The government needs to manage the cash

 

            When I have been involved in turning round companies in difficulties I have always concentrated on managing the cash.  When the banks are becoming  reluctant to lend more – or want some of their money back – the business has to concentrate on getting more cash in and letting less cash out. It’s not just a question of spending less and trying to raise more revenue, though that is essential. It’s also a question of reviewing all the assets of the  business and seeing which ones can be converted into cash, and which are no longer needed.

             Stopping spending is a lot easier than the government seems to find it. You put in place a comprehensive freeze on recruiting people from outside, and only override this   if you need some specialist skill which you cannot find already on your payroll. You run down stocks of everything before allowing any more purchases. You review every item in your budget and ask if you could run the business without it in the future, or with less of it. You do without so many external consultants, asking your own managers to do more of the tasks.

             Finding assets that you do without, or assets which can be sold to others for cash is also usually an essential part of battling an overborrowed business back from the brink. Here the government is in strong position, as some of the past spending has built up a wide range of public sector assets. Some of these are of no immediate use to the public sector and can be sold for that reason. For example, there is plenty of spare land and should soon be some spare office buildings as the overhead numbers come down. Some are of greater value in the private sector than they enjoy when under public sector management. The commercial  forests – as opposed to the heritage and recreational forests – would be better off in the private sector and could raise the state some cash, as Labour used to do with their annual sales programme.

             Two areas I have identified where improvements could run alongside raising cash are the cases of service housing and motorways. I am pressing again for the service personnel to be given the option of buying their own homes where the MOD still owns them, with a right for the MOD to repurchase and sell on to a new staff member when the person leaves the services. This transaction would be at market price, so the individual would get the full benefit of ownership and have their deposit for their next home, assuming house price rises during their period of ownership. This scheme helps tackle the problem of homelessness some service personel face on leaving MOD employment, whilst producing a one off cash injection into the government.

           The question of privately owned and financed roads is more contentious. The aim would be to lease franchises, so the state still owned the long term underlying asset.Tthere could also be a system based on motorists opting in to paying tolls only if they thought they would be better off than paying the Vehicle Excise duty the tolls would  gradually replace. The government could then say that tolls only applied automatically to foreign vehicles, currently avoiding most of the taxes, and to commercial vehicles. Private motorists could opt between carrying on with their present level of tax, or switching part of their tax to tolls. Meanwhile the state would get a sum of cash for the franchises, and the motorist would have a manager of the highway more interested in keeping it open and earning revenue.

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105 Comments

  1. Ralph Musgrave
    Posted February 19, 2012 at 6:19 am | Permalink

    Re service personnel buying MOD houses, the MOD has a habit of suddenly closing down entire bases or other establishments. Where the MOD owned a significant proportion of local housing, there’d be a house price crash. I.e. the new service personnel owners would be taking a risk.

    So JR’s idea here would need to be pursued with caution.

    • Disaffected
      Posted February 19, 2012 at 11:56 am | Permalink

      Europhile Cameron has just signed another EU treaty binding the UK to France for military action and to support and increase the European army. Do we ask France if it is okay to defend the Falklands or could they not supply Argentina with missiles?

      On principle is this the action of a Eurosceptic he claims to be??? I think not. He is integrating the UK further into the EU every day.

      • lifelogic
        Posted February 19, 2012 at 7:24 pm | Permalink

        Indeed clearly no one who appoints Lord Patten to the BBC can be a Eurosceptic – say one thing do another Cameron is clearly not be trusted an inch or 2.54 centimetres – as he would doubtless prefer.

      • APL
        Posted February 20, 2012 at 9:09 am | Permalink

        This argument, is David Cameron pro Britian or pro EUropean Union.

        It’s similar to the old ‘how many angels can dance on the head of a pin’ that used to occupy our religious fraternity in days gone by.

        While the argument is being conducted, Cameron like his predecessors is destroying the United Kingdom’s independence and ability should push come to shove, to defend itself.

        He and all the top echelons of the Tory party and by the way, the Labour party and by the way, the Liberal party (who didn’t matter until Cameron aligned the Tory party with Liberal policies), they are all traitors to an independent United Kingdom.

    • pete
      Posted February 20, 2012 at 11:04 am | Permalink

      Thats histirocilly true but I dont see that going forward. Remember the army is pulling out of Germany so they must be struggling for bases, with the army being cut to its lowest ever I cant see how it can go any smaller.

      I think this is a great idea, too many service people have no idea of the real world and get almightly shicks when they leave.

    • lola
      Posted February 20, 2012 at 5:34 pm | Permalink

      …assuming house price rises during their period of ownership. . Oops. I can see that going horriby wrong. Anyway what’s so good about house price inflation? No-one believes any other inflation is a Good Thing, so why is house price inflation? And why should service personnel go into debt? Maybe more wise to concentrate on buying a house off base (as it were) to move to when service life ends.

  2. colliemum
    Posted February 19, 2012 at 7:18 am | Permalink

    John, I am glad you mentioned the MoD in your post.
    This is the reason:
    http://www.telegraph.co.uk/news/uknews/defence/9090668/Ministry-of-Defence-civil-servant-awarded-86000-bonus.html

    What gave you the idea that squaddies would actually be able to afford to buy these MoD houses? They, after all, don’t earn nice big salaries on which they get a nice fat bonus – a bonus for doing what they are supposed to do anyway.

    And this bonus culture prevails right across Whitehall.
    We can all guess why the left and the Union bosses rail against the bonuses for bankers but not against the bonus culture in Whitehall, can’t we!
    What we cannot even guess is why this government, why Cameron and Osborne nor you in Parliament, have stopped this bonus culture which comes out of our taxes.

    John, if you and your colleagues keep fiddling around the edges and keep letting yourselves be dragged into socialist schemes such as letting LibLab “win” the debate of the NHS and ‘green’ policies, then you better start looking out for a new job come the next elections.
    This Tory “government”, Cameron right in first place, is losing credit with the electorate hand-over-fist. Time for them and all of you to listen to us, your employers.

  3. A.Sedgwick
    Posted February 19, 2012 at 8:06 am | Permalink

    “You put in place a comprehensive freeze on recruiting people from outside, and only override this if you need some specialist skill which you cannot find already on your payroll” -very straightforward and obvious and should include entry into the country i.e. no more immigrants unless we need them. Major stumbling block – the EU. There was a report in yesterday’s papers that one quarter of London crime was committed by East European immigrants. One day,probably too late, all our Eurosceptic MPs will come out and say we want a referendum and we want out and not all this repatriation of powers tripe.

    • Bazman
      Posted February 19, 2012 at 4:10 pm | Permalink

      Cheap labour is always needed and the British population will not work for rates that a young desperate immigrant will work for living five to a car/room.

      • Electro-Kevin
        Posted February 21, 2012 at 11:21 am | Permalink

        @Bazman – One presumes that you mean the statutory minimum wage.

  4. alan jutson
    Posted February 19, 2012 at 8:08 am | Permalink

    John, all good commonsense stuff.

    Again I ask, why if you can see it, many of us out here can see it, but the Government (past and present) seem blind to it. !

    Like your original thought solution on roads, ref Tolls OR Road Tax choice, which is a bit like the system we have with a choice of water usage (meters or rateable value) but think it would not be long before we paid for both, such is the way governments work to maximise income.
    The fact is you make the suggestion simply because we cannot under EU law, charge foreign vehicles (who pay no UK road tax) to use our roads.

