John Redwood's Diary
Incisive and topical campaigns and commentary on today's issues and tomorrow's problems. Promoted by John Redwood 152 Grosvenor Road SW1V 3JL

Anyone submitting a comment to this site is giving their permission for it to be published here along with the name and identifiers they have submitted.

The moderator reserves the sole right to decide whether to publish or not.

The public sector needs some Amazon magic . My IEA article

The UK has long be feted as a nation of shopkeepers. We have some great retailers with strong brands. Amazon came to the UK to take on one of the most advanced and efficient retail sectors in the world. The sector has luckily avoided nationalisation and the more extreme forms of government intervention. As a result we have avoided rationing of food and clothes. Meanwhile the NHS rations non urgent health care by long waiting lists. Councils and government limit the supply of nationalised roads to keep drivers fuming in congestion,suffering  peak hour road works and closures. You do not see Heathrow airport closing the main runway for repairs at the busiest time for landings during the day.  We have plenty of choice of shops, with market leaders like Tesco and Next achieving fast growth and high standards. We do not have a bread shortage, though state regulated water monopolies give us a water shortage.
Nonetheless Amazon has gone from a start up US business selling books in 1995 to having 30% of the UK on line shopping market today. 85% of all UK consumers use Amazon for some of their purchases. It is true Tesco dominates in on line groceries, with Sainsbury and Asda also important.  Next Directory is a great business success selling clothes and household goods. . Amazon has only been able to make such a dent in the general retail market place by the excellence of its technology, the ease of access and use, and the high quality of delivery and service. Some more traditional UK retailers have struggled to come up with a good enough on line offer to compete.
Amazon has advanced its competitive foothold in the UK by being fast and flexible in understanding customer wishes and responding to customer needs. It has greatly expanded the range of what it sells, to give customers maximum choice at the click of a mouse. It has two mega warehouses and many other distribution points so it has the stock to rush goods to people as soon as they buy them. It expanded its delivery system at record pace when covid lockdowns caused many more people to want to shop on line. When other retailers were having to limit our access to their shops to conform with government health advice, and were rationing access  on line for lack of capacity, Amazon seized the opportunity for major expansion.
Great companies listen to all their customers and seek to cater for all of  them. I myself as an Amazon user refuse to pay for Amazon Prime. Amazon tried to shock people like me into paying the subscription by increasing the delivery charges. Clearly enough of us objected and withdrew custom, as they soon stopped that and said sorry . Tesco who built my loyalty to buy many of my household basics from them through sensible price promotions and good whole basket discounts went too far, only offering a discount on a much larger shop than I needed. They have decided not to bother to win me back. It is easy to lose customers, difficult to get them to return.
Amazon handle complaints and returns well. They keep your retail history to make re ordering so easy and to remind you what you bought and what it cost. They have built total global sales to over last year’s  $775 bn, branching out into crucial new business areas in digital technology. They generate an impressive $500,000 of sales per employee and now employ 1.6 million people worldwide. They daily strive to improve, looking to provide better value and quality with everything they do. They adapt and adopt new technologies to get things to people cheaper and faster. Their on line shop is very accessible, making it  easy to choose and to specify where and when you want it delivered. Some other retail sites are much harder work trying to get through all the stages to finally complete a transaction, or even to see the goods and read their design details and specification.
The UK public sector has so much to learn about great on line access and great customer service. State computers threaten you if you cannot make them work, often fail to offer choices you like and are out to serve their owners, not their clients. The public sector does not think about your convenience but theirs. It does not ask what we the  customers would  like, but what they are willing to provide. They want to stress the rules. Amazon stresses the convenience and the product they can supply.
Amazon knows it can only hold its current success and expand its sales if it continues to improve daily what it supplies, keeps  its prices keen, and sustains fast deliveries. There is a good UK retail sector left, ready to take back some of that lost market share. It is competition which drives the innovation, the quality and the better service. The Uk public sector usually insists on monopoly provision, backed up by taxes, rules, and fines to make people conform with what it is prepared to supply.
The nationalised railway concentrates on building a new line that will be more than a decade delayed and billions over budget. It could spend that money on improving punctuality and capacity on main routes which is what travellers want. If Amazon ran trains they would arrive on time and would use the latest technology for signals and safety. The nationalised roads concentrate on making it more difficult for vehicles to get about, pursuing a policy of wanting contraction in the vehicle fleet and in  usage of the network. The nationalised Post office fails to capitalise through its network of counters on the demand for in person banking and services as other business automate too much. The Post Office prefers to lose lots of money and claim a grant from taxpayers.
We need more of the Amazon touch in our public services. Put customers first. Always ask what they want. Look to use latest technology in a customer friendly and accessible way. Use staff to deliver the service to people promptly and efficiently. We could save billions and cheer us all up as government turned from being a bad hectoring presence to being our friendly supporter.

