Innovation and productivity

In his speech to the CBI Annual Conference the Prime Minister called for more innovation and better productivity advances. He is right that innovation can accelerate growth, create more better paid jobs, and raise productivity. Waves of innovation in past decades have fuelled huge advances in living standards and pay.

The government needs to use its Brexit freedoms and its powers as an important buyer of goods and services in our economy to boost the ideas that will give us greater prosperity. A more productive economy is one with higher pay and with better service.

One of the ways to raise productivity is to concentrate more activity and people in the most productive areas. The suggestions below seek to tackle that:

  1. Pharmaceuticals and medicine.  Allow access to generic anonymised data about treatments and success rates in the  NHS to companies seeking to research new life saving and life enhancing treatments and medicines.  Amend the rules on the conduct of tests on new drugs and products to make them competitive with US ones, whilst ensuring strong safety protections.
  2. Energy. This is an area of high value added and well paid jobs. The government accepts that oil and gas are transition fuels which will continue¬† to provide the bulk of the UK’s energy this decade whilst the electrical revolution develops. It should therefore use its tax policies and licencing¬† powers to develop more of our domestic oil and gas. Home produced produces less CO2, sparing the CO 2 generated by long distance transport for imports. It also pays a lot more tax to the UK Exchequer instead of paying huge sums in tax away for foreign governments.
  3. High energy using industries like special steels and ceramics, where there can be high value added from design and specification. Suspend emissions trading which imposes a heavy extra cost on our industry making it difficult to compete against imports.
  4. Defence. Spend more of the growing and substantial defence budget on UK procurement. Encourage greater UK R and D in smart weaponry, communications and cyber.
  5. Nuclear. Pump prime the production of small modular nuclear reactor to gain type approval and licences, ready to mass produce for home and export markets.

The Minister for Development and Africa’s Replies to my Written Parliamentary Questions

I will pursue these matters, as I am concerned about how much aid we give to multinational organisations to spend for us. Having a voice at the Board table in general discussion does not mean all the aid spent will be in ways and in places we would choose, and it does raise issues over accountability for such large sums of money. Given the need to control public spending better it makes little sense to trust international organisations to spend money for us. 

 

The Foreign, Commonwealth and Development Office has provided the following answer to your written parliamentary question (92049):

Question:
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, what unrestricted aid funding the Government provides to international organisations. (92049)

Tabled on: 21 November 2022

Answer:
Mr Andrew Mitchell:

In 2021 £4,277 million of UK Official Development Assistance (ODA) was delivered through core contributions to multilateral organisations. This was 37.4 per cent of the total UK ODA budget.

Multilateral organisations, including the United Nations, global health and education funds, the international financial institutions and the Commonwealth are essential partners in achieving the UK’s goals. The UK uses its voice on multilateral boards to ensure decisions align with UK priorities, including how and where their funds are spent.

The answer was submitted on 29 Nov 2022 at 16:00.

 

 

 

 

The Foreign, Commonwealth and Development Office has provided the following answer to your written parliamentary question (92050):

Question:
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, what steps the Government takes to assess the suitability and value for money of (a) projects organised by and (b) grants from international organisations. (92050)

Tabled on: 21 November 2022

Answer:
Mr Andrew Mitchell:

The suitability and value for money of international organisations receiving Official Development Assistance (ODA), including the projects they organise and grants they provide, is continually assessed through FCDO annual reviews and business cases, as set out in the Department’s Programme Operating Framework.

The Independent Commission for Aid Impact (ICAI) independently scrutinises UK ODA to international organisations to assess value for money and impact, including recent ICAI reviews of tackling fraud in multilateral organisations and of the UK’s work with the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). The UK is also a member of the Multilateral Organisation Performance Assessment Network (MOPAN), which carries out regular assessments of multilateral organisations.

The answer was submitted on 29 Nov 2022 at 16:01.

Top Public sector management could do better

I am always disappointed though not surprised by the very different approaches taken by Private sector company  Chief Executives and public sector ones when being interviewed about their organisations.

The company CEO s go on to explain how well their business is doing. They  explain their passion to serve their customers better, to keep prices down and to innovate. They can manage whatever circumstances  throws at them. If they are being interviewed because something has gone wrong, they apologise and tell us how it is now being put right and will not happen again. They  do not blame their shareholders for not supplying them  enough money or giving  them the wrong instructions.They do not say the Bank manager was to blame for being too mean.

In contrast public sector CEOs often come on to tell us their service cannot manage, to say the increases in the  cash they are sent are insufficient, to say they are unable to recruit the  people they have been asked to employ. They are rarely asked why they cannot run the service better or even what they are doing to try to improve it.

We need to encourage a can do approach amongst high paid public sector CEOs who need  to grab the quality and cost problems which bedevil too many public services.

Why does government cost so much?

