In 1973 when the UK joined the European Economic Community it had to impose tariffs on Commonwealth countries, put in VAT and confine its free trade ambitions to the European continent. There was a sense of betrayal in New Zealand and Australia where they saw Europe replace themselves in crucial export areas like food. The UK was brusque and unhelpful to those countries that had done most to stand by Britain, especially during the long and brutal second world war when the UK was fighting against Germany and Italy, two founders of the EEC.

Winston Churchill put out many ideas about the future and about how the world might develop. He did envisage a European Union, though any careful reading of the relevant speeches makes clear that was for the continental countries and did not include the UK herself. His work has been much traduced since by those who claim he was an early pioneer of the EU. To reinforce the point Churchill wrote a long four volume history of the “English speaking peoples”, not of the Europeans. That concluded that he thought there would be a union of the english speaking peoples and it would begin as a defence alliance.  All his life he had closest affinity with the English speaking world, from his family and strong political links with the USA through his early adult life in South Africa to his passions for Empire and then for Commonwealth.

Today this takes shape. The UK is a member of the five country 5 Eyes alliance for sharing deepest intelligence with the USA, Canada, Australia and New Zealand that goes beyond what NATO members share. There is the 3 country Pacific AUKUS defence alliance with the USA and Australia. The USA and UK have been the leaders of NATO, given the French on off involvement and wish to create a separate EU defence arrangement. The TPP with a services chapter missing from many EU trade deals is more suited to the UK needs and may attract the  USA as a member to join the UK, New Zealand and Australia.

I do not myself favour unions of states and do not expect an eventual union of the UK with either the English speaking world or Europe. You do not need to be governed by trade partners to trade with them. Most jobs and income in the UK will continue to depend on home UK trade.

 

In our later years in the EU it was becoming a problem that the Uk was in the EU but not in the Euro. There were meetings the UK had to leave early when they wished to go onto tackle Euro issues. There were programmes they needed to complete their political and monetary union that the UK did not want to join. There was a burgeoning set of debts and transfers that sharing a currency necessitated.

Since we left the EU has been freer to get on with the necessary increased EU level government to underpin the currency union. The EU needs larger transfers from  the richer parts to the poorer parts as we have in our sterling currency union and the US has in its dollar union. The system kept going in the past through allowing the countries in need of more financial support like Greece, Spain and Italy to borrow at zero or low cost from the European Central Bank, drawing down surpluses deposited by Germany and the richer members. What was planned as short term and limited facilities to ensure the Euro deposits were honoured throughout the zone became a long term cheap financing facility. Germany today has contributed 1.25 trillion euros through the ECB. As interest rates rise this becomes more problematic.

Now the EU is relaxing the former constraints on more state debt by two main means. It is introducing large borrowings at EU level, with Euro 800 bn of new borrowings planned under the NextGenerationEU green energy led development projects. It is relaxing the limits placed on running deficits at 3% of GDP and on the stock of state debt at 60% of GDP. Each country will be able to agree with the EU laxer debt totals for policies the EU likes. As a result total debt in the EU will grow, and each member state in the system will be jointly liable for the growing EU debt .

The European Central Bank has stirred itself to a rare criticism of the EU, reminding them that too much debt is undesirable and asking them to retain some controls over the total level of state and EU debts. The Bundesbank has gone further, condemning the move to more borrowing. The UK no longer has to pay its share of a fast rising budget, nor accept liability for any share of EU debt now being accumulated. I am glad we have shed these risks, and glad our former partners can now pursue their debt union without a UK brake on the budgets as that seems to be their desire.

One of the biggest Brexit wins so far is avoiding many billions of extra debt as the EU borrowings grow rapidly.

Our period in the EU led to the loss of substantial market share in many important areas of economic life. In the first ten years in the EEC our car output halved, before the Thatcher government helped rebuild the industry by inviting in large Japanese producers. German and French cars proved too competitive for the largely nationalised UK industry on entry when the tariffs came off. We lost a large part of our steel industry to more competitive German steel. Under Labour and under Conservatives the progressive closure of most of the large 5 integrated works of the nationalised industry occurred with continental steel replacing some of the lost output.

Our fishing industry went from producing more fish than we consumed to losing large amounts of capacity to foreign vessels under the Common Fishery Policy. Our ports were drained of trawlers and we turned to importing more of what we ate. Large industrial trawlers from the continent , some over 100 m in length were allowed to hoover up too many fish and do damage to the fishing grounds. Our natural resource was plundered.

Our farms suffered under the Common Agricultural Policy. We lost about 25% market share as the EU paid grants to grub up our orchards to import apples and pears from elsewhere. Fruit, vegetables and flowers from expensively heated and subsidised greenhouses in Holland took market share. Vegetables and fruit from hot Spain, short of water, replaced English produce on supermarket shelves. Our beef industry was damaged by an excessive response to BSE, and our dairy industry cut back by inadequate quotas.

