How to get more capital projects


          The Uk is short of roadspace, electricity generation capacity, fast broadband, airport capacity, gas storage, deep water port capacity and homes in the right places. Most people agree it would be good to have more of all or most of these. Most people agree it would be good if the building and construction industry had more work, before its underlying capacity to work is reduced more permanently.

          The government is involved in these matters. Businesses and individuals need planning permission to build. They need Building Regulations approval, and  Health and Safety approval. In cases like energy and aviation the government is involved in pricing decisions and special taxes.It does not mean, however, that the government can or should own the assets and build new ones out of taxpayers money.

            There is a lot of money around in pension funds, insurance funds and held by individual savers. The income  returns on this money are now very poor if you try to stay in low risk assets. If you keep it on deposit or place it into “safe” government  bonds the income is small. Many say they would like some new assets safer than shares that would give them a better yield.

           The government should be able to work with the private sector to develop just such instruments to finance the infrastructure projects we need. The cashflows on a popular tollroad like the Dartford Crossing  or from a baseload new electricity power station are good and reasonably reliable. Finance for such projects could be available where the investor agrees to make money available for say 25 years in return for an income of say 5% or so. The bonds could be traded on the market like government bonds, so you could get out long before the repayment date.

             Many of the potential projects are held up. The government is trying to address the delays. More progress is needed to grant the permits, licences and the planning permissions and settle the tariff regimes so more projects can go ahead.  It would be quite possible to have a much larger capital programme largely financed by private money. So far this has proved elusive, as there are so many obstacles in modern UK and EU government that can get in the way.

          The immediate task of providing more cheaper energy is something we have often discussed here. Ministers do need to revisit damaging EU energy policies which are pricing us out of international markets owing to the business bills, and making it very difficult for many people to afford the domestic fuel bills.

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  1. lifelogic
    Posted March 12, 2013 at 6:48 am | Permalink

    Indeed, just get the government out of the way, alas the livelihoods of the state sector is all about getting in the way and taking fees and taxes anywhere they can find someone to mug, delay or inconvenience.

    Any release can only come from politicians. Politicians are the only protection that the public and businesses has from the state sector. Cameron clearly likes such nonsense he has gone ahead with no retirement rules, gender neutral insurance, kept absurd energy certificates and building controls, even allowing the EU to fix bankers bonuses it seems. The new paye reporting rules yet another new tax/imposition on employers starting in April.

    Not to mention the endless tax increases, but we have a Prime Minister who clearly likes swimming/drowning in totally the wrong direction. Cameron’s lack of vision and direction is the major part of the problem, the EU is another part and Labour in two years is the final disaster looming.

    Such a wasted opportunity, given the open goal Cameron was presented with at the last election.

    • Single Acts
      Posted March 12, 2013 at 9:06 am | Permalink

      We have further evidence this morning that these clowns can’t even put salt on a major motorway when light snow was forecast in good time. Thus people stuck in the dark with nowhere to go and left to freeze. A nice metaphor of the future.

      How many people from the highways agency will be sacked for this latest disaster?

      • livelogic
        Posted March 12, 2013 at 12:30 pm | Permalink

        Indeed they were probably all on some team building exercise, discussing the no retirement rules how they are going to adapt their systems to allow 85 years women to do all the snow clearing or something. Or waiting for health and safely people to ascertain if the snow was too slippy for staff to safely work with. Or were advised to work from home or on maternity/paternity leave.

        50% of GDP and they cannot even grit the roads or get a glass of water to people in hospital.

      • zorro
        Posted March 12, 2013 at 12:47 pm | Permalink

        Yes, I heard from the ‘spokesperson’ that…….’We had a plan, and we put it into operation’……….Right……..great plan.


        • lifelogic
          Posted March 12, 2013 at 7:46 pm | Permalink

          She must have been on an expensive PR course – on how to talk ***** on the media. Paid for by the tax payers as usual.

      • Nicol Sinclair
        Posted March 12, 2013 at 2:15 pm | Permalink

        @Single Acts: “How many people from the highways agency will be sacked for this latest disaster?”

        I predict none. Go on, tell me I’m wrong.

        • lifelogic
          Posted March 12, 2013 at 7:54 pm | Permalink

          In the state sector you only now get sacked for making a sexist comments, saying the words coconut, choc-ice, welsh on a deal etc. or pointing out the abject failing of where you work the NHS perhaps.

          Nowadays mere incompetence is just fine.

        • W Long
          Posted March 13, 2013 at 9:59 am | Permalink

          As we have seen form the Stafford hospital fiasco they are more likely to be promoted than sacked.

    • Bazman
      Posted March 12, 2013 at 8:53 pm | Permalink

      What about employment laws? We are all still waiting on you opinions on umbrella companies, short term contracts, agencies etc. And how else rights can be reduced of the employee to further help job creation. If you cannot answer this question then you as ever need to ram it.

  2. Leslie Singleton
    Posted March 12, 2013 at 6:50 am | Permalink

    Was that article (by Christopher Booker) I read over the weekend about the Drax power station some sort of joke? Huge areas of lifegiving trees in America being continuously chopped down to be turned in to wood chips and transported across the Atlantic and burned instead of coal. This is nothing short of deranged especially at a time like this and will do no-one any good at all and at vast costs. This is the sort of capital project the Government does manage to get done for our sins. Apart from all else, householders who have any experience will know how much less heat is thrown out by burning wood instead of coal. I suppose this was Huhne’s and the Liberals’ doing and I hope they are satisfied. They and the Green lovers have a lot to answer for. Pray God that whatever else happens at the next election these misguided fools are annihilated.

    Reply: This was the issue I raised with the Energy Minister recently in the Commons (see speeches section here for furtehr details) when I asked him to tell the EU we were simply not going to conform but carry in burning coal at Drax until we have a better solution.

    • Mike Stallard
      Posted March 12, 2013 at 7:21 am | Permalink

      And then we hear on the TV last evening about the “Nuclear” that is still just a muddy field because the French have been stood up for trying to charge too much.

      • Denis Cooper
        Posted March 12, 2013 at 11:44 am | Permalink

        How have we come down so far from the Queen opening Calder Hall in 1956 to now apparently being incapable of building nuclear reactors?

        Why do we keep electing politicians who serve us so badly?

        More to the point, maybe, why have the main political parties proved so bad at offering parliamentary candidates who would serve us well?

        • livelogic
          Posted March 12, 2013 at 12:32 pm | Permalink

          Why do we keep electing politicians who serve us so badly?

          Well we have little choice even the Tories are incompetent socialist who say one thing but do the opposite.

          • APL
            Posted March 12, 2013 at 8:05 pm | Permalink

            lifelogic: “Why do we keep electing politicians who serve us so badly?”

            For the most part, the ones we actually get to elect have already been preselected for qualities the PARTY prefers. Those qualities that make an outstanding sheep, but a lousy MP.

          • lifelogic
            Posted March 13, 2013 at 11:20 am | Permalink

            @APL – indeed the party system, career politicians, lying politicians and the voting system all subvert any real democracy.

        • uanime5
          Posted March 12, 2013 at 6:26 pm | Permalink

          Once the energy industry was privatised politicians believed that the private sector would simply provide them with all the energy they needed. However the result was the private sector creamed off the profits and didn’t make any investments. So now we have a situation where several coal power plants are going offline and there’s nothing to replace them with.

          • P O Pensioner
            Posted March 13, 2013 at 11:50 am | Permalink

            The French Government own our nuclear industry and the Spanish own our major airports and the French, Germans and others own our water and electricity generators. Why should they invest in new facilities when they can just hike up the prices and make even more profit without any accountability. Who allowed this to happen? Politicians!
            Would the French or German governments allow this?

          • Richard1
            Posted March 13, 2013 at 5:50 pm | Permalink

            Coal-fired power stations are going offline due to political direction driven by official fear of global warming. Now that the observed data do not support such official fears the Government should seek to reverse commitments to get rid of coal-fired power stations.

