It is unusual for a governing party under 2 years into government to undertake a public debate about what it believes and what it should be doing.  This is what Tony Blair has asked them to do , writing a powerful and interesting essay with some wise words in  it. He is right that so far they have drifted leftwards from the stance adopted to win the election, and have u turned on many occasions when public opinion and or unhappy  backbenchers tell them something is unpopular and will not work.  He makes the point that there is no purpose served by having a leadership contest before the party has decided what it wants to do and how it is going to do it. He could have added that the Starmer winning Manifesto in the last election was careful not to overpromise or to threaten us with radical change. There is no mandate from the election for a socialist experiment in further largescale wealth and income redistribution. There is no mandate for a more thoroughly nationalised and state controlled economy.

Some in Labour disliking Mr Blair can riposte that a leadership election could force the candidates to  propose different visions and to grapple during the leadership election itself  with what the party thinks it now is and what it wants to do. The problem with that idea is the party should feel bound by the few General election promises it did make that cut through and were part of the decision making process of many voters. Most wanted faster economic growth, and that was the central pledge. Many wanted proper control of borders and liked the sound of Smash the gangs. Most were relieved with the promise not to increase main taxes on people. Many believed they would just make marginal changes to VAT on schools and to income tax on rich foreigners.

Instead Starmer and Reeves embarked on a reckless increase in spending, part financed by aggressive tax rises on enterprise, business, farms, shops, success and jobs. Despite this they are seen by many in Labour as too mean, not expanding the public sector even more quickly and extensively. Any new policy needs to start from the realisation that Starmer and Reeves have pushed the extra spending, taxing and borrowing too far already. The markets are uncomfortable and the voters largely angry and feeling cheated. We have not been living under 40 years of neo liberal market based economics, but under a highly overregulated EU style slow growth economy, nearly bankrupted by Labour’s banking crash and recession 2007-10.

The Labour MPs and Ministers are talking to themselves and a  few Green party voters with ideas to spend and borrow and tax more. Far from bringing faster growth and some relief from tight finances this route will  bring more disaster on the government. The answer to youth unemployment is not more subsidies but more jobs. More jobs require tax cuts for businesses that might create them, and ending the bans that stop them.Debt interest is already through the roof and Rachel Reeves has to pay much more to borrow than Liz Truss. The markets do not see Rachel Reeves as some tight fisted right winger, but as a left inclining spender who has already pushed the limits of what the UK can afford. If there is to be a new Prime Minister who wants a  more left wing Chancellor and approach, he or she will be speeding a  bond crisis that could see interest rates much higher and the UK state forced by markets  into reducing its appetite for loans.

Labour wrongly say they had the worst inheritance economically of any government since 1979 as they tell us this week how bad young person unemployment is. They forget they inherited in June 2024 inflation on target at 2% and growth for the first half of 2024 as the fastest in the G7.

Their beloved OBR set out forecasts in 2024 for 2026 on the basis of continuing with Conservative policies. They said this year inflation would be 1.9%, growth would be 2% and unemployment would be 4.2%. The OBR forecast this year for 2026 given Labour’s policies is for inflation to be up, at 2.3%, unemployment to be substantially up at 5.3% and growth well down, at 1.1%.

The OBR do not foresee a big drop in world GDP to explain the fall in their UK forecast, with world GDP still at 3.1% in their estimates. So they are saying that Labour’s high tax, high spend, high borrowing policies have caused this substantial deterioration in the economic performance they expect.

When it comes to bad economic inheritances it is right Labour  effectively accept that 1979 was a very bad one. Five years of left wing economics had taken us to borrow from the IMF and had left us with high inflation, high unemployment and high borrowing in need of controlling.  They should also recognise that the 2010 inheritance from Labour was also a very bad one, with the banks squeezed to near death, high and rising unemployment and a big recession. In contrast the 2024 inheritance was a good one. It is true 2020-2023 had been poor for growth and inflation thanks to the covid lockdowns and the Ukraine war and energy shock, but things were corrected  by 2024.

Since coming to office most of the policies Labour has adopted have destroyed jobs, driven up prices and put stress on the public finances by spending too much. Labour do not suffer from an inheritance problem but from their own disastrous drift to the big incompetent state, net zero self harm and excessive borrowing.