Our chemical industry wilted under pressure from German competition. We even started importing more heavy building materials products that we had been able to make for ourselves before. The UK moved rapidly into a large and permanent deficit on goods trade account with the EU. Our trade with the rest of the world grew more quickly and was often in balance or surplus, not deficit.

Today we could change the rules and the pattern of subsidies to produce more of the above. The government should work harder on encouraging more home grown and home produced items as other countries are visibly doing. The threat to ban all new diesel and petrol car sales here as soon as 2030 will undermine our car industry further and needs to be lifted. The pattern of farm subsidies needs to be radically shifted away from wilding and environmental grants to food producing grants. Over 100m fishing boats should be banned. There needs to be a scheme to help set up a new UK fleet of sea going trawlers to catch more of the allowable total in our own waters.Our high energy using businesses should be freed of the burden of extra carbon and emissions taxes. These serve to increase not reduce world CO 2 as they force us to rely on imports with extra transport costs.

The big decline in public sector productivity over the pandemic, and the failure to get back to previous levels now we are well past lockdowns is disturbing. The government needed to accept the Pay Review Body recommendations, as it did last year when they were tough on staff. It also needs to impart a something for something approach to senior public sector management so better paid and better motivated people deliver more.

In parts of the public sector leaving rates are high and sickness rates are high. These are usual signs of low morale that can become self reinforcing. If too many people leave or are absent the rest of the staff feel put upon and may have unrealistic workloads. If too many people feel  their grading and job specification is unfair there will be more people leaving. If an organisation has to rely on temps and recently appointed staff too much it will be more difficult to get things done efficiently and smoothly. Experienced staff will need to devote more time to informal training and mentoring to get things done reducing their own effectiveness.The NHS employs far too many temps at agency rates well above regular wage levels for the same job as a result of not retaining enough payroll staff.

The NHS workforce plan sets out to tackle some of these issues,  but it will only succeed if management buys into the need to ease the tasks of the medical staff, provides good back up and removes some of the burdens of form filling and training not central to the medical tasks of treating patients well. Management success requires each team member to feel they are valued, to know they are good at what they do, and to take an individual and a team pride in delivering great quality at a realistic cost. Promotions, rosters and back up need to  be organised to get the most out of people, the most important resource of these public services.Senior managers who cannot lead the staff, end the strikes and raise morale need to be trained and mentored to do so, with bonuses and promotions dependent on success.

 

The UK and much of the EU needs to wake up to the reality that China has gained control over much of the raw materials and fabrication capacity to make vehicle batteries for electric cars. China is about to unleash more competitive car products onto the wider world market, from her large home base where electric cars are already a quarter of new car sales. Indeed a Chinese company acquired the MG brand to have a more familiar name on some of their products for a western market.

The UK and other European countries that do make cars are in a scramble to attract investment in electric vehicle assembly, and in battery and component manufacture. Much of the value of an EV lies in the large battery which typically forms the base plate or chassis of the vehicle. Making this is central to making an electric car and confirming it is a UK or EU product with sufficient added value from local sources. There is also a scramble to acquire lithium, nickel, graphite, copper and manganese amongst other materials to produce the batteries. There are sources of these in  friendly parts of the world, but for the time being China dominates in turning the products from the mines into the usable metals.

The result is a subsidy war, just at the time when the last thing the UK government needs is more demands for public spending. The problem with excessive subsidy is it allows a private company to invest with less concentration on how commercial the product will be and with less discipline over how the investment pounds are spent. The taxpayer is a co venturer taking much of the risk but not eligible for any of the reward should the investment pay out well.

The truth is the western industry is not ready for an early ban or withdrawal of all new diesel and petrol cars which several companies here, in Germany and elsewhere  have excelled in making. The UK should put back its ban which will now act to divert private sector investment away from the UK and will terminate successful factories prematurely. The UK and other European countries also needs more time to make provision for more electric cars. It will require a huge expansion of both generating capacity and grid capacity to provide the power to recharge a large fleet of electric vehicles. It will also give the industry more time to design affordable popular electric cars that people want to buy. They cannot make people buy new electric cars,but they can lose us a lot of jobs and prosperity by early bans.

The government should scrap the proposed penalties from next year on car producers who do not sell 22% of their cars as so called net zero vehicles. Not enough people want to buy all battery EVs. They are anyway not net zero. They run off a grid dependent on gas, wood and coal for much of its power.

We should be grateful to the voters of Uxbridge. They have posed the main parties some important questions about environmental policies – even though the one most in question was in pursuit of the admirable aim of cleaner air. Many voters objected strongly to imposing a heavy charge on the owners of older vehicles, trying to force them off the road at a time of cost of living pressures. It is not a good look to undermine the precarious budgets of those who need to use an older car or van to earn a living at a time of high inflation. By definition, they cannot afford the newer greener vehicles that the Mayor of London insists on, leaving him defending a policy of cars for the better off only.

