Fiscal rules

We await new fiscal rules to guide the economy. According to the IFS we have had 12 fiscal rules from 1997 until 2017 and have broken or ditched ten of them. Labour’s aim to keep state debt below 40% of GDP was blown away by their Great Recession and the idea that they would balance the current budget over the cycle with it. Osborne’s aim to get state debt falling as percentage of GDP every year so that actual debt fell from 2014-15 was relaxed when he did not hit target.The 2019 aim of getting the current budget in balance within three years was binned by the pandemic.

All the fiscal rules have been variants of the Maastricht requirements that the deficit should be under 3% and state debt should be under 60% of GDP or declining as a percentage of GDP to get closer to that target. The formal rules are currently in suspension pending new rules. However the Spring 2021 OBR and Red Book was based around getting the budget deficit down to slightly under 3% by 2024-5 and getting state debt falling as a percentage of GDP by the end of the period. It is  all very familiar.

The government is still reporting our progress against the Maastricht rules as if we were still under the EU reporting system and in their semester control. The OBR assures us there are still guides and it still clearly likes the state debt and deficit controls. The rules that the current budget should on average across the cycle be in balance, and capital spending should be no more than 3% of GDP is just another way of expressing the EU  budget deficit ceiling. The way spending growth is constrained in the later years of this Parliament and taxes planned to go up shows just what a grip on policy the state debt controls have.

I am urging a new approach. The  government should stop monitoring the U.K. economy  against the EU debt and deficit rules, and stop budgeting as if they ruled the future. Instead it is a good idea to have a limit on debt interest as a percentage of revenues. The  current limit of 6% is generous and could be brought down to 5%.

There then could be targets for growth and inflation . We  already have  a 2% long term inflation  target which is fine. To produce a balanced policy where there is scope to invest and grow we should set a stretching but achievable growth target. This  should be above 2% for the long term average and should be much higher for this year and next given the need to recover from the pandemic recession.




Put British back into the BBC

The BBC is meant to be a U.K. institution. It should help create a sense of common culture and shared democratic conversation for citizens anywhere in our Union who want that. Instead in recent years the BBC has fanned division. It has helped nationalist movements in Scotland, Wales and Northern Ireland gain more voice for protest and grievance. It has stood for the continuing  submission of our country to government from Brussels against the pro Brexit majority. It has belittled and ignored England, perhaps with a view to building an English backlash to nationalisms elsewhere in our Union as the SNP and others want. BY highlighting the differences and the better deal Scotland has over funding per head, access to higher education and social care the BBC has done the SNP’s work for them in trying to create English grievance.

The U.K. is a complex country. Many  cannot describe the subtle differences between UK and  GB, or explain the relative powers of the UK and Scottish Parliaments or even remember the different voting system used in devolved elections. There is no adjective  to describe U.K. ness. Pro Union citizens of the U.K. in Northern Ireland are happy to be called British even though technically our country is the United Kingdom of Great Britain and Northern Ireland. The BBC seems less keen to be called British, using Scottish and Welsh branding in those parts of the Union whilst trying to break up England with regional branding that fails to resonate with most English people. The BBC often seems better disposed towards the EU/Republic of Ireland approach to Northern Ireland than to the view of the majority community in Northern Ireland it is meant to serve.

The BBC’s decision to encourage and allow a journalist to use illegitimate means to gain an interview with the Princess of Wales was bound to disrupt her marriage,  and harm the family and monarchy that stood behind it. It  was not just wrong in itself, but symptomatic of an institution, the BBC, which wanted to use its special place in our nation to disrupt our constitution. They were cruel on the children of the marriage with the interview and its questions, and wounding to the monarchists in the wider nation. This is why this dispute about journalistic techniques has such resonance. It sums up  a characteristic of BBC journalism in recent years that wants to go  beyond acting as a faithful mirror to the varying views within our nation  to being a player seeking to make news. BBC journalists often go beyond their welcome task of reporting accurately and in a balanced way what people are saying, to adopting a tabloid opinionated approach seeking to put words into people’s mouths. They  to get people to do ill advised interviews where they can try and make them say something disruptive, or can create a new division or split where it scarce existed before or where the plan is to make one worse.

The BBC’s treatment of England is a disgrace. It is as if our country did not exist. We are treated in England to a regular diet of commentary on the words and deeds of the SNP government in Scotland. The BBC gives Scotland its own Scottish news then muddles the national  newscast with English news because it cannot bring itself to have an English news to match the Scottish news. We are told the Scottish  covid regulations in the main  news, their continuing opposition to Brexit all the time, and often see the SNP used as a displacement for the official opposition in challenging the UK government. We are not told what the Mayors of London, Birmingham and Manchester are actually doing with the powers and money  as we are with the SNP occasionally. The Mayors  are usually  only heard when they talk about  matters decided by  the national Parliament.

The BBC is respectful of Scottish and Welsh culture and identity  but stumbles over UK and English identity. They love pictures with plenty of Scottish saltires and Welsh dragon flags but make a joke of the Union flag and repress the English flag most of the time. Most national broadcasters would be happy with their flag over their websites and close to their newsreaders, but you could not see the BBC ever wanting to do that. The BBC website is largely devoid of symbols, colours and familiar favourite history of the UK, and carefully screened to remove anything that could reflect well on England. The choice of topics and references to our history seems keener to reveal the flaws of the past which the UK usually shared with many other nations, rather than the exceptions where England and the UK made unique contributions to the advancement of freedom and prosperity through bold moves and radical movements. It is a great irony that an institution that is so keen to encourage and help many people to come as migrants to our country can never think of all the good things about the UK which means so many of them want to come.