        • APL
          Posted March 12, 2013 at 8:08 pm | Permalink

          Denis Cooper: “why have the main political parties proved so bad at offering parliamentary candidates who would serve us well?”

          Well yes.

          Because a party wants it’s MPs to serve the interests of the party, not the interests of the constituency.

    • Acorn
      Posted March 12, 2013 at 8:01 am | Permalink

      Leslie, this may be of interest. Defining carbon neutrality ain’t that easy. .

    • Jerry
      Posted March 12, 2013 at 9:51 am | Permalink

      Another, and immediate, problem is that the coal fired power station at Didcot is about to be shut down, not because it is life expired but because it will have reached the coal burning time limit that has been imposed by silly EU Green regulations – immediate instructions should be sent out that it will and must be kept on stream, but this will not happen because we have people who should have stood for the Green party in charge at DECC. 🙁

      The government needs to act and act fast, all serviceable coal fired power stations should be kept available to the grid, if the Germans can build new then we can keep our old plant ones open. Should the EU not like this (even more so if they try and fine the government) then we need to have an immediate and emergency debate in parliament, if it takes a 24/48hrs plus sitting and matchsticks to keep eyes open then so be, this is a batter of peoples lives and the nations well-being after all, and give notice of our intention of leaving (meaning that we have, to all intent and purpose left, other than for the eurocratic niceties) the EU…

      Even if this had to be put to the country, either a referendum or election, in February 1974 Heath went to the country to ask who governs Briton, the electors replied “The party that will keep the lights on mate!”, thus if power cuts are likely (or are happening) now because of EU regulations it is a safe bet that the electors will say the same again. /rant.

      Reply I did highlight this issue in the Commons recently, proposing to the Minister that we seek a revision to the EU requirements.

    • lifelogic
      Posted March 12, 2013 at 10:49 am | Permalink

      No more of a joke than putting PV panels expensively on roof houses in the cloudy UK.

      • livelogic
        Posted March 12, 2013 at 12:34 pm | Permalink

        Or turbines in non windy Notting Hill.

    • Peter Stroud
      Posted March 12, 2013 at 11:08 am | Permalink

      You are correct in advising the government to disobey the EU in this matter. However, the important thing is to educate Tory ministers in the so called science behind the catastrophic climate change issue. The entire case is built upon a hypothesis that far from being verified, would in any other branch of science, have been deemed falsified.

      I get the impression that there a number of Tory MPs who are ‘climate sceptics’ or ‘deniers’, as the greenies prefer to describe any one who doubts their doctrine. These need to be organised to speak as frequently as possible, and question the blind faith of the majority of MPs in this matter.

      • Peter Stroud
        Posted March 12, 2013 at 11:31 am | Permalink

        Apologies. The above comment was intended to follow Mr Redwood’s comment on Mr Singleton’s piece.

        • Leslie Singleton
          Posted March 12, 2013 at 4:46 pm | Permalink

          Mr Stroud–Mr Singleton here in person and agreeing with you totally. The alarmist science (and, Yes, unanime, I once studied and did research in science to a level you might be impressed by–a year at Harwell for instance) is very thin. I have been pondering how we can be where we are and I reckon the answer is twofold viz 1) Scientists being paid whose pay would stop if they were to cease inventing and sounding the alarm and 2) Non scientists over-reacting to the very thin evidence because if what they are persuading themselves they should be worrying about were true (an enormous and unwarranted if, if ever there were one) the position would be serious. That’s all very well but we are spending uncountable billions on this which we (especially unanime) could well spend elsewhere and we simply were not put on this world never to take a risk–that’s if there were a risk which there isn’t. No temperature rise for 16 years and who cares anyway if there were a rise as has occurred without question so many times in the past and followed naturally by decline?

      • uanime5
        Posted March 12, 2013 at 6:27 pm | Permalink

        Climate change and global warming has been proven to exist through rigorous scientific study. The fact that you don’t like this doesn’t make it wrong.

        Were these Tory MPs to speak out against climate change it would not take real scientists long to dunk their arguments.

        • lifelogic
          Posted March 13, 2013 at 11:31 am | Permalink


          No one sensible disputes climate change it always has and will

          No one sensible disputes the fact that humans are one of many factors in it.

          But which way it is changing and if it will warm catastrophically, due to man made C02 is highly questionable. It is also questionable even if warmer is not better.

          It is also certain that the wind farms and pv pushed will make no real difference anyway.

          Real scientists tend to think as I do on this issue, unless paid to think otherwise. The pro-lobby rarely agues on the actual science which they know is weak – they use emotion about our grandchildren, talk about proven science, picture of London under water and other drivel.

        • Leslie Singleton
          Posted March 14, 2013 at 10:01 am | Permalink

          unanime–This is what once would have been called an ipse dixit, In other words pure “says you”.

    • A.Sedgwick
      Posted March 12, 2013 at 11:49 am | Permalink

      Radio 4 news last night featured a report from the Japanese nuclear power station devasted by the earthquake/tsunami two years ago. The financial and environmental implications are enormous and massively more serious than CO2. Mrs Merkel has made the sane decision by stopping nuclear power developments in favour of new coal power stations. It is both lunacy for us to allow Drax to be converted and even contemplate any further nuclear stations. The cost of decommissioning the ones we have, given anyone wants the waste, is problem enough for the next generation or three.

      • sm
        Posted March 12, 2013 at 12:27 pm | Permalink

        The waste can and probably will be reburned in new reactors leaving less difficult waste, we need existing plant to buy time for the new tech.

        • stred
          Posted March 12, 2013 at 6:17 pm | Permalink

          The DECC book Sustainable energy points out that all our nuclear waste could be stored in a space about the same volume as an Olympic swimming pool. The French store much of theirs 60 miles away under a hill near Dieppe. If it goes up the prevailing wind misses most of France. I hired a gite next to it.

      • stred
        Posted March 12, 2013 at 3:13 pm | Permalink

        Nuclear, according to the DECC book, Sustainable Energy is one of the safest forms of power. In the UK there is hardly any seismic risk. Could the nuclear experts who debated the possiblity of the UK building our own station, rather than being taken to the cleaners by the French, answer the following points?

        The Sizewell station seems to be quite a success and is running safely. So why can’t we update the existing design and make it bigger and even safer. Use nuclear engineers from say Rolls Royce or those that had to leave when we failed to build any more. Or perhaps design a variation on the Westinghouse design sold for bugger all to the Japanese.

        Then just put the building out to selective multiple tender, with all the site investigations done before. The sites are existing and even Dungeness has plenty of space, providing we ask the birds to move over a bit. There must be a way to get around EU legislation, which makes nuclear too expensive and hands the work to EDF.

        Thorium, is not well enough advanced at present, is it?

        • uanime5
          Posted March 12, 2013 at 6:31 pm | Permalink

          If there was EU legislation that made nuclear power expensive then it would apply equally to the UK Government and EDF. The UK wants EDF to build the nuclear power plant because if construction costs increase then EDF will have to pay the extra costs, not the UK.

    • Nicol Sinclair
      Posted March 12, 2013 at 2:17 pm | Permalink

      JR. And what pray was/will be the answer? Nothing or a load of dribble I foretell.

    • uanime5
      Posted March 12, 2013 at 6:23 pm | Permalink

      John unless you want the UK to face a huge fine for breaching EU law Drax cannot continue to burn coal. Given that the UK has had 25 years to adapt the EU won’t shows the UK any leniency for doing nothing to meet EU law.

      • Mark
        Posted March 13, 2013 at 10:28 am | Permalink

        So how is Germany not breaching EU law by building more coal (and lignite – even more polluting) power stations?

  3. stred
    Posted March 12, 2013 at 6:58 am | Permalink

    Any large or small investor in a government sponsored project would be advised to check that the specification for what is required is firmly agreed and cannot be ‘upgraded’ or taxed differently by government during construction.

    This happened during the construction of Eurotunnel and, as a result, the cost doubled and investors lost almost everything except free fares for 10 years.