This result will lead to a wider rethink of green issues. The Government does need to reconsider some of its policies undertaken in the name of net zero. It has listened to those of us who pointed out its former policy of leaving more of our domestic gas and oil in the ground will increase world CO2 output in a self-defeating zealotry.

And for as long as most people have gas boilers at home and industry fires its factories with fossil fuels, our choice is not to use less of them. It is: do we import more or produce more ourselves? Importing gas in LNG form generates more than twice as much CO 2 as piping our own gas to users, thanks to the energy it takes to liquify, ship and convert back. Some say that the cost can be several times as much CO 2. Far better then to pipe our own gas and spare the CO2. It also is far better in every other way. We get more better paid jobs at home, far more tax revenue from taxing the production and a big saving on the balance of payments. Another net zero idea which produces more CO2 is to spend UK grant money on stopping farmers in the UK growing food or rearing animals, only then to import the food instead. All those extra lorry miles and shipping routes burn more diesel in transport. And once again we lose the jobs, the investment and the tax revenues at home whilst adding to our balance of payments deficit. It is time to spend the grant money on investing in more automated and modern home food production instead.

The UK imposes the highest carbon tax and most penal emissions trading of the main economies. This makes such UK industries as steel and ceramics uncompetitive here. Government is then forced to hand some of the tax back as subsidy. Furthermore, there is the loss of more UK capacity, leading to more imports of high energy based products. This, too, can often increase total world CO2, given the extra fossil fuel consumed in long distance transport. We may also be importing from factories and furnaces abroad that generate more CO2 from their processes.

The way to net zero requires many more people to change their heating from gas to electricity, more electricity to come from renewables, more transport to be electric and more people to eat less meat. All this requires innovation and new products. Voters cannot afford some of the current green options, if they think they are inferior to what they already have.

So if the UK persists with the idea of banning new gas boilers as early as 2025, people will not be persuaded that heat pumps are cheap enough or good enough. They will make do with their old gas boiler. If the Government stops the sale of new petrol and diesel cars in the UK in 2030 before the other main car producing countries do, we will face early collapse of our car industry. Customers will want to buy nearly new imported petrol and diesel vehicles from countries that have not banned their sale.

The UK could help to find new products that work and are sensibly priced. Our innovative businesses, entrepreneurs and academics should be encouraged to do so. Government can use research grants, low business taxes and pro-innovation policies to resolve the difficulties. It makes little sense to plough on with taxes and bans that clobber our jobs and tax revenues whilst increasing world CO2 as we become ever more dependent on imports.

Government also needs to review its often speculative or poorly directed spending on net zero projects. Unresolved questions such as whether electric heating or hydrogen heating will prove more effective need answers that worldwide research and development can help determine. The Government should not think these can all be sorted by its grants and directions, given the scale and complexity of the task. It needs the best of large company research and entrepreneurial flair worldwide to drive a successful revolution. Government has not had to tax, ban and subsidise people into using mobile phones and laptops. Where is the iPad of the domestic heating world or the Beetle of the electric car ranges? That is the crucial consumer challenge on the road to net zero. More UK imports will make things worse, not better.

Every UK citizen  has a  right to a bank account here. Mr Farage praised the UK government today for its words and actions  over cancellation of accounts. The Nat West CEO has apologised for her conduct and left the job. I have not been involved in this issue but post this so people can comment on the matter if they wish. As usual contributions making personal attacks  and unsubstantiated allegations will not be posted.

There are pressures today to identify core public services and claim they need to  be nationalised again. The list is often strange. Water is on  but food is not. Rail travel is on but air or road travel is not. Electricity is on but broadband is not.

As I was pointing out yesterday there are very few monopoly provided services using state employees and equipment and offering a free service. We could not afford many of them given the large tax costs they entail. Prices that people have to pay provide a necessary curb on excessive demand in many cases and send signals about scarcities. Whilst the UK has made clear it has no wish to ration health care by price when people are in need of  care and help, it is generally agreed that for most things in life charging makes sense. To make sure people can afford enough of the  basics like water and energy all parties believe in income support, minimum pay and other means to ensure people can afford what they need. Offering free power or water  to the family that can afford the heated swimming pool or the six bedroom mansion would not be a good idea.

So the case for nationalisation is the case to restore public monopolies that have powers to charge people for energy, water or whatever they produce. When we had public monopolies for water, energy, and some transport modes in the 1960s and 1970s  there were constant problems. These bodies did not do a good job in keeping prices down. There was no competitive threat to keep them honest or to press them to greater productivity. Rail fares, water and power bills often went up too much and there was little anyone could do about it. There was  no opportunity to switch provider.

