Prices going up is usually a bad thing. If food, rents and energy prices go up too much living standards fall and people on lower incomes are particularly badly affected as they spend a big proportion of their incomes on basics.Better off people are made to spend very big proportions of their income on a wide array of taxes. When they go up people rein in spending or leave   the country.

Governments facing an inflation often intervene to control prices. They offer to stop rents or food prices or energy going up. This is popular when they start to do it, holding out hope of relief from ever rising and increasingly unaffordable bills. It becomes unpopular when people find out it cannot work in the longer term, as it stifles supply and investment in more capacity. It will lead to higher prices as we see in UK energy.

The current government presided  over a near doubling of inflation in its first 16 months. It has increased the number of areas subject to price control and has exercised existing powers to control prices.

Despite or because of price controls energy has got dearer, with  increases in managed prices. The government’s big interventions in  favour of more renewables has hiked energy costs.

Rail fares have gone up, with a large government pay settlement for train drivers adding to cost pressures.

Water bills have shot up  with government deciding to require or allow the industry  to invest much more in new pipes  and water works.They need to catch up with the big increase in population brought about by government migration policy.

Food bills have gone up,with domestic farmers growing  less thanks to higher taxes and withdrawal of subsidies.

Rents have  shot up thanks to extensive new controls and taxes on landlords. Many smaller landlords are exiting the market. Government contractors have been bidding  up rents to give priority to recently arrived migrants.

Wherever price  controls have been tried it leads to less supply. To get prices under control you need more supply. Dear energy created by overriding markets is now leading  to many industrial closures, driving home supply down further and adding to inflationary pressures.

1. Remove all interest from reserves, cutting Bank of England losses by £22 bn
2. Remove interest from minimum reserves  needed as the ECB does. Bank said they need minimum reserves of £325 bn (low end of range). So that saves them 4% on £229 bn or £9 bn.
3. Pay a lower rate on reserves to give Bank a spread between its lending  and borrowing rates. E.g 0.5% less or £2.75 bn
4. Double Bank levy raising £1.3 bn
5. Return Corporation Tax surcharges  to 8% raising around £2 bn

The Home Secretary had more than a year as Justice Secretary. She let out a lot of prisoners early, watched as wrongful releases rose in numbers, allowed a weakening of  control over the prisons and was promoted to leave Mr Lammy with a difficult inheritance where he blamed his predecessors.

She now tells us she is carrying out the biggest ever changes to our immigration system. I doubt that. The biggest changes have been made by the European Court of Human Rights endlessly extending the grounds to allow more and more people to come and stay against the wishes of many voters and past  Ministers. Big changes were made during our period in the EU when we had to have open borders. Brexit has stopped the flows of EU nationals, only to see many more coming from non EU countries as government,  the public sector employers  and business have welcomed more and more in to take lower paid jobs and then to be joined by dependents.

The present package of measures can help a bit,  but does not go far enough to stop the boats and smash the gangs, nor to relieve the pressures of legal migration on homes, infrastructure and benefits.

When will she produce draft legislation and when will it pass the Commons? Why the delay?

How can she limit the jurisdiction of the European Court of human rights  over migration cases when the government is firm that it wishes to abide by international law and the Convention? She will need to negotiate and agree changes with the ECHR which will take time and give limited or no improvement.

When she says people granted asylum may need to return to their home countries if the UK view of these countries changes, how will she enforce deportation if the people want to stay? What will be the status of children born here to people granted refuge?

How often will the government make a new assessment of a country’s risks and status? Will Afghanistan under the Taliban ever be deemed  safe? Sudan in civil war? Iran under the theocracy?

When she offers additional legal routes for people to seek asylum, will there be any limit on numbers? Could we see all the people currently coming by illegal boat simply being able to come legally with speedier processing? Will people using these legal routes require prior vetting on the continent before being allowed to come here by boat or plane from France?

It is important to both reduce legal migration substantially and stop illegal. These measures will not do either.

Reform led Worcestershire County inherited a tight budget with rising spending for 2025-6 from the outgoing Council when it took over at the beginning of the new financial year. Councillors rightly argued for lower spending to get elected.

Instead of making early spending reductions which were clearly needed in its first year in office it  has allowed  spending  to rise more, well above its income growth. It inherited a maximum increase in Council tax bringing in considerable extra revenue.  The Council has also drawn down more reserves to pay some of the bills over and above the tax rise.

It  has now asked for a Capitalisation Directive from the government. This is an emergency device which allows a Council to borrow to pay the running bills, where under the rules they are only usually allowed to borrow for capital investment. They are meant then to take action to control future costs to avoid further overspending in  later years. If the Council carries on borrowing to cover running costs of services it can get into an unaffordable debt spiral, with interest costs taking up more and more of the income.

