2023 could promise much. It will be the year when inflation falls from the unacceptable peaks of 2022. It should be the year when we put lockdowns and special inconveniences from covid behind us. It should be a year when western resolve deters new aggressive actions by Russia, China, North Korea and Iran. It could be a year of economic recovery. It should be a year to show freedom works, offering hope to the world.

It is true that tomorrow though it is a new year we will still inherit the pains and problems of the old. Russia will continue to shell and bomb Ukraine, though should recoil from her dangerous threats with nuclear weapons. China will incur a cost in cases and deaths as she embarks on the last big move away from covid lockdown. The economies of the UK, USA and EU will experience more months of slowdown, recession and cost of living squeeze as their Central Banks seek to correct their gross inflationary errors by inflicting economic pain.

That is why as we want this year to be so much better than last we must look to governing establishments to change what they are doing to give us a better outcome. In the UK that means three things. A pro growth budget that makes it more worthwhile to work and to run a business, with tax cuts and benefit changes. A belated reform of business rules and laws , to facilitate more UK business and individual opportunity and success. This should include tackling the supply of illegal labour and illegal migration which undercuts legal businesses. A major private sector led investment in growing more food at home, landing more of our own fish, producing more of our own energy and producing more of our manufactured products.

If we do these things we can emerge with a stronger growing economy by end 2023. More people can succeed in their personal journeys, getting more skills, better paid jobs and owning their own homes. True levelling up is about helping create a nation of owners where owning your home, having a stake in the business you work for and having savings for the future is the experience of the many and the credible aspiration of many more.

The Opposition parties’ menu of  higher taxes, deploying the politics of envy, attacking  profitable businesses and seeking  to level down the successful would .keep us  in recession, intensifying the cost of living squeeze. If we carry on with price controls we will create more shortages. If we back windfall taxes we will deter the investment in  extra capacity we need.

The Prime Minister and Chancellor have choices. If you want a better 2023, if you want the troubles of 2022 to recede, then join me in calling for growth policies. Let us give freedom more of a chance. The UK backs  brave Ukrainians  fighting for it . We need to insist on it at home and abroad by voice and vote.

The 40% collapse in UK new car demand was intense from 2016 whilst we stayed in the EU and grew worse with covid lockdowns. The  UK car industry lobbied furiously for the UK to stay in the EU, claiming exit with  tariff barriers would cut its output. The industry got its way with the conclusion of a tariff free Agreement on leaving. Meanwhile domestic demand plunged far more than anti Brexit forecasters thought car exports to the  EU could fall with a so called hard Brexit.

Had we left on WTO terms and had the EU imposed a 10% tariff on imported cars from the UK, the Uk would have countered with a 10% tariff on imported EU  cars to the UK. As we import so many, UK manufacturers would have been able to sell more to UK buyers whilst losing some continental market share.

What is odd is the industry has not lobbied strongly against the UK banning new ICE cars by 2030 nor against  the penal Vehicle Excise taxes imposed on some vehicles. Why no voice, as these have done far more damage than any unlikely EU tariff would have done that caused so much concern?

It is also odd that the UK industry does not seek to sell more to UK customers. That should be the easiest tariff free market to serve, with lower transport costs and trade friction than exports to a variety of different EU countries using a range of languages and trading customs.

It is most unusual to watch a great industry accept that it must write off all its invested capital in the products it currently makes, and stop the development of ever better intellectual property for diesel and petrol cars. It is even stranger to hear them cover up the demand collapse and explain away bad figures by claiming it is all about microchips. Shouldn’t we have a more honest debate about the costs and pace of change to an all electric car park? And shouldn’t the industry listen to consumers who are making clear most are not ready to buy the electric product any time soon.

The UK new car sales figures peaked in 2016, just ahead of new more penal taxes on buying new vehicles came in with higher Vehicle Excise duties. Since then car sales have fallen by 1m cars a year to just 1.6 million.
The industry seems to be in denial about this. It usually blames a semiconductor shortage which got in the way of making more vehicles.

Clearly the tax was a turn off, though never mentioned. So was the government decision to ban new diesel and petrol car sales by 2030 allied to great pressure to buy all electric cars. The public was put off buying the traditional products by the uncertainties created by a future ban. They were not persuaded by the merits of EVs, fearing lack of range, lack of charging points and disliking high prices. They expect government to have to introduce taxes on electric power for cars when EV ownership takes off to offset the loss of fuel duty, making the total electric costs of owning and running even higher.