Nationalisation was bad for innovation and investment. Our telecoms system fell way behind the USA in terms of technology and efficiency, sticking with electro mechanical systems when the US was going electronic. Our electricity industry stuck with inefficient and dirty coal stations. Our water industry carried on running a pipe system that was creaking from age and inadequacy. They rationed access to a phone making people wait for a line or sharing a line with the neighbours. Water was often rationed in a dry summer with hose pipe bans or worse. The nationalised industries were always at the back of the queue for extra money to invest behind key services like the NHS and education. All their capital had to  be approved and formed part of the state  budget.

Service levels were often disappointing. The water industry regularly fouled our beaches . Trains were often late or cancelled. The telephone system limited the devices you could add to the network and could not provide good quality data lines for business in some cases.

Were the UK to want to renationalise it would  be a monumental waste of taxpayer money. The UK could not confiscate the privatised assets like some communist autocracy, needing to respect international laws of ownership and trade rules. The money spent on buying the existing assets would balloon state debt without adding a penny to the amount the industries could invest. No prudent Chancellor would want to find big sums for additional utility investment on top of the other many budget demands.  There would be no guarantee that prices were lower or service better than the current privatised levels. Indeed, history suggest they would likely to worse, as the absence of competition blunts achievement.

We were prisoners of nationalised monopolies when we had them. Taxpayers had to bail them out and pay their losses. Customers were treated badly, faced rationing and poor service

The crude public sector good private sector bad which dominates much opposition party thinking is no reflection of the reality of life.

Some years ago I wrote about how we could better characterise and assess public services. I proposed assessing each with three main questions:

Are they competitive or monopolies?

Are they owned and run by the state or by private individuals and companies?

Do they charge customers for their service or are they offered free to users?

These questions reveal that there is more to life than an all public or  an all private service.

The two types that get closest to what the public v private thinkers have in mind are

1. A public sector provided monopoly service provided free to users using public sector employees and equipment    Defence is the nearest to this model
2. A private sector competitive service delivered  by many, charging customers for their use and using private sector employees and equipment.. This is the most common model of public service covering things like food supply and mobile phone services

There are then the following

A private monopoly  provided free to users  – a free local newspaper, a local radio station

Private competitive services provided free to users   Much social media, independent tv

Public monopolies charging customers  – Planning services, much licensing activity like passports and driving licences

Public near monopolies using substantial private sector competitive contractors – the NHS buys in all its drugs and contracts out various hotel services to private sector staff

Competitive services delivered in part by public sector owned institutions – Council leisure services that charge, Public sector transport

“Free” competitive services provided by state organisations and financed from taxes   BBC,  state museums

You could add to this analysis the provision of services by the third or charitable sector, where their provision may be free to users or may be subsidised competition to the private sector as with charity shops and leisure offerings.

 

In the private sector attention is centred on what service or good the company provides. If I go to shop I do not want to be told how much the shop spends on buying and selling things and managing itself. I would not regard a shop that cost £1m to run each year as intrinsically better than one which cost £900,000. I go to the shops that offer the  best prices and service quality, concentrating on what I as a customer receive and the value it represents. Shops can win more custom by cutting their costs of managing themselves to lower their prices. Discount food retailers have done well out of stripping down costs of display, property  and support staff, When the private sector delivers poor service or bad goods it usually apologises, takes the blame and where necessary offers compensation.

Many people in the public services concentrate on the inputs rather than the outputs. Much of the debate is about how much extra money is put in, about many extra people are appointed to provide the service. To some political parties extra or additional or “new” money is all important and to them has magical powers which the base budget or the “old” money does not possess. This is strange misconception. The base budget is always the dominant part of the money, and more attention needs to be given to how that is spent each year with a constant thirst for improvement. When the public services  deliver poor service they normally say they were “underfunded”. They say  remedy for poor service is more cash and people. Rarely do they say they got it wrong, will do better and misspent or failed to direct  the resources they had available.

Of course there are times when we do need more doctors and nurses or more teachers. If we keep expanding the population we need to recruit and retain more qualified people to provide extra service. You can also have too many managers or administrators. You can fail to harness new technology to cut costs. Managers in some public services multiply and impose an increasing burden on the front line workers who get diverted by management from their main task of teaching or nursing.

Good management is about supporting the front line staff. It is about keeping the costs and intrusion of management down. It is best with few layers and clear responsibility for specified and measurable tasks. A well managed organisation has low rates of staff turnover, low rates of absence , high staff morale and unity of purpose in serving the public to a high standard. Some parts of the public esrvices fall down on these criteria. Their senior managers need to be challenged as to why, and asked to improve the way they treat the staff, spend the money and achieve results.