One of the worst features of past highways mismanagement in the UK has been the practice of putting water pipes, gas mains, phone and broadband wires and electricity cables down the middle of busy roads and covering them with large amounts of concrete and tarmac.

The Highways authority has to grant access to the utility undertakers to close all or part of the road, dig it up and repair, monitor or replace the pipe or wire. Parliament has tried to impose some discipline, giving the Highways Authorities the power to schedule the work, to time limit it and to fine the contractor for non performance. Of course access has to be granted immediately if there is a gas burst or a water mains leak where safety is paramount. There are roads that are designated sensitive where the Authority can demand that repairs and replacements be done off peak or at night owing to how busy and crucial the road is.

I have urged utilities and Councils to put new networks and replacement networks into verges, under pavements or away from main  roads, preferably in accessible conduits so there  will be no need in future to drill through layers of tarmac and concrete to find your particular pipe or cable without skewering someone else’s. Wokingham Borough tell me they are doing this with new developments. It would be good if universally we were starting on a long work out to get rid of this problem.

In  the meantime we have to manage a situation where most cables and pipes are under main  roads. So today I ask how should Councils manage the demands for access to repair and replace? Do they need any new legislative powers? Is the balance right between the needs of the utilities and the needs of the users? Should we be tougher and demand mpre off peak working?

One of my favourite green policies is to ease congestion and get traffic moving smoothly without so much stop start interruption. We could save so much fuel and cut emissions substantially if vans, cars and buses could proceed at a steady pace more often.  Allied to it is greater safety, through better modelled junctions with fewer frustrated drivers taking unreasonable risks.

I have often argued that roundabouts work much better than traffic light controlled junctions to maximise flows and minimise interruptions. Today I wish to share with you some work I have been doing on light phases, following careful observation of a large number of regularly blocked junctions with lights.

One of the common causes of delay is the four phase light set at a conventional crossroads. If we assume a 100 second complete set of phases for the lights then  traffic from east, west, south and north have a green phase just 25% of the time or 25 seconds each way. Traffic from any direction can use that green phase to carry straight on, turn left or turn right when they finally reach the turning points. This means each direction of main road is not being used for 75% of the time, apart from turning traffic.

It would be much better if the lights were rephased so that most of the time east and west traffic have a green light for straight on or left turning, or north and south traffic have green for straight on and left turning. There should be short right filter phases, with one allowing north and south to turn right, and one allowing east and west to turn right.

If we allow 7.5 seconds for each of the two right filter phases, the primary east-west and north-south phases then operate for 42.5 seconds per 100 seconds instead of for 25 seconds.  This gives us a 70% increase in road use or capacity across the junction, which will greatly cut delays and allow more smoother flows of traffic.

Another regular cause of delay at off peaks is lights turning red on main roads to allow access from lightly used side roads when there is no traffic present in them. All light sets allowing side road traffic onto a main  road should have traffic sensors, with constant green for the main road unless traffic is detected, when the normal timings of phases would then kick in.

The IMF published their latest forecasts for growth yesterday as I opened the first debate in Westminster Hall this decade, choosing the topic of how to promote faster growth. The IMF cut some of their forecasts. They also drew attention to how the monetary easing (other than in the UK) has led them to expect 0.5% extra growth world wide within their 3.3% forecast for 2020.

The IMF expects the UK to grow at 1.4% in 2020 compared to 1.3% for France, 1.1% for Germany and 0.5% for Italy and 1.3% for the Euro area as a whole. These are poor Euro area figures and are despite the Euro area enjoying a substantial monetary easing from the ECB. The UK could grow faster than that if the government and Bank of England took the actions I have been proposing.

The IMF shares many of the assumptions of the Davos internationalists, urging states to drive the green revolution faster. The IMF usually fails to forecast turning points, missing recessions until they are happening, and exaggerating negative consequences for any country not following the global agenda.

It is probably right to be so pessimistic about Italy where the Euro rules impede change and about Germany where the green policies are damaging the car industry. The UK should continue to outperform the Eurozone this year if pro growth policies are followed through.

As we leave the EU we need to create our own approach to preventing unfair competition and avoiding unacceptable subsidies. The very wide ranging EU regime under the control of the Commission and Court can be too long winded and unfair itself.

There are some industries which can benefit from exit from the EU once we can change the rules. Fish is the most obvious which I have talked about before. As we take control of our fish stocks again we need to stimulate a larger domestic fishing fleet to capture a much larger proportion of a smaller total catch. This in turn can act as a means of creating a larger fish processing and related food products industry.

Farming too can be given a domestic boost by leaving the restrictions of the CAP and providing a system of financial support which encourages more domestic food production.