    I would be against the above, as I simply do not trust governments any more to keep their side of any deal.

    The goalposts on Tax seem to change with almost every budget.
    Thus long term financial planning for anything is now an absolute lottery.

    Osbourne has already made excuses in past budgets that he cannot do this, he cannot do that, as he is controlled in part by EU tax/VAT legislation.

    Thus we cannot run our Country as we wish.

    Time a few more than the 101 Mps realised this was the case, and did something about it.

    • alan jutson
      Posted February 19, 2012 at 8:29 am | Permalink

      I see the much hyped IRIS recognition system introduced with much fanfare (by the last government) and used at our airports as a prime security measure, is now being abandoned due to software problems which cannot be resolved.

      Yet another government IT contract which has failed !.

      Will the government be making any claim against the system designers on the basis of non performance/not fit for purpose ?.
      or
      Is this an example of yet another contract which has been badly set out in the first place, with no reference terms about delivery of service or performance criteria.

      More waste, more taxpayers money down the drain, soon we will need to call in Dyno-rod, such will be the amount of mony stuck in drains that they will cease to function as well. !

      • APL
        Posted February 20, 2012 at 9:24 am | Permalink

        Alan Jutson: “Yet another government IT contract which has failed !.”

        It is time that people associated with these failed projects, be surcharged. There has been so many of them, that the sheer negligent waste of money constitutes malpractice / malfeasance in public office.

        Especially as is often the case, one project goes down in flames, the fellow overseeing it moves off to another cushy government position in charge of another expensive project.

        Past time for some sanctions!

    • alan jutson
      Posted February 19, 2012 at 8:44 am | Permalink

      I see we now have a number of People who work for HMRC are now being paid as one man businesses (todays press reports) so that they can minimise their own personal tax liabilities.

      This is disgraceful, whilst not illegal, it hardly gives them much credit when those very same people can make life difficult for those who genuinely run a bona fide business.

      I guess this is the end result of unintended consequences when the IR35 Regulations which attempted to curtail self employment were bought into force.

      The more you dig the worse it gets.

      George Osbourne says he intends to do something about it.

      Best thing he can do is scrap the whole system and start again.

      When will governments realise that a simple but fair tax system, which the majority can understand easily, is of much more benefit to everyone, rather than the 11,000 pages of complex absolute nonesense we have at the moment.

      • lifelogic
        Posted February 19, 2012 at 7:29 pm | Permalink

        Indeed absurd time wasting pointless job creating complexity.

      • APL
        Posted February 20, 2012 at 9:29 am | Permalink

        Alan Jutson: “number of People who work for HMRC are now being paid as one man businesses (todays press reports) so that they can minimise their own personal tax liabilities.”

        Waiting for uname5 to pipe up about evil tax avoidance schemes.

        Any second now. …

        Perhaps not, this is the public sector manipulating the system. So that OK then.

    • Timaction
      Posted February 19, 2012 at 11:48 am | Permalink

      I agree with your sentiments on self sufficiency Mr Redwood but like others on this post experience tells me there would be tax creep if tolls replaced road tax. We would end up paying both, such is the way with large Governments. We are overtaxed when we earn, spend, save, invest, buy energy, fuel, insurances. There are very few areas of our life where there is no Government tax interference and an attitude of ” they know best” how to spend (waste) our money. How can the past and present Governments be trusted on the EU (£10.5 billion net, no referendum or repatriation of powers), immigration (increasing), dumbed down education (25% of students weren’t born here), foreign aid (£11.5 billion), International Health Service, 1000,000 young people unemployed as first jobs going to Eastern Europeans on minimum wages whose public services are subsidised by the taxpayer? I’m afraid those of us out here in the real world suffer the consequences of their incompetence daily. The Government is effectively the gang of four (Cameron, Osborne, Clegg and Alexander) and Parliament do not hold them to account but pass their wishes with a socialist whipped nod.

    • Disaffected
      Posted February 19, 2012 at 11:58 am | Permalink

      Here here. The EU would have seen the Uk budget before parliament does. It will not be long before Germany tells the UK how to tax and spend. The financial transaction tax will soon be here, what will Osborne do to make up for the loss of revenue?? it will need more than hope that the EU courts will support the Uk over Europe.

      • sm
        Posted February 19, 2012 at 5:10 pm | Permalink

        I understand, at least initially the EU promised to allow the UK to keep the FTT that applied within the UK. Its what happens later..

        • Havocman
          Posted February 19, 2012 at 7:51 pm | Permalink

          That’ll be the same EU that promised to revamp the Common Agricultural Policy when Blair gave up the UK’s rebate then.

    • David John Wilson
      Posted February 19, 2012 at 4:23 pm | Permalink

      There seems to be a government plan to charge all vehicles entering the UK but that seems unfair to those who have already paid VED. The solution would seem to be to get rid of VED completely and collect the money lost by increasing fuel duty.

      Insurance companies co-ordinating with Swansea could issue a certificate to be displayed on windscreens to show that avalid MOT and insurance exist. This has the additional advantage of completely removing a level of bureaucracy and also the subject of tax avoidance, police investigation and prosecution.

      We could also reinforce the old regulations that limited the amount of fuel that vehicles can carry in their tanks on ferries thus avoiding fuel duty avoidance.

    • APL
      Posted February 20, 2012 at 9:21 am | Permalink

      Alan Jutson: “Time a few more than the 101 Mps realised this was the case, and did something about it.”

      Resign?

      Reply: I never understand why it is so popular here for the MPs who are on your side to resign, leaving just the ones who disagree with you in Parliament!

      • APL
        Posted February 20, 2012 at 11:49 am | Permalink

        JR: “I never understand why it is so popular here for the MPs who are on your side to resign, ”

        Frankly John, tired of being hoodwinked, made promises that are instantly broken and lied to and made a fool of.

        So, am I disenchanted with the so called EUrosceptic Tories? You bet!
        Do I think they will change their spots? Not a cats chance in hell!

        But in the unlikely event that they do, that they start holding the executives to account and start scrutinizing European Union originated legislation – AND REJECTING SOME OF IT, start holding civil servants to account when their departments run amok.

        You know, basically when they start doing the job they are supposed to be elected to do, then I will be a little more supportive.

        Reply;We regularly scrutinise, criticise and oppose. As I keep saying , we do not have a majority to veto things.

        • APL
          Posted February 20, 2012 at 3:24 pm | Permalink

          JR: “We regularly scrutinise, criticise and oppose.”

          Ever reject any EU legislation ?

          No thought not.

          Reply: We do not have a majority, though some of us do vote against the worst of it.

      • alan jutson
        Posted February 20, 2012 at 1:10 pm | Permalink

        Reply to Repy

        John I was outlining that indeed it is the others (not the 101) who need to do something about it.

        I understand perfectly that the 101 are trying their best.

  5. Alan
    Posted February 19, 2012 at 8:48 am | Permalink

    I’m sure you are right about how to bring over-spending companies back from the brink of bankruptcy, and I support your two ideas of a market in MOD houses and road charging, but I cannot resist pointing out that both these initiatives would require MOD and DfT to do things they are not doing on any significant scale at the moment, and so would require extra staff and expenditure in the short term.

