John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

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Remodel the bureaucracy

The Chief Secretary needs to come forward urgently with a good plan to raise productivity in the public services, at least back up to 2019 levels. Setting this an immediate task should not be threatening or should it require large amounts of new capital investment to bring it about, as four years ago we are at the levels we should wish to regain.

Central to this task must be reviews with the 4000 senior managers at Director level and above and their equivalents in the quangos. This is a good job for junior Ministers to lead or review. What has changed for the worse? What immediate steps can be taken to boost output. There should be a comprehensive freeze on new staff from outside, and a review process to amalgamate or remove jobs as people leave by natural wastage. External recruitment should only be allowed where there is a clear need approved by a Minister.

The reviews should encompass use of external consultants. Staff should be encouraged to replace some of the consultancy contracts that come up for renewal by offering cheaper in house routes of doing the work using present staff.

There can also be plans to get above older levels. After all, the private sector has exceeded pre covid levels of productivity, in services as well as in manufactures. One thing to do is to eliminate some of the duplication and overlap between central government departments and quangos. More work should be taken into the department under proper Ministerial supervision. Ministers in many cases will be blamed when the quango makes a mistake or gets it wrong, so better to have more control where there is accountability. Employees in the civil service should be allowed or encouraged to bid to take over areas of work to run as contracted out activities where they turn themselves into contractors and can use their skills to win work form others. This would not apply to matters relating to national security, policy and other sensitive matters. I led such changes to the old Property Services Agency, the direct labour organisation within the civil service that maintained public sector properties.

The application of more computing power through AI and related technologies can also produce plenty of productivity gains. Much of government is processing data, awarding grants and benefits, answering similar queries from the public, handling applications and ensuring access to public services. This is eminently suitable for more automation.

The rise of the civil service

In the three years to March 2023 there was an increase of 63,000 civil servants, or 64,000 full time equivalents. Over the 3 years 2020 to 2023 there was a substantial fall in public sector productivity. There are now more than 4000 senior civil servants in Director level and above jobs.

Whilst it is understandable that the NHS and the civil service needed extra temporary help to deal with the special needs and extra government direction which covid controls and lockdowns brought, it is surprising that extra recruitment has continued well after lockdown was lifted.

At the same time there has been expansion in numbers at various quangos and so called independent bodies. Far from slimming the centre as more is done outside core government, the advent of more and more powerful independent government bodies seems to have increased the need for staff. Maybe the need or wish for cooperation, coordination and communications between the external body and the government department has required more people to talk to each other.

It is time for Ministers to set out their plans to get productivity back up to 2019 levels. It is time for them to ask civil service senior managers and quango chiefs how come productivity has slumped? What action is being taken to put it right?

Poor productivity can come with bad service. Get things right first time and productivity and quality rise.Do things  promptly and spare yourself the need to respond to enquiries and complaints about delays. Have easy and friendly systems and requirements and have fewer complaints or need to help people access your services.

The Autumn Statement – again

The Times runs detailed stories on what will be in the so called Autumn Statement. Time  was when the Autumn Statement was an annual review and future budget for spending, provoking proper debate about priorities, costs, public sector productivity and the rest. This was followed by a Spring budget which set out how the spending would be paid for. Tax changes were proposed and revenue voted by Parliament.

This Autumn Statement appears also to be a budget. There is active discussion of tax changes. The story has changed several times recently. I have no idea what the PM and Chancellor will decide. I do not think the Times makes it all up, so their stories presumably  come from people who do know something. This implies that the ideas for the budget have been fluid. Today’s stories say the decisions are still not made. This is running it late as the government will need to print all the documents with their confidential press in time to release them the moment the Chancellor completes his presentation to Parliament.

 

After someone briefed widely a cut in Inheritance tax I now read that this will not happen next week. A tax cut for a  small group of well off families to receive more  on death does  seem an odd priority for now. I am sticking with my advice to prioritise getting inflation  down with energy tax cuts for the next year, and to boost growth and output with cuts to tax on small business and self employment. There is a suggestion in the press that the latest figures give the Chancellor more scope to cut taxes as the outlook is better again than OBR forecasts.

