John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems

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Easing road congestion

Road congestion stems from three main  causes. In some cases it is a simple lack of capacity for ever growing traffic volumes. Governments accepting large numbers of new people to the country every year need to upgrade road space as well as adding extra NHS and schools capacity.

In some cases it is the deliberate mismanagement of traffic on the existing roads. There is the endless substitution of traffic lights for roundabouts to delay vehicles, allied to poor timing of traffic light phases. There is the failure to provide left hand turning lanes and filters, or to segregate right hand turning traffic which may not be able to  turn when the light first changes to green. There is the deliberate reduction of lanes on busy roads causing delays in traffic merging. There is a failure to supply alternative cycle lanes to prevent friction between bicycles and motor vehicles.

In other  cases it is temporary disruption. It may be  caused by Highways works with missing lanes and temporary lights. It may be the joint decision of utility companies and Highway authorities to place most cables and pipes under main roads and to insist on digging up the roads every time they need access to their systems instead of placing utilities in locked conduits with easy access. In some  cases it is the decision of taxis or delivery vehicles to double park to offload, blocking the highway. In some  cases it is not allowing pull ins for bus stops.

I am going to produce few blogs examining how some of these problems can be reduced, and set out how a Highways authority that did want to cut congestion could make a difference.

Why do so many Councils hate vans and cars?

Next week when the effectively nationalised and heavily subsidised railways go on strike more people will need to use a motor vehicle to go to work. Once again our personal transport will be the ever reliable necessary back up.

Many people need to use their vans and cars all the time to go to work, to take children to school or to carry the weekly shop back from the supermarket. The plumber, decorator, domestic appliance engineer and other home service providers need to travel with their tools and spares and need to get round several clients a day. Only a van can do that. If a parent needs to drop children off at a school not near a station and get to a place of work not near a station they need to use a car.

Private sector businesses like supermarkets, DIY sheds, garden centres and other retailers that want to make life easier for their customers provide large car parks next to the shop entrance. They do not cluster near a station or expect most shoppers to come by bike.

The Times yesterday asked people to select their main travel mode in a poll. When I read the article 63% said the car. So why then do so many Councils tax us to make it more and more difficult to drive anywhere? They specialise in cutting roadspace for cars and vans, in creating junctions that cause needless congestion, they rephase  traffic lights to impede main road flows, reduce parking facilities and turn municipal car parks into technology nightmares to catch more people out with penalties.

They would say they are implementing environmental policies to get people to leave the car at home and take the bike. If they clog the cars or ban them altogether or tax them too much surely people will go by bike? Why do they think that? How can the plumber get there by cycle with all his kit? How can the Mum shopping for four put all the food on a bike carrier? How can a parent get children to school and get to work by bike?

Councils are meant to serve the public, not disrupt our lives. It adds to the  insult when they send us a huge bill for trying to stop us getting around. No wonder some town centres struggle for custom because people cannot easily get there and cannot find good parking if they do. Councils  should study successful retailers who do let you drive to the store and park free by the door. It is a very popular model with the public. Fewer obstacles on the roads and less congestion would also be good for the environment, cutting fuel use and exhaust gases.


My Question to the Chancellor about the Bank of England’s loss on bonds

Treasury has provided the following answer to your written parliamentary question (11535):

To ask the Chancellor of the Exchequer, what his latest estimate is of the Bank of England’s loss on bonds held in the Asset Purchase Facility guaranteed by his Department. (11535)

Tabled on: 01 June 2022

John Glen:

To date, £120 billion has been transferred to HM Treasury from the Asset Purchase Facility (APF) which has been used to reduce the government’s debt issuance. The size of future cash flows is uncertain and depends on developments in Bank rate, the speed of APF unwind, and the evolution of bond market prices. It is likely that as monetary conditions normalise HM Treasury will make cash transfers to the APF to cover losses.

However, the eventual size of the net payments to or from HMT should not be used as a measure of the success of asset purchases, or of the impact of the scheme on the public sector accounts as a whole. The scheme should instead be judged by the degree to which it helps the Monetary Policy Committee meet its objectives.

In their most recent forecast in March 2022, the Office of Budget Responsibility forecasted net cash transfers from the APF to the Treasury of £3.5bn between 2022-23 and 2026-27.

