Many people stayed at home or switched to Reform in protest at the big surge in legal migration. Reform had highlighted the numbers of illegals but like the other parties said little about the far bigger numbers of legal.

People were right in seeing difficulties from allowing so many visas to be granted. The country is short of homes, short of water and sewage pipes, short of electricity generation, short of GPs, short of school places. Inviting  in so many people is not fair on them without the homes and services they will need, nor fair on people already here facing high prices for homes and scarce services.

The Treasury backed by most parties and many MPs thought more inward migration welcome to fill poorly paid job vacancies and to add to growth of output. Very few MPs in the last Parliament were willing and able to argue we need higher out per head, not higher output from more low income jobs. It needs investment in more mechanical and digital backup to help people be more productive and to earn better wages.

Every extra migrant adds to the need for more infrastructure, more public service and more highly trained staff like doctors and teachers. So why cannot the parties see what people can see? Why can’t  there more concentration on the need to get numbers well down? Will more make the case for a higher wage higher productivity economy and stand up to interest groups that think the answer to their woes is more cheap Labour from abroad? A large increase in low pay migration means large increases in public spending to provide them with homes and services.

Many voters are angry that the U.K. government allowed inflation to hit 11%. That is part of the reason Conservatives lost so many votes as they were meant to be in charge.

The public also saw that Labour did not warn about the coming inflation to suggest any policies that might have prevented it. Their vote also fell.

The problem went unsolved because most MPs and all parties in the House said the Bank of England is independent, None  of them wanted to challenge let along change the inflationary policy the Bank of England followed. This was both under its own powers and more importantly through the main policy of printing too much money and buying too many bonds which government and Opposition both backed and approved.

There is still no party calling for an end to the sale of bonds in the market at huge losses. This policy is not followed by the European and US Central banks though they made the same big inflationary mistake as the Bank of England. All parties want a better financial outlook to afford more spending and or tax cuts yet none can see how the Bank is sending huge needless bills to taxpayers.

Why? inflation  in Japan, Switzerland and China stayed low despite the war and energy price surge.This shows it was not the war but Bank policy that caused the overall inflation. .

I read there is a debate amongst Conservative MPs over who to have as leader, which goes to the heart of what the Conservative Party should believe and advocate.There is also a debate over the leadership and structure of the Reform party with some wanting a democratic  Party constitution to be introduced.

The One Nation group of Conservatives thinks they lost because they did not move sufficiently in the Labour/ Lib Dem direction. They say the party needs to win back voters from Labour and Lib Dems by moving  closer to their preoccupations and ideas.They want to downplay migration, move closer to the EU, talk more about public services and uphold the European human rights law.

The more conservative minded group thinks they lost because many former Conservative voters either stayed at home or voted Reform. They want a new Conservative Party to have a credible offer of much lower migration, lower tax rates and a more focused state, using Brexit freedoms to promote global U.K.

To help them examine this choice it might be useful to analyse voting patterns in Wokingham, one of many seats that passed from Conservatives to Lib Dems  or Labour.

In 2024 the Conservative vote plunged by 13,336
The Labour vote fell by 2819 , a nearly identical percentage fall to the Conservative vote

The Lib Dem vote rose by 2392

The new Reform vote was 5274

So if you add Lib Dem and Labour their combined vote was slightly down. There was no net switch from Conservative to Lib/Lab. The most likely explanation of changes in their votes is more Labour voters switched to Lib Dem to defeat the Conservatives.

Even if you thought all 2392 extra Lib Dem votes came from Conservatives you still need to explain where the other 11,000 missing Conservative votes went. The most likely explanation for the 13,336 fewer Conservative votes is many of them voted for Reform with the larger number staying at home. This would marry with the national outcome.

The voting pattern means there are many voters who want a more identifiably conservative approach to borders, taxes, economic growth than the last government managed and than Labour is offering. They split between voting Conservative, voting Reform and abstaining. The new Conservative leader will be in a struggle with Reform over who can best represent this group. Both Conservatives and Reform also will be looking for a platform with wider appeal that is compatible with the core economic policy and border controls they need to unite this large group of conservative voters. Reform have added the Lib Dem policy of proportional representation to their offer which complicates their priorities.

The government has got off to a bad start over migration.
It sounds as if they will effectively grant an amnesty to the backlog of applicants who have already arrived illegally. They have scrapped the Rwanda plan which for all its troubles was putting some illegal migrants off coming to or staying in the U.K.

The strategy rests entirely on better enforcement. The previous government spent a lot money and effort on trying to get more collaboration from the French. They claimed a lot of boats were intercepted and gangs prosecuted, but such a lucrative trade produces more organisers. The French coast is long. Yet you would have thought they could intercept the buses that now take people to the boats. With drones and surveillance cameras they should get early sight of boats getting ready to make an illegal run.

Following the money should help as banks are charged with watching out for money laundering. How do they pay for the boats? Why not respond to more of the adverts for the trips?

They need to ask why so many want to come to England? Why is England seen as offering a much better deal than France?