Postings to this site

I allowed  endless criticisms of the Conservative government when in power, and in the early stages post election. I then made clear that this site is mainly designed to discuss government policy and actions, not Opposition parties. I write an occasional piece about the opposition  when topical. I did not write or allow continuous criticism of the Labour Opposition 2010-23, and deleted comments personalising attacks on Labour figures. I have published several  of you who remain critical of the Conservatives so we know what you think. There is no need to keep repeating.

If you want to pursue old criticisms of the last Conservative government you should send them to an official Conservative website. You should remember the new leadership has made big changes to migration, net zero and international law policies amongst others.

The Rejoin EU party loses its deposit again

The Clacton by election was an ideal opportunity for the Rejoin EU party. The main pro EU parties, Lib Dem, Greens and Labour had stood aside. The former MP incumbent  candidate was Nigel Farage with a lifetime of being anti EU. Surely this would show that even in relatively Eurosceptic Essex there was a serious minority of support for rejoining the EU, which could then sustain the often quoted argument of the pro EU forces that a majority of the UK would now like to be back in.

Instead the Rejoin EU party polled under 1.5% of the vote. Their candidate  John Stevens, an experienced politician and a former MEP, failed to get any cut through with the electors and as a result was ignored by the media. The media rightly worked out the only challenger to Mr Farage likely to get  serious support  was Count Binface, who as a result dominated the non Farage coverage. This demonstrates that the alleged wish of many to see the UK back in the EU is not true. If it cannot convert to being  the leading minority vote in a relatively Eurosceptic part of the country, it cannot be the view of anything like a majority of the UK electorate. Those who wanted back into the EU had nothing to lose by voting for Mr  Stevens, as the by election was never going to change the government or make any significant difference to the Commons. A strong vote for Mr Stevens would however have sent a message and would have been greatly used by those who do want us to surrender more powers and align with more EU government.

That is why those of us who think EU Re set and closer alignment will bring us less growth, higher taxes and more bad laws need to remind people that even in the free vote conditions of this bizarre by election the pro EU party got little over 1%, whilst the winner who wants us to stay out got 62.8%. Count Binface campaigned on being in Clacton more than Mr Farage and in favour of cheap ice creams. He promised to build one subsidised home and offered to cut any individual voter’s tax whilst putting it up for the rest. This was preferred by those who did like Mr Farage to the serious – and wrong – proposal that we should re set our relationship with the EU and seek membership put forward by Mr Stevens. Doesn’t that say it all?

Mr Burnham rails against new reservoirs and treatment works

A day after a meeting to deal with the water shortage and other issues from the hot weather, Mr Burnham condemns the idea that water companies in the worst drought affected areas should be allowed a small further increase in prices to cover the costs over the next few years of providing more water and water treatment capacity. He seems blissfully unaware that the Regulator has kept investment spending down over recent years to try to keep bills down, at the cost of the companies not being allowed to put in the extra capacity we obviously need.  He also seems to be unable to grasp as PM that if we are to provide adequate supplies and capacity we either have to pay for that through our water bills, or the government will have to pay for it and send us bigger tax bills. The last thing we want, I would have thought, is the kind of design and construction delays and cost escalations that HS 2, our fully nationalised railway, has cursed us with when it comes to a needed programme of new reservoirs and treatment works.

 

Mr Burnham is right in thinking many people dislike the water companies, feeling let down by sewage in our rivers and now by the threat of water rationing during a drought. He is wrong to think nationalising would correct this. First, the nationalised industry in 1976 with similar weather was worse, with standpipe water only for some regions with no tap water in the home. It presided over  permanently dirty rivers and seas with dumping raw sewage as a matter of policy. Second, if he did want a nationalised solution the costs of taking over the water companies would be huge, as UK shareholders, charities and pension funds that own some of them would not take kindly to theft. Once nationalised the whole extensive investment programmes they are already doing, and the extra investment needed, would be another colossal bill for taxpayers.  The mistake with water privatisation was leaving the monopoly in place which so disfigured the nationalised regional concerns. I have set out before how water competition would unleash more capacity, innovation and new technology to resolve the shortages and dirty water.

