Two cheers for the Church of England

I am writing this in a personal capacity, although for several years I have been chair of the friends of the local parish church.  As well as raising funds for the fabric of the Church, as an iconic building in the townscape (larger than many cathedrals), we have been seeking to promote its wider use as a community asset, e.g., there is a café run by Ukranian refugees (not my work). We even showed Life of Brian in the church.

I was baptised in the Church of England and attended a CoE primary school.   This was of enormous benefit to my intellectual development as I had to wrestle with complex theological ideas at the age of seven or eight.  After we had been told we could attend Catholic services if we were on holiday abroad (none of us could afford that then), it was not received well when I suggested that the main quarrel with the Roman Catholic church appeared to be that the Pope was in Rome not Canterbury and was Italian not English.

I was never confirmed and I am not in communion with the CoE and have refused to be blessed.  I have had some interesting theological discussions with the vicar, but I remain an agnostic liberal Erastian (supporter of an Established Church).   I think that many of the ethical principles listed in the New Testament are good ones.   Katja Hoyer seems to take a similar stance in her most recent blog: https://www.katjahoyer.uk/p/whats-left-of-christianity

On the specific issue of safeguarding, the parish church has been trying for months without success to secure a replacement voluntary safeguarding role and it is now going to become part of a new paid post.

The impression I have formed is that the bureaucracy of the CoE is rigid and dysfunctional, not least at diocese level.   I also think that the Bishop of Newcastle has been badly treated by her fellow bishops.

Within my town each of the churches of the CoE offers a different menu: one is Pentecostalist (having been visited by the Holy Spirit); two are hand clapping evangelical; one appears to tolerate speaking in tongues; one reserves the sacrament, has Benediction and is under the aegis of a 'flying Bishop'.  A member of the PCC kindly invited me to his house to try and explain the theological stance of the parish church and 'English Catholic's is the nearest label I can provide.

Given such variety, it is difficult to maintain an established Church, although the legislation required to disestablish it would be complex. (See: https://commonslibrary.parliament.uk/research-briefings/cbp-8886/ As far as I can tell, Wills has little enthusiasm for the role of Supreme Governor.   The position of bishops in the House of Lords is best dealt with as part of a wider reform.

There also some interesting questions about who would take responsibility for maintaining the fabric of cathedrals and architecturally valuable churches.

One of the advantages of an Established Church is that its services are available to all citizens regardless of their religious standing.   I have paid up front for my funeral and asked a friend who is a lay preacher to conduct it according to CoE rites.   The timing should be ok.

Letters to a great-granddaughter (2)

In a later post I want to talk about nuclear proliferation and Cold War 2.0, but this blog is about the original Cold War.

By the time I was born the Americans had used atomic weapons on the Japanese cities of Hiroshima and Nagasaki.  The Japanese then surrendered, the Emperor addressing his people for the first time in a reedy voice and saying 'The war has proceeded not exactly to Japan's advantage.'   Russia entering the war also played a part in the Japanese decision.   It  has been argued that Nagasaki was bombed because the Americans wanted to try out a different type of weapon (a plutonium bomb).

Within a few years Russia had also tested an atomic weapon and the UK raced to catch up.  Thousands of servicemen were exposed to dangerous levels of radiation in tests in Australia and the Pacific and their descendants are still feeling the effects today.   By detonating a very big A-bomb, Britain managed to hoodwink the Americans into thinking they had a H-bomb and could therefore be given nuclear secrets.

My first post-war political memory is of being in Coverack in Cornwall on holiday and hearing about the war in Korea on the radio.   There was reference to the possibility of a third world war and I asked mu parents what that meant.

The Suez crisis simply revealed Britain's reliance on the United States in an asymmetrical special relationship.

I was 15 and on half-term holiday at the time of the Cuba crisis which had me really scared.  Fortunately, Kennedy was a cool decision-maker and restrained his military such as air force general Curtis Le May ('bombs away with Curt Le May.')  He did a secret deal with the Soviet Union to remove American missiles from Italy and Turkey after a few months.