My package was modest, and included asset sales and spending changes to give more leeway. I read they are considering a possible 5% cut in the standard rate of income tax from 20% to 19 % or a lifting of the 40% threshold or a cut in National Insurance. Of those as an extra to my proposals I favour threshold changes to take more out of 40% tax and to correct the anomaly of withdrawing tax free allowances from £100,000 rather than a higher figure. A cut in standard rate would also be OK. The National Insurance proposal is the least attractive.

I stress again the main objectives must be to  give inflation another push down and get growth going. This argues for a more generous package for the self employed, small business and on energy costs than I set out rather than tackling Income tax next week. Sort growth and inflation now and start a stated planned reduction of Income Tax next spring as growth returns and yields more revenue. Getting  inflation down faster would mean earlier interest rate cuts to boost the economy .

The Autumn Statement

Next week the Chancellor presents his Autumn Statement.

It is important he starts to cut taxes. The Conservative party must be the party of lower taxation. It needs to do that as well as say that. It has two main opportunities left before the  next General election. It should start now on the downward path of tax rates and numbers of taxes.

It is important he tells the Bank of England to stop selling so many bonds at big losses. The European central Bank who made the same inflationary mistake as the Bank of England in printing too much money and buying too many bonds, is not making the same mistake of selling them too soon at huge losses. Hold the bonds to redemption and the losses will be smaller. Selling bonds now gives us higher mortgage rates, as forcing the price of bonds down puts the rate of interest up. The bond portfolio is fully indemnified against loss by the Treasury whose permission is needed for it. Why do taxpayers have to pay those big losses?

It is important to cut taxes that boost output and or help bring down inflation faster. The tax cuts need to help the self employed, where we have lost 800,000 this decade. Remove the 2017 and 2021 IR 35 Income Tax changes. Boost output by raising the VAT threshold for small businesses so they can expand further. Cut taxes on energy and on petrol and diesel to push prices down.

The Treasury wrongly thinks tax cuts are inflationary. If you  pay for them by cutting the growth in public spending they are not inflationary. If you get enough revenue in from the extra growth they are not inflationary. If you borrow money through selling more bonds they are not inflationary. What was inflationary was to have a surge of public spending along with massive money creation and bond buying.

Indeed, helping creating more business capacity to supply more goods and services cuts inflation. Taking taxes off energy cuts inflation.

What should Esther McVey do?

Esther McVey is taking up a new post in the Cabinet Office as Minister without portfolio. The press say she is the “Commonsense Czar”, the wokefinder general, the slayer of wrong headed wokery.

So where should she begin?

The kind of commonsense I would like from government includes putting the public first when designing public services. Car parks that are friendly  where it is easy to use the machines, rather than tax and fine traps with complex rules and limited ways to pay. Roads designed and looked after with drivers in mind, rather than obstacle traps getting in the way of getting around. Council websites that are easy to access and allow you to see what service is on offer, find out things about your local area, and see an honest account of where all the tax money is going to. Appointments that can easily be arranged to access a public service and mean the times on the agreement.  Trains that run on time and are not cancelled. More commonsense on net zero, better value for money from many public services, less intrusion into our lives by government. Fewer forms and compliance with ever more rules.

The government may have in mind altering views on cultural matters.

What would you want her to take up and achieve?

The letter and the Court

Suella Braverman has made clear that she thought she had the agreement of the Prime Minister to legislate over small boats in such a way that the UK Courts would have to follow the wishes of Parliament rather than applying overseas rules and laws. She also claims his agreement to legislating to change the Northern Ireland Protocol and to remove unwanted EU inherited laws.She resigned because these promises were not kept. Downing Street has not contradicted these statements.

The government lost in court yesterday. They had refused to include the notwithstanding amendment some of us proposed and the outgoing Home Secretary says she wanted which we think would have offered better protection for the small boats policy.