My water bill is a small fraction of my Council Tax Bill. It presents good value for the water I use. The Lib Dem led Council wastes and loses a fortune on bad projects and bad management. It regularly puts the bill up by more than inflation. It spends a lot of money on consulting us, only to do the opposite of what we recommend in many cases. Mr Burnham should understand it is rip off government that is doing far more harm to  most domestic budgets. He should also grasp the bad role played by the Water  Regulator in getting us into a position where we have not put enough new capacity in to cater for the millions of extra people  we have welcomed into our country this century.

“Phew! What a scorcher”

The tabloid headline of my youth at the top of this article  used to  be rolled out when we had hot days. We used Fahrenheit then, a more sensitive and large scale way of judging the temperature. We all knew during summer that 70 degrees was pleasant day, 80 was a warm day and 90 was a hot day. As temperatures sometimes soared into the high 90s that was a too hot day. Nonetheless those with money opted to go to the south of Europe in search of the 100 degree fix for a holiday , equipped with sun tan lotion and often then a passion to lie out in the very hot sun. Today we call  those temperatures  21.2 Celsius, 26.67, 32.22 and 37.77 which are more  difficult to remember and not so clear in the message they send. Maybe we need to unite around 20,25,30 and 35 as benchmarks of how

Cobra on hot days

Interesting that the government has at last spotted we are having some hot days. Curious that they chose now to make this an emergency issue to warrant a meeting of their COBRA Committee. That is meant to meet as soon as a new disaster hits, not weeks after a problem has emerged.

You would have thought the priority meeting should have been how to stop the new mega dinghies, the jumbo inflatables now hitting the Channel. That surely is an emergency, given the large numbers of lives at risk, the passivity of the French and the need to stop the flow. There is new evidence that we are now facing much larger boats who stop to pick up hundreds of people along the French coast before they come to English waters.

What should the “Summer days” Cobra do? Government does need to respond to the possible water shortage and has been meeting to try to do so, and to the stresses on our electricity and rail systems. Here is a short agenda:

  1. Stop many  categories of new migrants like those seeking low skilled jobs coming by legal routes to the UK. We do not have enough water, power, NHS capacity for our current population, so why keep increasing numbers?
  2. Press ahead with the 9 new reservoirs that are being considered. The government should drive through the licences and planning permissions rapidly to ward off future water shortages and to catch up with all the extra people invited in in recent years with no new reservoirs being built.
  3. Tell the owners to get the Beckton desalination plant working and use it to reduce draw down from reservoirs for London supply

 

 

Mr Burnham needs to learn how to govern

When Mr Burnham says he understands people do not want the early release of two criminals serving time for their part in the death of a policeman he seeks to be popular. That’s no bad thing in a leader  to pick up the public mood about an issue, and if it is well based as this is, to support it. What is wrong is to do so without a clue about what he can do about it as PM.

We have seen him dither and delay. The Justice Department presumably under the supervision or surveillance of the Justice Secretary had determined they needed to undertake early release of a large number of prisoners. They have  been closing so many old prisons so they had almost entirely eliminated any gains from  the 14,000 new prison places Conservative Ministers had got them to undertake. Under the Starmer government too, as 3000 new prison places from the Conservative plan became available other places were shut, cancelling the wins. The PM allowed this policy to go forward. The policy  entailed the early release of the two connected to PC Harper’s murder and some in the grooming gangs.

When the PM got round to understanding how unpopular the Justice Department policy was  he asked for a rethink. On August 4th a new policy was announced, saying that the early releases would not now include rape, serious child sex and grooming offences. This did deal with some of the  public anger over grooming gangs but the public was still unhappy. Those who assisted the murder of PC Harper were still eligible for release. So Mr Burnham gave up defending this second improved policy and asked for another rethink. At last yesterday the PM has called for his Justice Secretary to present a new policy to Parliament in early September to free the necessary places without early release of categories of dangerous and nasty criminals the public want locked up for longer.

Why? Surely any person who becomes PM should know that before you blunder into a public policy statement you sit down with colleagues and the Head of the relevant Department and hammer it out. You look at the bad aspects and you require a better answer if the policy fails to achieve your aims. Instead we have a PM so in love with his own work on social media that he says what he thinks the public want to hear without engaging government or making sure he can deliver.

Why did the Justice Secretary behave like this? Is he not in charge of his Department? Can’t he get the Department to do what he or the PM wants? Does he accept two public changes of his policy by the PM and the obvious implication that the PM thinks he has let him and the public down, and has failed to do the homework to sort out prison places. If a PM has to get a colleague to try harder it should be done in private, not in public. From the Justice Secretary’s point of view it must be a nightmare working for Mr Burnham if every time he agrees a government policy he then goes back on his agreement and asks for a rethink.

