Author: johnredwood

The row over what kind of car led to the Luton car park fire reveals a deep divide over what cars people want to buy and which they think are good. I have  not posted items from people who claim the car was an EV or was a diesel as clearly this is an important contested fact. Some assumed it was an EV, some countered it was a diesel and some now say  it was a hybrid with a lithium ion battery. Let us have the truth from some independent authority.

The reason for the row is of course the fact that the establishment wants people to love electric cars, whilst many people do not want one for all sorts of reasons. They are looking for any more bad news to try to put the establishment off its huge support for EVs. If cars with lithium ion batteries do self immolate more often than petrol or diesel then that would be a big negative. Bringing down a whole new car park is not a good look. We must be thankful no one died in the fire. There are worries about newsworthy vehicle fires and about the difficulty in putting out a battery fire, and issues over how common these disasters are.

The underlying problem is the insistence of net zero governments that we should buy or accept products we do not want because we think they are dearer, less convenient, not so fit for purpose. Indeed in one case government wants us to accept a product, the smart meter, which is offered free. We all of course are paying heavily for this through our tax and energy bills. Despite the free offer, years on half of us refuse one. Huge money and effort is being expended on trying to get us to take one. They will not take No for an answer. They should  try instead to understand the wide disagreement with these products and produce better ones we do want.

Too many people see EVs as dear, with too limited a range posing big problems to recharge. The refusal of government to say how lost petrol tax will be replaced is also a major worry. Too many people think heat pumps are far too expensive even after a subsidy, and worry they would be dear to run and let us down on temperature on cold days. Smart meters are thought to be a change designed to overcharge or switch off power if supplies become too irregular.

The green revolution needs to take consumers with it to make faster progress. That will require improved products and services that people can afford.

Much has been written and spoken about Labour this week as they met for Conference. I will today give one of my rare critiques of the leading Opposition party’s policy approach.

It is difficult to square their analysis which wrongly claims public services  have been starved of money in recent years, with their proposal that there should be an iron discipline against more spending, taxing and borrowing save for a very few limited changes paid for by VAT on school fees, and an extra tax on Non Doms. They ignore the £350 bn increase in annual cash spending this Parliament so far, an increase well above inflation. They ignore the collapse of public sector productivity.

Were they to win office they would soon be subject to many spending pressures from the public sector Unions and some of their own MPs to tear up the iron rules and go for a higher taxing, higher spending, higher borrowing model. They have no ideas for getting productivity back to even 2019 levels. Their attack on waste centres on getting back more of the wrong claims on covid relief monies,  where the present government’s policy is to maximise the repayments. Labour would be using the same officials to pursue the same policy. Savings on private planes will be tiny in a £1.1 trillion budget and many Ministers will doubtless still be flying around the world in expensive seats on commercial flights.

Their views on migration favour making faster decisions on applications,. The danger is they will allow or encourage flagging many more people through. The safest and quickest thing to do for the official is to say Yes. This avoids criticism from the applicant and legal challenge and means they could rush the weighing of the evidence or skimp the need for proper documentation seeing the Ministerial imperative to get a fast time for processing. Putting on  more safe routes of entry and speeding consideration could be similar to offering an amnesty to all who are here in the queue, and is closer to having open borders. The wish to do a deal with the EU to try to get more co-operation from France would come at the cost of accepting more migrants from the EU. The EU  are keen to spread the large numbers coming across their southern and eastern frontiers through as many states as possible.

The policy of wanting to force through more planning permissions to build homes and new towns whatever the local view of the desirability and feasibility of this policy is at least consistent with a migration policy likely to boost numbers of newcomers. The housing shortage is partly the result of up to 600,000 additional people coming to the UK and needing homes in a single year, when the homes build rate has neve been anywhere big enough to cope with such arrival  numbers on top of domestic demand.  The planning policy is not a good idea. Communities have been asked to take a lot of  new homes in many parts of the country, and have seen homes built before the extra roads, hospitals, schools, utility provision has been completed. It is also very difficult to hit CO 2 targets for reduction if the country invites in many more people and  needs to build many more homes for them, as this is bound to increase the CO 2 output substantially.

Please find below the link to my participation in the Spectator’s ‘Has Brexit Failed?’ event at Conservative Party Conference last Monday

https://www.spectator.co.uk/podcast/has-brexit-failed/

Scottish devolution when voted on at the end of the last century was claimed to be the way to allow Scotland to perform better than England in public services and economic growth when they could run their own services and boost their tax revenues.

I have no intention of arguing we should seek to reverse a democratic decision taken in a referendum, and many Scots may well have voted for more Scottish decision taking however it worked out. It  nonetheless sheds an interesting light on policies towards higher spending and higher taxes to see what Scotland has bought by choosing both. It is a perfect experiment compared to England over the last 23 years.

Scotland has imposed a higher 21% intermediate Income tax rate, a higher higher rate at 42% and a higher Top rate at 47% compared to the rest of the UK at 20%, 40% and 45%. This has helped Scotland to afford much higher public spending per head, though the bulk is paid for by a bigger grant from UK taxes. Scotland last year spent £13,881 per head on public services  compared to £11, 549 in England.

If we take the two key services of health and education we see little advantage from these higher sums. Scottish pupils on average are well behind English ones in maths and science judged by international secondary school comparative  assessment, and similar in English. The NHS in Scotland has more long waits to get NHS treatments than England and has a bigger percentage on waiting lists.

Meanwhile there has been no boost to growth from higher spending and taxes. Since 2000, the first full year of the Scottish Parliament, Scottish GDP has advanced 86.6% in cash terms compared to 106.2% for the UK as a whole.

Scottish voters need to ask some tough questions of their government. Why aren’t public services better for all the extra money? Why is economic growth lagging so badly? It also warns England that a further hike in taxes and public spending would not deliver better results on this evidence.

So Labour wish to run large scale investment projects better than HS 2. They wish to halve the government’s use of consultancies, reduce the use of chartered planes for government Ministers and ensure more private investment is added to state investment to boost output.

This is not going to suddenly change the growth prospects, get inflation down faster or transform public sector management. Consultancies may be due a hair cut, but you cannot say how many you need until you identify what they do and whether  they are essential because  the civil  service does not have the skills and knowledge. Otherwise they should only be used where  they are cheaper and better than in house.

Cutting down on plane use may afford some small savings though rail tickets are also dear these days and chauffeured cars do not come cheap.  Most of us would like to see more private investment alongside or replacing public investment. The question is does the state identify enough projects that will earn a decent return to attract the investment? Labour’s wish to impose more windfall taxes will put off some private and foreign investors, reminding them that if their investment works the government will want to pocket more of the profits.

Labour promises us iron clad  fiscal rules. They want to double up on Treasury forecasts and an independent Office of Budget Responsibility . They will make every decision on tax and spend dependent on a report and forecast by the OBR. They should have learned that that very system allowed a huge increase in spending and borrowing over covid when they backed government spending plans and urged more. It then led to big rises in tax revenues  which they attack.  Chancellors have to make judgements as they will be blamed for the results. The OBR needs to amend its models so it can forecast the levels of tax revenue and borrowing more accurately than it has been able to do in recent years. We need an accurate guide to help steer the ship. How would they restore lost productivity with public sector Unions keen to expand workforces?