The Prime Minister  promised legislation to deal with the Supreme Court issues over Rwanda . This legislation needs improving and widening if it is to work. He must clarify Parliament’s aim to stop the small boats and to send illegal migrants elsewhere in a law which overrides any international agreement which could act as the people traffickers friend.Simply embedding a new Rwanda Treaty in law leaves the government policy subject to further legal upsets based on international treaties, the ECHR  and principles.

The PM must continue his reform of net zero policies

 My latest Conservative Home article
The Prime  Minister made a little headway with Conservative opinion when he announced a new realism concerning the road to net zero. Former Conservative voters who are telling pollsters they will abstain or vote Reform took some interest  in what he had to say. They agreed that it makes sense to get our own oil and gas out of the North Sea instead of importing more. It brings us better paid jobs, lots of tax revenue and lowers world CO 2 output. They agreed we should not ban new diesel and petrol cars in 2030. They  are expecting more in this same sensible vein and are impatient for future developments.
          The world background is so different from the world implied by  UK policy. Most forecasts expect oil and gas output and use to continue to increase this decade. Most anticipate further large increases in CO 2 output this decade from China and for many years  from India. As a result we are still some way off peak CO 2 output for the world. Many UK people who buy into the idea of curbing world carbon output do not see the point in the UK cutting back further on its own high energy using activities if we simply import what is needed from countries like China. They carry  on burning coal oil and gas to make the things for us. If the UK did more for itself the amount of world carbon dioxide output would fall a little as we would save all the transport CO 2 to bring in the goods from abroad, and would often have more fuel efficient processes than the leading exporters. It would also help if we grew more of our own food instead of using subsidies to stop home production.
          The UK has allowed itself to get hung up on wonky carbon accounting. If we import all the wood we need to burn in the Drax power station apparently that is green, but if we started producing our own sustainable timber to burn there would be a CO 2 attribution. What about all the extra CO 2 bringing  the wood all the way across the Atlantic causes? Shouldn’t we account for that? If we close down our coal burning blast furnaces and import our steel we have cut our CO 2 but world CO 2 will go up. In the meantime we have lost the jobs and  the tax revenues making our own steel brings, and have weakened our ability to make things from steel including vital defence items. The Prime Minister is good at detail so he needs to challenge these absurdities in official policy formation.
          There needs to be a big rethink on the idea that we can  get everyone to net zero by regulating, lecturing and fining companies. It’s a  crazy world where our energy companies are fined because not enough people are prepared to have a “free” smart meter in their homes. The government needs to ask why people do not want them and trust them instead of wasting so much tax money on trying to get them adopted. It is bizarre that car companies making and selling  vehicles here will be fined if they sell too many diesel and petrol cars at a time when electric cars are unpopular with the general public. Again the issue is ,how can electric cars be made affordable and attractive to customers? The government keeps on recommending heat pumps to be faced with tiny demand compared to the popular gas boilers.  They need to work on their affordability, their practicality and their running costs. They also need to let the industry  catch up. I would like a good one for my flat  but there is nothing on offer that could be installed in my block. It is strange that there are windfall taxes on those who dare to meet our demand for oil and gas, and now there are also windfall taxes on renewables if they are too profitable. The aim is always to end up with ever dearer and less competitive energy
         The government also needs to lead thinking on the pace of change and the order of putting in the investments it does help pay for or regulates. If someone goes out and buys an electric  vehicle today when they plug it in to recharge the electricity companies will doubtless have to burn some more gas to supply the power as they normally use all the available renewables for existing demand. How does that help us on the road to net zero.? If too many people got an electric car or heat pump there will not be enough grid and street cable capacity to supply their needs. When will the grid catch up? When will more investors be able to connect new wind or solar farms to the grid, where there is a long queue?  Shouldn’t we put in the infrastructure first?
          If someone scraps an older petrol  car and buys a  new electric  vehicle how long does it take to offset all the extra CO 2 generated by making the one and scrapping the other? If the driver does a normal mileage many years pass where the impact is more CO 2 from the change, not less. This is aggravated all the time the recharging electricity may have to come from fossil fuels.
         Taxing  carbon is said to be the market based solution to these dilemmas. What our regime does is hasten the end of high energy using industries in the UK, speeding more imports and thus boosting not reducing world CO 2 output. The UK has especially high energy prices given the taxes and market regulation, which is wonderful news for our competitors who take a more pragmatic approach to energy pricing. The UK has lost a lot of capacity in aluminium, glass, petrochemicals, fertilisers, steel, ceramics and other similar industries as a result of our lop sided approach to making and using these products. We consume them avidly but moralise about how we must not make them here.  Last week saw the sad news that our remaining blast furnaces are under threat of closure. The Opposition scarecely stirred over it.  Surely this matters?  We used to battle long and hard to invest in and keep a variety of large domestic steel plants as a crucial part of our industrial base.
         Meanwhile the government allows very large number of migrants in to undertake mainly low paid work. Given the importance of national CO 2 accounting to the system why do we  not reduce this? Every new person coming in creates extra demand for CO 2 for all the homes, products and jobs they need. Following a low wage model is bad for many reasons as well as the environmental impact. We should aim for a higher real wage higher productivity economy. Better energy efficiency should   be part of the greater emphasis on investment in good machine and computing power to do more of the tasks. If we invite in an additional 600,000 workers  every year as we did last year that requires huge outpourings of CO 2 to build the homes, hospitals, roads, sewage works, power stations , schools and the rest they will need, and to run them. We then need bigger cuts in CO 2 elsewhere in energy using activities to hit targets.
         The official government uses the policy wish to get to net zero to override common sense in its advice to Ministers and in the decisions of quangos. This come to suppress other important policy aims like increasing real wages, cutting poverty and promoting prosperity. It is time for a further re think, starting by getting rid of some of those  so called  net zero policies which mean more world CO 2 and fewer UK jobs.

