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Jaguar Land Rover lose a customer
So why does the government want us to stock up for disaster?
In the case of each kind of event the government thinks might need us to keep some tins of food and some water in the store cupboard it is the government that should be taking action to prevent the event from happening.
If it’s hostile countries or terrorist groups disrupting our undersea cables, issuing cyber attacks and damaging UK facilities that is an argument for the government to get on with strengthening our defences and putting in a sufficient Defence budget. Where are the ships to patrol our nearby seas and the counter forces to stop illegal criminals getting into the country?
If it’s hot weather leading to us running out of water why the delay in putting in the new reservoirs? If the threat of flood in winter where the new containment and storage measures?
If it is running out of power, where are the back up facilities, the energy stores, the stand by generators that can work when the wind has gone on strike and the sun gone to bed?
If it is poor harvest and a food shortage, where are the grants and support for farmers to farm, and to put in farm irrigation with more fruit and vegetables under cover?
Most of us agree we need greater national resilience. Current policy forces dependence on more and more imports, with all the extra risks to supply that that brings. We are increasingly dependent on the goodwill of foreigners for energy and food, and on their ability to provide for themselves and for us. That may not always be possible.
My IEA article on the collapse of the UK car industry
Buses and trains preoccupy Mr Burnham
Downing Street South must have a cluttered desk. There is the delayed need to pay for a better defence settlement. There is the Milburn Report on how to get people back to work, delayed until after a budget it was meant to influence. There is the escalating benefits bill as more young people get a sick note for life . There is the brain drain as more talented and hard working people and businesses flee UK taxes.There is the collapse of high energy using businesses, throttled by the UK’s super dear energy.There is the progressive closure of all our petrol and diesel car factories thanks to the early ban in 2030. There is the threat to the Falklands and the disastrous and expensive attempted give away of the Chagos. There is the delay in getting our own oil and gas out forcing us to rely on dear and less reliable imports.There are many more problem files in the in box.
So what does Mr Burnham do as he sits at his desk in Downing Street North? He plans £2 bus fares, reviving an old Conservative policy. He dreams up new fines for people playing loud music on buses and trains. He imagines a nationalised rail and steel industry will work fine, and dreams of an industrial strategy which remains unconnected to government reality.
Where has he got to with his first pledge, to offer every rough sleeper in every postcode somewhere to live? How can he pass more powers to Mayors whilst giving away hard won rights to self government in his proposed Re set with the EU? Why can’t regional Mayors say No to illegal migrant accommodation?Why can’t they use any extra grant to cut taxes? Why can’t they turn down plans for developments they do not like?
Talking about buses, noisy trains and devolution from Manchester to look away from the growing inbox in Downing Street south is not a good way to do the job.
You do not save the Union with more devolution
Reflections on the French riots
We hear that protests about poor conditions in French schools and unfairnesses at universities have broadened into general protests about everything from the cost of living to the state of the Middle East. The far left party Insoumise denies responsibility for the state of the streets and the left generally criticise the police for inflaming things with too much tear gas and too many rubber bullets.
What is clear is that the protesters express their anger in a self defeating way. Small businesses are looted and ransacked. Great public buildings are damaged or burned down . Bond markets take fright making it dearer for the government to borrow. Many law abiding hard working people fear for their local shops and property and face the riots and tear gas when they venture out.
These protests make the economic issues worse. They terrify some of the people they say they want to help. They do not offer solutions.
President Macron had a Marie Antoinette moment dancing in a privileged box as Paris highlighted poverty and public sector austerity. His attempts to crack down with curfews on the many who do not riot shows his weakness.The centre of French politics has not held. We await the electoral contest between right and left.
The 1970 s were dreadful. Why does Mr Burnham wish to revisit?
What was it that took Mr Burnham’s fancy about the 1970s?
Was it the high inflation that made our current cost of living crisis look mild?
Was it government borrowing longer term costing 15.5%?
Was it the rate of pit and factory closures?
Was it the halving of UK car output 1972-82?
Was it the colossal losses of the nationalised industries led by coal, rail and steel?
Was it the brain drain as talent and investment left the country?
Was it the 83% higher tax rate on earnings and 98% on savings income?
Was it going to the IMF for a loan when the government ran out of money?
Was it areas in the hot summer of 1976 cut off from running water in their homes by nationalised water?
Was it Heath putting the country onto a three day working week thanks to a miners strike?
The run up to the budget
The latest figures for GDP growth show the year to August has delivered reasonable growth in services led by computing and digital services. This is the biggest part of our economy so overall growth remains better than the sluggish main EU economies whilst remaining below digital leaders USA. Production industries have been flat, whilst construction has fallen.
The collapse of new housebuilding is dragging down growth. There is no sign of a surge in new Council housing which Labour promised and used to get the OBR to up their forecast a little on the back of the promised package of measures. Rising government borrowing rates knocking on to mortgage rates are holding back private housing work.Labour will discover wanting more Council houses rather than Housing Association ones means far fewer new homes with public money .far more of the cost of a new Council home than of a new Housing Association one counts as public spending owing to the absence of private sector money in the Council home.
The new Chancellor has allowed some speculation on new and higher taxes whilst apparently realising that is a bad idea which hits confidence and stops new investment. He said he could not rule out harmful tax rises, then later did rule out Capital Gains Tax , leaving open other feared tax rises. Labour had anyway ruled out any increases in the three main taxes in their Manifesto showing you can rule out tax rises. What a stupid muddle.
There is no sign of a plan to control runaway benefit spending, no wish to find the much needed extra money for defence that John Healey resigned over. Most commentators think the forecasts will find the Treasury too close to the minimum level of reserve for comfort. The latest rumour is yet more tax on banks. They already pay 3% more as a supplement on the standard 25% Corporation Tax, and pay a levy on their balance sheet. These two bank taxes already make it less worthwhile to keep and use money in London. If John Healey makes it worse more banks might divert more capital abroad.That will be another anti growth policy.