However, we came very close to armed confrontation.    A Soviet submarine with an exhausted crew nearly launched a nuclear tipped torpedo at the US vessels enforcing the blockade of Cuba, but were restrained by the boat's political officer.   If the US had invaded Cuba, as they were preparing to do, local commanders could fire 'tactical' nuclear weapons at them without getting authorisation from Moscow.

Britain relied in the 1960s on its 'V' bombers to deliver its nuclear deterrent.   They were dispersed around various airfields.   One was stationed near Leicester when I was at university and we heard and saw it making endless slow circles overhead when there was a Middle East crisis.

Curiosity and the desire to earn some extra money from NATO exercises led me to join the now disbanded United Kingdom Warning and Monitoring Organisation (technically I was a RAF reservist and had a RAF uniform).   I was based in a protected above ground structure a few miles outside Exeter (near what is now the M5).

Because I had a MSc from Strathclyde they thought I was smarter than I was and trained me to use what appeared to be a telex machine (relatively easy for me as I could touch type).   I have learnt very recently that it was in fact a more sophisticated piece of machinery, perhaps useable for a back up launch capability if High Wycombe was out of action.   (The launch mechanism was very belt and braces and possibly still is).    I have also learnt that there was a device at the airport on the Isles of Scilly that could transmit instructions to the submarine fleet.

Another point of danger was in the early 1980s when a geriatric Soviet leadership thought that a NATO exercise might be cover for a first strike on them.   The placing of cruise missiles in the UK also alarmed the Soviet leadership who considered 'taking them out'.

But then Ronald Reagan (who deserves more credit than he usually gets) and Mikhail Gorbachev came to an agreement to substantially reduce the number of nuclear warheads and also engage in other forms of cooperation.   Cold War 1.0 was over.

Another scalp for the right-wing media

'Red Lou' promised to be a first rate transport secretary after so many mediocre ones.  Now she has been driven from office over a spent conviction on a matter where she was given bad legal advice.

The difficulty is that if she had stayed she would have been hounded by the likes of 'Death' Rigby and the Daily Mail.

The right-wing media can claim another scalp.

Letters to a great-granddaughter (1)

One of my family returned from a visit to the Spanish branch of the family with a lovely photo of my great-granddaughter looking a little pensively over the sea wall at the beach at Calp, some 45 minutes away from where she lives with her family in the hills.

Her life will be very different from mine.   She is having to cope with three languages: English at home most of the time; Spanish and Valencian (Catalan) in her nursery - which costs about one tenth of the price of an equivalent in the UK.

I grew up in analogue world and have had to try and adapt to a digital world: the world she has encountered is fully digital, although her home is off grid and produces its own electricity and has deep wells.

It is very easy in one's later years to become unduly pessimistic, but I do worry about the state of the world I have bequeathed her. Populism is making gains in most countries: the US; France; Germany; Italy; Austria; most recently, Romania.   It is far from absent in Spain.

There is a big debate about what we mean by populism, but its essence is simple solutions to complex problems.  'Elites' ate blamed for the state of the world and the fact that the growth in personal income and well-being seems to have slowed, stopped or even reversed.

At one time the purveyors of conspiracy theories were regarded as marginal individuals, but social media has given them a platform and echo chamber.   Of course, there are real drivers of concern, not least the global challenges presented by mass migration.

While the Falklands War was on, I was invited to address an afternoon colloquium organised by a think tank affiliated to the Italian Communist Party.   The other speaker was a hard line Marxist, so goodness knows why a sloppy centrist like me was invited.

Just before I was about to speak, the organisers informed me that the followers of Lyndon La Rouche intended to invade the event with smoke bombs, but I was not to worry as the riot police had been mobilised and were round the corner.   Nothing actually happened

La Rouche believed that there was a global conspiracy involving the Queen and the Rockefellers.  Pretty tame stuff compared with some of the beliefs circulating today, and some of their believers will soon be in office in the United States.  Needless to say, my great-granddaughter has been vaccinated.

Next time: nuclear proliferation.

Thoughts on the APR controversy

I have been having a bit of a debate on social media with a dairy farmer and former Nuffield scholar.  He says, with justification, that farming is hard physical work, dangerous and offers returns of 0.5 to 1 per cent.