    The idea that a project would only chage tolls for 25 years and then be turned over free to taxpayers is undermined by the Dartford Crossing experience. The government saw the opportunity to quadruple tolls and call it a congestion charge by creating maximum congestion, with queues up to 10 miles long. The rules should be strictly adhered to.

    • lifelogic
      Posted March 12, 2013 at 10:51 am | Permalink

      Indeed pointless congestion on an expensive key bridge – reducing its capacity due to tolling and an inefficient systems of tolling too. Wasting people time and fuel too. Just get rid of it.

      • Iain Gill
        Posted March 12, 2013 at 12:27 pm | Permalink

        few things illustrate the perks the scottish have from devolution better than the skye bridge toll versus the dartford crossing… just the english being taken for a ride i feel

        • stred
          Posted March 12, 2013 at 6:21 pm | Permalink

          And they scrapped the tolls on the Forth road bridge because it was causing congestion. How sensible. How many Scots are and have been in the Treasury and coudln’t give a monkey’s about congestion on the M25.

      • zorro
        Posted March 12, 2013 at 12:49 pm | Permalink

        So much for their green policies and carbon capture, letting all those cars slow down and idle at the tolls……


        • lifelogic
          Posted March 12, 2013 at 5:41 pm | Permalink

          Not to mention the millions of man hours wasted pointlessly in jams when they could be earning money and paying taxes.

  4. James Reade
    Posted March 12, 2013 at 6:58 am | Permalink

    How interesting that in your list of things we need, there isn’t a mention of an improved rail network. I wonder why? I’m guessing it’s just because you think our current stretched network is really just fine? Or is it because you have some prior prejudice towards road travel over rail travel?

    I’m not talking about HS2 here, so don’t bring that into it. I’m talking about a network that persistently delivers delays rather than on time services.

    Don’t tell me that greater private involvement will improve things – if, low and behold, service was improved (as I agree it would be if train companies could be freed from the regulations constraining them), then the network would be yet more at breaking point.

    So, why the absence of rail on your list of things we apparently need?

    Reply I have regularly called for more use to bemade of oru current network and set out the technical ways this could be done. I did not mention railways as the current balance of public investment greatly favours rail over road so I would not add to that imbalance.

    • lifelogic
      Posted March 12, 2013 at 10:53 am | Permalink

      Fine where railways can produce a real return but they so very rarely do.

    • behindthefrogs
      Posted March 12, 2013 at 11:31 am | Permalink

      We urgently need container terminals to be created in central locations with good rail links to each other and our container ports. These would take a lot of traffic off our roads. In particular if containers moved by rail could be used internally the economic advantages could be huge.

      • lifelogic
        Posted March 12, 2013 at 4:36 pm | Permalink

        Rail does not work in the UK the distances are short and trucks are usually needed at each end anyway. There is an economic disadvantage in putting freight on rail, other than for a few special situations.

        It is just the usual superficial Guardian, BBC, Libdem “think” to imagine there is any economic benefit at all. And there is all those rail unions to be considered too.

        • Pleb
          Posted March 12, 2013 at 9:46 pm | Permalink

          You need a truck to get it to the train and a crane. You need a truck to take it away from the rail and a crane. The tripple handling makes a single truck much more effective

          • behindthe frogs
            Posted March 13, 2013 at 12:40 pm | Permalink

            These comments miss the point.
            Transfering containers by rail from the ports to an internal hub would create much needed advantages. Once these hubs have been created using them to transfer containers between them by rail would make more efficient use of them.
            Yes, the distances are short compared with cross continent movements but we have very crowded roads and need solutions that do not involve building even more of them.

          • lifelogic
            Posted March 13, 2013 at 10:02 pm | Permalink


      • Mark
        Posted March 12, 2013 at 10:07 pm | Permalink

        It makes more sense to set aside and convert rail routes for use by automated trucks that are already technically possible. That way there is no need for a container depot: the container can be unloaded from ship to trailer and delivered to its destination. The only depot needed would be at the port, for containers awaiting a particular ship. Multiple handling costs and transport delays are minimised. The routes could operate at high traffic densities because of the automation.

    • James Reade
      Posted March 12, 2013 at 11:32 am | Permalink

      Explain to me this supposed imbalance, I’m interested. And do please provide some links to some figures that support your position.

      • Lindsay McDougall
        Posted March 12, 2013 at 4:07 pm | Permalink

        It’s like this, James. The railways don’t generate enough revenue to pay for the costs involved, whereas road transport most definitely does. The arguements in favour of rail are environmental. However, it only works with rail freight because so many nearly empty passenger trains are run for social reasons.

      • lifelogic
        Posted March 12, 2013 at 4:39 pm | Permalink

        Trains are subsidized hugely and largely not taxed at all.

        Roads fuel, roads, trucks, vans & cars are all taxed to the hilt and yet still are cheaper and far more flexible than rail in most cases.

      • Mark
        Posted March 12, 2013 at 10:22 pm | Permalink

        PESA data for 2011/12 outturn in £m

        National Roads_________________3,106_____15.3%
        Local Roads___________________4,934_____24.3%
        Local Public Transport___________3,557_____17.6%

        Rail handles about 7% of all passenger miles.

        • livelogic
          Posted March 13, 2013 at 11:45 am | Permalink

          Any no vat or fuel duty on rail either unlike cars.

          • Mark
            Posted March 14, 2013 at 11:35 am | Permalink

            There is a modest duty on GORV (diesel suppled to railways) – it is currently 11.14 ppl as against 57.95 ppl on DERV.

  5. colliemum
    Posted March 12, 2013 at 7:02 am | Permalink

    I really like your ideas about getting private finance for infrastructure projects, and I’m sure there are many others who’d be willing and happy to invest. After all, wasn’t this the way the Victorians financed their railways, sewers, the great ships? But we all know that in the present climate only the huge entities like Banks, Investment Funds, Pension Funds and international companies will be asked to invest – the ‘little’ saver who’d like such returns on their ‘small’ savings, those below £100,000.
    It would require government intervention to make that possible.

    However, albeit only in little asides, you do point out where the immense hurdles for such projects and the financing of them are: the EU.
    It’s another argument for getting out.

    • outsider
      Posted March 12, 2013 at 7:55 am | Permalink

      Dear Colliemum,
      Small investors were recruited to put up (on memory) £1.5 billion to build |Eurotunnel. We lost virtually all our money. So did those who backed most of the later Victorian railways.
      Institutional investors such as pension funds wisely eschew direct investment in infrastructure projects that carry substantial building risk or face a competitive market. As a private investor you can buy shares in many infrastructure companies such as National Grid, BT or the few remaining UK-listed water utilities. You can also invest in the minority listed shares of Electricite de France, should you so wish.

      • lifelogic
        Posted March 12, 2013 at 10:56 am | Permalink

        Indeed but anyone who read the prospectus and looked at the projected charges could see it was not going to make a profit. Just do your homework before putting money in.

        How were they ever going to charge much more than the ferries were already when the new tunnel capacity (supply) came on stream and hugely increased the capacity?

        Certainly do not invest in HS2 if asked!

        • stred
          Posted March 12, 2013 at 1:15 pm | Permalink

          The Eurotunnel prospectus was based on construction costs at the time and the fares and market share seemed to work. Then both governments worked together to regulate the project and required a Rolls Royce, when investors had ordered a Ford. Costs doubled and investors were ripped off by the politicians that took the credit when it opened. Today, it has been restructured and the new shares and company control is nearly al French, but starting to be viable.

          • lifelogic
            Posted March 12, 2013 at 5:44 pm | Permalink

            I looked at it for a friend and adviser her not to invest. It did not stack up for me at all, not even initially.

      • Denis Cooper
        Posted March 12, 2013 at 10:59 am | Permalink

        Indeed I well recall one friend saying that he was investing in Eurotunnel, and another friend chuckling and warning him that historically most large infrastructure projects have not turned out well for shareholders.