  6. Alan Wheatley
    Posted February 19, 2012 at 8:49 am | Permalink

    As to privately owned and financed roads, whether or not this seems to be a good idea likely depends on your point of view and the few issues that come most readily to mind. Certainly to argue the case from the point of view of capitalising an asset is to take a very narrow view of a very broad subject. There could be plenty of unintended consequences.

    But we do have the benefit of several years of the M6 relief road. So for a start an analysis of how that is working should provide some useful data.

    However, I think to embark on privately owned and financed roads as national policy has so many factors associated with it, both directly and indirectly, that for such a concept to make progress there will need to be a Feasibility Study. Why not publish such a document on the web site, JR, then we could all give it a critical read and let you have our considered views?

    • Mark
      Posted February 19, 2012 at 1:23 pm | Permalink

      M6 Toll has been a failure. We’ve discussed that several times here, and I have presented data from the accounts of the venture, as well as explaining the perverse incentives that exist to limit traffic – especially truck traffic that damages roads far faster than cars do. Toll collection costs are substantial, and dent the economics. Macquarie bank indulged in this piece of financial fast footwork:

      http://www.thisismoney.co.uk/money/markets/article-1601796/M6-toll-road-pays-Macquarie-pound392m.html

      before floating off the toll roads into an independent entity that is loss making on its M6 toll investment.

      • Mark
        Posted February 19, 2012 at 5:00 pm | Permalink

        MQA accounts M6 Toll loss details here:

        http://mqa.republicast.com/ar2010/?page=57&layout=1&zoom=100

        • Alan Wheatley
          Posted February 20, 2012 at 8:58 am | Permalink

          Thank you Mark. Over to you, JR.

          By the way I still think, in the nature of a pilot study, it would be worth allowing the operators of the M6 Toll the power to set the speed limit.

      • lifelogic
        Posted February 20, 2012 at 9:43 am | Permalink

        Clearly the M6 toll is daft as it have a free unfairly subsidised competitor running alongside.

        The solution is electronic toll charging on all the main road with rates changed by time and journey to limit any peaks in the traffic flows. With reductions in fuel and road tax to compensate.

        • Mark
          Posted February 20, 2012 at 9:41 pm | Permalink

          Only if you tolerate the Orwellian collection of data on everyone’s travel.

  7. lifelogic
    Posted February 19, 2012 at 8:54 am | Permalink

    All sensible stuff but trying to run a business with banks demanding cash back, or too little cash, forces business to run inefficiently with a lack of capital equipment. Selling assets too cheaply and in desperation, leaving them without the ability to compete in the future.

    Saving cash in the state sectors is easy, saving are everywhere you look, it is just that no one wants too save. This we see at Portcullis House with its huge costs, which works at out roughly £1m for each of the 215 MPs it will accommodate not to mention the £150.000 rented fig trees. First get rid of redundancy payments above a couple of months then fire one in two in the state sector and anyone managing Portcullis house.

    As a comparison normal large office block, build to a high standard, should cost perhaps £25,000 per office worker. I don’t suppose the figs will be eaten either and so will need need cleaning up every day so no one slips on them heath and safety first!

    • lifelogic
      Posted February 19, 2012 at 10:44 am | Permalink

      I see the BBC is most concerned at the number of female surgeons coming through even though 50% or more that enter medical school are now female and have been for so many years. Drivelling on as usual about glass ceilings, discrimination and barriers.

      It does not seem to occur to the BBC that the main reason is simple, they make other choices and to balance their lives in different ways. I assume the BBC would like to ban them from making such free choices or would actively discriminate against men to redress the numbers balance (redress as they see it anyway).

      • barry laughton (@kil
        Posted February 19, 2012 at 2:33 pm | Permalink

        Certainly there is a glass ceiling for females of a certain age being presenters.

        • lifelogic
          Posted February 19, 2012 at 3:51 pm | Permalink

          If the viewers turn over because they prefer the younger presenters on the other channel what do you do. Keep with the old one and have few viewers or go with the flow. Or perhaps genetically re-engineer people not to prefer looking at younger women. Also perhaps we should re-engineer woman to stop them preferring richer men while we are all it.

          What is your solution?

      • Bazman
        Posted February 19, 2012 at 4:05 pm | Permalink

        The BBC is story what the Royal College of Physicians is saying in a report. Your paranoia is telling you the BBC is saying this. Should they or any other news source not report this story or any other you do not like?
        Your anti BBC standing is like some sort of propaganda in itself.

        • lifelogic
          Posted February 20, 2012 at 6:09 am | Permalink

          It is the way the BBC always cover the story never any mention of the real reasons why fewer woman choose to become surgeons just an implication of discrimination and a demand for yet more absurd and counter productive government action.

    • Disaffected
      Posted February 19, 2012 at 12:01 pm | Permalink

      John, You have suggested several times to sell the state owned banks and inject them with cash to help small business. The socialist government would prefer to spend £32 billion on a single rail line to save 30 minutes on one journey to support the infrastructure project of regionalisation of the EU.

      • BobE
        Posted February 19, 2012 at 7:34 pm | Permalink

        It won’t save any time because it will drop you 20 mins from Brum mainline. You will still need to complete the journey in some other way.

        • lifelogic
          Posted February 20, 2012 at 4:00 pm | Permalink

          And it won’t stop anywhere on route to pick you up or drop off either so you have to travel further door to door.

    • Bazman
      Posted February 19, 2012 at 12:11 pm | Permalink

      Again I refer you to the governments own redundancy calculator.
      http://www.direct.gov.uk/redundancy.dsb
      You think this is over generous?

      • lifelogic
        Posted February 20, 2012 at 4:02 pm | Permalink

        I know the redundancy rules – yes it is over generous, given the huge mess the bloated government has made of the country. State sector employees get far more anyway.

        • Bazman
          Posted February 20, 2012 at 8:31 pm | Permalink

          A fifty year old with 30 years of service on £400 a weeks gets less than 10k. Over generous? You are wrong.
          I did get a redundancy package from a large company last year. Very generous and found work almost straight away. The factory was the most efficient and profitable, but they still closed it, the money reflected this. You seem to think that any workforce should just be happy with a couple of quid thrown their way when the directors feel like it and then sacked with no money when it is convenient to the them. Again you are wrong.

  8. davidb
    Posted February 19, 2012 at 9:02 am | Permalink

    Upon entry to Switzerland a few years ago, we were obliged to purchase a Carnet and display a sticker on the windscreen. This was to pay for our use of Swiss roads. As an island with border control that shouldn’t cost much to administer. And I proudly sport the green emmisions badge I bought in Germany for my ( gas guzzling actually ) funday car, which lets me park unhindered in many German cities.

    Of course some places may retaliate.

    It would be nice to have a right to buy on council/ railway/ development company owned factories.

  9. NickW
    Posted February 19, 2012 at 9:30 am | Permalink

    What I dislike about the idea of road tolls is that the (relatively) poor are already being priced out of transport.

    The end result of a toll road system is that the roads will only be used by the very rich in their S Class Mercedes and the vast majority of the population will be priced out of transport, priced out of travel and consequently priced out of opportunity and employment.

    The problem is the inevitable creep upwards of the scope and magnitude of tolls.

    I think road tolls is a place to which it is better not to go; they would be extremely unpopular with the electorate for the reasons I have given.