For 2025-6 its first year the new Council will use £23 million from inherited reserves for current spending, and will borrow a further £33.6m under this special permission from government. This borrowing will need to be repaid with interest over the following 20 years. This has happened despite receiving the extra  tax from a full 5% Council Tax rise this year imposed by the outgoing Council.

The Council is now consulting on its 2026-7 budget. It says it wants an additional £98 m to spend on a net revenue budget of around £500 m. It asks for views on Council tax rises below the 5% maximum, at the 5% maximum and at the higher levels of 7.5% and 10% where they would need government permission. Assuming the 5% rise, they say they will still have a gap of £66m between their wish to spend and their income. From the look of the document they think their tax choice rests between 5% and higher.They are consulting  on another Capitalisation Directive, to borrow an additional £43.6 m to cover current spending.

The document mentions the possibility of reducing the growth in spending, but sets out no options on how to do this. It argues that corporate overheads have been cut in previous years and are under good control. They are stated as just 3% of the budget total, whilst soaring debt costs as they borrow more are now 5% of the budget. It is unlikely the public will write in with a costed schedule of spending cuts. This surely should be the job of the Councillors to set them out with the officers, and to consult the public on them.

I urge the Council to identify the savings necessary to avoid more emergency borrowing and to keep the Council tax rise down . The government back up  of allowing emergency borrowing for cost over runs must not become a regular event as that is the route to the public sector equivalent of  bankruptcy.

The collapse of public sector productivity in the UK is a national disaster. Productivity was down 8.4% on 2019 levels. It was down by an alarming 18.5% in the Health Service, which has received large increases in funding over the last five years. It is still not back up to 2019 levels.Government has expanded the public sector whilst allowing this collapse. This has resulted in record levels of taxation and huge deficits leading to big increases in borrowing. It is a simple case of poor public sector management.

There is no shortage of managers, as there has been a rapid expansion in their numbers to preside over and help cause the productivity drop. Their salaries and pension plans are much better than in the last century. Some of the worst managed parts of the public sector have been misled by people on more than £500,000 a year. Take the case of HS2. The job of CEO is to spend public money on building a new nationalised rail line to time and budget. There is no need to manage passengers and collect revenues, just spend well.

The result has been mega salaries and bonus for overrunning time and budget massively. Or take the case of the Post Office. CEOs paid more than £500,000 pay and bonus. They presided over losses running up to £1800 m. Worse still they falsely accused service managers of fraud and theft, leaving taxpayers with a huge compensation bill and some of their staff gravely damaged.

When I was a Minister I used natural wastage to slim the organisation. It worked better with fewer.

Old initiatives rarely die in the public sector, they just get shifted to a less prominent location. The culture of collective judgement and responsibility leads to overmanning and frequent changes of leadership on projects and activities. It creates inefficiencies and ensures no one is to blame if it goes wrong. When activities are contracted out there are quite often savings of 10-20% despite the need for the private sector to make a profit.

We’re not buying it.

The MOD is bad at buying things though weapons procurement is a major part of the budget. The Ajax military vehicle should not have posed big problems as it relied on conventional technology. Yet £3bn into the programme only a few vehicles had been delivered and there were quality and design issues that needed sorting out. How come so many intelligent and well paid procurement managers allowed that? Why was no one in charge who could create a good outcome? When government wants something new to happen it is often best to set up a new task force led by an outsider.

The development of  covid vaccines was based on just this model. It does not always work as it needs a good leader with Ministerial backing. The construction of the Nightingale hospitals needed Ministerial and military assistance and leadership. The NHS then did not make use of them, preferring to close down non covid activity to keep covid cases in general hospitals. Why? The idea of specialist covid places was a good one to contain infection

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The enthusiasm for too much regulation in recent years has burdened us as taxpayers and as consumers as we pay for it. Some of it is wasteful and needless. Take the paperchase when someone buys a home. If they are paying with a deposit saved in a UK bank or building society why is there need of anti-money laundering paperwork, as the bank satisfied itself of their customer and can see the taxed income that provided the savings coming into their account. AML controls should be for the minority that pay in cash or draw on a foreign bank.

Having a driving licence and a utility bill does not prove someone with exotic sources of cash is not a money launderer, so in the minority of cases there needs to be a proper examination.

The Bank of England is the biggest loss making public sector institution by a mile. According to the OBR at budget autumn 2024 they will lose £240bn from end 2022 to the final run off of their bond portfolio. Why are they allowed to lose such huge sums? The Treasury and taxpayers have to send them the money for the losses and Chancellors approved the original bond buying. The European Central Bank made a similar error in buying too many bonds at high prices. It has loss containment policies which mean it will lose far less proportionately than the Bank of England.

The rail industry is largely nationalised. It is heavily loss making and needs big subsidies and borrowed capital. When train company franchises end their activities are nationalised. The high cost tracks, signals and stations have been long nationalised. The nationalised train companies do not perform better for customers and taxpayers than the private ones, and often perform worse.