        Of course there are exceptions where shareholders have done very well, but Eurotunnel was certainly not one of them.

        • livelogic
          Posted March 12, 2013 at 12:37 pm | Permalink

          The projections figures were absurdly optimistic as was clear at the time.

  6. Mike Stallard
    Posted March 12, 2013 at 7:28 am | Permalink

    So how does all this affect the actual voter?
    I tried to set up a free school where the Coop used to be. It wouldn’t have been ideal, but it would have been OK as a start-up with the help of the very best Swedish provider and their excellent CEOs. The government (DfE) dithered around for a year, called us all up to London (we paid) twice and then, after three months, banned it. It took a whole year out of all our lives.
    Meanwhile, Morrisons (a private company) bought the Coop, transformed it and now it is a really effective Superstore with a large car park making loads of money and giving this very desperate local community shedloads of work.

    Reply Why did they reject your free school? I thmought Mr Gove was very keen on them.

    • Backofanenvelope
      Posted March 12, 2013 at 9:40 am | Permalink

      Mr Gove is keen on them, but his civil servants are not.

      • lifelogic
        Posted March 12, 2013 at 2:17 pm | Permalink

        So Mr Gove is virtually powerless – especially as Cameron has saddled the country with the Libdems. Libdems who will veto anything sensible. All the power is against him. The BBC, the civil servants, the state sector unions, Labour, the “Arts” establishment, the Libdems and perhaps even Cameron himself the closet LibDem.

  7. Nina Andreeva
    Posted March 12, 2013 at 7:35 am | Permalink

    A great prescription for getting Britain moving again, unfortunately we have Cameron who wants to devote his boundless talents and energy to non issues like “gay marriage”. JR for the good of the country please send the necessary letter to Mr Brady

    • Leslie Singleton
      Posted March 12, 2013 at 11:31 am | Permalink


    • Nicol Sinclair
      Posted March 12, 2013 at 2:34 pm | Permalink


    • wab
      Posted March 12, 2013 at 11:13 pm | Permalink

      Mr Cameron is not wasting much time or energy on gay marriage. And what time he does spend on it is because of all the anti-gay marriage people in his party, who are the very ones complaining that time is being spent on this even though they are the ones forcing time to be wasted on it. Fox hunting was a similar story. The people complaining that time was being spent on it were the very ones forcing time to be wasted on it. Perhaps these time wasters have no real argument to make and so instead focus on procedure.

      And obviously this might be a “non issue” for you because (presumably) you are not a gay person who wants to be married. In the same way that unemployment benefits are a “non issue” if you have a job. And the NHS is a “non issue” if you are healthy. Technically correct, but indicative more of the kind of person who would make such a statement than anything else.

  8. Bryan
    Posted March 12, 2013 at 8:04 am | Permalink

    Fear not fellow citizens, we are leading the green revolution.

    It is all part of the master plan to make us ‘Great’ again whilst all falter around us and gaze at us with awe!

    • Leslie Singleton
      Posted March 12, 2013 at 11:32 am | Permalink

      Bryan–Yes but with pity not awe

  9. Gary
    Posted March 12, 2013 at 8:31 am | Permalink

    Why don’t we build coal fired power stations like Germany is doing ? I am not sure the EU is the problem, the EU is allowing coal, we might be the problem. We can then revive the coal industry creating thousands of jobs.

    Also, instead of HS2, why not link Heathrow and Gatwick by high speed train to effectively make one airport with 4 or 5 runways ? Maybe add Stanstead into the link, although it may be a bit far ?

    • lifelogic
      Posted March 12, 2013 at 11:00 am | Permalink

      Indeed start with Heathwick with 5 runways and extend to Stansted later as needed to give 7 runways. An HS train link say 12 mins Heathrow to Gatwick and 20 mins to Stansted.

      It is a hub that is needed.

      Just get on with it.

      • zorro
        Posted March 12, 2013 at 12:53 pm | Permalink

        And far, far cheaper than HS2…….and actually of some practical use……perhaps some better connections at airports apart from Heathrow will take the strain off the business traveller.


      • stred
        Posted March 12, 2013 at 1:35 pm | Permalink

        Stansted is only 5 miles further from London than Gatwick, which has planning restrictions. More land is available and fewer nimbys. The terminal is not a fragmented mess like Heathrow making extension simple and cheaper. An improved rail line would connect to Eurostar at Kings Cross, making transfers for continental passengers easy. The line would be closer to the North, making it easier to use for the largest region of the UK. It would be cheaper and a start could be made very quickly, providing legislation and bungs were organised.

        When booking flights which need transfers, any sensible person has to allow hours between flights or risk delayed arrival and missing flights. (this happened to me and other passengers on the last 3 trips my mrs organised) The prospect of a 25 mile train journey between Heathrow and Gatwick would not be a great attraction. Airlines would organise hubs from each separate airport.

        • lifelogic
          Posted March 12, 2013 at 5:49 pm | Permalink

          If it takes only a few minutes on an efficient HS shuttle train it is in effect one airport hub.

          • stred
            Posted March 13, 2013 at 8:13 am | Permalink

            £33 miles at 150mph average is 22 minutes, with security checks more. This would have resulted in me missing the connection the last 3 times my journey was sold to my bird on the net. I arrived at the gate with sweat dripping off my nose. Good exercise though.

    • lojolondon
      Posted March 12, 2013 at 11:46 am | Permalink

      Fracking for gas is the only answer!!

      • Nicol Sinclair
        Posted March 12, 2013 at 2:37 pm | Permalink

        @Lojo: Freaking gas is the answer…

      • Bazman
        Posted March 13, 2013 at 9:26 pm | Permalink

        How do you know this? Much evidences say it is not an answer in any way. Your fantasy.

    • uanime5
      Posted March 12, 2013 at 6:37 pm | Permalink

      The EU doesn’t allow certain coal power plants, so the UK either needs to upgrade the existing one or build new ones.

      • Leslie Singleton
        Posted March 14, 2013 at 6:02 pm | Permalink

        unanime–We are, Oh so very fed up, listening to what the EU wants and doesn’t want. The good news is the more we hear of this relentless hectoring the more likely Brexit becomes. And I hope you have read the recent anti EU word from a good chunk of German politicians. I was telling you this a few weeks ago. Watch out because Mrs Merkel can be very flexible when the need arises (or even when it doesn’t as with nuclear power stations) and may just decide as I have said elsewhere that everything has a price. In particular she may just decide that German guilt has been sufficiently expiated by now and that the German people are in any event sick of being vilified by the idealogically different Latins.

  10. matthu
    Posted March 12, 2013 at 8:50 am | Permalink

    I see that the government has signed up to more energy madness:

    “Britain has signed up to an EU directive which says suppliers must dilute petrol with environmentally-friendly alternatives such as ethanol made from corn.

    The new petrol is called E10 and is 10 per cent ethanol. It is due to be launched in the UK later this year, alongside standard petrol and other green fuels.

    However, using petrol diluted with ethanol generally cuts a vehicle’s fuel efficiency.

    The report calculates that if the EU policy of supplying 10 per cent of transport energy from renewable sources had been applied in the UK in 2011-12, it would have cost motorists some £1.5billion, or around £80 a year more per family.”

    Was this idea properly debated and scrutinised in the House? And if so, did the government think it was a generally a good idea to sneak higher costs onto the motorist?

    Is this likely to boost our economy?
    Is it likely to lower inflation?
    How did the Conservative Party vote on this?

    • stred
      Posted March 12, 2013 at 2:56 pm | Permalink

      From Sustainable Energy.. the DECC book p.284.

      Bioethenol from corn in the USA.

      ‘The power per unit area of boiethanol from corn is astonishingly low. Just for fun, let’s report the number in archaic units. 1 acre produces 122 bushels of corn per year, which makes 122 x 2.6 us gallons of ethanol, which at 84000btu per gallon means a power per unit area of just 0.02W/m2- and we haven’t taken into account and of the energy losses in processing’.

