GDP figures for July showed growth of 6.6%, continuing the recovery that started in May as the lock down began to ease. It still leaves the UK economy 11.7% down from the February peak.

Within the totals manufacturing is now down 8.7% on February. Areas like computers have regained all the losses, and pharmaceuticals are ahead. Trailing at the bottom of the pack comes transport equipment including cars, still down 26.7% on February. I have set out the special factors that are depressing this output in previous blogs.

Even more worrying is the continued poor performance of education and health. In July education output was still 21.9% below February. This will now correct given the successful return of most schools this month. Health output was still down 25.7%. More work needs to be done to get a full range of treatments, operations and surgery appointments to start tackling the big backlog. This should be an overriding priority of government.

Naturally arts, entertainments and catering remain very depressed as social distancing is continuing to take its toll.

The government waited until the virus had fallen to very low levels. It then began a gradual relaxation of controls, essential to economic recovery and allowing freedoms back.

Its policy to control the virus switched to testing people to seek to ensure that all those with it or in contact with carriers self isolated, so the rest of us could lead a more normal life. It added to the measures by still not allowing some sectors to go back to work, and insisting on varying measures of social distancing for everyone.

With more testing today more cases of the virus are being identified, and the graph is going up again, as it has already done in places like Spain and France. So far it seems to be spreading more amongst the younger and fitter, so there are still not so many severe cases and deaths. Some say this pattern will continue. Others think it is only a matter of time before more vulnerable people get it and the serious cases rises.

The government and Councils turned to local lockdowns as a supplement to testing and isolating more people.In places where there was a surge in cases normal life was further interrupted to seek to control the spread. Now the government is moving back to national restrictions again as the cases still increase.

Yesterday the PM said he now wanted the NHS to develop a much faster test so people could get the result shortly after taking it. He would want to see a massive increase in the number of tests, perhaps a fifty fold increase on current levels. The idea is we could go to an event but be tested on the way in. Meanwhile current levels in excess of 200,000 tests a day are not backed up by sufficient laboratory capacity to give quick results, and some people are being told to wait several days or travel very long distances to get a test.

It leaves people asking some questions. Why can’t the NHS test more people locally? When will the current testing system be fixed? Who is now working on a rapid test and how many would it be possible to make when there is one? How will the public react to a prolonged period of restrictions on freedoms? How much more economic damage will be incurred if the virus does continue to flare up?

The government’s Single market Bill is a necessary piece of legislation to ensure the smooth running of the UK’s single market and customs union, and to provide the base for our independent trade policy after leaving the EU single market and trade policy on January 1. At the time of the Withdrawal Agreement and Political Declaration the EU signed up to two important propositions. They agreed that  the core of our new relationship with them would be a free trade agreement with  no tariffs, and they would respect UK sovereignty. If the EU keeps to its promises there will be no need for the arrangements envisaged for the Irish border in  the current legislation. If they do  not pursue these promises then the UK government has the right under Clause 38 of the EU Withdrawal Act to establish control over its borders and trade, notwithstanding  the Withdrawal Agreement. This is expressly recorded in UK law. It was also clear to the EU at the time when we legislated in this way that was the UK’s understanding of the Withdrawal Agreement, as we put it into primary legislation.

Yesterday I raised in the Commons some questions about how exams should be set and marked and how standards of our main educational qualifications should be upheld for the class of 2020.

Ofqual has come up with ways of modifying the exams for next year to take into account the interruption to education experienced by pupils in some schools who did not teach a full timetable from March to September by on line means. It has also changed arrangements for field work and oral exams to respond to CV 19 social distancing rules.

As a result pupils will be offered more choice in content for the exams in History, Geography and Ancient History. In English literature pupils will be able to take three of the four blocs of work for the exam. Fieldwork in Geography and Geology will be dropped and the questions on it in the written papers. Foreign languages and English will no longer have a formal oral or spoken language requirement.

It is important next year that we get back to an exam based system. Ofqual and the Exam Boards are still considering what is best to do on dates of exams. Should they be a bit later to give schools more time to make up for lost teaching time this year? How much later can they go without jeopardising University entrance procedures?

I hope they work out a system which is fair to all students and upholds the standards established in past years. Next year they have to span the range from pupils who got a full education for the full syllabus between March and July to pupils who got very little formal education during lock down.

Many companies are saying they are looking at more staff working some days at home and some in an office in the centre of a city. One of the issues that arises is how will people travel to and from the office, and what will that cost? Will the nationalised railways respond with attractive new tickets and offers which allows people flexible choices of when to travel, with a suitable discount for being regular users?

I started researching this article by going onto one of the big well known rail ticket sites. They ask the right questions there, and offer a cost comparison for people wanting to commute for fewer than 5 days a week. They of course can only compare costs against the background of the present ticketing offers. They show that the railway has not yet bothered to think through what a part week commuter might like.

