Let’s not get distracted?
If you’re feeling a little down about Britain today, you’re not alone. The media is awash with the issues that appear to plague the nation. In the last few months, weeks and days we have had a belly full of issues and scandals that have driven many of us to apoplectic rage or despair. Illegal boats full of immigrants washing up on out shores, migrants housed in expensive hotels, some of whom are being moved into neighbourhood camps and of course rounded off by tales of young immigrant men molesting girls in our cities, towns and villages. Add to all of that the incessant revelations of misdeeds of Messrs Mandelson and Epstein and add the parallel Andrew/Epstein intrigue layered with stuff about Epstein/Sarah Fergusson. What of the culpability of Mr Starmer? It seems that our world is falling apart. Then of course there’s the whiff of double dealing over the Gorton and Denton by election and the banning of popular Mr Burnham, which perhaps gives one even less confidence in the powers that be.
What does it all mean? Absolutely nothing. All of the above issues are in fact nothing more that totally trivial distractions. Imagine, if you will, that none of the above had happened? Assume that Mr Mandelson is a saint and Geoffrey Epstein a model citizen, leading no one astray and without the slightest interest in inveigling young women. Imagine the illegal immigrants all decided to do their rubber boating elsewhere. Would it have changed any material fact about our country today? Would the national health service waiting lists be significantly reduced (remember a population of near 70 million and just 70K boat people)? Would it significantly reduce the waiting time to see your GP? Would the sick and elderly, unable to fend for themselves, receive better care and attention. Would the potholes in our roads have been mended? Would all our state school buildings have been properly repaired. Would we have improved the educational levels of our children which are among the lowest in Europe. Would children with chronic special needs all be able to find suitable local state schools. Would our railways run on time and at an affordable cost? Would our water companies stop discharging sewage into our seas and rivers? Would people not have to face soaring energy bills? Would the problem of the crippling student loan interest rates have been solved? Would our soldiers no longer have to buy their own body armour, and our veterans no longer have to sleep in tents? I could go on. The truth is that the nation is being distracted by issues that are insignificant when dealing with our real problems. Yes, seventy-thousand boat people are irritating but don’t be fooled, they aren’t the real problem. Turning back the boats, digging up Epstein and hanging him, sticking Mandelson in jail and banishing Andrew to Siberia won’t help.
The fundamental problem of Britain today is catastrophically low productivity. Put simply, there are too few workers doing enough to sustain all the great things that our society tries to provide; notwithstanding all the taxes collected, the government just doesn’t have enough money to repair what’s gone wrong and provide the services for which we all cry out. Things that we venerate and cherish, like the availability of state provided health care when required, free primary and secondary education, a welfare system that provides the wherewithal for old people and those who genuinely need assistance. Services that provide protection for our society and deals with threats from outside. We have the bones of the essential infrastructure, such as roads and railways that we need, but they are worn and creaking.
I don’t believe that governments of any specific hue can easily make a difference. Too much is required of the state to be provided by too few people. More is being required with fewer providers. Things are getting worse. People in the UK feel overtaxed and seem very unwilling to give more of their earnings to a government to spend on their behalf. This seems patently true if one examines the promises of the current government at the last election – the promise of no higher income taxes or VAT as a way of persuading the populace to vote for them. To give them some credit the current incumbents have stayed away from the oft used solution of borrowing. In fact, based on existing debt, government interest payments are already dangerously high with the possibility that we could easily topple into no longer being a guilt edged borrower, then see what happens to interest rates.
Other, usually third world countries, have to some extent solved some of their infrastructure deficiencies by getting other, richer nations in to build roads, railways, ports and airports for them. One assumes that this largess is not without strings. I imagine that a deal that would get the Chinese to maintain all our roads (one assumes in super condition) in exchange for twenty guaranteed House of Commons seats, would not be popular with the electorate, even if it meant beautifully smooth roads without potholes. I suspect that, if it came to it, the Chinese would be much more subtle in how they might extract their pound of flesh.
I believe there are three key factors affecting productivity; education, investment and
infrastructure.
A well-educated populace, trained with the right skills, is vital in establishing a productive society. There is an ever-changing set of educational requirements. As we have moved away from making things (manufacturing) there is an increasing need for productive skills in areas like computer technology, electronics, communications and logistics. Investment is crucial. As an example, I use a small specialist engineering business local to me. They make specialist engines and the like for other much larger automotive firms. They have invested (many £ millions) in a machine that processes a metal casting into a complex component. A giant machine carries eighty-one different tools at the same time, all can be dialled up for use. The object being processed can be turned and presented to the tool head in any 360º vertical or horizontal plain. Once the job is on the bed, the wonder tool can complete the entire job without manual intervention. Why have I bothered you with this example? I think it demonstrates firstly, the need for investment, the machine isn’t cheap, and secondly the need for a very specialised and well educated operator. Whereas in the past, the job would been undertaken by a team of skilled machine operators (with relatively inexpensive lathes and mills), today just one trained programmer does the entire job, with a programme that can be replicated as many times as required with no further input. Although this is an industrial example, the principle can be applied to many different disciplines. An example of the need for the right education coupled with the appropriate investment.
Together with education and investment we need top class infrastructure. Computer and information highways and networks to move, store and retrieve information quickly, easily and accurately. Roads, rail, ports, airports, all need to function efficiently in order to get data, people and goods in, out and around, with minimum cost and disruption resulting in wealth creating productivity.