      And then the transport to the EU! Maybe the sprouts couldn’t understand the Imperial Units. They should get the watts/m 2. Or perhaps they just think it’s BIO!, so it’s ok. It would be interesting to have been a fly on the wall at the DECC if this was discussed, with the figures given in their own book.

      • stred
        Posted March 12, 2013 at 3:19 pm | Permalink

        and of ->any of

    • nina andreeva
      Posted March 12, 2013 at 4:06 pm | Permalink

      I have used this stuff in my car when I have been in Germany. I have noticed no effect on its performance, especially when being allowed to let rip on the Autobahnen. Remember the “Daily Mail” was vehemently anti unleaded petrol at one time.

    • uanime5
      Posted March 12, 2013 at 6:40 pm | Permalink

      If E10 is 90% normal petrol and 10% ethanol won’t it be much cheaper than normal petrol? If so expect the Government of the day to claim credit for the lower fuel costs.

    • Mark
      Posted March 12, 2013 at 9:55 pm | Permalink

      A very damaging policy….

      Was it signed up to when Mr Huhne was Energy Secretary, or was it Mr Miliband?

  11. outsider
    Posted March 12, 2013 at 8:51 am | Permalink

    Dear Mr Redwood,
    You conflate a number of issues here but it seems to me that you underplay the role of risk and whether institutional investors, taxpayers or consumers will have to shoulder the risks. Low-risk infrastructure investment can only be achieved if a monopoly is created and/or or taxpayers assume the risk. If the risk is low, the City can easily arrange finance.

    In the energy sector , it does seem to be madness that Germany is building new coal-fired stations but the same companies are not allowed to build coal fired stations here and we have gone down the blind alley of carbon capture and storage.

    But our centralised competitive electricity market (devised by Enron) makes it extremely risky to build nuclear or renewables because market prices are largely determined by the world prices of fossil fuels. So they will only be built if the state forces taxpayers/consumers to offer guaranteed minimum prices or market share, leaving them prey to political preferences.

    There is no problem for the private sector to build and finance schools and hospitals because there is an inbuilt monopoly financed by taxpayers. The closure of the Lewisham A&E shows who is taking the risk.

    The private sector also invests vast sums in water and sewerage without any fuss or delay because water supply is largely a monopoly. As I understand it, you wish to destroy this system by artificially forcing a competitive market on the industry.

    My feeling is that your thrust is aimed at private roads. Only someone who lives well to the West of London could describe the Dartford crossing as “popular”. If the traffic reports are any indicator, it causes more hours to be lost than other point on the nation’s transport system. It has low risk and high usage only because taxpayers had built the rest of the M25 for free public use. It was a state-created monopoly.

    Yes, new private toll roads are fine but please understand that most us simply find it unacceptable that existing trunk routes that we have already paid for should be converted into private monopolies, as planned for instance for the widening of the A14. .

    • zorro
      Posted March 12, 2013 at 12:55 pm | Permalink

      Indeed, keep the roads flowing wherever possible. Tolls can be rather fiddly….


    • Mark
      Posted March 14, 2013 at 4:31 pm | Permalink

      I know the link to Macquarie’s annual report from Australia is rather slow to load: I placed to there to verify the direct copy/paste quote. It’s findable by search for those who want to check, if you prefer to omit the link to save verifying its safety and provenance yourself.

      Reply Yes, very useful. It is slow to load and complex to read. I was trying to work out if your quote from it was a fair reflection of what the accounts say, as your claims were worrying. It will take time I am afraid.

  12. Graham C
    Posted March 12, 2013 at 9:00 am | Permalink

    Unfortunately pigs don’t fly.

    Try options outside of EU interference and government ‘initiatives’ – there are none sad to say.

  13. Brian Tomkinson
    Posted March 12, 2013 at 9:48 am | Permalink

    Planning permission should be no problem for anyone given the following revelations in the Telegraph regarding the activities of councillors and planning officers! I suppose nothing will be done unless the press keep the pressure up.

    ( references to recent Telegraph articles given)

  14. oldtimer
    Posted March 12, 2013 at 9:55 am | Permalink

    Let us hope it all works out as intended. So far as much needed energy capacity is concerned my hopes are not high with Cameron, Clegg and Davey in charge. They only seem determined to inflict expensive, ineffective, non-solutions on the country.

    Let us also hope we do better than recent German experience with public projects. Speigel Online has been reporting deep problems with Stuttgart 21, a new railway station described as a “money pit” by one critic – it is now 2 billion euros over budget.The new Berlin-Brandenburg International airport is running late – it was meant to be finished in 2011 but it is delayed, it is said, until 2014/15 and will cost at least double its original estimate. Spiegel Online has catalogued other public works projects in trouble with long delays and spending overruns – the new Foreign Intelligence HQ in Berlin, Leipzig`s City Tunnel, Hamburg`s Elbphilarminie Concert Hall, Cologne`s North-South Subway Line and Munich`s Second Commuter Rail Tunnel.

    The blame is put on the politicians who pushed these projects, who deceive the public about their costs and benefits, are complete amateurs when it comes to overseeing their projects and make themselves scarce when things go wrong. One they cannot escape is the predicament facing users of the Kiel Canal which is currently closed to all but smaller vessels. The cause is a lack of maintenance of two locks. The Kiel Canal is said to be the busiest manmade waterway in the world, providing passage for 35,000 vessels a year. It is under the jurisdiction of the Federal Government.

    What a contrast to the efficiency of the German engineering industry – the biggest and most effective exporter in the world.

    • Mark
      Posted March 14, 2013 at 8:22 pm | Permalink

      Even with cost overruns, Berlin Brandenburg looks cheap compared with estimates for new airport capacity in the UK. LHR runway 3 was costed at £10bn, compared with the €4.3bn spend at BBI.

  15. Richard1
    Posted March 12, 2013 at 10:01 am | Permalink

    The geat thing about getting such projects financed in the market, with the govt acting as enabler rather than funder, is there is a real test of their actual economic value. When the govt finances infrastructure there is an inevitable tendancy to fix the evidence to achieve the desired conclusion – which is why there is a theortetical justification for HS2, biomass, wind farms etc. If these projects had to fund themselves in the market they would never happen, with the result that capital and other resources would be free to be put to more prodcutive use. The call for a debt financed govt infrastructure splurge must be resisted.

  16. MajorFrustration
    Posted March 12, 2013 at 10:33 am | Permalink

    Can understand Lifelogic’s frustration. JR, is it me or have you “always” just made a speach which is contrary current Government thinking? To what effect? I sense that there are any number of Tory MPs making a stand on one issue or another more for the opportunity to say in the future “I told you so”. Self protection rather than voter protection. However I think the stable door is shutting fast even with two more years to go.

    Reply: Government policy does change in response to our speeches – as with renegotiaiton and referendum on EU

    • lifelogic
      Posted March 12, 2013 at 2:24 pm | Permalink

      Well, the “promised” policy but only well after Cameron has left power. But no one trusts him an inch and he will not be in power or even the leader to deliver anything. So it is clearly as worthless as his Cast Iron Guarantee and Inheritance Tax promises proved.

    • Nicol Sinclair
      Posted March 12, 2013 at 2:41 pm | Permalink

      JR: Reply to reply: Perhaps some examples might prove useful?

  17. Iain Gill
    Posted March 12, 2013 at 10:33 am | Permalink

    Still the most obvious “investment” that will genuinely pay back is to increase the insulation in the housing stock of the country. If you simply said you wanted to double the roof insulation in all houses in the country before the end of this parliament you would oil the wheels of the economy a bit, but more importantly it is money that would genuinely be repaid by savings.

    • behindthefrogs
      Posted March 12, 2013 at 2:20 pm | Permalink

      If only it was that simple. I like a number of my neighbours boarded my loft so that it can be used for storage. It has the recommended level of insulation under the boards. Under the current scheme all I seem to be offered is putting a thicker layer of insulation over the boards. This rather defeats the objective of having it boarded in the first place.
      We need the government to sponsor a method of insulation that is fitted to the roof leaving the floor of the loft available for use.