The answer was submitted on 13 Jun 2022 at 13:35.


Response. ¬†This answer seems to imply the recent forecasts were wrong and we are now entering a time when the Bank’s losses the bonds it holds requires Treasury transfers. every time the Bank raises interest rates bonds sell off leading to losses on the Bank portfolio.

My interventions about the future of Channel 4

Rt Hon Sir John Redwood MP (Wokingham) (Con): Many fine British businesses have grown, flourished and invested far more once being privatised, and I hope that this one will too. But will the Secretary of State see, during the privatisation, whether there is a way of allowing the people who work for Channel 4 and do so much for it to gain participation, perhaps partly by buying and partly by gift, so that they become shareholders in whatever entity emerges?

Nadine Dorries, Secretary of State: I will go on to talk about the fact that we have many bidders who are looking at purchasing Channel 4, and we are looking at all options before we bring the matter to Parliament to see what is on the table. But for the sale of Channel 4, as it says in the ‚ÄúUp next‚ÄĚ White Paper, what we are looking at is to sell Channel 4 as a¬†PSB. Therefore, I do not think the model that my right hon. Friend outlines briefly would be conducive to that sort of purchase. We are going to sell to an organisation that will invest in Channel 4 and keep it able to make those distinctive programmes.

Rt Hon Sir John Redwood MP (Wokingham) (Con): Has my right hon. Friend noticed that the Opposition think that they know better than the audience what Channel 4 should show every evening? Is it not a good idea that we move to a model where the owners engage with the audience and try to grow the audience, because that way they will attract more revenue?

Nadine Dorries, Secretary of State: We agree on many things, and we agree on that.



The Bank of England writes another letter

The establishment  states that the Bank of England is independent and is responsible for keeping inflation around 2%. The authors of this relationship did foresee the possibility that the Bank would fail to achieve its single objective. Their remedy was to make the Bank write a letter to the Chancellor, who in turn was empowered to write back. We have just seen another example of the letter writing arts of the two parties. The constitutional position has in fact been that the key decisions of how much money to create and how many bonds to buy, the main drivers of Bank policy in the last 13 years, have been joint ones requiring Treasury sign off.

When you get to letter writing stage it is clear the Chancellor becomes part of the decision process, with the formal opportunity given by way of public letter to criticise, influence, support or reprimand. So far these letter exchanges usually show the Bank offering some excuses for failure to keep inflation down and saying something vague about how they might remedy it going forward. The Chancellor often agrees whilst placing more accent on the excuses or more emphasis on the need for future action depending on what he wants next. No-one can read these exchanges and seriously say the Bank is completely independent. They must accept the ability of the Chancellor to write a public letter invites him or her to influence analysis and policy at a time when the Bank has clearly failed to carry out its single task. If some other Governor in the future had wantonly failed to curb inflation the letter could be the last straw presumably leading to replacement of the poor performing Governor. The government after all owns the Central Bank and appoints its boss.

So what should we make of the latest round of letters? I was disappointed but not surprised that  neither side mentioned the fact that they had jointly agreed to create so much money and to go on buying up bonds for so long.  That might have affected inflation. Neither side mentioned the rapid rate of money growth during the intense Quantitative easing period or thought that  might matter. Neither side made any forecast of what might happen to credit and lending from here or what role the large savings balances of the better off part of the population might play going forward.No-one asked why Bank and OBR forecasts of inflation have been so hopeless.

Both accepted that the obvious large price rises in energy and food played a part more recently following the Russian invasion of Ukraine. Neither asked why China and Japan, large importers of fossil fuels themselves, still have inflation around 2%.

The inflation was mainly¬† fuelled by last year’s policies. This year policy is much tighter, and the Bank itself expects inflation to come down next year. If in the next few weeks inflation does not embed and inflation expectations do not climb, the economic policymakers will need to address a shift from too hot an economy to potentially too much of a slowdown.

My Question to the Chancellor about the difference in taxes taken in 2022 compared with the last Budget forecasts

Treasury has provided the following answer to your written parliamentary question (11536):

To ask the Chancellor of the Exchequer, what recent estimate he has made of the difference in tax taken from (a) VAT on fuel, (b) North Sea oil production and profits taxes and (c) all taxes on petrol and diesel sales in 2022 compared with the last Budget forecasts. (11536)

Tabled on: 01 June 2022

Helen Whately:

Forecasts for Government tax revenues are provided by the Office for Budget Responsibility (OBR).