The worked example I was offered showed this for the daily costs of travel:

3 day commuting Anytime day return £48.90

Weekly season £39.53

Annual season £33.83

Traditional 5 day commuting

Anytime Day return £48.90

Weekly season £23.70

Annual season £20.24

As these figures reveal, there is a substantial discount offered on high ticket prices for daily commuting 5 days a week. If someone now wants to commute three days a week they still have to buy the full 5 day a week season ticket, but get a much smaller effective discount on the daily fare. I guess these figures do not allow for holidays which means the actual daily cost on the season ticket is higher.

The railway needs to do better than this. People may now be flexible not only about which days they go into the office, but also which times. There may be a willingness by employers, particularly all the time social distancing applies, to allow or support staggered hours. The railway has always claimed commuter fares even on season tickets have to be so high because it is all peak travel. This imposes high peak costs on the railway which needs high capacity for just a few hours a day. This new pattern of reduced days and a wider range of times allows the railway to flatten the peak, which should lead to economies to pass on to users.

If the railway wants it business back it needs to do better by commuters. One of the main reasons people do not want to return to five days a week in the office is the high cost rail service which often let them down.

There seem to be some misunderstandings about what government and Parliament did sign up to as we set out the Withdrawal Agreement and Political Declaration.

As far as I am concerned I strongly supported Clause 1 of the EU Withdrawal Agreement Act 2018 which simply repealed the European Communities Act 1972, the source of all EU power in the UK. The Act then went on to recreate EU powers for a transitional period which I was less happy with.

The EU Withdrawal Agreement Act 2020 contained the all important Clause 38 to reassure people like me that the UK is going to be an independent sovereign state from the date of exit. That Clause as enacted says

“It is recognised that the Parliament of the UK is sovereign. In particular its sovereignty exists notwithstanding…” the provisions of the 2018 Withdrawal Act that had reimported EU powers. “Accordingly nothing in this Act derogates from the sovereignty of the UK”

This was a crucial reassurance, reflected in the Political declaration which committed both parties to negotiating a future relationship that reflected this UK sovereignty. No-one reading either document could be in any doubt that the UK was not signing up then or now to anything which meant the European Court of Justice would decide our fate, nor to anything that meant we had to follow EU laws. The UK did not offer up its fish as some further concession.

The Political Declaration said “It must also ensure the sovereignty of the UK and the protection of its internal market, whilst respecting the result of the 2016 referendum including with regard to the development of its independent trade policy and the ending of free movement of people between the Union and UK”. It went on to explain a Free Trade Agreement with no tariffs would be at the heart of the new relationship.

I find it very odd that some are now making silly allegations about the UK and international Treaties when the UK placed this central point at the heart of all our dealings with the EU over Withdrawal Agreement 2019/20. Either the EU assists in good faith to secure this with a deal, or it will have to accept that the UK can confirm all of this again in primary legislation by way of amendment to the detail of the Withdrawal Act . We can stress again we end Transition EU powers at the end of the so called Implementation period. So far it is the EU that has resiled from the Withdrawal Agreement by not accepting UK sovereignty and not offering the tariff free Free Trade Agreement they signed up to in the Declaration. .

Mrs May had the right approach and the right slogan when she first embarked on negotiations over the UK’s exit from the EU. “No deal is better than a bad deal.” If she had stuck to that we would now either be completely out with no deal, or more likely out with a Free Trade Deal to protect EU tariff free entry to the UK market and vice versa.

Once she dropped this important statement and revealed a continuous wish to give in to most demands the EU made she left the UK unable to get any kind of decent deal. The EU perceived the UK as weak and willing to recreate many features of its membership without the votes or voice. This was all much chronicled here as elsewhere, as delay followed concession and concession followed delay.

UK voters showed their massive disapproval in the European elections which should not have been needed had we simply left as planned, and went on to confirm their clear wish to leave the EU with or without a Free Trade deal in the General election of 2019.

The new government has rightly insisted on three things . They do not wish to stay in the single market and customs union which we are still in during transition. They are not trying to recreate something like membership of the EU through a comprehensive partnership or Association Agreement. They will leave without an agreement if the EU does not want a Free Trade Agreement. As they say in vivid language, they do not want the UK to become a vassal state. The UK is not seeking any special privileges from the EU and and is only suggesting similar trade arrangements to other independent countries like Canada and Japan.

It is crucial to success that the government adheres to this sensible position. It was rightly reminding the EU of it in statements by both the Prime Minister and the Chief UK negotiator this week-end. Brexit means taking back control of our laws, our borders, our fish and our money. The UK is offering a Free Trade Agreement which is of more benefit to the EU than to us, though both would benefit from it. Instead of continued posturing and refusal to discuss this issue the EU should take advantage whilst the offer is still there. The UK government this time does have to get on with No deal if the EU does not want to talk about proposals that are mutually beneficial.

I am glad to see the government has drafted unilateral U.K. legislation to amend the Withdrawal Agreement. We need to remove bad features of that if they do not agree to by negotiation. The EU has not negotiated in good faith so we must get on and establish full U.K. self government as we wish.

In the current debate about the return to the office I have only one firm conclusion. It is not the job of government to tell the private sector how to organise their workplaces or how to run their companies.

It is the job of government to lead the management of the public sector. Ministers appoint the most senior managers, like the bosses of Network Rail , the Environment Agency and all the other nationalised businesses and quangos. Ministers direct the work of the civil service. They do need to make decisions about how many staff need to attend an office, and where that office should be, on the advice of the senior managers.