My response was in that case why not sell up, reinvest the capital and have an easier life?   The standard response is that it's 'a way of life'.   I am familiar with this response as my nephew is a seventh or eighth generation farmer.

Of course, it is way of life that people are entitled to choose, but don't complain too much about the hardships.   To me, it doesn't seem an enviable way of life, but opinions clearly differ.

Why are returns from farming so low?   The removal of CAP subsidies after Brexit hasn't helped and it is possible that some farmers are having buyers' regret..  I remember touring the North of England explaining some of the risks to farming audiences during the referendum campaign.

There has been a shift of power down the food chain from farmers to supermarkets that seek the lowest possible prices for their customers.  Farmers' margins have been squeezed.   Supermarkets impose demanding contracts and there have been allegations of malpractice.

However, another factor has been people buying up farmland as a hedge against IHT.  They are not necessarily buying whole estates as in the case of farmers' hero Jeremy Clarkson, but often smaller bundles of land that can be rented out to farms seeking to expand.

According to an AI  overview, 'A variety of buyers purchase farms, including private investors, institutional investors, and lifestyle buyers. In 2023, non-farmers bought more than half of farms and estates sold in England, with private investors accounting for 28% of transactions.'

Will APR's reduction (remember we did not have this relief before the 1970s and 1980s) push down land prices and make it easier for innovators to enter the industry other than by succession?

The honest answer is that I am uncertain.   An interesting article in Farmers Weekly recently argued that land prices revert in the long run to a ratio used at the time of the dissolution of the monasteries by Henry VIII.  But in the long run, as Keynes said, we are all dead.   There have been some big fluctuations in between, e.g., after the passage of the Corn Laws which lay the foundations of a cheap food policy.

As for the APR proposal itself, no new Government is going to U turn on a central element in its budget, even if the revenues to be derived are not great.

However, given the conflict over the likely effects (partly arising because different things are being measured), it is worth having an independent review of the evidence to ensure that the threshold does not affect too many smaller working farms.

Given anecdotal evidence on the number of very old farmers who have not gifted their farms, there might be a case for relaxing the seven year rule for those over a certain age.  Mind you, I would quite like for my children for liable for just 20 per cent over 10 years on my relatively modest estate!

Why Rachel Reeves is an economist and I am not

My formal training in Economics is limited to a one year course in my undergraduate degree, admittedly a very comprehensive one,   I later had the good fortune to teach a module on the Making of Economic Policy with the late, great Nick Crafts who courteously pronounced me 'economically literate'.   My economics education was rounded off my teaching a third year PPE economic and political theory module with Ben Lockwood.  So I picked up a lot of economics on the hoof, so to speak.   But I wouldn't call myself an economist.

Rachel Reeves holds an upper second in PPE from Oxford.   She also holds a MSc in Economics with merit from LSE, not an easy programme I am told by people there.   For me, that is enough to count as an economist, leaving aside time working at the Bank of England.   At least she didn't leave a conviction for assault off her cv.

A lot of complaints directed against the Budget have come from the hospitality industry.   However, if the town in which I live is any way typical we have seen a proliferation of coffee shops, cafés and gastro pubs.  Rather than viable businesses being threatened, it seems to me that we have a structural overcapacity problem.

The more general issue here is the right-wing backlash against the Labour Government, culminating in a ludicrous petition for a general election instigated by the very people who defended the narrow majority for Brexit.  Indeed, a petition calling for a second referendum that was signed by four million was ignored (not that I signed it personally).

One would expect distortion from the right-wing tabloid press, but their audience is ageing and declining. Sky's criticisms are perhaps predictable.   More concerning is the BBC's stance which, as personified by 'Tory Laura', thinks that 14 years of accumulated problems can be solved in four months.  The dispute over APR has been illustrated by sentimental interviews with farmers (I have an outstanding complaint against BBC Radio 4).  Even more disturbing are the pronouncements of 'co-president' Musk who uses his social media platform to demand the resignation of the British prime minister.

When I was young I held to the naive view that politics offered the possibility to make things better, provided issues were debated and policies backed by evidence.   Unfortunately, I seem to be handing over a much more sinister world to my gteat-granddaughter.