For almost two years  the government has watched as  the number of young people not in training , education of work has risen worryingly. Yesterday Alan Milburn published a report telling us this has been happening, and expressing justified moral outrage that it is happening. HIs Report did not set out what the government should do about his. The lack of urgency continues, so we have to await a second report to tell us what might change this alarming trend.

The government wants people to believe that this has been a long standing and deep rooted set of problems. It is true the previous Labour government left office with young people unemployment far too high and rising. From 2012 to 2021 the Coalition and Conservative governments got it well down. It has been rising since 2022 when higher energy costs, higher interest rates and post covid recovery issues affected the figures. The rise has got worse under this government. No-one should be surprised, as their National Insurance hike has hit young people’s job opportunities hard. Higher business rates for High Street shops, entertainment and hospitality has hit those jobs for young people. The new Employee Rights Act has put more employers off offering a job to a young person to see how it works out.

The government should as the Opposition proposes, urgently reverse some of these mistakes and get behind business so they can create more jobs and want to recruit again. There is a growing gap between what the market needs and what  jobs are on offer. People would like more choice of services to their home, but the hostile atmosphere hitting the self employed  and small businesses means fewer are prepared to venture to meet those needs. The country is short of builders, digital technicians, medics and other trained people. This government likes to intervene substantially in the labour market, so why can’t its interventions deliver better results for both consumers of services and the young people who would like jobs in those areas?

Ministers are often telling us they do things at pace. Instead they do not even get their reviews to run to a tight timetable. What a pity they did not think these big issues out in Opposition before the election.

The government is going to spend a lot of money developing digital ID. They should mend  the system they already have.

I was a Trustee of a charity. Under recent legislation I was required to register  my ID with Gov.UK and then tell Companies House I had done  this to reaffirm my Trusteeship. I duly registered with Gov.UK and then wasted hours of time trying to get Gov.UK to share with Companies  House in the required way. After several days of failed attempts I asked the Secretary of the charity to help. She also was unable to get it to work. I have since heard of many others encountering the same difficulty. My contacts with Companies House failed to resolve the issue. As I needed to comply by a deadline I resigned from the role instead.

This is causing upset and losing charities and companies helpers. It is difficult to see why we need another more expensive  system of digi government ID, or why the contractor cannot  be required to get Gov.UK to be able to confirm information for other departments. This system puts people off the whole idea of digi ID as it impedes law abiding people but will not catch lawbreakers. It will be like the chronic failure of the National Insurance number system to control illegal working and illegal migrants.

I am not writing about the by elections before the results and will not publish partisan comments on them prior to the poll. There are so many candidates that balanced coverage needs to mention.

There have been plenty of populist parties rise in the EU. No wonder, when the traditional parties, the national establishments and the EU serve up slow or no growth, high taxes and high levels of inward migration. The populist parties do sometimes get into power, but then often let people down. Syriza seized the government of Greece only to get into a dispute with the Euro authorities over austerity and economic policy. They ended up backing down and the voters decided they had not enjoyed the experience, with a stop on withdrawing some of their money from Greek banks and more damage to the economy. In Italy Lega came into a position of influence but was unable to kick start the Italian economy or halt the arrivals of large numbers of migrants. From the left Five Star also rose and fell.

The populist parties of the so called right often adopt a number of important attitudes and policies from socialism, and populist parties of the so called left often adopt  supposedly right wing attitudes towards migration. They do so because they often create programmes – or more accurately craft soundbites – based around polling. Most voters are not ideological. Many want more freedoms for themselves and more controls on their neighbours, lower taxes for themselves and higher taxes for others, more public services that suit them and economies elsewhere. Why not? Of course people vote primarily for their own interests. The task of competitive parties is to come up with a policy offer that will work, to tackle the main concerns of the majority.

In the UK there are four populist parties today, Reform, Restore, Green and Advance. Green has decided to drive hard left, ignoring many of the traditional green issues like climate change and concentrating on major redistribution of wealth and income and Middle Eastern Palestinians concerns. Reform has flirted with backing parts of the two child benefit cap withdrawal, proposes extensive nationalisation, wants proportional representation, seeks to abolish the Cabinet Office and set up a much bigger and more powerful Office of the Prime Minister  and struggles to find savings in the spending of the Councils it runs.It has highlighted unacceptable levels of illegal immigration and suggested various measures to reduce it.