Their most recent published forecast, provided for Spring Statement 2022 on 23 March, is available on the OBR website at the following link

For the financial year 2022-23, Value Added Tax is forecast to be £154.2bn; UK oil and gas revenues are forecast to be £7.8bn; and fuel duty revenues are forecast to be £26.2bn. An updated forecast will be published by the OBR at the next Fiscal Event.

HM Revenue and Customs publishes monthly tax receipts statistics, including for UK oil and gas production, VAT, and fuel duties, on a cash receipts basis, at GOV.UK at the following link

The answer was submitted on 13 Jun 2022 at 13:40.


JR Reply VAT on domestic fuel must be delivering considerably more VAT now the typical bill has gone up by 50%. VAT on petrol and diesel must also be substantially up  on forecast now pump prices are in the 180s and 190s.

My Question to the Chancellor about the potential effects of a windfall tax and a planned increased corporation tax

Treasury has provided the following answer to your written parliamentary question (11537):

To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the (a) windfall tax on oil and gas producer profits and (b) planned increase in corporation tax on the UK’s position in global league tables of the best places to do business. (11537)

Tabled on: 01 June 2022

Helen Whately:

The UK’s oil and gas ring fence tax regime balances attracting investment with ensuring a fair return for the nation.

The Energy Profits Levy is an additional, temporary tax which reflects the extraordinary global context. It will raise around £5 billion over the next year. The OBR will take account of this policy in their next forecast.

The UK’s rate of Corporation Tax is currently 19%.

To balance the need to raise revenue with having an internationally competitive tax system, the Chancellor announced at Spring Budget 2021 that the rate of Corporation Tax would increase to 25% from April 2023, after the point at which the economy is expected to recover to its pre-pandemic level. 25% is the lowest rate of tax in the G7.

The answer was submitted on 13 Jun 2022 at 13:47.



JR Response   The Minister does not tell us what impact a 31% increase in the corporate tax rate will have, and omits the possibility that the windfall tax on oil and gas will run for three years, not just one. These changes must have an adverse impact on investment.

My intervention to the Home Office Minister about the total cost of setting up every economic migrant upon arrival to the UK

Rt Hon Sir John Redwood MP (Wokingham) (Con): We all wish to end abusive people trafficking and the dreadful journeys across the channel. As the Opposition’s only idea to tackle it is to let in every economic migrant who wants to come, will the Minister tell us how much it costs taxpayers in Britain to set up every economic migrant in decent circumstances when they arrive?

Tom Pursglove, Parliamentary Under-Secretary of State: It is fair to say that the costs associated with this illegal migration to our country are considerable and unsustainable. That is why we have the new plan for immigration in place to get it under control and ensure that those who follow the rules and seek to come here through safe and legal means are not disadvantaged by those attempting dangerous and unnecessary crossings as we have seen. For example, we are spending nearly £5 million a day on hotel accommodation in the asylum system. That cannot carry on, and that is why we must act as we are proposing.

My intervention to the Treasury Minister about the Government’s big increase in tax burden

Rt Hon Sir John Redwood MP (Wokingham) (Con): Why are the UK Government the only Government of an advanced country making a big increase in the tax burden this year and next, at exactly the same time as we are seeing very necessary monetary tightening to control inflation and a huge hit to net incomes from that inflation itself? Is that big tax rise not bound to make things worse and slow the economy too much?

John Glen, Minister of State (Treasury): We always listen carefully to my right hon. Friend. As he will know, we cut taxes earlier this year for hundreds of thousands of businesses though an increase in the employment allowance. We have also slashed fuel duty and halved business rates for eligible high street firms. We will continue to support growth through tax incentives, including the annual investment allowance and the super deduction‚ÄĒthe biggest two-year business cuts in modern British history.

As I said in my response to Mr McFadden a few moments ago, we look forward to working closely with him and Back Benchers to construct the right agenda going into the future.