When we leave we will also be able to strengthen our domestic capability to provide the weapons, vehicles and protection that our armed forces require from their suppliers. When the government wishes to buy naval vessels or aircraft or body armour or small weapons the competition should preferably be organised for domestic producers so that the technology and ability to scale up production rests here in the UK should need ever arise created by a larger conflict. We can rebuild parts of our defence industries that have been run down in recent decades as a result of smaller budgets and shared procurement.

Where we wish to buy good products from allies that are already available we should seek the capacity to make them in whole or part under licence, to have access to the technology, or have an alternative we can control in the event of disagreements. Of course there are benefits from sharing ideas with allies and from buying from each other, but there needs to be fair give and take and satisfactory arrangements to ensure we have the ability to replace and repair the weapons in any circumstances.

It needs to be easier to set up a business, to work for yourself, to take on your first employee, to find new premises and to expand a larger business. All these barriers to growth need examining and changing if we are to achieve the government’s  ambitious target of 2.8% growth from here. Today we need to look at the regulatory framework and the relationship with government.

The government has rightly made clear it has no wish to lower employment standards or weaken health and safety and other essential protections. There remain many opportunities to make life easier for businesses without making it worse for employees or neighbours.

More freeports offer the opportunity to run a business which brings in imported raw materials and components, transforms them into goods and export them  without having to pay tariffs and taxes  until you sell them on  and make a profit. It cuts down the paperwork and promotes lower cost production.

More Enterprise zones allow business to obtain better capital allowances or business rate relief. They could also offer simplified planning and access to cheaper land with permissions.

As the government steps up its funding of science and technology in schools and universities, it should also encourage university/business collaboration and offer contracts which foster business spin off from research. The very successful Oxford and Cambridge clusters of research and business parks can be replicated elsewhere and grown everywhere.

The government will want to improve FE, technical and vocational training and ensure accessibility for all ages and experience levels. Training a better workforce is central to raising productivity which allow higher pay and the fulfilment of more individual ambitions.

The Chancellor gave us an upbeat message yesterday in  his FT interview.  He is putting growth at the forefront of his economic policy, as I urged. He thinks we can achieve the average  growth rate since 1945 of 2-.7-2.8%. It’s a bold ambition, given the poor rates of growth we have witnessed in the advanced world since the banking crash and Great Recession in 2008-9. Most forecasters now think the trend rate of growth is more like 2% than 3% from here, with some now thinking the UK and the Euro area can only manage 1.5%.

On Tuesday I am  leading a debate in Westminster Hall for 90 minutes on how we can put in place a Growth strategy. We clearly need to reverse Mr Hammond’s fiscal squeeze, as the government has promised to do. The state debt rules hold the EU in thrall and help keep growth down because they keep taxes up.  They do not flex for the Laffer effects of lower rates bringing in more growth and in due course more revenue. The USA went for big tax cuts in 2016 and delivered much faster growth than the EU as a result.  

We clearly need the Bank of England to get in line with all the main Central Banks of the world and have a policy which fights slowdown and recession  instead of promoting slowdown. I have written plenty about that since the spring of 2017 when the Bank started to tighten.

Today in preparation for the debate I am asking  for ideas on which taxes and which tax rates should we cut to get faster growth. There are three broad categories, tax on transactions , tax on work and income, and taxes on growing a company and owning and managing assets. Some of the tax rate cuts could bring in more revenue, some will result in lower revenue.

Transaction tax cuts  to consider that could boost growth include Stamp Duties, Vehicle Excise Duty, and VAT on some purchases.

Taxes on employment and income include Income Tax, National Insurance., the Apprenticeship levy, and  IR35.

Taxes on managing and owning businesses and assets include Capital Gains Tax and Business rates .

 

It has been widely accepted that the Iranian authorities made a tragic mistake. They now confess that they wrongly thought a civil airliner with 176 people on board was an incoming cruise missile.

In a world desperate to calm tensions it is probably wise to accept the latest Iranian explanation of what happened. It is important, however, that Iran learns the lessons of this tragedy. The plane they shot down had only just taken off from their main civilian airport.  It had been given clearance by the Iranian authorities for take off, and must still have been in closely controlled airspace adjacent to the airport. Their military need to know of civilian movements from a central civil aviation hub under the control of their government. They could always instruct the airport to avoid take offs at times of high tension where and when  they might unleash missiles.

It appears that many people in Iran are now angry with their government over the delay in offering this latest explanation of the last seconds of the airliner, which in turn is reminding them  of their dislike of other features of the Iranian regime. Iran’s stance supporting various terrorist movements around the Middle East, and backing proxy wars against  Saudi Arabia and other Sunni states has led the USA to impose strong sanctions on Iran. These are gradually damaging the Iranian economy, and are forcing Iran to find sales outlets for her oil away from traditional markets in the West. Some Iranians also dislike the disregard for personal freedoms and the limited adherence to human rights.

