Best Of

In more concrete matters relating to Starmer's future we have just had our 11th consecutive month with manufacturing PMIs below 50, that is indicating a future contraction and the latest figure is one of the worst: https://www.msn.com/en-gb/money/other/uk-factories-stumble-as-new-orders-fall-back-pmi-shows/ar-AA1LD3ZA?ocid=msedgntp&pc=HCTS&cvid=68b69efe1dfd4e56a1a8495a30003596&ei=27

I may have mentioned our trade deficit from time to time in passing. This really isn't helping. Its time we had a government more focused on the day job.

The economy is only staying afloat because of services . The latest update to that is due out shortly .

Yes and to be fair that has largely been the case for 30 years or more. But what we are not seeing is any sign of investment in new production in the UK, any uplift in training, any growth in productivity, any facilitation of growth by removing planning hurdles or otherwise, any attempt to encourage entrepreneurial activity in the UK, it makes you despair. What we got instead was the increase in Employers NI and an above inflation increase in the minimum wage with inevitable consequences for the level of employment.

It just won't do. Our forthcoming budget needs to focus on growth (as Reeves herself recognised before the election). That means finding ways to boost investment through more generous allowances, encouraging training, not hammering Entrepreneurial Relief or Capital Gains or share based ISAs, looking at why London is struggling to compete in the IPO market, etc etc. I fear we are going to see the reverse as our Chancellor scrabbles around for a few billion more taxes to make her nonsensical targets and kick the can down the road for a few more months.

My new brainiac IQ 190 squillionaire friend, who was freaking out about the gilts market months ago (presciently) is now freaking out about gilts EVEN MORE

He says the government is “driving straight into a brick wall”. He thinks the present gilts “crisis” is maybe the markets reacting to Starmer’s “phase 2” speech which didn’t acknowledge the fiscal emergency at all

He says, as tax rises won’t work, borrowing can’t be done, and the government refuses to cut, we “may become Turkey or Argentina for a bit”

🫣

I am no brainiac, nor do I have an IQ of 190, nor, sadly, am I a squillionaire but this is kind of obvious. We are heading towards a fiscal crisis. It is not just that we need to borrow new money at penalty rates, we also have to roll over ever more debt taken out when interest rates were very, very low. 10 year gilts maturing just now were probably borrowed at less than 1%. To replace those borrowed funds we will be borrowing the same money at more than 5%. The cost of our debt is going to be rising for a long time, even if we manage to get current rates down. Every other category of spending is going to be squeezed by this.

Right, so what do we do? The "cut spending" brigade envisage that the sick and the poor are wasting the money so just take it off them. In reality they are sick and poor and when need remains and you cut the provision you spend more mopping up the various crises you create.

So we can't cut spending on the front line. We need to cut spending on everything else. How is it that we have an NHS where the budget goes up every year and front line provision shrinks? Its a bonfire burning our cash - and we can't afford to fuel it any more.

We set up a crisis team during Covid. Massive spike in patients, fewer resources, how do we do things. We need to do the same thing today. We simply cannot afford the vast bureaucracies and overlapping managers that we have in health and education. If that means that we have to make redundant the staff at NHS Trusts and Education Trusts then sobeit.

Even the guy running a company that provides school transport for SEND kids has gone on record complaining of the complete madness & waste in the current system.

PIP payments appear to have gone from “I need money for transport because otherwise I can’t get to work” to ”I have ADHD and find using the bus a bit tricky & would like my own car”,

The NHS maternity service is spending more on compensating mothers & children for damage done to them due to lack of adequate staffing than it is on actually delivering maternity services.

We trapped many of the “sick and poor” in unemployment because we let large corporations argue that even jobs that paid less than minimum wage counted as “shortage professions” that deserved unlimited work visas. How are they going to get work when made to compete in that environment?

The legal profession has turned the Equality Acts into a tool to undermine market forces in the labour market, leading inevitably to the chaos in Birmingham & the further casualisation of labour as employers flatly refuse to take on employees who have been turned into future legal liabilities for the sin of paying different jobs different amounts of money in order to attract workers.

We’ve made it completely impossible to build anything at all, anywhere. Latest stupidity on this front is that the cheap rate for non-degradable landfill that can be used to fill old quarries (cement, soil etc) at £4/tonne is being removed & the standard rate of £136 / tonne is being applied across the board, adding something like ~£25k to the price of the average house & vastly increasing the costs of larger projects. But that’s a pinprick next to the new Building Regulations, which appear to have cut house-building in half from already pitiful levels & the marauding Environment Agency that believes spiders matter more than housing children.

I could (very easily) go on, but there is so much in this country that doesn’t require money spending on it - it needs saner review & regulation. Successive governments have made this situation worse and worse because every regulation has had a proponent who cares very much about it being implemented but the costs have been spread across all of us, so pushback has been difficult to organise. We have ended up with a diffuse rule by lawfare, where everyone has a very important job to do but in the aggregate their job is to prevent anything happening at all.

You have hit the nail on the head.

We need a bonfire of regulations.

In a lot of cases, the regulations themselves aren’t the problem - it’s the interpretation of them via the legal system that has created the monster that now lies before us. We need to convince Parliament as an institution that following up on the interpretation of the law by the legal system is part & parcel of the job of lawmaking.

NB. To give an example of this - the last Parliament made a sensible change to the planning regulations that said that it would be permitted to add an extra floor to your property (with reasonable restrictions on which properties were allowed to do this), with only your neighbours being allowed object. The justification being that adding a floor to suburban houses in London would be a cheap way to add housing space without needing huge housing developments & with minimal impact.

A householder in London duly applied to extend their property upwards & the planning application was immediately opposed by people in neighbouring streets, horrified by the idea that “their” area might be defaced in this fashion. The case went to the courts, where a judge decided that the word “neighbouring” in the law in question didn’t mean “adjacent” as the lawmakers had intended - it meant anyone living within a mile or so.

Unsurprisingly, no one has bothered to make any planning applications of this kind since, as the inevitability of opposition by someone in a 1 mile radius circle makes it completely impossible to get through planning.

Parliament could have noticed this & issued a one line change to the law saying “no, when we said neighbouring we meant immediately adjacent”. But no one involved appears to have realised that this useful bit of planning reform that was carefully shepherded through the Parliamentary law-making maze was shot in the back by the judiciary the moment it became law.

Re Rayner: I do have a little sympathy for her if she's been badly advised but I think the politics means she will have to go:

1) It's a large sum of money - she'd probably get away with underpaying £200 but £40k is a huge amount by anyone's standards
2) Labour are about to put up taxes in the next budget. If she stays then the attack lines write themselves.

One thing I found interesting is Davey's stance on this. I wonder if the LDs are getting a bit too cosy with Labour. Certainly, Davey never seems to throw any hardball questions at Starmer during PMQs.

The latter is reflective of Lib Dem members, take a look on here - the government's main defenders aren't Labour voters who are all in despair, it's Lib Dems who are really out there pushing the Labour narrative.

No, what we’re pushing is the non-Farage narrative. The fact that Starmer, Cooper and Co are all happily channelling the Reform leader leaves a gap.

Lib Dems aren’t suddenly going to stop being liberal internationalists or pro-Europeans just because the ruling party is - on paper if not in fact - also a liberal internationalist and pro-European party.

And yet they didn't come out against the OSA, one of the most illiberal policies in a generation. Pull the other one.