Where all the money is going and what should be done. Making state services more efficient

Please find below my latest article for Conservative Home:

This government has been generous with taxpayers’ money. Record sums have gone into the NHS, alongside the huge amounts spent on Covid measures. Extra money has been allocated for the police, defence, levelling up. and other priorities. Despite this, NHS waiting lists have surged, our armed services are shrinking, we struggle for skilled people to fill thousands of jobs and the (effectively nationalised) railways are perpetually striking to resist changes that would boost productivity.

This century, our public sector has seen productivity gains come to a halt. The latest ONS publication on the subject is dated 7 April 2020. The long-term graphs included show that from a base of 97 in 1999, productivity had just managed to reach an index level of 100 twenty years later. There are some in the public service senior management who think productivity does not apply to them.

By associating productivity with cost-cutting, those managing our public services have not learned that good productivity programmes aim to improve quality whilst reducing costs. Concentrating on good outcomes cuts complaints and remediation costs. Employing fewer better-trained and better paid-people for any given task often raises customer quality, improves motivation and performance, and leads to more growth of the business as a result. Productivity can be raised by applying the right technology, automation and machinery to tasks and training people better to do the tasks only people can do.

Some claim that the public sector requires a high ratio of staff to users for the best service. Whilst limiting class size in schools can improve the quality of each pupil’s experience, learning experiences can also be enhanced by giving pupils remote access to star lecturers, or by using digital lessons that are not as staff intensive. Many like access to a named GP or hospital consultant if they become seriously ill, but also approve of new opportunities for phone calls or online links to their GP for advice or  treatment. The railways should also be an ideal industry to embrace automation to improve safety and raise productivity.

The government is right to seek better control over public spending after the huge expense of tackling Covid. The first reductions were easy: removing Test and Trace and scaling back the vaccination programme after most people had received three jabs. But there is more to do. The Secretary of State needs to take a tougher interest in the amazing array of administrative and policy jobs still being  advertised for various health quangos. I have twice now asked Ministers to tell me how many Chief Executives there are of health bodies in NHS England.

As they are all clearly drawing large salaries you would have thought the NHS would know. But on each occasion they have replied that they do not. No large private sector organisation would employ CEOs without knowing how many there are, what they cost, and what they do.  It was particularly strange that one of these exchanges was debating a report into the senior management of the NHS, which should logically begin with its size and cost.

My next recommendation to curb spending targets the million people on out of work benefits whilst there are far more than a million job vacancies. Both the individuals and the public finances would be better off if they took those jobs. The pre-Covid checks and support offered to job seekers must be reinstated and improved so we can take advantage of these plentiful vacancies.

When it comes to handing out money, the Treasury could offer ways that cut government costs rather than raising them. Its wish to offset the high price rises for fuel by sending one off payments to people based on various criteria is more expensive than reducing taxes on the specific items. The Treasury also adds to costs by inventing new taxes when it should concentrate on economic growth and the large revenues generated from pre-existing taxes. Recent and upcoming Treasury reforms will make tax collection less efficient and add to compliance costs. It does not set a good example for Whitehall.

With the Government hoping to extend home ownership, it would be wise to review the number of permits granted to people to come and live and work in the UK. The current rate of admission requires the UK to build many extra homes, to construct additional school and healthcare capacity, put in extra roads and much else to accommodate the rising population. All this requires substantial up front capital to be provided, and adds to demand side market pressures  Accepting a slower rate of population growth would relieve some of the pressure and cut the need for additional public sector capacity.

The government should review quangos and contract terms for Chief Executives of agencies and public bodies. It should slim down the number of bodies, transferring more to central Whitehall and the existing team of senior managers, and amalgamating elsewhere to cut overheads. Doing more better with existing resources should be a normal expectation in many areas, as it is in the private sector. The public sector pays large salaries to some of the chiefs of the larger trading bodies but often does not get the performance from them you should expect from such well paid individuals.

There have been long-running problems with public procurement. Most of the system is run by officials to avoid allegations of favouritism in contracts. There should be methods to ensure the system is capable of delivering great quality and a good price for all that government buys. It should also ensure domestic supply and access to technology is properly looked after in a competitive process. Importing too much is often not the cheaper option in the long term, is subject to overseas supply interruptions, entails more transport cost and undermines the domestic industry and tax base.

There is a big productivity agenda to make government better that the government needs to take seriously. There are plenty of Ministers. They should be charged with the task of raising the quality and volume of output we get for the large resources now committed.