If Mr Burnham is serious about the cost of living he needs to ditch the EU re set

Mr Burnham inherits a ruinous half completed EU re set negotiation. If he is serious about raising living standards and listening to voters, he should pull out of the talks. The Manifesto was right to say the government would keep us out of the single market, the customs union and freedom of movement. The likely deal breaks all these promises. So far there is no news that it can deliver the very modest aims of easing the restrictions on touring musicians or obtaining mutual recognition of professional qualifications also in the Manifesto.
As Mr Burnham departs on his listening journey he will find welcome support for his idea that the cost of living is voters’ main preoccupation. Family budgets are too squeezed and living standards have at best stagnated. People want improvement.
He will also discover that the second big preoccupation is to him the less welcome strong feeling that illegal migration  is an expensive pressure on housing, utility supplies and communities. People do not just object to seeing illegal arrivals put up in good hotels that the communities would rather use for travelling business people, tourists,  local events,  weddings and special occasions. They also object if the illegal arrivals  are given priority for social housing, or convert family homes into Houses of  Multiple Occupation. People object to the whole idea that their home areas have to change to house people who should not be here at all. People want stronger border control, not a new way of housing the results of weak borders.  He will also hear if he listens that opening up safe routes so the illegals can all become legal is not what people have in mind either.
The leaked plans for re set will worsen the cost of living pressures. Joining  the EU carbon emissions trading scheme means imposing a higher tax on energy intensive goods which we will have to pay. Imposing a carbon border tax (CBAM) on imports from outside the EU will mean dearer energy intensive products which we rely on. The give away of 12 more years of large amounts of our fish for nothing in return means we cannot rebuild our home fishing industry and have a better supply of local fish.
The proposed SPS Agreement on food trade will mean the imposition of a large number of unwanted rules on the many small UK companies and producers who do not export to the EU. This will involve them in extra costs that will help push up prices.
The EU demand that the UK makes a Solidarity payment to secure the deal w8ill come on top of stated charges for rejoining parts of the EU single market for their administration. This should  mean a tax rise for us to pay the extra bills, as the government has run out of room for yet more borrowing.
Rejoining Erasmus to replace Turing for students means a far worse deal for UK taxpayers and students. Students will lose the opportunity to go to non EU universities. Taxpayers will be paying an extra £700 m of tax to meet the bill, which will largely go to EU students coming to the UK. If the Uk concedes domestic discounted student fees for EU students the universities in the UK will have to hike the fees for all students to make up the shortfall, fitting UK young people yet again.
The proposed Youth Opportunity scheme is a version of freedom of movement for all under 30 year olds. There are so many more on the continent than in the UK, and many there want to come to the UK to learn English. Where will the government house them all? Will they qualify for free benefits and free public services? How will those bills be paid?
So here is some good free advice to Mr Burnham. If he is serious about wanting to control the cost of living he needs to control public spending and the costs facing UK business. The current EU re set plans do the opposite. So scrap them.
If he picks up on his travels the anger about weak borders, he needs to close down the talks on more young people getting the right to come here from the EU. The difficulty the EU is having in controlling its own borders reinforces the message from the public that we need stronger controls, not weaker rules. Making illegals legal is not the answer most people want.

Net zero all over again

Yesterday evening I was asked to join a discussion about net zero policies on LBC. The person putting the net zero view wished to mount a personal  attack on me on false grounds rather than dealing with the realities of the damaging policies he and Mayor Kahn are proposing to Mr Burnham. He seemed surprised by my line of argument and unable to cope with it.

In the short time I was given I tried  to summarise my long advanced case that the main UK net zero policies are self harming  and self defeating. I pointed out that most of them lead to more world CO 2, most notably the crazy decision to keep our gas in the ground, replacing it with imported LNG. This generates three to four tines as much CO 2 as using our own piped gas. This came as a shock to my LBC counterpart who then tried to deny the obvious.

I did not have time to point out if I bought a battery car large quantities of CO 2 would be generated abroad in its manufacture to  mine the battery materials and make the battery. More importantly when I plugged it in to recharge most  likely  they would need to burn more gas in a gas power station to meet my extra demand. How does that help? It would be more efficient to burn the fossil fuel directly in the vehicle.

I did point out in the ten years from the Paris climate Treaty there has been a big increase in world CO 2 led by China, India, USA, Russia and Brazil. There is no sign of that trend changing. The UK inflicting self harm  and choosing a self defeating policy makes things worse all round. Why won’t they listen? How many more times do we need to explain the obvious?