The costs of running government have escalated whilst the crucial outputs of more and better service have  not risen as we would like. I will look at why in a number of  articles.

One of the reasons is the escalation of the overhead, with more and more management and administration being recruited. Two trends this century that have spurred this process are the moves to so called independent bodies to carry out what remain as government functions, and the overlay of an increasing  number of additional objectives to meeting service needs from net zero targets through diversity targets to behavioural requirements.  These may be desirable in themselves but can become a conflicting overload or impediment to service delivery if not well managed. Carbon reduction targets for example can conflict with the policy need to maintain national energy security and to have more contract gas and electricity at affordable prices from reliable domestic suppliers.  Wanting more legal migrants to fill jobs with a more diverse workforce can lead to greater pressures on social housing and NHS services as the population grows.

The danger of the new models of government are that you can end up with three different managements all running the same bit of service. If we take the  case of NHS England, the Ministers and officials in the Department of Health have a large paybill as if they were running the service, yet they are merely monitoring and supplying resource to the large management cadres of NHS England and the other  national Health quangos. These in turn seek to influence or control the management teams of the NHS Hospital and GP trusts that actually run the service day to day. So there are three public sector layers of senior management. The NHS then contracts in a lot of its needs from the private sector, so taxpayers also end up paying for the management of drug companies, staffing agencies, private care   and pharmacies who provide some of the service.

I have  no issue with sensible buying in and contracting out for drugs, catering services, cleaning and other matters that are well established under Labour and Conservative governments and where the result is better quality and value. I do have an issue with three or four layers of management within the public sector and the contractors, increasing the costs of dealing with each other and increasing the likelihood of blurred accountability.

The idea that a quango like NHS England is an independent body free of Ministerial involvement is not even accepted by its advocates. As soon as anything goes wrong the Minister is called in and is usually blamed. The Minister is rightly held to account in Parliament for the scale of resource , the aims of the service and the success or failure in using the resource well. Rarely does Parliament summon the CEO of the quango and hold her to blame for failure to use resources well, failure to manage staff well or failure to deliver sufficient quality and quantity of care. It is so much easier for all concerned to blame the Minister and blame a lack of money, which of course suits the Opposition in Parliament . As a result we do not get the alleged advantages of independent management, but we do get plenty of extra cost from pretending some of the time that we have this independence  and  that it is better than the people in the department doing the job.

The Immigration Minister’s Replies to my Written Parliamentary Questions

I find it bizarre that the government does not have an answer to this question which it can share with the rest of us. Given the high numbers of migrants welcomed into our country in recent years, it has taken considerable investment in social housing, primary and secondary schools, new surgeries and other capacity to accommodate them. The EU last decade suggested a figure of around 250,000 Euro for the set up and capital support costs for new arrivals, given the need for homes and good quality public services.

 

The Home Office has provided the following answer to your written parliamentary question (92052):

Question:
To ask the Secretary of State for the Home Department, if she will make an estimate of the average capital cost of providing (a) housing, (b) school places, (c) health services and (d) transport capacity for a new migrant family. (92052)

Tabled on: 21 November 2022

This question was grouped with the following question(s) for answer:

  1. To ask the Secretary of State for the Home Department, if she will make an estimate of the average cost to the public purse of providing (a) housing, (b) benefits and (c) public service capacity for a new migrant who takes a job below the average wage in their first year in the UK. (92051)
    Tabled on: 21 November 2022

Answer:
Robert Jenrick:

The Home Office does not hold this information.

The answer was submitted on 29 Nov 2022 at 15:46.

 

 

 

 

 

The Chief Secretary to the Treasury’s Replies to my Written Parliamentary Questions

I have confirmation that on Treasury/OBR forecasts debt interest will fall substantially by 2024-5 . They confirm the large increase in tax revenues over the forecast period that they expect. They also confirm that were the economy to grow a bit faster the deficit would fall.

All this reflects their strange definitions, including the capital item of index linking with the revenue item of interest paid. It also reflects a model which regularly exaggerates the deficit when there is bit faster growth, and understates the deficit in slowdown or recession.

It reminds us that the budget strategy revolves around increasing tax revenues to pay for rising expenditure.

 

The has provided the following answer to your written parliamentary question (92043):

Question:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the amount by which the total paid in interest on state debt will change between this year and 2024-5. (92043)

Tabled on: 21 November 2022

This question was grouped with the following question(s) for answer:

  1. To ask the Chancellor of the Exchequer, what estimate he has made of the potential increase in tax revenue between the 2022-23 and 2027-28 financial years. (92044)
    Tabled on: 21 November 2022
  2. To ask the Chancellor of the Exchequer, if he will make an estimate of the amount of extra tax revenue that would be received in financial year 2022-23 if the GDP of the UK were to remain at its present level, by comparison with the amount he expects to receive in that year according to present forecasts. (92048)
    Tabled on: 21 November 2022

Answer:
John Glen:

The Office for Budget Responsibility (OBR) is the UK Government’s independent official forecaster. The OBR’s most recent forecast was published alongside the Autumn Statement on 17 November 2022.