The controversy over APR

Changes in agricultural property relief are leaving farmers threatening to take their tractors to Westminster next and to spray manure on the capital's buildings, hardly likely to win sympathy for their cause.   Threats have appeared in the farming press that manure will be dumped to disrupt the nation's roads.

Given the debate about the impact of recent proposed changes in APR on 'family farms', it is as well to remind ourselves that there are some big estates in England and not just those held in trust for the likes of the Duke of Westminster.

Sir James Dyson, the billionaire inventor of high-tech vacuum cleaners, has become an outspoken critic in recent weeks of Britain’s plan to reintroduce inheritance tax for farms. He should know: his farming empire alone could result in about £122mn in death duties. The entrepreneur — who sparked controversy by supporting Brexit then moving his eponymous technology company’s headquarters from Wiltshire to low-tax Singapore in 2019 — has developed one of the UK’s largest farming businesses, owning some of the country’s most productive agricultural areas.

The 77-year-old tycoon — who says he has a mission to “protect and nurture” British farmland — has been able to expand his agricultural business over the past decade free of the threat of death duties. The company says it has invested a total of £140mn to upgrade its farms. Dyson Farming owns at least 36,000 acres, the group says, across Lincolnshire, Oxfordshire, Gloucestershire and Somerset. It recorded profits of £5.2mn in 2023, up 10 per cent from the previous year, according to the company’s accounts. The group is now one of the top five UK producers of wheat grains, malting barley, oil seeds, peas and potatoes.

Chancellor Rachel Reeves proposed changes in last month’s Budget to measures that soften the impact of death duties: agricultural property relief (APR) and business property relief (BPR), which were designed to ensure the survival of family and farm businesses after the owner’s death. 

 “You can find cases of people who have specifically said they purchased land for the purpose of acquiring this tax break,” Arun Advani of the Centre for the Analysis of Taxation told the Financial Times.. “There are lots and lots of problems with the way we tax the transfer of assets between generations in the UK. This Budget closes some of the gap.”

From April 2026 farm business owners will have to pay IHT at a rate of 20 per cent of the value of their estate, beyond a £1mn cap.   (In practice for some family farms thiis threshold could be £3m and it can be paid off over ten years). With £612mn in net assets in its annual accounts, the changes could translate into about £122mn in duties for Dyson Farming, according to the Pink Un's estimates.

It was “wrong to assume that my investment in farming is to avoid inheritance tax”, Dyson wrote in a letter to The Times in 2019. “There are far simpler and less risky ways of achieving it than buying farmland.” A spokesperson for Dyson said that the changes to IHT introduced in the Budget would “severely undermine” efforts to improve the UK’s food security. “The Dysons’ motivation has been to bring new thinking and new technology to promote sustainable agriculture, to produce high quality food for the British market and to improve UK food security,” they said

According to the Land Registry, privately owned Dyson Farming owns 185 separately listed properties, with the bulk of the purchases coming between 2013 and 2016. In some locations, such as around Carrington in Lincolnshire, he has strategically assembled large tracts of land by buying up neighbouring properties.

Carrington and Nocton, Dyson Farming’s two major farming hubs where the head office is located, make up two-thirds of all farmland owned by the entrepreneur.  “Lincolnshire produces a third of the UK’s fresh food and has very good soil, very big fields, a good rural agricultural community, and good skills,” Dan Cross, managing director of Dyson Farming, said in an interview. “If you want to be scale farming, [it’s] a great place to start.” 

I should emphasise that I am not a tax lawyer and given that the changes don't come in until 2026, individual farm businesses would be well advised to seek appropriate professional advice.  To judge the effect of the measures, I would need to have better data about individual farms that often have complicated structures, e.g., some land is rented,

The new £1m threshold after which tax will apply at a reduced rate of 20 per cent is in addition to the existing nil rate bands which can offer as much as £1m of protection, hence many families would qualify for £2m or even £3m in relief.

The Country Land and Business Association estimates that 70,000 farms will be affected, Rachel Reeves says that three-quarters won't be.  Part of the problem here is that many farms have complex structures, e.g., a mix of owned and tenanted land. The final figure will be at the lower end of the range, in part depending on how many work arounds professional advisers can discover,   It does not mean the end of family farms, but it does pose a new set of challenges.