    • APL
      Posted February 20, 2012 at 9:42 am | Permalink

      NickW: “I think road tolls is a place to which it is better not to go; they would be extremely unpopular with the electorate for the reasons I have given.”

      Why introduce a new complicated means of working out how many miles a person travels, requiring a new computer system at the very least and probably a new administrative organization too.

      When we already have a system that rakes in huge amounts of money from motorists in direct proportion to how much they use the roads how big their vehicle engine is.

      It’s called Fuel duty and Fuel excise duty. The obscene tax on a tax.

  10. Andy Man
    Posted February 19, 2012 at 9:37 am | Permalink

    All excellent ideas and should begin immediately. Also the wholesale closure of whole departments and quangos.
    Trouble is not even the mildest of your proposals will happen, Mr Redwood. Inertia and self interest rule in the public sector.

  11. Single Acts
    Posted February 19, 2012 at 9:43 am | Permalink

    O/T but most interested in your views on Mr Hague’s rattling of the saber on Iran recently

    • forthurst
      Posted February 19, 2012 at 6:17 pm | Permalink

      He seems to be doing quite a good job: a read today he has successfully managed to get our oil supply cut off, so well none, Little Willie Hague! Obviously, some of us, including Evangelicals in the USA are rather hoping to launch WWIII; anyhow, big things from little things grow especially if they’re nurtured with care, as this neocon plant appears to be.

  12. Nick
    Posted February 19, 2012 at 9:43 am | Permalink

    Tolls
    —————

    More tax. More tax More tax.

    New taxes solve nothing.

    How about hypothecating taxes for the roads? Road taxes pay for the upkeep of the roads and that is it?

    VED abolished. Just fuel duty. So the more you use the more you pay.

    Ah yes. You can’t control spending so you need to soak the road user.

    What’s the cost of the roads compared the taxation imposed? Yep around a 400% mark up.

    Reply: The scheme I set out imposes no extra tax overall. The toll is avoidable, as there will still be plenty of free roads. Of course I want less overall tax and less spending – that is a different argument which we have exmained on other days.

    • Bazman
      Posted February 19, 2012 at 12:14 pm | Permalink

      You can be sure my boss would insist I drive the lorry on the free roads. Which would be through many picture villages. How would rich people and MP’s who live there stop this?

  13. Iain Gill
    Posted February 19, 2012 at 9:57 am | Permalink

    need to ensure we are earning at least as much as we spend before we worry about selling more capital assets, first actions are easy stop “aid” to india, stop tax concessions to work visa holders, increase price of work visas, impose heavy duty on goods coming from countries proven to be using child labour/unsafe practises/heavily polluting factories/etc, reduce spend on EC, remove entitlement to free NHS from any non citizens without indefinite leave to remain, remove free entitlement to schooling to any foreign child of a family without any members entitled to indefinite leave to remain, start addressing issue of large companies avoiding UK tax and using tax havens, dont allow any individual to work more than ten years in the public sector in their lifetime

    etc

    if you want capital items to sell you can start with Chequers and Dorneywood

  14. Caterpillar
    Posted February 19, 2012 at 10:00 am | Permalink

    I “love” the first paragraph of this article. I believe the cash focus (survival rather than profit, market share or growth) is exactly the focus that some businesses have to take at times of uncertainty (e.g. when credit lines can vanish). I do not think this fundamental behaviour was (is) at all understood by members of the MPC who have followed a policy of inflation and currency weakening to supposedly stimulate growth. (Chosing to destroy known domestic demand but hoping to encourage new export demand – high risk at times of crisis, and not following through with corporate debt buying during QE1).

  15. Sue
    Posted February 19, 2012 at 10:15 am | Permalink

    Ministry of Defence civil servants have been awarded £40 million in bonuses despite fierce criticism of the department.

    http://www.telegraph.co.uk/news/uknews/defence/9090668/Ministry-of-Defence-civil-servant-awarded-86000-bonus.html

    If the entire government stopped awarding themselves extortionate wages and insane bonuses despite running the country into the ground, we might save a few bob!

    Oh and Cameron can stop giving precious work to the French for our nuclear power stations, when we have our own engineers.

    • Sue
      Posted February 19, 2012 at 11:39 am | Permalink

      It is quite astonishing that the only answer you can up with is to tax us even more. We pay tax on everything twice. Once when it’s deducted from our wages and secondly when we purchase things via VAT.

      Go drive down the new coastal toll road on the Costa del Sol, IT’S EMPTY!

      • alan jutson
        Posted February 19, 2012 at 4:11 pm | Permalink

        Sue

        Most toll roads are empty, unless you have no choice but to use them.

      • Disaffected
        Posted February 19, 2012 at 4:21 pm | Permalink

        Perhaps the socialist government would be better served to pick on the salaries and bonuses of these people rather than the private CEOs!!!! After all, look at the incompetence regarding MoD contracts and spending. How about contracting out the whole of our defences to France and placer trust in them they will do everything we want?

  16. Mactheknife
    Posted February 19, 2012 at 10:20 am | Permalink

    John – I see you are back to the old chestnut of privatising the roads. I like most of your ideas normally but on this issue I have to disagree. Every government sees the motorist as a cash cow to be milked in times of need. We have the highest fuel duties in Europe (and possibly worldwide) and we have a vehicle taxation system which is desisgned (by Labour) to penalise the driver who chooses anything but a motorised lawnmower.

    I drive around the US alot and they have many toll roads, but the toll is a few cents as opposed to toll roads here in the UK (M6 etc) which are several pounds for a short journey. As I travel around the UK’s motorways I see thousands of foreign trucks who know doubt have filled their double tanks with cheap diesel before enetering the UK and are using UK roads without paying any vehicle tax.

    The only way I would even entertain your scheme is:

    1. If the excise duty on fuel is substantially reduced (currently around 70% of the pump price
    2. The road tax is reduced to a very low flat rate for any car irrespective of engine size / emissions etc
    3. Tolls are capped at say £1 per journey (if the government still owns the road why should it be more?)
    4. Foreign vehicles pay a duty on their fuel load and road tax when they enter the UK (say £100 each time they enter)

    This would at least give the driver some choice in which way they want to pay for road usage.

    reply: Under my scheme you would only pay tolls if you paid no VED. You would only pay tolls for the limited hnumber of toll roads – there would always be a slower free road alternative. There would also probably be off peak rates for the fast roads.

  17. Pericles
    Posted February 19, 2012 at 10:28 am | Permalink

    “… override this only if you need some specialist skill which you cannot find already on your payroll.  …”  Hollow laugh !  Like some-one with Economics 101 ?

    One asset this ideologically mixed-up government seems bent on selling is the post office.  Why any-one would to-day buy a post office I cannot imagine ;  there will presumably continue to be such a thing till every-one now over about fifty years of age has died but after that …

    How do I know that, despite its having disappeared from the news bulletins and the absence of ‘industrial action’ (what an absurd expression), the government is preparing for this sale ?  I just received the annual bill for a postal service I use :  it’s gone up in price by an eye-watering 59%.  No, that’s not a literal :  fifty-nine per centum.

    These children running the government imagine they can make a dying industry profitable by simply raising prices ;  they clearly haven’t the foggiest notion of the shape of post office’s demand curve.  All they are doing by raising its prices is bringing forward its demise.