Mr Trump clearly still does not want to go to war with Iran. Because he had signalled his wish to avoid military encounters in the Middle East he felt Iran saw this as weakness and thought they could attack the USA and her friends in the area as they chose. The President countered with an unexpected targeted attack on the high command of Iran. It was a formidable demonstration of the powers of US military technology, knowing exactly where a named individual would be and being able to kill him from a distance with no US individual needed anywhere near the scene. The Iranian government thought they saw an opportunity to speed the USA’s departure from the Middle East, hoping they could accelerate US withdrawal of troops from Iraq.

The US President hopes he has found a technological answer to so called asymmetric warfare. If Iran uses terrorist groups and informal armies to kill Americans and damage US installations, the USA will use precision to kill the leaders responsible. The danger is a possible escalation. The fact that so many Iranian people now think their government has gone too far is a better augury. Any sensible person wants peace, which means different future conduct by Iran to be matched by the USA responding favourably to such moves.

Members of the Monetary Policy Committee are now telling us that maybe they should cut interest rates after all. Having watched as their tight money policies predictably slow the economy, they now express surprise at what they have done and seek some change of tack.

I am not proposing a 25 bp rate cut. I would urge them to look at the substantial tightening their Bank has undertaken through changes to the capital buffers, tough guidance on lending and the cessation of the Funding for Lending scheme. There is practically no money growth in the UK, implying continued slow performance from the economy.

Meanwhile the reintroduction of Quantitative Easing by the ECB has led to a spurt of money growth which probably heralds some pick up in the economy later this year. The Fed has stimulated a sharp rise in money growth in the USA which probably means a decent recovery for an economy still growing faster than the other advanced countries as the year advances.

Why has it taken the Bank so long to notice the obvious? Why are they still so out of line with all the other major Central Banks of the world? This institution got the ERM comprehensively wrong, the banking crisis and great recession hopelessly wrong and now is getting the world slowdown wrong.

Some write in to tell me increased spending needs to be accompanied by reform to ensure better quality and efficiency in delivery of the services provided. I agree.

Let’s take the case of schools spending. The government is promoting Free Schools. They have greater freedoms over the curriculum, teacher recruitment and rewards, and management. They can vary the school day and the length of terms. They receive their money direct from central government, removing the Council’s involvement and costs. 30% of these schools are rated outstanding, compared to a 20% level for all schools.

The government plans to drive forward its schools reforms, encouraging more free schools and ensuring more of the money available in the education budget gets to the schools where a Local Education Authority is still involved.

I wonder what is the point of Local Enterprise partnerships. They involve themselves in parts of the transport and training budgets in particular, but there is overlap with Councils who make local transport decisions and central government responsible for the national networks. There is an argument for having just two levels of decision making an budgets, under elected supervision, at central and local government levels.

The costs of government can be reduced. The preparations for Brexit can be achieved more cheaply. We need no more wasteful preparations for Brexits that Parliament blocks nor over the top preparations for eventualities that are not going to take place. Whitehall was gripped with unrealistic pessimism which cost us needless spending.

Government should stop borrowings by Councils that want to acquire portfolios of commercial properties that they buy off the private sector outside their areas. We do not need Councils to become portfolio investors, often buying shops the private sector thinks will fall in value. There may be a case for Councils being involved in new property development investments in their own area, but again there need to be controls over the extent and the wisdom of the investment.

The new fiscal rules require the government to only spend what it collects in taxes, with the exception of capital investment. Given the increases promised for schools, the NHS and the police, this means that the government does need to be careful with its spending. If it has other priorities for additional money, it will need to improve the efficiency of the spend elsewhere or identify programmes that are no longer needed.

It is anyway necessary to regularly review spending and to challenge public sector managers over how  well it is being spent. Today I invite contributors to send in their best ideas for things that could be cancelled or trimmed from the present large budgets.

My own list includes some large items. I would cancel HS2, and spend some of the savings on more immediate and necessary improvements on rail routes into cities and towns, especially in the North and Midlands. London is currently receiving money for Crossrail and for tube improvements.

I would transfer some of the money required to be spent on Overseas Aid to housing, NHS capital and new school provision to represent the first year costs of refugees and economic migrants who need homes, access to surgeries and school places for their children. These are allowable costs under the overseas aid definitions.

I would toughen and spell out the terms of any future payments to the EU, as we do not wish to be paying more to them once we have properly left at the end of this year. The EU will have benefitted from an additional 21 months of our budget contributions thanks to the delays imposed on our exit by the last Parliament anyway.

I would promote faster growth in the ways set out on this blog, which will reduce the numbers out of work and so lower the benefit bills for a good reason.