    • lifelogic
      Posted March 12, 2013 at 2:28 pm | Permalink

      Roof insulation can pay back sometimes it is true, but most of the green agenda and green deal is nonsense. Let the people making the savings make the investment if they want to the last thing needed is more government.

    • stred
      Posted March 12, 2013 at 2:38 pm | Permalink

      This is true, and could be speeded up quickly. However, the roof insulation answer is often not the best investment, as most houses already have 6” or more, wheras the walls may have much poorer insulation and a larger area and uninsulated suspended floors have a large fraction of roof area. Energy companies often spend the bill- financed susidy on extra roof insulation, because it is easy, although loft space is lost.

      The law of diminishing returns applies. In the house case in Sustainable Energy… the DECC book by Prof MacKay the roof leaks 12% , the walls 30% (excluding windows and doors) and the floor 17%. Doubling the roof insulation will approximately save 6%. Insulating solid 9”walls with thin conventional insulation can improve value from 1 to 2.2. (higher U value is better) In the case of his house, wall areas are 70m2 so halving losses in a similar older house with solid walls would halve the losses on an area 45% larger.

      In my own old house I have used foil insulation which is not yet recognised by most building inspectors for insulation value. I have reduced heat loss to a third with floor insulation. Draughtstripping and lobbies are also very cost effective. Draught losses on the DECC house are 38% 0f conductive leakiness.
      Ref. Sustainable Energy… p294-296.

      In our new extension the walls are timber frame with 4” of fibregass quilt and multifoil inside and only 6” roof insulation, as it is not finally increased to a foot for Regs. Even in this cold snap the room is warm without a radiator and only a pipe to warm it.

      • stred
        Posted March 12, 2013 at 2:40 pm | Permalink

        JR I have spent half an hour on this. Please don’t moderate it as it is all checked.

      • stred
        Posted March 12, 2013 at 6:33 pm | Permalink

        Oops. Higher R value is better.

    • Mark
      Posted March 13, 2013 at 12:12 am | Permalink

      I thin a sensible rule would be that any household energy saving/generating measure should have a payback period not exceeding seven years, with a projected life of at least twice the payback period.

      For example, an energy saving lightbulb that lasts two years should pay for itself in one year. Insulation that takes seven years to pay for itself in energy savings should be guaranteed for at least fourteen years. Payback is calculated without allowing an interest cost, which is why the life needs to extend beyond the payback period.

      If this approach were adopted we would prioritise the economically effective measures, rather than those that have the highest smugness quotient.

      The typical EPC seems to recommend measures with extremely long payback periods. Some of them are so long that they would never finance the capital at all: they are complete loss makers.

      • stred
        Posted March 13, 2013 at 11:05 am | Permalink

        This simple rule would stop most mis-selling of solar. About 7 years ago I met a very bright lady accountant who managed a housing association.
        She and I had independently met a sales team operating in the region selling PV and water solar. We both spotted that they made no allowance for depreciation or cleaning and maintenance, including roof access and damage. The payback period was only based on energy saving to installation. Also no the performance was based on south facing roofs and no reduction for east/west.

  18. peter davies
    Posted March 12, 2013 at 11:00 am | Permalink

    Your idea of unlocking funds is a good one providing adequate safeguards are put into place to prevent a repeat of the Channel tunnel example.

    Your point on yet again the EU:
    “Ministers do need to revisit damaging EU energy policies which are pricing us out of international markets owing to the business bills, and making it very difficult for many people to afford the domestic fuel bills.”

    It yet another example of why MPs from all parties need to wake up and smell the EU coffee, I have heard you speak to the Commons in a balanced and coherent way on this issue, it seems we have an unelected class that just do not get it – the tentacles of the EU beast stretch far an wide covering competencies which our govt and civil servants should be more than capable of managing (we have enough of them)

    The freedom to do what needs to be done in a competitive world instead of continuously kow towing to these unelected idiots that have helped bring half of Europe to its knees would be a good step in that direction – bring on that referendum

  19. Roy Grainger
    Posted March 12, 2013 at 11:12 am | Permalink

    Investing infrastructure projects is not necessarility a good idea, for example the Earl of Grantham lost his entire fortune investing in the railways. Actually there are plenty of ways for small investors to get involved even now via collective investment schemes and companies (HICL Infrastructure is an example in which I have an investment) although it is true to say they concentrate on operating the assets rather than building them in the first place – one advantage of them is they offer a degree of inflation-proofing.

    • nina andreeva
      Posted March 12, 2013 at 4:12 pm | Permalink

      Have you actually made any serious money out of HICL over the long term? A great idea like ECOFIN on water, however looking at the returns you would have probably been better just holding cash

  20. lojolondon
    Posted March 12, 2013 at 11:45 am | Permalink

    All good sense John – I was gutted when the last QE by both our recent governments put all our newly-printed money into the banks merry-go-round instead of funding capital projects – like a spade-dug tube extension for example… All 100% wasted now.

    You speak so much sense you would be far more at home with UKIP than with the current Conservative government!!

    • zorro
      Posted March 12, 2013 at 12:57 pm | Permalink

      Indeed, criminal waste of money to prop up zombie banks and fund wasteful government spending, when it could be used more productively.


  21. Neil Craig
    Posted March 12, 2013 at 11:46 am | Permalink

    “Many of the potential projects are held up. The government is trying to address the delays. More progress is needed to grant the permits, licences and the planning permissions ”

    All of these delays “government is trying to adress” are caused entirely by government. Proof that the entire problem is government parasitism. Proof that we would be in a world beating boom if it were not for the state parasites.

  22. Denis Cooper
    Posted March 12, 2013 at 11:51 am | Permalink

    As I understand you propose that the government should “work with the private sector” so that private companies would raise funds for projects by issuing tradeable bonds.

    In your view, would that “work with the private sector” involve the government guaranteeing that the bond investors would be repaid what they were promised?

    Reply: No, of course not

    • zorro
      Posted March 12, 2013 at 12:58 pm | Permalink

      Fair comment bearing in mind how governments have dealt with banks….


      • zorro
        Posted March 12, 2013 at 12:58 pm | Permalink

        and PFI…..


    • Denis Cooper
      Posted March 12, 2013 at 1:26 pm | Permalink

      Then wouldn’t the purchase of any such bond through the initial public offering be potentially a fairly high risk investment, even if the investor was sure that he could hold it to maturity?

  23. mactheknife
    Posted March 12, 2013 at 12:00 pm | Permalink


    Your last paragraph spelled out the problem. The government commitment to a policy drafted for Labour by a green activist who was brought in to do it. You probably dont follow the climate chnage debate in depth but I do, and I can tell you that the overall claims by the environmentalists have been grossly exaggerated – something even the IPCC now admit. However we have a Warmista in Cameron who is reliant on the people in DECC who (are influencesd by-ed) companies making money out of climate chnage legislation and its impacts, yet he refuses to do anything about them or their policies and positions dictated to them by environmentalist movements. Read James Delingpole’s book “Watermellons” to see the way the green movement is infuencing policies and governments worldwide with spurious information and (worse-ed). Absolute scandal which is costing this country Billions.

  24. A.Sedgwick
    Posted March 12, 2013 at 12:26 pm | Permalink

    A little off topic but good news for the Government on keeping inflation rate down – ebooks and white rum to be included in the calculation!

  25. Martin
    Posted March 12, 2013 at 12:40 pm | Permalink

    It is a great pity that when the government came into office that it was not in favour of private sector investments. Even the last Labour lot had the sense to approve the third Heathrow runway.

    P.S. I hope the International Development Secretary hasn’t been stacked too much on her travels.

  26. Lindsay McDougall
    Posted March 12, 2013 at 12:59 pm | Permalink

    But it is the GOVERNMENT that encourages people about to retire to purchase annuities instead of putting their money to productive purposes.