They also need to understand that current levels of legal migration place far too much pressure on housing and public services. They need to tighten the qualifications further compared to the January policy changes.

Bizarre that the U.K. hosted the meeting of 46 leaders of European countries at Blenheim. That great British victory against France and Bavaria was an important part of a war  against Franco Spanish attempts to dominate Europe. Stressing the associations with the Churchill family made everyone think of the U.K. ‘s role in thwarting a later German plan to dominate Europe. These are unhappy memories of Europe’s centralising  thuggish tendencies and of the great loss of life resisting them entailed. Far from showing the U.K. as a friend and partner it reminds of times when the U.K. stood for self determination of people’s and states against those who wanted to create a European tyranny.

Today most of the Europeans assembled wanted to believe they are more united. They were willing to give the time of day to the U.K. offer of closer friendship without making any positive moves of their own. It was a mistake to think this was an occasion to reboot the U.K./ EU relationship when there were 18 non EU members there as well and when Commission President Von der Leyen was absent seeking votes from the European Parliament to keep her job.

The EU / U.K. relationship is set out in ghastly legal detail with the EU wanting to enforce it in ways that suit them. It is not normally a way to a happy marriage for the bigger partner to make the smaller sign a pre nuptial agreement they do not like, nor does it help the marriage if either partner wants to renegotiate. If the government does want to change the costly and unsatisfactory Treaty it will find changes come at a price which will not be worth offering.

The government would be wrong to enter a defence treaty with the EU. Let us stick to NATO and collaborate through that. They would be wrong to join Horizon and other EU programmes, It is cheaper and better to run our own. They are quite wrong to think being closer to the EU will boost our growth rate.The  EU is mired in slow growth and no growth. The single market is no free market. It is a rule bound  customs Union that is hostile to innovation and small business.  By all means have a growth strategy. The more you divert from the EU model the faster you can grow.

I have written to the Chancellor wishing her success in getting the U.K. economy to grow at the fastest pace of the G7 economies. As she says if we achieve that we can afford better public services and infrastructure. We should also boost the after tax incomes of the many and help business grow profitably.

The task is difficult but not impossible. The U.K. along with the other large European economies in the G7 have fallen way behind the USA in GDP per head, with a much slower growth rate this century. The US has raced ahead on the back of nurturing seven world beating digital giants, going for cheap fossil fuel energy produced domestically which it is also now exporting to Europe, and demonstrating leadership in many areas from pharmaceuticals to defence equipment. The U.K. has higher GDP per head than the EU, and has done relatively better at pharmaceuticals and digital technology than the continent.

I suggest the government look again at the control framework for the U.K. The US has twin targets of 2% inflation and growth in jobs and activity. The U.K. government could regard the 2% inflation target as binding on itself as well as the Bank, as government decisions on pricing public services and managed prices have a direct impact on inflation outturns. It could then complement that with a growth target. 2% would be an attainable improvement on the past. Maybe they would need to adopt 2.5% to give us a good chance of outgrowing the US in the years ahead from the lower base.

Of course government should consider OBR forecasts of debt and deficit, as both need to come down as a percentage of GDP. Relying  on their fifth year forecast is not such a good idea, as it is impossible to forecast accurately. If the OBR is too pessimistic it limits unduly choices to pay for a growth strategy.

I am a great believer in democratic parties and leaders telling us clearly what their aims are, and explaining the principles or beliefs that will help guide them. I am a critic of the modern craze to govern by targets.

Let’s consider the target to spend 2.5% of GDP on defence. The aim should be to ensure our country is well defended and can make a good contribution to the NATO alliance. We need first to ask what forces we need, not how much we must spend. If GDP falls or grows slowly the target means we have less defence, whatever the need.

A similar set of objections relates to the target of spending 0.7% of GDP on oversea aid. When this was in place the U.K. ended up backing projects of questionable worth and giving large sums to the UN and EU to spend in ways we could not control.

Worst of all is the deeply damaging national CO 2 target. This is encouraging all 3 main parties in Parliament to back closing down energy and industry in the U.K. to hit our domestic CO 2 target, only to import fossil fuel and industrial products so more CO 2 is generated elsewhere than we save.

The government’s target of growing faster than any other G 7 country is a good aim. It however depends on what 7 other economies do which we do not control as well as on what we do. Were they all to go into recession or slowdown beating them does not give us much growth.

Setting  a target to get NHS waiting lists down a more sensible target as it is under government control and not relative to external events.  Even this has proved to be beyond the U.K. public sector to deliver despite record NHS funding.They cannot even collect and publish reliable and relevant figures on how many are waiting for what. If you want to manage something that is under your control it helps if you can measure it accurately and watch progress.