These parties hold out the hope that they could push through the change people want, but they find it difficult to set out how exactly they would define the change and how more importantly they would push it through.  Starting with a big change in the structure of Whitehall departments could prove costly and create plenty of delays in achieving things voters want. The continental parties remind us it can prove to be a big let down. Most of the problems we face flow from too much government, from taxes that are too high and from a public sector which delivers too little for too much cost. It needs a lot of work to decide what needs to be stopped and how to generate the change needed in government. Soundbites and headlines will not achieve it. Determination, a detailed plan and an ability to drive the machine of government from within is what is needed.

The UK suffered from slower growth, higher taxes, large EU bills and a big balance of trade deficit all the time it was in the EU. Going back in would be even worse because we would  not get the opt outs, lower contributions and what different  treatment we did manage to negotiate to ease some of the worst features of full membership.

We would lose the rebate on contributions successfully negotiated by Margaret Thatcher. The EU budget has gone up a lot since we left. The EU is taking on large piles of its own debt, where we would become part liable if we rejoined. It is likely our annual cost of membership would be around £30bn, far higher than last time. How would we pay for that? What taxes would go up? We would of course have to surrender our revenue from Customs dues and the plastics tax as part of the deal.

We would need to join the Euro. That would mean the loss of democratic control over our economy, with the EU telling us to put up taxes or cut spending in line with their fiscal rules. It would mean accepting interest rates and credit controls appropriate for the European average which might not work for us. Look at the damage done to the UK economy, with a nasty boom and bust, from accepting the EU policy of the Exchange Rate Mechanism. Joining the Euro is joining an ERM you cannot get out of, even if it is  giving you too much inflation or forcing you into recession.

Going back in would mean putting tariffs back on the imports of goods we do not make and food we do not grow if imported from non EU, and tariffs on the raw materials and intermediate goods we import to feed our factories. It would jeopardise our Free Trade deals with non EU countries, and take away our seat at the table of the World Trade Organisation.

It would mean imposing thousands of new EU regulations that we have avoided by leaving, adding to business costs and make companies less able to compete and survive. It would damage crucial new industries from digital to plant breeding with rules that would ban or restrict innovation.

It would mean greatly adding to the already excessive UK state debt burden. We would become part liable for their big and growing EU debt, and we would b e borrowing more to help pay for the high costs of membership.

I set out to a meeting organised by OUCA how in the 1970 s nationalised industries sacked many employees, put up prices and delivered poor service to customers, and cost taxpayers a fortune in losses, subsidies and investment spending.

I went on to  highlight the same bad patterns in our current nationalised industries.

The Post Office sacking and imprisoning good honest employees

HS2 costing us a fortune and failing to deliver any rail journeys on time or to budget

Steel absorbing large sums  to pay losses,probably ending in job losses and compensation to the Chinese.

It’s more a case of nationalised industries owning us and plundering our bank accounts, rather than us owning and benefitting from the nationalised industries. We used to own something called public dividend share in some of them but instead of paying us dividends they usually sent us big bills to pay their losses.

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The Labour Manifesto was clear. The next Labour government would not put us back into the Single market, or into the Customs Union and open borders with freedom of movement.

We read that the UK government think they could create a new single market area of the EU and the UK. The EU as the larger party will say the way to do that is for the UK to join the EU ‘s single market. They will not allow changes of rules, or joint decision taking or opt outs. They would also demand a big UK budget contribution, freedom of movement and other EU controls over the UK. All this should be a non starter.

The government is mad to think accepting EU rules, taxes and charges would boost our trade. We import much more than we export to the EU, whereas our trade with non EU is much better balanced. Being closer to EU rules and taxes would be used by the EU to boost their sales to us by more than we could boost to them, reducing our net jobs, incomes and wealth. It is bad to want to sell out in this way, wrongly pretending it is not breaking a Manifesto promise .

What does the government  think we could sell more of? It is going to ban us selling petrol and diesel cars, new oil and gas, and make it dearer to sell high energy using products. These are all things we sold a lot of. It is giving away much of our fish, preventing expansion of our industry and more exports. We are fortunate indeed that the EU seems to have been wise and turned down this proposal.

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