An interesting and well argued article by a farmer defending the decision: https://www.theguardian.com/commentisfree/2024/nov/08/farmer-glad-tax-loopholes-investor-landowners-inheritance?CMP=Share_iOSApp_Other

For an authoitative analysis of recent changes in the EU agricultural budget go to: http://capreform.eu/agricultural-policy-reform-in-england-and-the-2024-uk-budget/

CBI takes a big financial hit

The CBI has informed members it had slumped to an £8.3mn loss last year after a governance crisis and allegations of serious sexual misconduct against some staff caused members to flee, pushing the group close to collapse. Revenues fell 12.4 per cent to £20.6mn as the self-styled “voice of business” in the UK suffered the loss of subscriptions and commercial revenues after it was forced to suspend its events and other operations for several months.

The accounts for the year ended December 2023, sent to members on Tuesday, show the CBI spent £3mn on costs directly related to the crisis, including lawyers and consultants called in to respond to the allegations and overhaul its culture and governance. It spent £729,000 on severance payments as it axed staff to stave off collapse. It had an average of 255 staff in 2022 but the number was now about 160. The group could have stemmed losses more quickly by making more economics and policy experts redundant but judged that without them it would be less useful to corporate members.

The group lost about one-third of its members during the crisis but some have begun returning, including nine FTSE 100 groups. BT, National Grid, GSK, AstraZeneca, Schroders, Phoenix Group, KPMG, NatWest, Anglo-American and Centrica have all rejoined this year.   The organisation is focusing more on across the board issues rather than ones dealt with by sector specific trade associations.

The accounts included a warning from auditors over the CBI’s ability to continue as a going concern. It remains reliant on banks to fund its operations, but its lenders were aware of its financial modelling. Revenues would fall further in 2024 because many members had already paid their subscription fee for 2023 before quitting the group, meaning the financial impact would only be felt in 2024, he added. This further drop would be offset by lower legal, consultancy and redundancy costs in 2024, he said.

The CBI is confident it can survive in the long term, but ultimately there may be some rationalisation of business representation.

Lessons from HS2

Whatever one thinks of the HST2 project (and it has not been too popular scything its way through rural Warwickshire) any benefits would not be secured by terminating at Birmingham (or at Old Oak Common at the other end).

The Institution of Civil Engineers has produced an interesting report on the whole mess: https://www.ice.org.uk/news-insight/news-and-blogs/ice-blogs/the-infrastructure-blog/lessons-from-the-cancellation-of-hs2s-northern-leg

It's interesting because it does pay sufficient attention to the politics, in particular the turnover of senior ministers (nine secretaries of state for transport).  And, perhaps surprisingly for a report from an engineering organisation, it admits that it was over engineered.

Are disruptive protests being tolerated?

Policy Exchange thinks that the police are not handling 'disruptive' protests properly and the existing legal framework is not fit for purpose: https://policyexchange.org.uk/publication/might-is-right/

It's a point of review, but it should be noted that this think tank is on the tight of the political spectrum.

Reflections of an amateur psephologist

I haven't said anything about the election so far in part because even the professional election studies experts are finding it difficult to work out what is going on.   And as a public policy person, it is what happens after the votes are counted that interests me most.   There has been a conspiracy of silence from the main parties on the fiscal challenges facing the country.  

Even with over one million drawn into the highest tax bracket and over 6 million paying 40 per cent, the money isn't there to fix broken public services.   Hard choices will have to be made and the campaign has done nothing to alert voters to this fact.

With a volatile electorate, it is difficult to turn votes forecasts into seats won.   There are going to be some tight three side contests in which the majority may be in three or even two figures.  Consider the new seat of Bicester and Woodstock (where one of my granddaughters will be voting).   Poll figures suggest that the Conservatives, Labour and the Lib Dems are neck and neck at around 30/31 per cent.

Turnout will be crucial and it will certainly be down, but by how much?  A lot depends on whether undecided voters who normally vote Conservatives decided to revert to their traditional allegiance on polling day - I suspect quite a lot will.   However, many will not vote because of a growing disillusionment with democratic politics.   'They're all the same,' they say which the Greens and Reform clearly are not.