    If you are approaching retirement, you can’t deal directly with the large pensions and insurance companies. You can do any amount of your own research into the funds they provide (5 years of past performance stored is on the Internet). However, you then have to deal through an “Independent Financial Advisor” approved by the FSA, who will recommend that you purchase an annuity. If a Financial Advisor makes any other rcommendation, he probably won’t get FSA approval. Needless to say, the FSA is part of the Government. The Chancellor of the Exchequer must be aware of what is going on.

    I rejected various annuity options three times before my “Independent Financial Advisor” let me create my own SIPP. They wrote that they had categorised me as an “Insistent Investor”. Needless to say, after a difficult first year, all 4 funds in the SIPP are doing well enough to make me glad of my decision to reject an annuity.

    If HM Government were to freeze public expenditure as suggested by Liam Fox, there would be less need for gilts and for annuities. Pension funds and, equally importly, pre-retirement income could be better employed.

  27. Ben Kelly
    Posted March 12, 2013 at 1:20 pm | Permalink

    One way to drive investment toward new capital projects and indeed start ups would be to remove capital gains tax from new projects and newly issued shares.

    Buying and selling homes, land and existing shares and bonds can continue to be taxed at current rates while those prepared to risk capital on well founded projects and companies could benefit from increased returns through taxation.

    This shoots Liam’s fox and rewards wealth creators which has become the mantra of your party in justifying avoiding punitive tax on the wealthy. One caveat would be the need to exempt any bonuses being paid in newly issued shares and another is that it further complicates our tax system but it would be worth it.

    • David Price
      Posted March 13, 2013 at 12:40 pm | Permalink

      Isn’t this the supposed purpose of VCTs and to an extent (S)EISs?

  28. David Saunders
    Posted March 12, 2013 at 2:15 pm | Permalink

    Re EU mandate for referendum – Cameron, even if he wanted to, could never get this past the Quad, a set up which is thoroughly democratic giving Lib Dems 50% of the votes with only 9% of MPs.

    Keep trying ,JR, and the best of luck.

  29. Alan Wheatley
    Posted March 12, 2013 at 2:21 pm | Permalink

    Fast Broadband is an ideal way of getting a quick return on capital with minimum hassle. As connections are incrementally made users can start to make use of them. There is no new technology to prove, no tricky planning issues to resolve, no major disruptions to mitigate.

    Unfortunately current policy is addressing the task in a very inefficient manner. The heart of the issue is a failure to differentiate between the infrastructure (that provides the facility) and the service providers who rent the facility to offer a service to end customers. Sort that out, provide capital funding and watch the returns roll in.

    • Iain Gill
      Posted March 12, 2013 at 7:00 pm | Permalink

      Its a bit more complex than that. BT have used their size to ram their chosen solution down everyones neck. A solution not selected elsewhere in the world. And they have a track record of picking the wrong solution. We need fibre optic cable to each and every house, thats the only way of future proofing it, and all new buildings should have fibre to the house mandated. The BT half way house is the worst of all worlds. Its a shame more folk dont understand whats going on.

    • Mark
      Posted March 13, 2013 at 1:11 am | Permalink

      I have been watching the progress of B4RN (I have no financial or other interest in them), which has been providing FTTP in rural Lancashire. They are talking of average costs of around £1,000 per connection which will run at gigabit speeds, which is far below the costs of large commercial providers such as BT for such a network. They have an innovative approach, seeking free wayleaves and contributions to trenching their ducts from landowners in exchange for initially free connection.

  30. behindthefrogs
    Posted March 12, 2013 at 2:28 pm | Permalink

    So many government sponsored projects fail because they depend on private finance that is just not forthcoming. The refurbishing of derelict schools is the latest example. We need government action that ensures these projects get underway and do not stall due to the inability of private companies to provide finance.
    Quite simply the country needs the project completion rate to be speeded up. In particular those that are expected to yield a financial return must be made to make that return as early as possible.

  31. muddyman
    Posted March 12, 2013 at 2:28 pm | Permalink

    We need Energy! at all levels.
    1/ Gas Fracking – Go!, 2/ Severn Barrage – Go!, 3/Build Two or Three coal fired power stations – Go!.And there you have work for many and the resulting power you need, with the money you would have spent on HS2.

    • Mark
      Posted March 13, 2013 at 1:14 am | Permalink

      I’m not so convinced by the Severn Barrage. It’s technically feasible, for sure, but economically highly dubious: serious proposals have only emerged after promises to pay a subsidy of 500% for tidal power were made.

      • behindthefrogs
        Posted March 13, 2013 at 12:07 pm | Permalink

        In the next few years it will be necessary to replace the Thames Barrier as rising sea levels will endanger London. This seems an ideal opportunity to create an energy generating barrage on the Thames.

        • Mark
          Posted March 14, 2013 at 11:40 am | Permalink

          The barrage would have to flood areas behind it to generate any significant energy: a self defeating idea, I think.

          On a previous occasion I calculated the approximate hydro power available down the course of the Thames, and concluded it was about the same as the output of a single Rolls Royce Trent jet engine when the river is flowing normally.

  32. nTropywins
    Posted March 12, 2013 at 3:16 pm | Permalink


    the planning process is long tortuous and extremely expensive and subject to the whims of unelected pressure groups. As a result the interests of badgers and bats are put ahead of the interests of human beings. No surprise there really. But if we had a government that had a clue it could be different.

  33. David Langley
    Posted March 12, 2013 at 3:38 pm | Permalink

    A benevolent dictator would be better than a government that takes years to debate and agree and then finds out it has legislated its ability to do things away.
    What a mad way to get us out of the mess we are in. Assuming we are bankrupt but allowed strangely to continue trading!!! Shouldn’t we adopt the war time practice of making a decision then doing it and chucking in jail or the dole queue the jobsworths getting in the way. I just get more and more frustrated by your good posts saying we should do this but we dont. I think a lot of frustrations have turned to anger and the Conservative led coalition is going to feel that in 2015 and will bitterly regret it.

    • livelogic
      Posted March 13, 2013 at 11:48 am | Permalink

      A benevolent dictator is usually better until they stop being benevolent that is.

  34. Michael
    Posted March 12, 2013 at 3:50 pm | Permalink

    The Retail bond market in the UK has seen issuance of nearly £3 billion since February 2010 paying 4.5 – 6.5% yield. Infrastructure debt would be far more secure even than these and their longer tenors would appeal to both private and institutional investors. The problem is that investors do not like to assume construction risk so most of these deals would need some kind of bridge finance to get off the ground although it might be possible to attract retail bonds for deals where construction risk was low. This could arise either by virtue of the sector itself (student accommodation or hospitals but not roads for example) or by the sponsor providing very strong completion guarantees backed by liquidated damages. They would need a higher return to compensate for this increased risk but, in scheme of things, not material.

    • Denis Cooper
      Posted March 13, 2013 at 3:05 pm | Permalink

      Is the total issuance for three years really just that £3 billion?

  35. Gary
    Posted March 12, 2013 at 3:57 pm | Permalink

    Expand broadband and get people telecommuting to work. eg. 90% of The City can telecommute, they all stare at screens all day in any case. If they don’t like working from home, then build telecommuting centres in their local towns.

    Then scrap HS2, and also watch how train fares plummet, house prices in major conurbations plummet, and the people who actually have to be at work, like nurses and teachers will be able to afford to live in the big cities. Some vested interest won’t like it, tough. We should be way past the point of worrying about special interests, only the interest of the country matters now.

    • uanime5
      Posted March 12, 2013 at 6:50 pm | Permalink

      It’s already possible to do this with the current infrastructure. The reason why most people can’t work from home is that managers like their staff to come into the office.

      Also if less people are using the trains then train fares won’t plummet, they’ll dramatically rise. Don’t expect house prices to fall either.