    ~ · ~

    I concede entirely Mr. Redwood’s main point :  first manage the cash.  Even profitable businesses go under by virtue of being unable to settle current bills as they fall due.  There comes a time, however, especially for a government, when it must assess an asset not as some kind of isolated business – as were it a grocery store – but on the understanding that it is part of the infrastructure :  part of the stratum upon which the economy as a whole rests.  Such are the post office, the railways and the roads.

    As he himself says, his suggestion for turnpikes is contentious.  Unfortunately they’re rather like privately run prisons :  they ought to run well because of the supposed motivation to excellence.  In practice – in this age of incompetence – things rarely conform to this beautifully simple model.  I suspect that his proposal is little more than a recipe for more red tape.  Vehicle-excise duty is already a bureaucratic nightmare, calculated as it is with reference to ‘carbon emissions’.  (I wonder how much these children in the government actually know about the fourth most abundant element.  As to their knowing anything about the rôle played by its vital dioxide in the nourishment of the plant kingdom …)

    ~ · ~

    All the blame for the present economic mess cannot be laid at the door of the British government.  The whole of the industrialized world has over the last decade developed a fetish for the elimination of sovereign debt – something that had grown over the preceding century – by ‘the next election’.  It is as although a great tree, sporting a luscious growth of ivy, had been suddenly stripped of that ivy by an enthusiastic gardener ;  now the gardener is surprised that the tree, which it turns out had been supported by the ivy, has fallen.

    ΠΞ

    Reply: Toll roads have to compete with free roads, and there could be a maximum toll regulation as well to protect potential users. The Post Office Counters business is largely privatised. Privatising the Crown offices completes this process. Royal Mail is a state run protected monopoly for smaller items, where allowing more competitive entry is a creeping requirement from EU legislation.

    • Mark
      Posted February 19, 2012 at 1:35 pm | Permalink

      According to the BoE, inflation since 1840 – when the Penny Black was first issued – would have pushed the price up to 83.5p, or roughly by a factor of 200.

    • APL
      Posted February 20, 2012 at 1:30 pm | Permalink

      JR: “Toll roads have to compete with free roads, and there could be a maximum toll regulation as well to protect potential users.”

      Here is the better way of introducing competition. Vehicle excise duty, Fuel duty, VAT on new vehicles and all the plethora of other transport related taxes should be paid into an escrow account.

      The Toll operators should get paid out of the funds in the account on the basis of the number of road users that use their stretch of road.

      The rest is dived up to the local authorities and other bodies responsible for the maintanence of the existing road system.

      In fact all road transport taxes should be hypothicated for road transport purposes.

      Reply: The Treasury would not agree to that, as motoring tax cross subsidises so much else.

      • APL
        Posted February 20, 2012 at 3:27 pm | Permalink

        JR: “The Treasury would not agree to that, as motoring tax cross subsidises so much else.”

        Yes I know.

        But that isn’t the reason they would reject the proposal. It’s because it runs counter to the thrust of post first world war government policy ; centralize, centralize, centralize.

        And of course that suits the civil service because they have the onerous job of administering the system.

  18. sm
    Posted February 19, 2012 at 10:32 am | Permalink

    Some good suggestions but im wary of big government and big business setting up further ‘tollbooth’ businesses where they sit in a special place and then rather successfully extract excessive or rentier profits. Meanwhile we have the additional costs of captured/neutered or otherwise compromised regulators.

    Again quies custodiet custodes ipsos

    Lets sort out the tax corruption/compliance issues in the public service, competition, cronyism, patronage and protection via regulation.Where are the public procurement principals and why havent those authorising the contract been held liable. (Malfeasance in public office?)

    If the contracts are for services then surely the individuals can be ‘letgo’ to re-invigorate the private sector with their highly sort after skills. Also surely these contracts should be made publicly available. Sunlight and leaks work better than regulators it seems.

    http://www.taxresearch.org.uk/Blog/2012/02/17/a-strong-tax-system-is-the-basis-for-a-strong-economy/

    There is obviously no competition in politics and voting because referenda are never specifically avoided to frustrate public opinion . Why would we trust government elsewhere, i am afraid i do not trust the system. IMHO The country is not being run for the benefit of the country at present.

    Meanwhile the BOE sprays cash into GILT with gay abandon. Order the BOE pension fund to mirror Mervyn Kings inflation forecasts.

    The banks are a classic ‘tollbooth’ supported by a fiat printing central bank when they should have been forced to take big losses and painful restructure. Banks are like kids in a real sweet shop who can create credit sweets out of nothing and charge interest and ask for real sweets in return. They eat all the real sweets get fat and sick and run to mummy crying and demanding to an indulgent poor mummy.

    Its all going Greek… how about just some simple representative democracy.

    I hear Iceland’s turned the corner- good for them- is there a lesson for us?

    • APL
      Posted February 20, 2012 at 3:29 pm | Permalink

      sm: “I hear Iceland’s turned the corner- good for them- is there a lesson for us?”

      Yep, keep your foot firmly on the bankers necks. Otherwise you end up like Greece, indentured servitude.

  19. Martyn
    Posted February 19, 2012 at 11:01 am | Permalink

    John – you sat “I am pressing again for the service personnel to be given the option of buying their own homes where the MOD still owns them, with a right for the MOD to repurchase and sell on to a new staff member when the person leaves the services”. So far as I know all married quarters were sold off under the previous Conservative government and are now privately owned and rented back to the MoD.

    Married Quarter maintenance is also contracted out and this has long been a source of serious complaints by Service families because of lengthy delays and poor or very poor standards of maintenance. Officers Commanding stations and units are often frustrated at their inability to resolve Service family complaints about their accommodation, especially so as this can impact on the operational effectiveness of their command when Dads or Mums are deployed away from home on detachment still worried about leaving their family at home in sub-standard accommodation.

    We have heard of the wide-ranging Service accommodation improvement plan, but it has not been made any easier by the years of neglect which has happened since the Married Quarters were all sold off. I suppose there may be some still in MoD hands, but I don’t know of any in Oxfordshire.

    Reply: Not all were sold. There are provisions under the contracts where houses were sold for MOD personnel to buy them in defined circumstances.

    • Martyn
      Posted February 19, 2012 at 3:28 pm | Permalink

      Reply to your reply, John. Thank you – I wasn’t aware of the defined circumstances opportunity for Service folk to buy these houses. Sounds like a good idea, assuming that the defined circumstances are not too restrictive. If we take a RAF station for example, one not under threat of closure, bearing in mind that many have a waiting list of people needing married quarters, which are usually ‘behind the wire’ perimeter of the domestic site, it is hard to imagine any being sold off to people as they leave the RAF because it would further reduce the housing stock at that station.

      However, with the closure of a unit or base the housing ought to be made available to ex-Service people on preferential terms, much like council houses were, but in this case the qualification for preferential purchase simply being the number of years that the serviceman or woman had occupied married quarter accommodation during their years of service.

  20. forthurst
    Posted February 19, 2012 at 11:06 am | Permalink

    I’m sure all the low hanging fruit has aleady been picked. The glory days are over. When the public sector negotiates with the private sector, there are costs and risks; these need also to be taken into account.