Some questions for the BBC

The BBC continues on its long chosen road of opposition to Brexit, hostility to  populist movements, veneration of the world of elites and international treaties, and a slavish following to everything wokeish. In interview after interview we have the same tropes and tired  questions, nearly always asked from the point of view that the UK government is to blame for the world’s ills and more government and a bigger public sector would solve many of them.

All this requires an avalanche of sloppy thinking and a passion for olds over news. It also means a relish for unseen contradictions. Here’s a few questions:

Why was it so crucial to have a zero tariffs free trade deal with the EU, yet a similar deal with Australia or the USA would according to recent questions and features be ruinous?

If the BBC really is concerned about UK farming, why has it never examined the great damage done by EU policy and EU imports to our ability to feed ourselves from flourishing food producing  UK farms?

Why does the BBC not recognise England and go on about England as much as it does about Scotland?

Why does the BBC persist in wanting to break England up into Euro style regions, given the way elected regional government was rejected by electors when offered?

Does Manchester which gets plenty of BBC coverage speak for Liverpool or Blackpool?

Given the BBC dislike of border fences and anti migrant policies why hasn’t it run features on the Spanish frontier at Ceuta or the long border fences and walls of central Europe?

Why has it never explored the relationship between the so called austerity policies of the Osborne era which it disliked and following the Maastricht rules on state debt and deficits?

I could go on with many more. You might like to supply some.




Letter to the Transport Secretary

Dear Grant

I enjoyed hearing your enthusiastic presentation of railway reform. I agree fully with the aims you have set for the new railway. It must indeed be passenger focussed, concentrating on the basics of punctuality, comfort, cleanliness and great service. I also agree that you need to harness more private capital and ideas, and allow more competitive challenge to ensure innovation and rising service standards.

Your example of extra cost and wasted effort concerning attribution of blame for delays was well made. 400 people in the train operating companies and Network Rail arguing over who had caused a delay and who should therefore compensate is not ideal. It also illustrates the need to remodel the railways under leadership who wish to reduce these kinds of costs. The danger will be that the train companies will still keep people ready to dispute their responsibility for delay, as presumably their new contracts to run the services will contain penalty clauses for poor punctuality, whilst Great British Railways may keep the transferred staff from Network Rail and still engage on the other side arguing that it was not their fault. Simpler contracts with more objective data to quantify risk and blame would obviously help but will not eliminate all disputes with contractors.

As Great British Railways take over responsibility for timetables, there is a need to ensure they wish to challenge past patterns in a pro passenger way. Various Councils and local communities will be lobbying for faster and more direct routes, and for more frequent services. There needs to be a fair way of evaluating these bids, assessing value for money and likely demand levels. There also needs to be a good review method to examine line capacity. Network Rail tended to a cautious approach on line capacity, with a reluctance to expand it to accommodate new services. There are various ways of increasing the capacity, including the faster roll out of digital signalling which allows more use of the lines safely, and more by pass track sections to allow more fast trains to dodge the stopping trains on the same line. Faced with demands for more and different services there may well need to be decisions taken to expand some line capacity to allow competitive challenge. How will such decisions be taken?

It will also be important at this time of massive change in work patterns and travel needs for the railway to adapt to the new train  travel demands, not to defend out of date service provision geared to five day a week commuting. Budgets need to allow changes to services and timetables, to permit improved capacity where needed, but to avoid subsidy for little used services which once commanded a decent number of passengers.

As they take over responsibility for service standards there will need to be decisions about how companies are rewarded for service innovation and good quality. How much can they expect to make by way of return from innovation? When and how will good new developments be rolled out across the network through other companies? Will there be any innovation franchise payment or one off contribution to the development costs for the innovator?

As they take over responsibility for routes will there be easy methods  by which communities and rival companies can offer to provide a more frequent or more direct or faster service to a named town or area than the current Railway offers? If so, how will this be assimilated and used? The Hull Trains service is a good example of a challenger company delivering a better service for Hull passengers, but it was all too rare under Network Rail when potential service providers often faced a variety of obstacles which defended incumbents.

One of the areas where Network Rail often blocked progress was in property. The large Rail estate is suitable for joint ventures and development attached to the rail lines. The large central City stations have now received attention with several undergoing extensive mixed use redevelopment, but the large bulk of stations, sidings and yards on the network have not. Worst still Network Rail can be a problem for others seeking developments on their land nearby, as in my constituency where Network Rail wanted a substantial payment  from the Council for wanting to place a bridge across the railway line to cut risks at the level crossing and to allow more housebuilding in the area.

None of this is easy. It will require a good constitution and objectives for Great British Railways, the choice of flexible and imaginative leadership and strategic Ministerial supervision to carry it off.

Yours etc




My Question during the Statement on Britain’s Railways, 20 May 2021

Sir John Redwood (Wokingham (Con): I welcome the use of private sector capital, ideas and management skill in the new railway, and I welcome the forthcoming attack on late trains, hard seats and dirty carriages.

Will Great British Railways ensure that it is genuinely open to bids and offers for new routes, improved timetables, property developments on railway land and improved service quality? Local partnerships and private sector competitors can bring these about as long as they are not thwarted from the centre, as they often were by Network Rail.

The Secretary of State for Transport (Mr Grant Shapps): Yes.