It is clear Ministers and the heads of the civil service think the core civil service is needed in person in the central offices of the state. The task is now set for civil service managers to bring that about. It is also the case that where public service is falling behind in meeting demand for licences, permits, passports and the rest compared to pre pandemic levels there needs to be an urgent review of working practices to ensure good service levels.

It looks as if parts of the private sector have decided that the five days a week commuting model into a central City office is not a good one for some of their staff. In many cases staff can work from home given ubiquitous digital technology. Many staff are trusted to work from home, and can be monitored in detail by the use they make of their computer, on line conferences, email and phone. Sensible companies want enough good quality output more than they want someone to sit at a given desk for specified hours. Companies seem to be saying they want a new settlement where some people attend the office all the time and some part time. Some meetings will take place by on line call, and some in person around an office table.

For any given individual there is a reward if they have trusted status and permission to work from home some or all of the time. They save a lot of lost time and money on commuting. Quite often employees reward the company by working additional hours or hours not within their formal contract to get the work done well from a home setting. If the employer lets you supervise the plumber or pick up your child during the working day, why wouldn’t you take a call from a customer in the evening?

What has emerged from lockdown is just how much many commuters dislike the travelling part of their old lives. Poor train and bus services that let people down with cancellations and delays, and crowd people on uncomfortably is neither a good start nor a good end to the work day. The collapse in demand for public transport brought on by anti pandemic controls is being seen by many as a bridge to not having to travel daily even after the virus has subsided as a threat.

There remain many employees who do not have the option of homeworking. Most of the much damaged tourism, leisure and hospitality industry requires staff to assist the public at the place of service supply. Public sector offices helping the public may need the maintenance of physical offices with staff to carry out the work, as well as on line options for many to use.

I would be interested in your views on what the new settlement might look like. How much flexible and homeworking will there be in a year or so’s time, assuming the virus threat continues to retreat?

August was a quieter month than usual for car sales. Despite the recent exit from lock down, sales fell 5.8% on the month, with an especially big decline in business purchases. Many people and companies remain put off by the aggressive Vehicle Excise duties, and by the continuing spin against conventional cars.

As I feared, present policy is much more successful at dissuading people from buying new diesel or petrol cars than it is at persuading them to buy new electric vehicles. 2020 to date has seen a massive 59.7% reduction in diesel car sales. It is this segment of the market that the UK had done so well in, with large investments in clean diesel engine technology. There was also a decline of 44.6% in petrol cars. There were substantial percentage gains in the sales of electric and Plug in Hybrid cars on a small base. The market year to date has seen all electric vehicles take just 4.9% of the sales, and Plug in Hybrids 3.3%.

If the government cares about the state of the motor industry it needs to review its tax policy, and to reflect on the pace of change to electric products. It is curious that the car industry itself does not seem that concerned about the damage transition is doing to it. Some are still talking about Brexit effects when it is obvious that CV 19 shutdowns and the hostility to diesel and petrol cars has driven a big decline in the market before we leave the EU single market. It is tax and electric car policies that pose future problems.

What would it take to get readers to buy a new car any time soon? And what would you want from an electric vehicle on range, charge times, availability of power and price of car to make it a more interesting proposition? Clearly the public is very underwhelmed by the current offerings despite the enormous pressure on everyone to switch. So far the government is just proving it is easier to destroy successful past investment than to make successful new investment pay. They have put people off new cars but find it difficult to switch them to battery products.

(A longer version of this was requested by the Daily Telegraph for this morning after I had prepared this blog)

Levelling up is a good idea. It requires tax cuts, not increases. It requires using the planning system to allow more building and construction based investment in the parts of the country that want the extra jobs and money it brings.

The government has just shown how a tax cut can provide a good boost to activity, jobs and incomes. The cut in Stamp duty has encouraged people to get on with swapping their home to a property that is closer to their current needs. It has helped people downsize and upsize, to move from urban areas to  more rural areas, or to move into cities from the countryside. It has allowed people to buy extra space for  homeworking, or  locate closer to schools or workplaces. It has given them more choice.

As a result housing transactions have just exceeded the pre pandemic levels. When people move it creates work for the estate agents, conveyancers, mortgage businesses, removal firms, painters and decorators, builders doing small works and many others. The Inland Revenue will probably be a winner too from  taxing all that extra activity as well as getting a Stamp duty boost from more transactions as some offset to the lower rates. 

Government works best for people when it respects their wishes, helps them achieve their ambitions and extends their effective choices. We need a series of policies that do just that. Levelling up needs urgent action to bring in  extensive freeports to boost industrial and commercial investment. It needs cheaper energy so we make more things here. It requires new farming and fishing policies so we grow and rear more of our own food.

The government cut the top rate of income tax and collected more revenue from the better off. It cut the rate of corporation tax and collected more revenue from business. It offered a meals discount and kick started restaurants. Let’s have some more policies that promote levelling up  by cutting taxes and costs for people. That way we will get the deficit down more quickly, from all the extra activity.