Cheap plentiful energy is crucial to GDP growth and to the success of any industrial strategy. China achieves it both by relying too much on dirty coal and by buying plenty of discounted oil and gas from countries that are sanctioned by the West for their wars and aggressions in world politics. The USA has achieved it by finding and producing huge quantities of relatively cheap oil and gas for her domestic market, and exporting the surplus to an energy short Europe. Europe has bene lefty struggling with scarce and dear energy. Germany for a time did well out of reliable piped gas from Russia, only to have to make fundamental changes in the wake of the Russian invasion of Ukraine. Relying more on spot market prices rather than agreed long term contract gas proved expensive and troublesome.

The UK has gone for some of the dearest energy in the world by adding to the market costs of the oil, gas and renewable electricity it produces or imports substantial carbon taxes and windfall taxes on producers, and VAT on fuel users. The UK decision to run down its own North Sea oil and gas fields earlier than nature requires has added to costs and imports. The decision to make it difficult or impossible to look for more oil and gas and produce it onshore has added to the strains. The m sot obvious thing a government should do that gives priority to economic growth is to be positive about finding and producing more domestic oil and gas top replace imports. This would not add to world CO2 but reduce it, saving the transport and gas liquefaction generated CO 2  on the imports.  A larger UK oil and gas sector would generate a lot of better paid jobs, boost overall UK productivity and contribute substantial tax revenue to the Treasury.

The UK needs to be realistic about the costs of early switching of electricity to renewables from gas. There needs to be more progress globally with improving and lowering the cost of storage of power generated when the weather is good for the purpose. There needs to be proper accounting for the costs of stand by gas power stations for days when wind and sun disappoints. Maybe there needs to be a general move to synthetic fuels s is planned for aviation, so the extra renewable power can be used to manufacture hydrogen and other derivatives that are storable fuels. Green jobs or green led growth will require decisions on what are the winning and affordable technologies and then government assistance in their roll out. Do we, for example, want a full roll out of charging points for electric cars, or would it be better to roll out hydrogen fuel distribution as it will be needed for trucks and could be sued for cars as well, just as petrol and diesel are today.

The immediate task for an Industrial strategy must be to get the taxes and prices for fuel down for manufacturers. The UK is losing its steel industry, has lost all but one of its aluminium plants, is losing ceramics, cement, paper and other heavy energy users thanks to skyhigh energy costs.

Nigel Farage bid for seats in the election by saying he would lead a strong opposition to the likely Labour government. The Conservatives countered by saying only they could win enough seats to form a strong opposition, which is manpower hungry in a Commons full of debates, committees and question sessions that need staffing.

It will be interesting this first week in action for the new Parliament to see who does best oppose. Reform start with many institutional disadvantages that come from having so few MPs. It means if they want to be a more visible and sometimes audible presence they will need to be there all the time, rushing from debate to committee to Westminster Hall to cover the ground.

The Conservative Leader will get 5 questions at every PM Questions, and the Lib Dem’s will follow as third party. Reform  MPs will get occasional chances of a single question  like other backbenchers but will not get a weekly slot.  The Conservative  lead will get first slot with time for a considered response on  Statements and main debates. Conservatives will be represented on all Committees. Reform will only be on a few committees and will be lowly ranked for main debates and Statements.

This week Nigel Farage will have to find a way to make an impact on the King’s speech debate, the crucial debate about the new governments plans and legislation for the upcoming year. Will he be able to speak on the first day sometime after the PM , Leader of the Opposition and other senior MPs/ Privy Counsellors? What will be his main thrust? Will he have briefed the press and given interviews in advance, chancing what might be in the speech? If he speaks later it will get less pick up without pre briefing. Will other Reform MPs try to speak on later days of the debate to cover the different topics highlighted, as the official Opposition will do? The government speech appears to have been much briefed or leaked.

The Leader of the Opposition has time, stage and audience to make an important speech in the first response to the PM. It will be in good time for early evening broadcasts and for the Thursday papers. He needs to deal swiftly with the past and the election, moving on to tell us what they agree with and what they will oppose in this government’s approach. Today should be an important day of preparation and briefing for both Mr Sunak and Mr Farage.

It is quite wrong for people to say this is the worst financial inheritance for a government. U.K. finances were much worse in 1979 after Labour’s visit to the IMF for a bail out and aggressive over spending and borrowing. It was worse in 2010 when the outgoing Labour Chief Secretary to the Treasury said there was no money left. The U.K. was wrestling with recession and near bankrupt commercial banks needed hugely expensive  taxpayer rescues.

In 2024 we have just witnessed 5 years of a large increase in public spending, partly paid for by tax increases. There is plenty of money being spent, but a lot of the spending is misdirected or wasteful.The government needs to sort out spending priorities and redirect cash.

It should tell the Bank of England to halve its losses. That would save taxpayers around £15 -20 bn a year. Following European Central Bank policies would save us by not selling bonds in the market and reducing the running loss on holding bonds,

It should aim to get public sector productivity back up to 2020 levels within two years, when it would then be saving £20 bn a year.

It should make a major reduction in legal migration for lower paid jobs, allowing substantial savings on social housing capital and revenue budgets and all the other capital and revenue costs extra people bring.

There’s a £50 bn redirection to allow government to pay medics more and to build more new public sector facilities.