The OBR forecast that tax receipts will increase from £1.0 trillion in 2022-23 to £1.2 trillion in 2027-28, an increase of £196 billion. Debt interest spending (net of the Asset Purchase Facility) is expected to reach £120.4bn for the financial year 2022-23 and fall by £37.9bn to £82.4bn in 2024-25.

The OBR does not regularly produce analysis of tax revenue according to varying paths of GDP. Previous OBR analysis from January 2022 suggests that raising real GDP growth to 2-3% a year over three years, from a base growth forecast of 1.6% per year for those three years, could provide a benefit to the public finances of £10-40 billion through a range of effects across tax and spending.

The answer was submitted on 29 Nov 2022 at 12:04.

 

 

 

T

Muddle in the middle

Sir Keir Starmer wants people to think he is standing up to the Corbyn  left and this will make him ready to govern. He tells Mr Sunak he needs to stand up to his right to woo the elusive middle ground voters.

At the same time, revealing his own self serving intents to deceive, Sir Kier woos the very same so called right wing voters by pretending he now cares about excessive migration and accepts Brexit which he spent three years  fighting after the decision.

The advice to Mr Sunak to ignore the views of those who want to see the Brexit wins and want the government to take control of our borders is bad advice. I do not accept there is a simple right/ left split. If there is the  centre ground has been shifted massively to the left with all the Opposition parties in Parliament wanting higher taxes, more subsidies, price controls, more migrants, compliance with EU rules after departure, aggressive unilateral  pursuit of net zero, Wokeish  cultural attitudes and a belief that more public spending solves all ills.

What Mr Sunak needs to do to raise Conservative poll ratings from their recent extreme lows is to show he does mean business when he says he will bring down migration, end small boat crossings, lower taxes , deliver Brexit wins and restore the unity of the UK internal market. Sir Keir may need to reject the left but Mr Sunak needs to embrace millions of Conservative voters who currently think the government is not Conservative enough

 

Implementing the 2019 Conservative Manifesto

My main advice to the Prime Minister  is to revisit the 2019 Manifesto and complete our delivery of it. We all signed up to it and pledged to do what it offered. There are still things to do to keep our word. Actual Manifesto pledges are in bold type.

There are 3 main headings:

  1. Take back control of our borders . Fewer low skilled migrants. Overall numbers will come down. 

The government needs as a matter of urgency to pass legislation preventing long delays and too many appeals against decisions fairly made. It needs to expedite processing of asylum claims. It needs to end the use of hotels and reduce the pull factors encouraging illegal economic migrants.

It needs to have a less generous system of visas for legal migrants, reducing low paid migration. It should intensify improvements to welfare and work policies so many more people currently not working are in jobs and better off as a result.

We will not allow serious criminals into the country. Cut foreign nationals in prison. 

Just get on with that.

2.  Will not raise rates of National Insurance, Income tax, VAT. Raise National Insurance threshold. Lower energy bills.

The Manifesto pointed to great growth and prosperity from lower or restrained taxes. The government needs to re work a growth package, to include lower VAT on fuel and energy, with a better tax regime for the self employed and small business.

3. Get Brexit done. Take back control of our laws, our money, trade policy. Full control of our fishing waters. Take the whole country out as one United Kingdom. Northern Ireland to enjoy the full economic benefits of Brexit.

The government did get Brexit done but there remains issues concerning Northern Ireland and fishing.

The government needs to complete the Northern Ireland legislation to remove ECJ interference from Northern Ireland and to enforce the parts of the Northern Ireland protocol which clearly state NI is part of the UK internal market so should be free of checks on goods moving from GB to NI. There should be no enforced  regulatory alignment for domestic activities in NI/GB.

The government needs to set out expansion plans for our fishing industry along with proper protections against large scale foreign industrial trawlers and undue quota for overseas vessels.

What the Manifesto did not say

It did not promise a full scale reform of social care. It said “We will seek a cross party consensus for social care reform” which still does not exist.

It did promise net zero by 2050 but did not commit to any particular milestones this Parliament.

My Intervention at the Ministerial Statement on Energy Security

Rt Hon Sir John Redwood MP (Wokingham) (Con): Over the last 48 hours, wind has generated as little as 1% of our electricity, and it was at 2% when I checked this morning, while of course most of the homes we represent use gas for heating. Will the Secretary of State confirm that we need to get on with issuing more production licences for domestic oil and gas, which cuts the carbon dioxide involved and will enable us to keep the lights on, which we cannot do when the wind does not blow?