I think that we have reached peak Reform and that should help the Conservatives.   Farage's remarks about Putin called his question his judgment and his patriotism.  My gardener thinks that Putin is a great man, but that is not a view shared widely among gardeners or the general population.   The remarks made by a Reform canvasser are a further blow.

I really do not have much idea of what is happening in Scotland, but there will also be some knife edge contests there.   I think that the Scot Nats will retain about 20-25 seats.

My hunch is that there will not be a Tory wipeout and that Ed Davie will not become leader of the opposition, but that Labour will have a substantial and sufficient majority.   There is in fact no such thing as a super majority and having large numbers of under occupied backbenchers is simply a recipe for trouble.

If the Conservatives retain about 150 seats they may be able to avoid electing a head banger as their leader and form a sesnible opposition.

We can then focus on two other very important elections in France and the US.   The UK may be an outlier in having a centrist dad in charge.

BTW, the first election I covered in print was in 1959.  This is the first general election in which I have not been asked for an opinion by a newspaper, radio station or television.  However, there is a time when everyone should leave the stage: President Biden please note.

Conservatives whistling in the dark

All but one mayoralty taken except Tees Valley, where the victor did not identify as a Conservative; all council targets taken by Labour except Harlow; the Lib Dems winning more council seats than the Conservatives; a clear win for Sadiq Khan in London despite attempts by Laura 'Tory' Kussenberg to call it for the Conservatives.  Yet Andrew Mitchell was describing it as a 'mixed' set of results.

I have met Andy Street and he was an energetic focused individual who did a lot for the West Midlands.  He disassociated himself from Sunak and he is quite right to warn that going hard right is not a winning formula for the Conservatives.

A nine per cent Labour lead over Conservatives does not mean a hung Parliament as there will not be a 24 per cent other vote in a general election, but clearly Labour has some work to do with former Muslim supporters.

The Lib Dems are threatening the blue wall and won Dorset but a breakdown of the Devon and Cornwall PCC results suggests that they are not making headway in their former strongholds there, indeed Labour is doing better.

Congratulations to Count Binface on getting more votes than a fascist in London.   And why did the Conservatives run a head banger as a candidate when better alternatives were available?

On Thursday I kept an eye on the polling station opposite my partner's flat and the North Leamington elite were storming to the polls - although most voters seemed to be under 35 and over 60.   Labour held the Clarendon ward in the by-electiion with 52 votes and failed by 216 to win the Warwickshire PCC.

This is a government on its last legs.

The Royal Mail crisis

I have been running an online campaign locally about the deterioration of Royal Mail services which has attracted a lot of support from others.   I would often go ten days without a delivery and then fifteen to twenty items would arrive, some of them time sensitive.

I eventually managed to contact the office of the chairman/CEO's office at Royal Mail and to be fair they contacted me by phone and by email and I suspect that they gave local management a bit of a kick up the backside.   Deliveries have improved.

In response they said: 'I have contacted the Manager at Leamington Spa Delivery Office who has advised they have had issues with deliveries due to high sick absence running at 20% as well as twelve vacancies they have at present.  Your delivery round is not getting fully delivered daily and they are working on ensuring there is a rotation on the delivery round to ensure mail is delivered every other or third day.'  [Clearly this was not happening].

Royal Mail is actively recruiting for these vacancies and once these vacancies are filled and staff return to work there will be an improvement in deliveries.   [One person locally alleged that these vacancies were not advertised and they had tried to obtain a position without success].

On the phone I was told that 'no one wants to be a postman any more', but perhaps the pay and conditions need to be better for a job that takes you out in all weathers and can involve meeting unfrienly dogs.

Ofcom is currently running a consultation on the future of the universal delivery obligation.   Royal Mail points out that we are posting fewer letters (of course, they keep putting the cost up).   They would like to remove the Saturday delivery and deliver second class mail every other day.

Some argue that Royal Mail should never have been privatised, although the example of the Post Office and some local authorities suggests that public sector managers are not necessarily better.   My hunch would be us that it is not a sector that attracts the best managers.

I think thare are a number of solutions rathe than a further deterioration in service, although cynically it could be argued that poor service plays into Royal Mail's hands as an every other day service would be better than what I have been getting.