 

A peoples’ BBC? My IEA idea

The UK media industry is losing out badly to the towering success of the USA.
The BBC is a great force against change. It  seeks  to freeze UK media in a top down take on what they think we need. Meanwhile the  audience  moves swiftly into an exciting competitive world of downloads, podcasts, on line videos,movies on demand and citizen journalists getting live clips of events as they happen. As a result the UK is slumping in the media rankings. The BBC slumbered and grumbled as Netflix surged from nowhere to have a turnover already six times the UK ‘s state broadcaster. They watched in denial as Amazon Prime and Disney sold subscriptions to their UK viewers who still have to pay the licence fee if they want to watch any live tv.
There are now more than 18 m Netflix users, 15 m Amazon Prime and 10 m Disney watchers in the UK. When asked what people look at  first, 26% say Netflix, 25% BBC and 10% fast rising You tube. This means the revenue, the profits and the investment are surging in the US as the UK state company sees its market share, purchasing clout, ability to attract talent and to win audiences badly squeezed by more fleet of foot and now much more powerful rivals.
The BBC looks to the licence fee for its revenues. More and more people are deciding they can live without live tv, allowing them to watch downloads without paying the tax. The BBC needs  more money to spend on technology, new market outlets and on programmes, only to find Comcast, Amazon, Netflix and Disney generate 30 times as much turnover as the sinking UK challenger. We should be in a panic about this collapse. The BBC is now a minnow  in the world of fast growing US media giants. 30 years ago Netflix and Amazon Prime Videos did not exist. They have already both dwarfed  the BBC.
The BBC has a commercial international company with a pathetically small turnover of £2 bn.This has access to the BBC back book of recordings, but lacks sufficient cut through in the global market .  It should be allowed to raise substantial new share capital from private investors with a Golden share blocking foreign take over. It should spend the money raised on expanding its technical and global reach and adding new content. It should not have recourse to public funds. Currently it receives no cash subsidy and is profitable.
The BBC’s free website service impedes the establishment of competitors who need to charge to cover costs.  This needs to be split between a factual and promotional website about the BBC and its offerings, free to users, and a site setting out BBC journalist and commentator takes on life behind a paywall like its competitors. The BBC domestic service  model says it is advert free, yet it increasingly uses its remaining  home market  power to self promote energetically. A recent generic controversial advert has added to the stream of plugs for individual programmes and promotions of BBC people.
Debate about  the BBC usual revolves  around bias and editorial decisions. Defenders  point to the Charter and to the understanding that government  that automatically  has great influence  over funding and personnel should not use  that influence  to affect comment and coverage of the government. It is true the BBC does give  a hard time to Labour, Conservative and Reform interviewees to demonstrate some fairness over parties. Critics allege deeper long term bias  in the approach to climate change theory and net zero policies , where they have been a fan, to pro government bias over covid lockdowns, and an unwillingness to question the Bank of England  and great quangos  like the Environment  Agency and Ofwat when they get things wrong. There  is a perpetual reluctance to challenge the EU and pro EU soundbites. Coverage of the EU is thin and often uncritical.
My case today is all this political debate caused by the BBC being a state owned and directed broadcaster is getting in the way of growing  and using the UK’s  great cultural  and news gathering potential. It means  many do not look at the worrying loss of UK market share. The licence fee model cripples growth and requires a different approach to cost control and economic riskiness of ventures, as taxpayers rightly expect prudence in how their tv tax money is spent. The licence fee money will diminish  as technology and US success undermines the numbers of people paying it.
Given the political sensitivity we need to examine new models. Offering everyone  a share in a mutual BBC that paid a licence fee could  create a people’s BBC. Licence fee shareholders could be guaranteed to keep at least 51% of the total share capital to protect from foreign takeover.A licence fee shareholder could just have one  share all the time they had a licence, preserving  it as a mutual . Alternatively  there could  be a single  initial  grant with people  free to buy and sell the shares. There could be a block on anyone buying more than say 10%  of the Corporation. The BBC would retain its Charter and  requirement to be impartial.
 It should be set the task to review new sources of revenue  and to have a planned phase out of the licence fee. It could go on to raise new capital  and add new  revenue schemes .It should charge for web access, and could  have  a variety of subscription  and advert based services.
 There would  be a taxpayer grant to cover World  service and related news broadcasting in support of a UK cross party foreign policy which would be pro democracy, free speech and impartial  news.
 Without BBC reform the nation will adopt more and more US services and the Corporation will have to cut and cut again as licence fee income falls.
Sent fro