Grant Shapps, Secretary of State for Business, Energy and Industrial Strategy: My right hon. Friend is characteristically correct that we cannot always rely on a single form of electricity generation. As the French have found out, we cannot always rely on nuclear. I think France has 71 nuclear power stations in its fleet, but about half of them are down at the moment, so it cannot rely only on nuclear. I was discussing this very fact with my opposite number yesterday. I know that my right hon. Friend welcomes the £700 million development approval cash that we have put into the first new nuclear since the 1980s, and he is absolutely right that we need a broad spread of different energy forms to ensure that we can provide the cheap power we require at all times.

Being in office does not mean a Minister is in power – My Article for Conservative Home

Being in office does not mean a Minister is in power. The present government has some attractive policies and ambitions, but it is finding it tough to get them adopted and implemented.

It wants inflation down as does the public but is caught up with the largely false doctrine that the Bank of England is independent. It appears boxed in by the past large mistakes of the Bank.  This is a body owned by the taxpayer, whose Governor is appointed by the government and who reports to both the Chancellor and the Treasury Committee of Parliament. On its website it tells us that its dominant policy of the last 12 years, printing loads of money and buying bonds was one where it was merely acting as the agent of the Treasury. It is true that successive Chancellors from Alastair Darling to Jeremy Hunt signed off all the bond buying and selling and indemnified the Treasury against the entire predictable huge losses they will now make on these bonds they bought so badly. Unfortunately the Bank’s  independence over interest rates led to them being too low for too long and an inflation five times the level set out in their target and the instructions from Parliament and government to them. . Ministers now need to get a grip on the losses and the policy moves to get inflation back to the 2% where government wanted it. The public will blame Ministers more than the Bank for the inflation and for any recession the Bank now wants to correct its past mistakes.

The government  wants migration down but has just presided over a record number of  new arrivals over the last year. The government looks powerless to stop the flow of illegal travellers across the channel most days. Ministers do want the numbers down. They have made that clear to their officials. They have put legislation through to toughen the rules. They have tipped more money into Home Office budgets. They have gone hoarse asking officials to speed up consideration of asylum claims, and asking legal advisers to ensure people cannot defeat a fair decision they are  not an asylum seeker by frequent appeals and legal stunts. Instead of this working Ministers  get briefed against and complained against for being impatient to demand a policy it appears officials do not like, and clever lawyers run rings round the current law designed to stop them. Some combination of new laws, better administration and fewer enticements to come are needed to bring a success. The PM needs to back his Home Secretary to get it done.

It wants more young people to be able to afford a home. I agree. ¬†Controlling numbers of new people coming to live here is the single most important thing the government could do to help. If every year we need to build the equivalent of a city the size of Portsmouth ‚Äď or last year twice the size, a city like Liverpool ‚Äď to house the new arrivals it is no wonder we are short of homes. Most of the new migrants need the lower priced homes and the social housing which young people also need. The government needs to end the cheap labour model based on granting more permits to migrants to come and take low wage jobs. This is cheap for the employer but dear for the taxpayer, who is left with the bill for top up benefits, social housing, extra public service provision and the rest.

It wants to deliver the Brexit it promised to win a decisive victory in 2019 on the slogan of getting Brexit done. To do so it needs to persevere with the Northern Ireland protocol legislation and understand the EU  has  no intention of reaching a  negotiated settlement that is fair. Their  negotiating mandate never changes and does  not allow flexibility. The Unionists will not re join the Assembly all the time EU law has to apply to Northern Ireland and all the time the ECJ rules over them. We need to restore the UK internal market as the Protocol promised but as the EU prevents.

It wants to deliver the Brexit wins that come from being independent, yet so often Ministers are talked out of them . Where are the VAT cuts? Where the generous Enterprise Zones and Freeports? Where the improved or removed EU regulations to allow business to flourish? Where are the plans and finance to rebuild our fishing industry? Where the grants and encouragement to reclaim lost market share by growing more of our own food again as we did before we joined the Common Agricultural Policy? Why can’t Whitehall and Ministers review all EU law and decide what needs keeping over the next year. Each department knows the law concerned.

It wants to level up the country. The Conservative way is to spread the wealth and income more widely, helping those on lower incomes into better jobs and business opportunities. It is not based on increasing tax rates on  the rich and on companies. It is about growing the pie so each person’s slice can be bigger. Conservatism at its best gets out of the way of the many who can lead their own lives and get on in the world if taxes and regulations allow them, whilst helping those in  need. It means helping people develop their abilities, not concentrating on disabilities and restraints. All so often policies to do this are delayed or overwhelmed by more of the high tax high subsidy public sector led approach which has failed over so many years to make lower income places as successful as we wish.

This government does not have long to motivate the official government and quangoland to achieve the greater freedom and prosperity people voted for in 2019. It must show determination and strong friendly persuasion to get change in Whitehall before Whitehall’s resistance helps engineer a  change of government.