    The last Labour government bequeathed some extremly disadvantageous PFI contacts. I read about a school where the lights shine continuously because there are no light switches. One aspect of the banking crisis, caused as we know, by numerous fraudulent transactions, largely still not investigated by the proper authorities, was how it sometimes appeared, coincidentally, that when a bank recklessly and disasterously made a deal, that both the bank officer and counterparty might be members of the same saturday morning drinking club.

    It might be prudent to re-examine all the PFI deals contracted by the last government and the circumstances and the companies that made them. Thorough legal and forensic investigations should be made, whilst parliamentary committees should stick to policy matters because they’re usually not sharp enough to wear deerstalker hats.

    The public have a right to redress when they have been the victims of daylight robbery.

    • Mark
      Posted February 19, 2012 at 1:45 pm | Permalink

      I agree: the value of the assets purchased under PFI was assessed recently as being just 25% of the PFI liability. That leaves very substantial scope for renegotiation of PFI deals, instead of e.g. providing emergency funding to NHS arms that got themselves in trouble through poor negotiation of PFI in the first place. I also suspect there might be a high return from some forensic accountancy.

  21. Mike Stallard
    Posted February 19, 2012 at 11:07 am | Permalink

    The problem with all these good ideas is that they are not going to happen.
    Ask yourself, would you put yourself out of a job? Especially if it was a non job?
    The Civil servants who run the show are so used to waste and to the rich uncle you mentioned that they are not going top change. they have built their careers on it.
    Meanhwile the rich uncles went ages ago and the poor are gong top have to pay their salaries and taxes.
    Hello GReece, hello Italy, hello Ireland.

  22. bluedog
    Posted February 19, 2012 at 11:08 am | Permalink

    The problems with public-private partnerships which you suggest in the context of infrastructure ownership is twofold. Firstly, the interest rate at which government can borrow is always lower that that suffered by private sector borrowers. Thus when a public asset is leased to a private owner one of the variable costs rises immediately. The second problem relates to future capex, and experience shows that the private sector is hugely reluctant to invest adequately for expansion in what are for them, wasting assets (leaseholds). It may therefore be that despite the superficial short-term attraction of sale of public assets to raise cash, in the long term there are penalties that are best avoided.

  23. A Different Simon
    Posted February 19, 2012 at 11:15 am | Permalink

    Quote “….so the individual would get the full benefit of ownership and have their deposit for their next home, assuming house price rises during their period of ownership.”

    This is the problem John – House prices rising above the rate of inflation leads to an unsustainable situation .

    We need accomodation costs to fall so that people have a surplus to save for their old age and bring our cost of living down to that of our competitors .

    You can facilitate this by flooding the market with ex-MOD land and putting provisions in place that it can only be owned by private British citizens and then only one house/plot of land at a time .

    There is no money in the kitty to pay a state pensionv . We need the next generation to make it . They need cheaper accomodation if they are to be able to do this .

  24. David John Wilson
    Posted February 19, 2012 at 11:48 am | Permalink

    There needs to be more inventory control of government departments and agencies. In the ten years that I worked for a government agency there was to my knowledge no valuation of inventory carried out. This would for example have provided some exposure of the dozen brand new never used cameras in a cupboard, purchased some years earlier to get rid of an end of year budget surplus.

    When working in private companies such checks happened regularly. I can for example remember an occasion when individuals and departments were required to return any excess stationery holdings to central stores. It was calculated as a result of this exercise that on average each individual had been holding their own stationery stock valued at over £50 and each department an excess stock worth over £500. In a single building that employed around 1000 people £100,000 worth of dormant stationery was returned to the central store.

    In another case stock replenishment levels in various stores were reduced to reflect usage levels. In one case this reduced the space occupied by the store by 50%

    reply: Indeed – a big destock in government would be a great idea and save a lot of cash.

  25. Sue
    Posted February 19, 2012 at 11:52 am | Permalink

    I have more great ideas.

    Stop funding “fake charities” (Stop smoking, stop eating salt, stop eating fatty foods, stop drinking, stop living)….

    Stop nannying and preaching and let people make their own decisions. Revoke the smoking ban, make it optional, then the pubs/clubs/bingo halls will start to thrive once again, ensuring a nice little return for the Inland Revenue and savings on benefits.

    Kill VAT on energy and fuel and lower it on everything under a certain price. Stop the “Green Revolution” – it’s a con, we all know it. Germany has had to fire up their coal powered stations again because it’s green generators can’t cope.

    Lower the taxes for small and medium size businesses, then they will be able to afford to take on more staff!

    Lastly, leave the EU and save £50 million a day, it’s a dead duck now anyway! Massive savings to be had there!

    Of course, all of this is dependent on a government with a spine, which unfortunately, as you know, Mr Redwood, we do not have.

    • APL
      Posted February 20, 2012 at 10:01 am | Permalink

      Sue: “make it optional, then the pubs/clubs/bingo halls will start to thrive once again, ”

      Absolutely the ban should be revoked.

      But not sure it’d make much difference to the Pubs, drinking is a social but also habitual passtime, many people who used to drink and smoke, have made other arrangements. Once a habit – visiting the pub – has been broken. It rarely comes back.

      Speaking as a six night a week pub drinker. Only go in now very rarely.

  26. Javelin
    Posted February 19, 2012 at 12:17 pm | Permalink

    I think the senior civil servants are key here. They ate reluctant to stop spending.

    The solution to this is to publish their budget recommendations.

    Senior civil servants recomend spending our money. Those recommendations need to be published.

    SENIOR PUBLIC SERVANTS NEED TO BECOME SENIOR PUBLIC FIGURES !!!

    • Popeye
      Posted February 19, 2012 at 3:32 pm | Permalink

      Excellent suggestion! I believe it to be a fact that if they do not keep their demands ever increasing, they get less next budgetary session. As they are interested mainly in empire building they must be forced into swingeing cuts.

  27. Damien
    Posted February 19, 2012 at 12:27 pm | Permalink

    As Boris Johnson will confirm the two bright spots in the economy of London have been tourism and property prices for commercial property in prime west end locations. Just recently the Irish government NAMA sold the Odeon Cinema site (4000 Sq Mtr) for over £100m to a hotel group. This will provide £1m ( s106) money for Westminster and add to the hotel capacity for central London creating immediate jobs in construction.

    I recommend that you visit the old secret service HQ in Whitehall which is now The Royal Horse guards, a 5* hotel to see for yourself the economic benefits of developing in that area.

    Is there really any need for the Wales office to be housed (since 1971)in Gwyndr House ,Whitehall? Surely they could use the £100m that could be raised for good use in Wales. Why does the Scotland Office need to be housed in Dover House, Whitehall? Tourism brings money into the country and these properties are located in the heart of the tourist attractions.

    The MOD in Whitehall occupies 74,000 Sq Mtr, that is about eighteen times the size of the Odeon site that sold for £100m. Do they really need to occupy all that space in Whitehall?

    London generates a lot of income and some of that is then distributed around the country. Tourism plays a vital role in that while providing much needed jobs and government needs to get serious in reviewing all these assets.

    Reply: I agree there are huge economies to be made from property reorganisation and slimming. I always did this in County and national government when in office.

  28. uanime5
    Posted February 19, 2012 at 12:54 pm | Permalink

    Given the rail and energy industries currently provides poor service for a high cost I doubt that letting private companies manage the roads will be good for the UK. Private companies are always more expensive that the state because they try to make a profit while the state is content with breaking even.