Why doesn’t the industry recognise it is not offering the products people want at attractive prices? Why does it design the EV schemes without thinking about the practicalities for many of us of a reliable working car that can be refuelled in five minutes at a readily available filling station and has a 500 mile range ?

It seems the industry spends its time discussing product design with governments and not with customers. As a result it has a demand problem which government policy has helped create. Maybe the idea is to have far fewer new cars as a means of cutting CO 2, as scrapping an older diesel and buying a new electric is heavy on the CO 2.

The UK industry faces the prospect of closing all its current diesel and petrol car plants in the next few years. It is making slow progress at putting in replacement capacity for all the electric vehicles government wants us to buy instead.Maybe the industry idea is we should import even more vehicles once electric is all we are allowed.

I have often called for an NHS manpower plan, and have been urging Ministers to agree a way forward over employment with senior NHS managers. The agenda for any talks between representatives of the 33,000 NHS managers and top Ministers should include:

1. How many medical and support staff will it take to get waiting lists down?

2. What will it take to fill existing vacancies?

3. Given the urgent need to put in more beds to hospitals, what extra staffing is needed for extra beds?

4. Are current arrangements for choice of shifts and timing of work sufficiently flexible?

5. Doctors retire early with some saying it is pension tax rules. Can these be eased?

6. The tax system hits people when they go over £100,000 a year where many doctors are. Can the anomalous 60% rate be reduced/ tapered better?

7.Are nurses correctly graded for the band based pay system?

8. How much use is made of promotions to boost the pay of good committed staff?

9. Is enough being done to train more future nurses and doctors?

10. Are there procedures and advice that can be handled by suitably trained and certified people who do not have full doctors qualification but are expert in the permitted field?

11 What will the savings be from substituting permanent employees for Agency staff?

12 How can quality and productivity overall be improved?

Three  contributors who know the guidelines  tried to post comments that violated my rules  of decency by a wide margin on Christmas Eve and Christmas Day. I will not be posting their thoughts in future. It was particularly foolish to try this when the tone of the blog was taken from the Christmas message of goodwill.

Let me briefly remind those who want to post

No swear words

No false allegations against named individuals

No hatred of others because you disagree with their views

This site is very tolerant of different views and wishes to explore differing ways of tackling national issues. The aim is to further democratic debate and understanding.

As the old year moves to a close I am urging Ministers to set out how they intend to create a new year less troubled by strikes. So far the government has worked hard on ways to limit the damage strikes cause whilst declining to enter talks with Unions over pay.

The government needs to differentiate between the strikes and tailor its response to their differences. The railway disputes are taking place in an industry that has lost a lot of its passengers and fare revenue. It has become very reliant on state subsidy, and runs too many near empty trains at taxpayer expense. Now its main revenue earner, five day a week commuting, has been changed by more homeworking it has lost bargaining power as well as fare income. The government should expect management and Unions to settle with something for something deals to improve working practises and manning arrangements. It should continue to make clear there is no increased subsidy on offer.

The NHS strikes take place in a service that has many unfilled  vacancies, has problems with retaining  staff and has a big waiting list of work. The senior managers should be required to deliver the much delayed manpower plan which should set out how grading, rostering, pay scales and conditions of employment will be improved to ensure full numbers and a motivated workforce. The immediate talks need to be between Health Secretary, Chancellor and PM with the top management of the NHS to agree a plan and to create a common response to the strikes. The strikes are said to be about more than money. Managers have flex over grading, bands, increments and promotions. There needs to be a recruitment and retention solution. Some of the top management seem to be on the side of the Unions. There needs to be a common agreement between Ministers and senior executives which managers then need to implement. There needs to be an agreed way of getting more value for all the extra cash channelled into the NHS.

Enjoy your Christmas. Have a great day.

Comment if you like. I will read it tomorrow.

Once upon a time there were three little Central piggy banks. Or to be more accurate, at three very different times  three  little Central piggy  banks were set up. First came the smallest one, the Bank of England. There was next the biggest, the Federal Reserve Board. Much later  there was the youngest one, the European Central Bank. 