    • Nina andreeva
      Posted March 12, 2013 at 7:03 pm | Permalink

      I think the problem here is that the “special interests” have a vice like grip on parliament at the moment, just check out the CVs of Labour and Liberal MPs. See how many of them come out of the public sector elite or even worse the “caring professions” (not people that are actually of use, like nurses and doctors, but “equality & diversity” officers,social workers and probation officers). Unfortunately we have a weak willed Prime Minister who was so desperate for the job, because he believes he was born to it , that he was willing to make a deal with one faction of it, rather than do the sensible thing and lead a min govt like Harper in Canada

  36. Vanessa
    Posted March 12, 2013 at 4:08 pm | Permalink

    If the government dropped its idiotic global warming tax and subsidies and started building power stations that would be a start.

    (video ref left out)

  37. margaret brandreth-j
    Posted March 12, 2013 at 5:28 pm | Permalink

    Perhaps we ought to reclaim some low lying GB land back to accommodate new projects and house the millions extra inhabitants…say the Fens…

  38. Rods
    Posted March 12, 2013 at 5:49 pm | Permalink

    I agree with most of what you are saying, except are we expected to pay yet again to use the roads with tolls on top of road tax and outrageous amounts of fuel duty for non-existent global warming?

    The other area I would like to see investment by either forcing the water companies to invest in or to see if it would be a viable investment is to link several rivers and reservoirs to create a national water grid and then make it that a consumer could then buy their water from any of the water companies much like energy to provide some competition. This should help to drive down prices, stop the south suffering from droughts and an out of area supplier would only be obliged to provide the water that there consumers are using to put pressure on leakage. IMHO OFWAT has been a poor and rather unsatisfactory QUANGO with still above inflation prices and the water companies accounts that I have seen, they have made between 15 and 25% profits, which is unacceptably high for a safe monopoly. As an island with much rainfall, it does vary from area to area and year to year, but there is much stored water in our underutilized reservoirs in the north, so there is never every any shortage of water in the UK only lack of infrastructure to get it where it is needed!

    New railways should also be funded by the private sector and rather than continue to invest in high running cost, high maintenance, Victorian technology, we should be looking to a high speed low noise Maglev future, with the Shanghai Maglev 268mph operational speed and 19 miles of track with trains, built for just over $1.2bn. On a like for like cost allowing for inflation London to Birmingham would cost £10bn and go from London to Birmingham in under 30 minutes making commuting to London feasible on speed and cost grounds, thus spreading London wealth generation to other parts of the country. HS3 would make London to Manchester or Newcastle commutable, so extending the areas of London wealth generation.

    Where the 19st century industrially belonged to the UK where we were at the forefront of the industrial revolution. The 21st century is going to belong to Asia where they are leading the development of ground breaking new technologies for mass transportation with Maglev trains (A UK invention, with Birmingham Airport being the first commercial application), nuclear power with India the world leader on Thorium power stations (The UK had the first commercial power station) and many other technologies.

    While most UK and European politicians are obsessed with equality, minority and human rights. The elephant in the room is our economic decline. If we continue on our current path by the end of the 21st century, I’m sure, the UK and Europe will have much equality, an equality of poverty and misery for the majority of the population. I think some of the former Soviet Union countries show that once you are a poor country, lacking capital, it is very hard to claw your way back.

  39. uanime5
    Posted March 12, 2013 at 6:49 pm | Permalink

    Finance for such projects could be available where the investor agrees to make money available for say 25 years in return for an income of say 5% or so.

    At present the Government is offering 8% and EDF wants 10%, so I doubt any company commissioned to build a nuclear power plant will accept 5%.

    Ministers do need to revisit damaging EU energy policies which are pricing us out of international markets owing to the business bills, and making it very difficult for many people to afford the domestic fuel bills.

    Given that these problems aren’t occurring in other EU countries it’s more likely that the cause is due to the UK’s domestic energy market, than due to EU rules. But that’s what happens when you privatise the energy market without putting in place regulations to ensure there will be enough electricity.

    In other news manufacturing is doing badly so unless the service sector has an amazing performance the UK will have a triple dip recession:

  40. stred
    Posted March 12, 2013 at 7:04 pm | Permalink

    Off subject, this evening R4 interviewed someone from Citizens Advice who was against paying rent directly to tenants rather than the housing society or council landlords. A trial has shown that arrears were 5x those when payment is direct. Many private landlords will not accept DHSS tenants for this reason as they had direct payment removed by Labour.

    Also interviewed was Shaun Bailey, who was a prospective Conservative MP and youth worker in London. He was keen to pay tenants their benefit and thought they should take responsibility for paying on the rent. To pay directly would be patronising.

    It was interesting to hear a Conservative politician with these views and to hear that Mr Cameron ever thought it would work. So a quick search revealed that Mr Bailey is one of his advisors and also runs a charity called My Generation.

    (raises issues about the charity which I do not have time to check-ed)
    How does Dave find them?

  41. Simon Jones
    Posted March 12, 2013 at 8:48 pm | Permalink

    I was talking to some builders at the weekend. All small firms that used to build the odd house and do small works but they are all stopping pretty well everything apart from miniscule jobs for themselves. They all cited taxes, bureaucracy and general interference from government jobsworths. I have had some experience of the sort of thing they were talking about and can see why they just can’t be bothered any more.

    I heard on the radio this morning that public sector employment is rising faster than ever so there aren’t going to be any changes. I wonder at what point Cameron and his colleagues will realise that they are stifling any hint of economic activity with their thirst for taxes, regulations and an ever bigger public sector.

  42. MichaelL
    Posted March 12, 2013 at 11:52 pm | Permalink

    “The bonds could be traded on the market like government bonds, so you could get out long before the repayment date.”

    Mad Mervyn and his gang can buy them off you when they get the presses into full gear …

    “Infrastructure debt would be far more secure even than these and their longer tenors would appeal to both private and institutional investors. ”

    Who is issuing, the UK government? ‘more secure’ … lol, lend to the UK government out 10Y, 20Y, … you ought to get yourself a job at the BofE.

  43. Mark
    Posted March 13, 2013 at 2:15 pm | Permalink

    How is your webmaster doing with looking at the site problems?

  44. Bickers
    Posted March 13, 2013 at 3:54 pm | Permalink

    The apparent fact that we’re incapable of building our own nuclear plant is probably a metaphor for our appalling misguided and mismanaged education system of the last 25 years.
    I went to a comprehensive in the 60’s located on a council estate. I can remember the teachers were clever and generally knew how to teach.

    • Bazman
      Posted March 13, 2013 at 9:30 pm | Permalink

      Or the lack of apprenticeships by companies.

  45. Dennis
    Posted March 13, 2013 at 5:21 pm | Permalink

    “The Uk is short of roadspace, electricity generation capacity, fast broadband, airport capacity, gas storage, deep water port capacity and homes in the right places. Most people agree it would be good to have more of all or most of these.”

    No reason given why this should be so and no policy ideas to address these problems.

    Reason:- Too many people. Not a single thought about this from anyone.

    Our 2050 carbon emissions target is not based on per capita emissions so bigger population means each person will have to have a smaller output – will it happen I wonder? More people equals more energy needed, more imports, more of just about everything – what a nightmare.

  46. Jerry
    Posted March 13, 2013 at 7:53 pm | Permalink

    Cookie set

  47. Mark
    Posted March 13, 2013 at 8:13 pm | Permalink


  48. Mark
    Posted March 13, 2013 at 8:19 pm | Permalink

    Posts on M6 Toll in answer to outsider, and on converting rail to dedicated truck routes in answer to behindthefrogs, and on coal in power stations in answer to uanime5 all missing.

  49. Jerry
    Posted March 14, 2013 at 8:50 am | Permalink

    48 hours and still not published

  50. Mark
    Posted March 15, 2013 at 5:58 pm | Permalink


  51. Mark
    Posted March 16, 2013 at 11:29 am | Permalink

    Cookie 2

  52. Mark
    Posted March 17, 2013 at 11:25 am | Permalink

    I guess this is now so far out of date that it may be best to return to the M6 Toll issue on another occasion.

  • 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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