    • Winston Smith
      Posted February 20, 2012 at 12:27 pm | Permalink

      Spoken like a true Marxist! Efficiency and a lower cost base allow the private sector to provide services cheaper then the State. Compare our NHS model with those in Europe and Singapore. Remember BR?

  29. Andrew
    Posted February 19, 2012 at 1:00 pm | Permalink

    JR -on the sale of MOD homes to existing residents ,would this FIRST sale be at market value or at a discount? Also would include leasehold sales (flats, etc. in blocks)in this ?

    Reply: Would include any property they wished to buy, at market price.

    • alan jutson
      Posted February 19, 2012 at 4:24 pm | Permalink

      Reply to reply

      Why would you want to buy an MOD property on an MOD site, which could end up being a wasteland, when you can buy a house on a properly developed private estate at a market price.

      Guess the Mod property would have a lower market price in the first instance but that would be as good as it ever gets, it will always be a lower value, less so if the MOD pulled out and the balance of properties were just rented out by the local council or housing association..

  30. Tedgo
    Posted February 19, 2012 at 1:02 pm | Permalink

    I see the latest MOD thoughts to sell off some large property housing 6000 tanks and other military vehicles is to move all the vehicles to Germany. I thought we were trying to pull out of Germany. I am sure the MOD civil servants who suggest these moves are taking the Michael, knowing the Ministers haven’t got the wit to tell them to think again.

    As to your forest proposals surely the commercial forests support the upkeep of the heritage and recreational forests.

    Selling off the country’s silver is no solution, we need the bonfire of useless Quangos and a hatchet job on civil service numbers.

  31. Sue L
    Posted February 19, 2012 at 1:41 pm | Permalink

    Dear John

    Where companies are members of the same group you will find a centralised treasury function which enables cash held by each group company to be automatically pooled, aggregated and used to reduce group debt. Such a facility does not mean that cash management is centralised, simply that each company is not trying to find the best place to deposit cash and earn interest with a secure bank – a process that needs to be done daily. Something similar could be done by this government, enabling it to consolidate the cash held by agencies, councils and its own departments against debt it would otherwise need to raise. This in turn would reduce the interest otherwise suffered on this debt (or increase the interest which could be earned on deposits) and free local treasury teams to focus more on debt collections and other cash management opportunities as well as reduce the potential for deposits being lost (as was the case with my local council when it deposited its free cash with one of the now insolvent Icelandic banks). There are substantial amounts of cash on deposit held by various government bodies which can be used to help reduce the need to borrow in the future.

    Sue L

  32. STAN FRANCIS
    Posted February 19, 2012 at 1:42 pm | Permalink

    Stopping money from going out of the gov’t’s hands is hard becuase it then affects so many jobsworths, that’s if the truth was to be told as it really is?..AND IN A TIME OF TIGHTENING ONE’S BELTS, the people do not like the gov’t to suddenly find cash for weekly bin systems to be resumed, cash going abroad etc,this therefore confirms we have no problem with money and we will never ever see the TRUE balance sheet….modern day serfs that’s what we are- too many cheque books flying around?

  33. Barbara Stevens
    Posted February 19, 2012 at 1:47 pm | Permalink

    Toll roads are OK if you can afford to pay. Petrol to get to work now makes enough dent in the weekly pay check without adding more. My daughter has to travel down the motor way each day and back to get to and from work, her petrol costs have almost doubled. Adding a toll would in effect make work just that work, and no pay.
    You cannot keep adding to people’s costs while salaries are not increasing at all. She has not had an increase for three years, and as asborbed the petrol increases. People these days travel to work for long distances, her’s is 40 miles there and back each day.
    There are many more like her.
    Cars are now are a no go for many people unaffordable. I’ve never owned a car, and transport as now become so expensive to visit the coast for example, is very expensive. I am a pensioner, and the free bus pass is the only way I can afford to access shopping areas, without that I’d be lost. Will these road toll’s be the start of taking away the bus passes too? Will all have to pay? Once you go down the road of ‘you must pay’ mantra, without proper considaration for what it might mean, all will be lost.
    Tolls may be OK for foreign lorries for example, I agree with that, but for all, No.

    Reply: Please all of you try readign what I suggest. You would only pay tolls if you wish to cease paying VED.

    • Mactheknife
      Posted February 20, 2012 at 9:41 am | Permalink

      So are you saying that there will be no VED for any vehicle and the driver can choose to use the slower roads without paying VED ? Or are you saying that if a driver does not use toll roads and uses the slower roads then they will have to pay VED ?

      I would suggest you make yourelf clearer to prevent misunderstanding.

      Reply: The proposal I have made is that you can either carry on using all roads for free and paying VED as at presebnt, or you can agree to pay tolls on all the motorways that became tolled in return for n ot paying VED. I.e. Any Uk citizen can opt to be better off, whilst foreigners and commercial vehicles would have to pay the tolls but would not pay VED, meaning foreigners would pay more.

  34. Neil Craig
    Posted February 19, 2012 at 2:17 pm | Permalink

    The fact that Cameron refuses to use your undeniable talent in managing the politically unpopular task of finding cuts shows he is not serious about improving the economy.

    It also shows that he is a bit of a fool since taking on such a politically disadvantageous role would tend to neutralise you as a competitor.

  35. Pat
    Posted February 19, 2012 at 2:37 pm | Permalink

    I would have thought, in the case of HMG there is some even lower hanging fruit than that!
    Why are we borrowing money to give it as foreign aid? If we were running a surplus then aid out of that surplus might be fine- but we’re borrowing to make ends meet.
    Why does HMG give any money to charity- again it might be OK if we had a surplus, but even then I doubt it. Too many charities use the money to advertise and lobby for their pet causes, calling in the process for greater costs on the rest of us. It might be allowable for a cash strapped company to contribute to a charity as a form of advertising, but HMG will get their taxes anyway, they have the power of compulsion which private companies do not
    Where HMG has decided that XYZ charity is the best provider of a given service, then pay them as a contractor.
    Why do we have charitable status at all? It means that individuals who do not subscribe to the individual charity (The Smith Institute comes to mind but is far from unique) have to suffer higher taxes to compensate for their favourable position.
    Why do we see so many advertisements telling how wonderful such and such government service is? We cannot opt out of paying for it- A simple information source is all that is required.

  36. waramess
    Posted February 19, 2012 at 2:52 pm | Permalink

    I’m afraid that you don’t get it or, if you do, you are happy to ignore it. Cameron and Osborne are not about to admit defeat and are not about to change their policy. Sound bites have been working well; the markets view the UK as a safe haven and the IMF and the World Bank are on side.

    Cameron and Osborne will continue to play the same game as the others no matter where it might lead simply because they will there find support for their so called policies.

    This has nothing to do with the real world so long as a total collapse is avoided and at the moment the markets do not have very many options.

    Privatise health and education, scrap overseas aid and Scrap the Energy missions and you might be about to sort the deficit, add to that the privatisation of the roads and maybe we start to reduce the debt, but the political issue is not about sorting the problem. It is about something else.

  37. Popeye
    Posted February 19, 2012 at 3:27 pm | Permalink

    Why are you not Chancellor of the Exchequer?

    • APL
      Posted February 20, 2012 at 10:07 am | Permalink

      Popeye: “Why are you not Chancellor of the Exchequer?”