Well, that’s the easy bit. Spelling out what’s wrong and identifying the broad but non-specific things that will improve matters doesn’t provide real solutions The hard bit is coming up with ideas that can be practically implemented.
One of the features of our modern society is that vested interests have gainsaid many of the innovations that could make a significant difference. I suspect that most of my suggestions will be met with cries of rage from different quarters. I must also point out that I’m no expert and my ideas have no intrinsic value.
The government needs to generate cash to improve services and fund productive investment. The usual strategy is to try and offend no one by looking for efficiency savings and reorganisations. If one examines the past success of these strategies, one can’t but help feel discouraged. Reorganisation of organisations like the National Health take forever and, while ongoing, nothing improves. They have not proven worthwhile in the past. I suppose that it doesn’t mean that it’s not worth looking at improved efficiency in government, but we shouldn’t pin our hopes on speedy or significant short-term improvement. One area that would cause shrieks of unhappiness would be for the government to drop the triple lock on pensions; at least until our economy improves. We are not talking about a lot of savings and up to now the party in power has weighed up the saving against the potential electoral damage and chickened out. We spend about £200 billion on pensions against an overall government spend of around £1,200 billion. Even a small saving would be worthwhile.
One of the ways of achieving high productivity is by finding a valuable natural, consumable resource, recovering it for a reasonable outlay and selling for a good profit. If we look at rich nations like Norway, they have built their prosperity on their naturally occurring hydrocarbons as well as their wise and careful use of the resulting revenues. Britain has been less wise in the use of North Sea oil revenues but as there apparently is still a lot more oil available it’s not too late.
Surely then it makes sense to get at it and use it to drive our economy, including reducing our purchase of and reliance on foreign energy. Of course this is going to generate a huge row. “Drill baby, drill”, Mr Trump’s call has been met with outrage in many quarters. I’m not gainsaying the prevalent view on climate change, but I do think that as the UK is responsible for about 1% of carbon emissions (and falling), our intention of achieving carbon neutrality in the short term may be laudable, but getting there is not worth bankrupting ourselves. If we abandon our immediate ‘net zero’ goals, lift the ban on petrol and diesel vehicles and start using our own oil and gas resources, the result will be cheaper energy for all, as well as healthy revenues for the exchequer. Cheaper energy would be a shot in the arm for British industry not to say households across the land.
Lets, by all means still go ahead with using solar and wind. Our manufacturing capacity may have been sorely depleted but surely we have the wherewithal to manufacture our own wind turbines instead of buying them from China. I’m not advocating abandoning generating energy from natural resources, but oil and gas as well as solar and wind power can go hand in hand, at least until our economy improves. If the UK goes on using its own oil and gas for the next twenty years (if it lasts that long) will it materially affect the world global warming situation? One of the justifications of the current policy is that we are a world leader significantly influencing other more powerful polluters. If you really believe that, then what world are you living in?
If people still want electric cars, fine, let them have them, but don’t outlaw the ICE. In fact virtually all electric cars run on electricity generated by power stations that even today use mostly oil and gas.
Since Brexit, our trade with the EU has stagnated with very little or no growth. On the positive side, our exports to other non-EU nations has grown significantly. Given that we want to keep our new-found non-EU trade partners and not go back into the Union, are we not in a very strong position to press the EU for a better, one off deal? Initially they were loathe to offer us special status for fear of other member states leaving the Union. In the light of Russian aggression and general world order uncertainty, it seems that the EU sees the UK’s military ability and knowhow as a vital component of European defence. Would it not be possible to use this carrot as an incentive to get closer trade ties without barriers and red tape? Now is the time for the UK government to push for a better trade deal. Selling more, more easily into Europe would provide a big economic boost.
Looking at various government statistics I noticed, with alarm, that there are almost six hundred quangos and government agencies. Each, one assumes, with a leader, one or more offices and a host of officers, secretaries and staff. How much does all this cost? Do we really need 600? I don’t have the figures but I am led to understand that over £300 billion is spent from the budget on these bodies. If one looks through the list there are clearly organisations doing vital and important work. There can be no doubt that agencies like the Border Force, HMRC and Courts and Tribunals do vital and valuable work but there are questions. Why are there ten separate quangos/agencies that deal with defence matters; is there scope for merger? Is there room for rationalisation? We have, for instance the Forestry Commission, Forestry England and Forest Research, each one, one assumes, with their own panoply of staff and establishment; again, is rationalisation possible? When one looks through the list, one is struck with the potentially useful job done by each but it seems that each time the need for some function is identified, a new organisation and all that goes with it is created. There is, for instance, a Groceries Code Adjudicator whose responsibility is to advise on the treatment of suppliers by big supermarkets. One can see that at some point the topic was raised and a need identified. The strategy adopted however, was to set up a new quango rather than pass the job to an existing organisation. I suspect serious rationalisation will be a tough job with resistance at every turn but surely, given the sums involved, rationalisation is worth attempting. As an example of success, it wasn’t that long ago that the Inland Revenue was merged with Customs to form HMRC; it can be done.
If the government is to spend some extra cash, I recommend that they be bold and give development grants to projects that promise real growth. How about huge tax breaks for development projects that promise significant national benefits? It’s time to be bold and maybe do the very un-British thing and take some risks. We’ll win some and lose a few but overall, I believe bold policy will pay dividends. Boldness shouldn’t be one-sided, once a project looks bad, kill it at once, don’t let it linger with continual spend; I cite HS2.
I don’t suppose anything above will prove useful or seem particularly useful - hey ho!