The Home Secretary

It would have been better if  the Home Secretary and Prime Minister had agreed both the policy and the way to explain it. As I understand it the policy was heavily influenced by Downing Street who ruled out the amendment many of us wanted to the Immigration Act to ensure the small boats can be stopped without ECHR override. The Home Secretary was more sympathetic, understanding the need to be sure she could deliver what is after all the Prime Minister’s promise, to stop the small boats.

The Prime Minister  now needs to hope the courts are kind to him this week when we  hear the result of the further UK appeal against his policy. There still remains open the possibility of someone trying to use the European Court of Human Rights as well, which is why it would have been better to have made the legislation ECHR court proof. If the purpose of the law is not clearly enough set out  for the Supreme Court in the UK then obviously amended law should  be able to fix that. They should put through a simple amendment as quickly as possible.

Let us hope a Cabinet of people the PM feels happy with can deliver the five pledges the Prime Minister has made. He also needs to make sure the Cabinet has a wide enough range of views so the debate is worth  having and the conclusions more to the liking of the audience outside.

I think it wrong to appoint David Cameron to the Lords and Cabinet. We need a Foreign Secretary in the Commons and one who is a strong believer  in Brexit UK developing her role in the world, taking advantage of our new Brexit freedoms.

Shakespeare’s plays 400 years on have messages for us

400 years ago the First Folio of Shakespeare’s plays was published. The well off could buy a copy of this most important and impressive volume for £1 from a bookshop in  St Paul’s Churchyard.

The First Folio published versions of 18 plays that had been published individually, and another 18 that had never been published. Two of his actor friends put this together, with patrons and the assistance of those who owned the copyrights. It is one of the great works of publishing, ranking alongside the bible in English for the influence it had on our language and history. In more modern editions it has become a worldwide fount of great stories, memorable characters and superb writing. So many of our common phrases can be traced back to Shakespeare’s lines.