They all had misleading names. The Bank of England is the Bank of the UK, not just England. It went in for understatement or historical lethargy about its name . The Federal Reserve Board is the Central bank for the whole USA . It has kept its old name too as a memory of how the dollar helped drive integration of the states of the Union through its federal approach. The European Central  Bank is not the Central Bank for Europe but just for some countries that joined. It launched with glorious overstatement. 

By 2000 the three Central piggy banks thought alike and started to hot things up. They all asserted they were very important and independent. They denied that the states who owned them and who appointed their top people had any influence over what they did. Armed with this moral right and their cleverness they allowed a massive bubble in credit, fancy derivatives and bank lending. By 2007/8 it was so extreme they decided to stop it. In doing  so it caused a Great Depression. There was the noise of a large banking crash. 

The governments were not very happy about this. Several of them were criticised  by angry electors who blamed them rather than the banks. So the banks and the governments got together and blamed everyone else in finance apart from themselves. Electors threw out the governments anyway. The top people in  the three little piggy banks kept their high salaries and important jobs.

The three little piggy banks reckoned they needed to try something new as the public might get cross with them as well as just sacking the governments. So they decided to make themselves very popular by printing lots of money and driving down interest rates. All they had to do was create a big figure in an account and then go out and spend it. And so they did. They were not very imaginative shoppers. They decided to spend all their newly made money on buying up government bonds. This meant all those who owned these bonds got richer as the prices went up, and some had lots of money to spend when they sold their bonds to the banks.

The big bad Inflation Wolf stood outside the doors of the little piggy banks. These were wise piggy banks who had learned from the old story of the three little pigs. All their banks were built of  stone or steel  so they did not fear the Inflation Wolf. They told him he could not blow them down.

A small number of monetarists told the piggy banks if they printed lots of extra money there would in the end be a big inflation. The banks ignored them .

They got away with the money printing for a bit. They were lucky because the commercial banks were all so damaged by the banking crash and by new rules stopping them lending so much, money stayed under reasonable control despite the printing. Even the  monetarists were not alarmed either all the time money did not grow too much.  The wolf got fed up with waiting.

When there was a new disease spreading fast around the world governments decided to lock down large parts of their economies and order people to stay indoors. Once again the little piggy banks cranked up their printing presses. The governments were so grateful as it meant they could borrow billions to give to people so they had some money when they could not work. Everyone agreed this would not be inflationary.

Unfortunately as the economies were unlocked and recovered quickly the little piggy banks kept on printing. Why stop now they asked? it makes us popular. There is still no inflation. The monetarists stirred and pointed out that  now there would be a big inflation because the new money was leading to lots more money around . The little piggy banks thought they were silly and  carried on printing and buying up bonds at ever higher prices. 

The bad old inflation wolf had learned a few tricks compared to his ancestor who had landed up on the fire by going down the chimney of the third  little pig’s brick house. He saw that whilst the litttle central piggy banks all had strong steel or stone buildings, they had very weak finances. They were buying many times as much in bonds as they had capital. If as he thought they started to lose money on all those very dear bonds, what would happen then? 

And so it proved. A great inflation took hold just as the monetarists had warned and the wolf had  hoped. The little piggy  banks decided they had to do something about it, as suddenly they were no longer popular . People had believed them when they said they knew what they were doing and there would be no inflation. So they did what they do best. They blamed the  big inflation on  a  nasty war though prices had been surging well before it started. Then they decided to  create a recession to make things cheaper again. This meant they would lose huge sums on all those bonds they had bought.

The wolf licked his lilps  about all those losses. They were going to run out of money and have to leave their strong buildings. In each case the losses would amount to far more than the capital the banks had. If they were normal businesses they would go under. But said the little piggy Central Banks, we are not normal . We do not have to worry about losses. The Bank of England had a good answer to the wolf. They had a guarantee that all their losses would be paid by the taxpayers, so they were financially secure. The Fed said we can just create more dollars. The world needs our dollars so we will just ignore all the losses and print what it takes to pay our salaries. You will not get us Mr Wolf. Which left the European Bank at a bit more of a loss. So they said most of their losses would be sent to the member state national banks , sparing the European Bank  the problem. If the member state banks  ran out of money they would need to get it from their governments.

Mr Wolf is dismayed outside the three little piggy central banks. It looks as if they are cleverer than him after all, just as the third little pig outwitted the original Mr Wolf all those years ago. The little Central piggy banks will live on, with the taxpayers having to pay colossal bills for their latest mistakes.