellor, suspend VAT on domestic fuel. Cut fuel duty of petrol and diesel. Suspend carbon  taxes on heavy  energy using industries. These will directly cut the inflation rate. These are tax cuts to bring inflation down sooner and more.

As this happens so the Bank will be able to ease the squeeze. The Chancellor will have some flexibility even on pessimistic OBR numbers. He can add to this by selling all the shares in Nat West. He can delay some spending on carbon capture or turn to the private sector to finance it. He can pursue a drive to get the lost  productivity back in the public services. A recent big fall has cost us around £30 bn extra for doing the same things.

He needs to boost output and capacity in the  economy. More services and goods on offer will help bring inflation down. The quickest and cheapest way to do this is to lift the VAT threshold for small business. Many of them want to do more and have the ability to do so. They do not because  they cannot face all the costs and compliance of registering for VAT.

He should reverse the changes to IR 35 . This measure blocks self employed people from getting contracts from businesses  nervous about being caught up in an argument with HMRC  about the tax Status of their sub contractor. He could lower their National insurance as well to provide more incentive. We have lost almost  800,000 self employed since February 2020. We need to help them back. They would give us more supply, more flexibility, more choice.

Halving inflation this year is welcome but it is not job done. Key to growth and future prosperity is getting it down faster. Then we can have a better money and credit policy to boost jobs and growth. Tax cuts are essential to competitiveness, to promoting self employment and helping small business. Cheaper energy helps everyone, giving hope of a better Christmas with more to spend on good food and presents thanks to lower heating and driving bills. Growth brings more capacity and choice, removing inflation creating shortages

If only the government would break free from the gloomy advice and models at OBR and Bank which have given such wrong forecasts. If we set the same business tax rate as Ireland we would see our business revenues shoot up. Ireland gets four times as much business tax per head as we do by setting a much lower rate of tax.

My Telegraph Article after the Autumn Statement

The Office of Budget Responsibility makes running a consistent economic policy extremely difficult. Their numbers  change from forecast to forecast with wild swings making it impossible  for the Chancellor to know how much future borrowing is likely to be, how much he needs to do stimulate growth and to curb inflation, and what is likely to be the outcome. I have long been a critic of the fiscal rules which seek to ensure debt is falling as a percentage of GDP by the end of a five year planning period. I argue for proper controls on inflation and borrowing for the immediate year of the  budget. Strengthen the inflation target, have a growth target, and have a statement about how much it is appropriate to borrow in the light of debt interest costs.  No-one can come up with a reliable forecast of what the borrowing will be  five years  out. The OBR can stop tax cuts by offering an unduly pessimistic forecast of revenues. The Treasury can try to create more scope for tax cuts or spending rises by putting forward an unduly low figure for spending for the fifth year. The Chancellor needs to make good judgements about how much he should borrow , tax and spend in the first year of the forecast when the forecasters have much more opportunity to get the numbers roughly right. Unfortunately the run of estimates this decade have been far from accurate for the immediate year in question, let alone year five.

The latest OBR forecast is a revision for forecasts made as recently as March 2023. The OBR tells us “The combined effects of the historical revisions and latest outturns leaves the level of real GDP at the start of this forecast almost 3% higher than we thought in March”¬† A fall of 1.1% has become a rise. The government had to live with all the bad press for the alleged bad performance, and the March¬† budget judgement was on the wrong basis. Their views of inflation have gone the other way. In March they said inflation would be well beaten next year¬† and into 2026. Now they tell us it will get down to the 2% target a year later and will¬† not go well¬† below as they said in March. That requires a very different policy response as well.¬† They expect the Bank of England’s base rate to be 100 basis points higher or a quarter¬† up on the rate in the March forecast, and expect longer dated gilt interest rates to be between 100 basis points¬† and 150 basis points higher. That has a direct impact on the debt interest charges which on the official method of calculation are large. The higher inflation rate also boosts those account items as they lump the indexation of debt costs which are not¬† items requiring cash payments year by year with normal payments of debt interest which are most certainly annual spending.

The government is rightly concerned to get borrowing under good control and¬† not to add to the real stock of debt going forwards relative to the country’s ability to pay. The OBR have announced that they overstated the deficit and borrowing for just the period from April to October this year by ¬£20 billion, so why should we¬† believe their five year figure and agonise over it? The deficit mistake is based partly on an understatement of the amount of revenue that existing tax rates will yield.¬† They confess that they greatly understated migration numbers which they use to boost GDP as more people taking more jobs boost output. There are arguments over what the public spending impact of that is, and whether it helps GDP per head as well as GDP. Their report does include a summary of the overall errors in GDP forecasting and shows they have got larger in recent years.

It seems likely the tough monetary squeeze which the Bank is administering will help inflation down some more and will continue to slow activity. It is clearly hitting the housing for sale  market and will drag on some companies ability to expend where they have high borrowings. The Autumn Statement was right to look for ways to stimulate more investment, to help the self employed and small business, and to look for more ways to help people into work. There will only be a stronger recovery when inflation is down enough to persuade the Bank to relax its squeeze. The Bank  like the OBR have had major problems with forecasting. They ran far too loose a policy for too long  because their forecasts said inflation would stay around 2%. Now they run the risk of doing the opposite and running too tough with forecasts that do not properly reflect the slowdown. The Bank is selling far too many bonds at huge losses, unlike the European Central Bank who made a similar problem by creating too much money and buying too many  bonds to create inflation. At least the Bank is reviewing its models and forecasting. Maybe the OBR should do the same.

The idea of the OBR was to have an independent referee or forecaster who could keep the Treasury honest. It can only work if the referee has sensible  rules and gets its forecasts right. If it persists in getting growth, inflation and deficits very wrong it can generate wrong policy responses and can certainly distort the debate about how the economy is doing.  There are always dangers that an independent body formed largely from Treasury officials talking to Treasury officials a lot may not consider other views and other ways of running models that are more accurate. Maybe a truly independent OBR would be bought out by its managers and experts and would be available to offer tailored forecasts for others. I  am all in favour of independent forecasts as a means of exploring public policy and as a check on what governments do and say. I  worry about  an independent body owned and paid for by the Treasury that offers  fluctuating forecasts that are given so much significance when on some of the key variables they are wrong.

My Question to the Chancellor on the Autumn Statement

John Redwood (Wokingham) (Con):

 

I welcome the measures to promote more investment and more growth, which is vital. We have lost about 800,000 self-employed people since February 2020. The national insurance measure will help a bit, but will my right hon. Friend look again at the way in which IR35 prevents them from expanding their businesses and getting contracts? The measures to promote the growth of small businesses are also welcome, but the VAT threshold acts as a strong disincentive to expand a business when it reaches a certain point.

Jeremy Hunt, Chancellor the Exchequer:

I thank my right hon. Friend. I had extensive discussions with him in the run-up to the statement, including many discussions about the self-employed. Indeed, it was partly his advocacy of the role of the self-employed that made me so enthusiastic about making the national insurance changes that I was able to make.

I hear what my right hon. Friend says about IR35. We took our decision partly because of concerns about avoidance, but I am happy to look at that again. As for the VAT threshold, many other colleagues have made the same point. We do have the highest threshold in any major European country, and, indeed, any G7 country, but there is always this issue of the cliff edge, and my right hon. Friend is right to draw my attention to it.

Dublin stabbings and riots

I am not posting contributions on this topic as the Irish police are not telling us who carried out the knifing though they do tell us in general terms who they think were rioting.

I condemn all the violence and law breaking.

Ireland needs to manage its own migration and law and order issues and will want to deal with criminal activity in ways their local laws and Irish public opinion require.