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9 May 2023
It is hard to see the defence and security establishment being enthusiastic about closer ties with the EU, in their areas, as Labour wants.
Labour is weak and concedes in the wrong places.
On the other hand larges swathes of the population would like to see much freer movement for under 30s and over 60s (inflows would be partially balanced by retiree outflows) between Britain and the EU if the returning of refugees who could have sought asylum in the EU in the first instance is reinstated, reducing the risk to life in the Channel. This would lead to more civilised protocols.
More trade deals with countries much more populous than us, like the U.S. and India, should not be pursued as they are likely to be not in our favour. We are unlikely to be able to flood another country with our products but the probability that it could happen to us, even if unforseen, is greater.
It is not more defensive alliances or trade we are deficient in but in cultural ties and allowing small companies to grow large so they have products everyone wants to trade in.
Labour has to realise that the nation does not want to go back to the level of state restrictions that obtained during Covid but which it egged on more than any other party.
Neither does the electorate want to go back to the New Labour culture when the state engaged in more wars than in living memory, made small enterprise feel inferior to administrative jobs and when the state thought it had all the answers.
A rung down, it does not want to go back to the coalition target culture that, amongst advisors, gestated five targets that will never be delivered as envisaged - balanced budgets, net immigration below 100k, HS2 to time and to budget, net zero and centrally prescribed housing location.
A civil service that is skilled at passing legislation and writing targets is not one that finds it easy to execute.
Labour does not know what to do and has no contemporary skills in execution.
If necessary, the electorate needs to use strategic voting to make sure it does not hold a majority of seats.
WAYS FORWARD
Reviewed by ANDRE BEAUMONT
8 March 2023
On the side of some London Fire Brigade vehicles there is the advice Get Out and Stay Out or something similar (they pass too quickly to photograph) and it is very sound.
It is a pity we have not had a worthy replacement to the London Building Acts regime in London.
If you have children you would do well to get them out within 60 seconds if you discover insulation igniting (which it ought not to do) - even in a two-storey building because it is likely to have only one staircase.
If you want to insulate 19 million homes that is up to you. Some would rather not take their chance with toxic fumes.
This week there is an interesting article about sargassum - [1] - and the search for something commercial, or at least practical, to do with it.
There is a picture of it having being used to make bricks.
The thing about building materials is that they are often quite heavy and thus best not shipped too far but sargassum bricks, on the face of it, look a good idea as an insulator to replace crude oil feedstock based insulation products.
It would be best if in their manufacture the sargassum could be combined with something inert like gypsum, cement or clay to render ignition impossible.
18 May 2023
Contemporary capitalism makes it easy to set up a business but hard to grow it beyond small scale. This, however, is a problem of a great many jurisdictions. Britain has an additional problem. It is difficult for a medium sized company to grow into large one.
There are no structural personal incentives at all to grow companies, just tinkering at the edges.
25 years of uncomprehending Treasury policy has made these aspects worse with every passing year.
What would our vote winning budget, in the autumn, contain? You have to have regard to who actually votes.
There would be four fiscal measures - two tax cutting, two tax raising. These would be contained in a promise within 12 months to:
abolish inheritance tax;
abolish capital gains tax;
abolish tax relief on interest payments;
abolish the upper limit on employer national insurance contributions.
In that order of priority.
People would at last be freed from tax considerations when entering the enterprise space and growing businesses within it.
We need an inheritance regime to match Australia.
We need a capital gains regime to match The Netherlands.
We need a regime that values the risk taken by equity. We need a banking system that recognises this.
Instead we still expect more tinkering at the edges and a hung parliament, or something close to it, after the general election.
30 June 2023
The old saying was that if you owed ten thousand (pounds, dollars, euros) you had a problem but if you owed a million it was the bank's problem.
It is an uncomfortable truth that inflation is usually the friend of governments that have high national debt because it reduces the amount thay have to repay in real terms whilst the nominal amount continues to rise.
The percentage of GDP that national debt represents can also be on a falling trajectory whilst the nominal amount continues to rise, due to a growing economy raising tax revenues.
Tax cuts or the avoidance of austerity can stimulate this growth. It is not guaranteed but done right, worth a try.
Industrial policy can also stimulate growth but anything that looks like anything advocated by the left over the past 75 years will not work.
Balanced budgets can happen almost by accident (perhaps once every two decades in Britain) when the economy is going great guns but to target them by perpetual cutting is not a good idea.
If parties had policies that did not quite work it would have been best to let them fade into memory.
Post-war Labour austerity did not work but we had forgotten it. New Labour did not understand business but we had forgotten it. The coalition did not understand fiscal policy but we had forgotten it.
Now by bringing back austerity, subservient business policies and high taxes we are reminded of earlier failures of comprehension.
13 July 2023
The truth of the matter is that you should change who controls planning permissions every 30 years to avoid the petty corruptions that build up over time in obtaining planning consent.
The post-war planning regime is now very long in the tooth and not fit for purpose.
It is time to cycle control to newly established regional civil service offices. The civil service is still known for higher standards of probity.
In a further 30 years it might be sensible to cycle control back to some form of local authorities as new types of petty corruption might have emerged from the so called following of central rules.
Labour's plans to supposedly devolve sketchy powers to local authorities has a large chance of failure as people know local democracy is thin and have had bad experiences with past cronyism at local level. People prefer the civil service. That is one of the reasons why centralisation has had such a clear run.
So it is time to remove planning powers and control of urban roads fom local authorities, freeing them to concentrate on things they still have good skills at, like cultural promotion.
I have never had difficulty with large housebuilders. They develop as their balance sheets and market demand dictate and not in accordance with what politics suggests though they will of course lobby for more land.
Coalition tax policy, specifically on capital gains and inheritance tax, made nearly all small developers withdraw from the market. They liked to take some of the risk in their personal names and that policy made it highly unattractive. They were not stupid. Developing at small scale is highly risky, like running a restaurant today is.
They did most of the infill work that large housebuilders will not touch and were less driven by balance sheets so could build at different points in the economic cycle to the large housebuilders.
Central bank guidance to banks, more concerned with preventing bank failures, post-Northern Rock, than financing the economy meant that banks also stopped financing these developers.This was not intended but we have next to no bank failures and next to no small housebuilders. Welcome to the work of central targets rather than reality.
There are 'small blocks of flats' developers but these tend to go to specialist financiers in the City and, in all events, the British are not enthusiastic buyers in blocks higher than six stories. They leave buying in those to foreigners - which does help the country pay its way in the world as there are no more small industrialists than there are small developers.
There is a need for more homes just for rent, pitched just below local market rents and of good quality to draw renters to new areas but let us not call them council houses. Councils will simply not have the capital to buy land in existing settlements without distorting land values upwards to most people's detriment.
There are solutions but ideological backwash prevent them from coming forward.