One solution would be to recognise that there is a social element to the service and pay a subsidy for it as happens in France.

Another would be to allow customers to pay for a better service.   I don't want to read my news magazines digitally and buying them from the newsagent would mean a loss of discount (for newspapers I get vouchers).  So I would not lose out much if I had to pay for a six day a week service.

More tax cuts will endanger public services

The Financial Times this morning has a story that Jeremy Hunt is considering further cuts in public expenditure to make room for tax giveaways to boost Tory election hopes.   As the Pink 'Un notes, Hunt's current plans to increase public expenditure by just 1 per cent would imply real cuts.

We are surrounded by examples of deteriorating public services in 'broken Britain'.  Many people cannot access NHS dental services and have had to extract their own teeth.  There is a huge backlog in the courts and buildings are in such a poor state that trials have been delayed.  Even well-run local authorities don't have enough cash to meet their statutory duties. 

Of course, Hunt is setting a trap for Labour who, apart from some modest increases, have pledged not to increase taxes.   The tax burden is at its highest for a very long time, but it is very difficult to see how needed improvements in public services can be funded.

Unfortunately, voters can't have it both ways: lower taxes and better public services.  With the economy in a technical recession and generally flat lining there is no medium-term path out through growth.  As a report from Goldman Sachs make clear, Brexit has hit GDP.

It is possible that interest rates will start to fall and this will reduce the very high cost of servicing the public debt.  About a quarter is index linked and new gilts are being used at higher rates than previously.

Kicking the can down the road doesn't help with the the PFI contracts favoured by New Labour coming home to roost with schools having to over pay for maintenance.

Who would be a decision-maker?

What are the lessons of 1992?

A young relative told me yesterday that after Keir Starmer reduced Labour's planned funding for green investment he will vote Green rather than Labour.  There were similar responses from Radio 5 listeners.

Last week The Spectator had an interesting article on the Green threat to Labour,  Apparently, local polling shows that the Greens are just four points behind in Bristol West, the seat of the shadow culture secretary.

In many ways I think that Labour could also lose some votes to Reform in red wall seats for rather different reasons.   Other Labour voters may stay at home and I think that turnout will be down despite the importance of the election.

Keir Starmer was caught between a rock and a hard place.   He was open to charges of fiscal irresponsibility.   The public finances are in a shocking state.   Conservative plans for public spending allow for only very small real increases when the problem of 'broken Britain' is all too evident.

Reference is quite often made to the surprise Conservative victory in 1992.  Circumstances were different and it is easy to draw the wrong lessons.

I have contributed a chapter to a forthcoming book on John Smith and my concluding paragraphs are relevant:

'One lesson that has lodged itself in the Labour Party’s collective memory has been the myth of the shadow budget.   It is thought to demonstrate that the party must be very cautious about any proposal to increase taxation.  However, the Smith legacy is more complex than that.   Reassuring the international financial community, the City of London that Labour offered a safe pair of hands ‘tended To squeeze out anything too radical or distinctive, diminishing any positive sense of what the Labour Party stood for … Labour risked being portrayed as a pale imitation of the Conservatives.’ 

Labour runs that same risk today under Keir Starmer.  Of course, any new Labour government would have a difficult economic inheritance: low growth, poor productivity and historically high levels of taxation.   It is not unreasonable to reassure business that there would be a more constructive relationship and less erratic policy-making than under Boris Johnson or Liz Truss.  However, Labour has to offer something beyond a more competent version of the Conservatives.  Policy commitments are continually being diluted.   A policy that has become emblematic of this tendency is the refusal to contemplate removing the Conservative Government’s two child benefit cap.   Potential Labour voters faced with an offer of prudence and business as usual may decide to vote for the Greens or not vote at all.'

---

 

[ii] Stuart, John Smith, p.194.

No silver bullet for UK economy

UK in a Changing Europe has brought out an important report on the state of the UK Economy in 2024 edited by Anan Menon and Jonathan Portes.   It shows that there is no silver bullet for the UK economy and many of the problems are very familiar.   However, it is thorough, authoritative and comprehensive: https://ukandeu.ac.uk/research-papers/the-state-of-the-uk-economy-2024/