      It wouldn’t make any difference, Redwood can say what he likes now, as soon as he joined the Cabinet, the dead hand of collective responsibility would take the helm and he’d turn into another useless drone, talking EuroSpeak and implementing the latest European Union directive, while charging us £120,000 for the privilege of being dictated to by a foreign power.

      £64,000 talking sense is reasonable value for money.
      £120,000 talking Euro drivel – what’s the point?

      Reply: I do n ot think I will ever be speaking Euro drivel!

  38. Keith Peat
    Posted February 19, 2012 at 3:37 pm | Permalink

    Road tolling isn’t the answer JR. UK’s drivers are already paying about £50 billion per year and only about £7 billion coming back. This would send it all back through our villages and towns and create very costly congestion too.

    However there are many billions being wasted in a very aggressive and profitable road safety industry, most of which prevents not one single accident, and the profitable but mostly ideological, over-slowing of roads at a cost of about £3billion per 1 MPH per annum which also, happily for the profiteers, turns 1000s upon 1000s of perfectly safe drivers into offenders at great cost too.

    Since after about 300 billion driver miles a year, there is less death on the road from all causes, than from accidents in the home, we should ask why we have all these costly partnerships, quangos, advisory groups, lobby groups all supported by the economy for roads and yet nothing for people running houses? Self evident. Follow the money. Lot’s of it.

    • Alan Wheatley
      Posted February 20, 2012 at 9:36 am | Permalink

      Agreed.

      It is depressing how little those with a responsibility for road safety understand.

      The mantra is “speed”. I was told by someone who was in a position to know that the DfT directive is that speed is to be treated as a more significant cause of collisions than the evidence shows because speed is under-reported by the experts carrying out the collision investigations. This is, of course, adjusting the facts to fit the policy.

  39. David John Wilson
    Posted February 19, 2012 at 4:33 pm | Permalink

    You only have to look at the plans for building housing on the site of Arborfield Garrison much of which was raised to the ground a number of years ago to see how adept the MOD are at dragging their heels. When land like this is earmarked for brown field development the MOD should be tasked with enabling its development and not allowed to put hurdles in the way.

  40. Robert Christopher
    Posted February 19, 2012 at 5:37 pm | Permalink

    “The government needs to manage the cash”

    So, it looks like we have spent £200m (no, thanks to JR’s questioning, circa Jan 24th, we know it’s nearer £750m) spent on HS2, and we get this FOIA refusal?

    “Heriot-Watt refused Freedom of Information Act requests about the new project, saying that releasing any information on it would cause “substantial prejudice to the effective conduct of public affairs”.”

    What is all this about?

    “In papers lodged with the Government’s Engineering and Physical Sciences Research Council (EPSRC), Prof Woodward warned that speeds as high as those proposed by HS2 could trigger “significant amplification of train-track vibrations” causing “rapid deterioration of the track, ballast and sub-ballast, including possible derailment and ground failure”.”

    More details here:
    High speed rail link ‘at risk of derailment’ because of 225mph trains
    Secret research has been ordered into the safety of the Government’s controversial HS2 rail scheme amid warnings that the high speeds proposed could cause catastrophic track failures and derailments.
    http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/9090727/High-speed-rail-link-at-risk-of-derailment-because-of-225mph-trains.html

    So Cameron doesn’t only ignore ‘his party’ then?

    Unbelievable !!!!!!!!!!!!!!!!!!!!!!!!

    • BobE
      Posted February 19, 2012 at 7:53 pm | Permalink

      Imagine the effect of the first HS2 crash?. Mind you by then we will be run from Europe. With our government just a regenal council impliment the wishes of the German dominated leadership.

      • APL
        Posted February 20, 2012 at 1:23 pm | Permalink

        BobE: “Mind you by then we will be run from Europe. ”

        We ARE run from Brussels.

        That is why our politicians debate Chocolate oranges, there is nothing else for them to discuss.

    • Alan Wheatley
      Posted February 20, 2012 at 10:02 am | Permalink

      Thanks for the link.

      The more one learns about HS2 the worse it becomes.

      A vanity project – look at us.

      An envy project – others are doing it so we must too.

      A superior project – faster and more frequent than others.

      And, and, and …… finally a disastrous project – but someone else’s fault and mess to clean up.

  41. Matt
    Posted February 19, 2012 at 6:51 pm | Permalink

    You said it all last week – approval of £70bn+ for local government going through the house and it didn’t get much of a mention.

    Could 10% of this not be saved you wonder –

    The government lost the opportunity a couple of years ago; people would have understood proper cuts.

    Many of my clients in the private sector – three years ago they made people redundant, last year they froze pay and this year they are squeezing working capital.

    Many keep going as they have the PG’s that they don’t want to crystallise.

    I’m not sure that this government is doing much that labour wouldn’t have done – post election.

  42. NickW
    Posted February 19, 2012 at 7:38 pm | Permalink

    Another watershed in the tyranny of the EU.

    The EU has decided it can retroactively and unilaterally change the terms and conditions of any EU Sovereign Bond.

    All European Bonds have now been degraded to junk.

    http://www.zerohedge.com/news/ecb-has-opened-pandora%E2%80%99s-box

  43. BobE
    Posted February 19, 2012 at 7:50 pm | Permalink

    Cap all public service and council salaries to a max of £150k.
    Cap all public service and council pensions to a max of £80k per anum. Any excess is returned to the treasury.
    Imagine the cost saving.

  44. Bazman
    Posted February 19, 2012 at 8:11 pm | Permalink

    If you’re hanging on to a rising balloon, you’re presented with a difficult decision. let go before it’s too late or hang on and keep getting higher, posing the question: how long can you keep a grip on the rope? They’re selling hippie wigs in Tesco’s man. The greatest decade in the history of mankind is over. And as Mr Redwood here has so consistently pointed out, we have failed to paint it black.

  45. David Langley
    Posted February 20, 2012 at 8:59 am | Permalink

    Dear John, In the late 60,s the Royal Navy was experiencing a dramatic shortage of junior ratings in specialist engineering and electronics. One of the reasons was the long sea trips preventing young men from maintaining their relationships with their wives. The result was the introduction of the Long Service Advance of Pay scheme LSAOP. To qualify to draw down the advance of gratuity of a Leading Rate or Corporal RM to enable the direct purchase of a property. there were stipulations. Firstly the individual had to sign on for pensionable service, be qualified for the next rank, and all the money went to the building society and solicitor. The advance would be returned via deductions in the last ten years of service. The amounts in those days were about £650 which when houses were about £4000 was capable of getting the individual onto the housing ladder and the wife into her “Nest:. This scheme was not for commissioned ranks. Brilliant scheme and worked but not for todays men and women I fear.

  46. Winston Smith
    Posted February 20, 2012 at 12:45 pm | Permalink

    I suggest you view some of the MOD properties that you believe can be sold off to servicemen. In my experience they are cheaply built, poorly maintained and in undesirable locations. Some of them resemble run down council estates. Even such poor housing is not within the reach of young families, with one earner on a low Army salary. Do you know how little they are paid? Swan Lane MOD housing in North London is one such place. Several properties are now squatted by Eastern European migrants. For all your good business and Govt experience, I sometimes feel you are not in touch with life at the sharp end.

    Reply: When some were sold at Arborfield we had queues wanting to get them as they were good value.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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