Shakespeare’s work has been important in my life. One of the  best things in my education was the first year of my English A level studies. We were told to read widely for that year, leaving the set texts for the second . We had to write an essay every week on a different Shakespeare play for a period. It was a revelation. The plays showed what literary genius could achieve  as I struggled to improve my writing style. If you want to write well, read well.

I have been to see many productions of plays from his repertoire. Some have impressed and some have undermined the brilliance of the writing with crude impositions by the Director. One of the most extraordinary was a production of Henry VIII in the Church at Stratford. They acted in the spaces between the pews promenade style. The costumes were lifelike based on famous portraits of the characters. You felt you were so close to one of England’s most fearsome Kings and his courtiers.Theatre can bring the past to life.

Shakespeare has a lot to say about the gaining and exercising of political power. The power crazed Macbeth murders his way to the crown egged on by his demonic wife. We are asked if the devil can speak true and reminded that false face must hide what false heart doth know. The fool in Lear is full of good advice. You should let go thy hold when a great wheel runs down a hill lest it break your neck by continuing to follow it. Many MPs move away from powerful figures when they are on the downward slope. He tells Lear he should not have been old until he was wise, surveying the damage that the succession to his throne has brought on Lear himself.

Most cutting of all was John of Gaunt’s criticism of Richard II. “That England that was wont to conquer others, hath made a shameful conquest of itself”. How many Brexiteers with no wish to conquer others felt the second half of that shaft, that the UK   had surrendered powers foolishly. Giving away his kingdom to daughters who were meant to be allies  proved disastrous for Lear.

The history plays are so well written that they have had considerable influence on how history sees the late medieval civil wars and the personalities of the Kings and their main rivals. What shines through it for me is the hero, England.  “This scepter’d isle…this other Eden..this fortress made by Nature for herself…This happy breed of men.. This earth, this realm, this England”. Whatever bad, weak and ill advised Kings might do to their country its underlying strengths, its rich landscape and farms, its freedom loving people, its sense of right somehow survive and carry it through to a better future.

Some of that future arrived in Shakespeare’s day as London thrived and expanded and as English culture lived through a golden era of plays, poems, music and paintings. The way Henry V cast off the wayward  pursuits of his youth gives us a shining example of great kingship, improved by having the common touch from his tavern experiences.  The Merry Wives of Windsor is a wonderful romp which shows how the middle classes could puncture the unacceptable  demands of a knight of the realm claiming to be close to the court , trying to exploit his status.

I will leave the last words to Puck who delighted audiences of Midsummer Night’s Dream. Shakespeare’s vision of a fairy that could travel round the world in  4o minutes was an  exciting  fancy. The fastest they could do their early circumnavigations was the pace of a sailing boat, remarkable though those new achievements were in a shrinking world. Puck had in mind the people as well as the politicians when he famously quipped “Lord what fools these mortals be.” We  need to prove him wrong.

Remembrance

Earlier this week I placed a small cross with a poppy for Wokingham in the Parliamentary garden of remembrance. Today I will lay wreaths at two local Memorial services. It is right that we remember all those who gave their lives in the two great world wars of the last century, and in other recent conflicts.

Born like most people alive today after the  wars, I recall how  they did shape the lives of every family in the land. My two grandfathers fought as very young men in the trenches of Northern France and Belgium in the first war. My mother and father met through their naval duties in the second war. Both generations had years dominated by death, injury and deprivation all around them.  They lost friends and comrades, worried about the bombing of their family  homes and accepted the obligations of rationing and black outs.

I felt very privileged to be born into a UK  at last at peace, free of ration books  and visibly getting more prosperous as the bomb damage was replaced with new shops and homes. I  wished to work to keep it that way. I feel a great debt of gratitude that the lives of more recent generations including my own has been spared living under a foreign imposed tyranny of the kind Hitler and Nazi Germany  imposed on much of Europe at the peak of his powers.

It is right that we keep a silence and say a thank you to all those who gave their today that we might enjoy a better tomorrow.