Why can’t public sector management of a monopoly system do better? Throughout the public sector there is need for fewer but better managers. There is need for good bonuses only paid for good delivery. There is need to mentor and train Ministers to take an intelligent interest in management of their departments.

They should be criticised for allowing bad productivity. In the industrial businesses I have led I always found a limited number of well-paid good people was best. Quality and efficiency are two sides of the same coin. Getting things right first time matters. Honesty and quick remedies are essential when you get something wrong. Learn from your mistakes, design error out and always put customer and service users first.

Labour under Tony Blair was good at spin. Keir  Starmer’s team is hopeless.This  week saw a too stupid by half briefing against leadership challengers spectacularly backfire as Wes Streeting  tackled it head on and came out stronger. The public wants the PM to stay at home more and solve the big problems. Making the toxic atmosphere of the advisers the issue is a disaster.

The big difference between government and Opposition is Ministers own the actuality. Opposition can describe a world as they want it to be, and set out  how they  might get there. Ministers own the current facts. If they cannot defend them  then they need to make urgent changes and quickly show they are starting to work. On first coming into office maybe for a year you can blame inheritance, but a year on you have had plenty of time  and resource to change things for the better.

There will be more alarums and undermining of the PM all the time he fails to change key areas for the better. He promised smashing the gangs. Instead illegal migration has risen a lot. Instead of strengthening the law he repealed tougher measures the Conservatives were belatedly  bringing in.

He promised ending cost of  living pressures. Instead he has put inflation  up from 2% to 3.8%. He has fuelled inflation  with increases in managed fuel and water prices and big public sector lay  awards.

He promised no big tax increases. He instead put a big jobs tax on via employers National  Insurance, and is now threatening an Income Tax hike.

He promised faster growth and more jobs. Instead unemployment has risen  sharply to 5% and last month the economy contracted.

He cannot spin his way out of these truths. He needs to stop people near him talking about a Labour civil war and get on with practical measures to right these obvious wrongs  He owns higher taxes, higher borrowing, slower growth and more illegal migration. When will he make changes that tackle these big issues?

The government’s worst mistake as it surveys the damage it is doing to our economy is thinking an EU re set will boost growth. As the EU is making  clear, any attempt to get closer to them would come on their terms. It would mean us paying big bills to them. It would mean us accepting their laws on many matters. It would mean even higher carbon taxes and dearer energy.

They want us to pay  £5 bn a year to have a chance to bid to supply them with some weapons. They want us to surrender the Turing  scheme which helps UK students to go to a university anywhere in the world, and to go into Erasmus to pay  for more EU students to come to the UK at the expense of the freedoms of UK students to go to non EU universities.

They insist on us joining their carbon market to impose a still higher carbon tax on everything we do. They want us to impose big tariffs called a carbon border  tax on imports from outside Europe, making things dearer. They want us to accept a lot more younger migrants into our country, who may come with the need for subsidised housing and free public services. They require us to accept their rules  over farm products and will impose a charge for supervising our food trade.They have demanded many more years of taking too many fish from our waters, stifling the UK fishing industry.

None of this would make us better off. Linking to a slow growth protectionist customs union gave us dire growth in the last decade. Their rules make them uncompetitive   with the USA and China. The OBR should mark down their forecast of growth for the re set policy.They should add in around £10 bn a year more cost and lost activity.

There is one simple word for Ministers to use for every one of the EU’s demands. It is No. When I was single  market Minister No was in constant use as we had to fight off  so many costly and damaging proposals.

Many of us forecast a rise in unemployment.Three months of undermining confidence last year was followed by a tax raising budget. Telling us all the  UK economy was in a dire state and nothing worked was followed by a swingeing tax on jobs and a large hike in the minimum wage.No wonder job vacancies tumbled and companies  decreased their workforces.

When you are in government you own the government actions and administration you inherit. Talking it down depresses staff and annoys the voters who want government to manage it better and be positive about what they manage.The government has had plenty of time to change things that were not working well Pity they changed them for the worse.

One of the reasons there is a new black hole in the finances is the big rise in unemployment, now up by a quarter from the low in summer 2024. Two  of the big successes of the previous government was the near halving of unemployment during their time in office, and the introduction of Universal Credit to make it more worthwhile to work . This governments failure to extend this to disabled and to help  more people into work has led to more public spending on benefits . Granting too many sick notes for life, benefits without  the need to look for work, is ballooning the costs.

The government should worry about the self employed, hit by IR35, higher National Insurance and more regulations. They should be concerned about small business, put off employing people by higher taxes and the new Employment legislation .Government says  it wants cheaper energy, so why press ahead with the extremely expensive renewables and more grid plans?

We still need a growth plan. We need a productivity boost in the public sector, and policies for cheaper energy and less migration that work. more unemployment is the last thing we needed, but it was baked into the disastrous first budget and into much of the preparation for the second.