‘The only answer is growth’, the Chancellor told Labour conference today – but does he know how to deliver it?
John Healey’s speech had few specifics, and no answers to the big obstacles in the economy’s way, from expensive energy and high labour costs to the record tax burden. Perhaps sensing the danger of Labour being painted as the Welfare Party, he did warn that ‘a bigger and bigger benefits bill’ was not progressive and that bringing it down was a ‘moral duty’. Good luck getting that past the backbenchers.
Meanwhile, Andy Burnham is promoting his commitment to put the creation of a National Care Service in the next Labour manifesto, while carefully avoiding the question of who pays for it. He does promise more detail tomorrow. There have been strong hints that part of the plan is to scrap the triple lock on pensions. A brave move if true, but not one that will actually cover the upfront costs.
Much more on both below.
And for those frustrated with the state of our higher education system, Anthony O’Hear argues on CapX today that it is time to recall the spirit of 1209, when a bunch of fed-up Oxford scholars founded Cambridge. Is the only way to escape the stifling managerialism bred by the Dearing Report to create new colleges outside state control?
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
Marc Sidwell
Editor, CapX
Today’s Takes
Fresh thinking from CapX
Bureaucrats own our universities
Anthony O’Hear
‘We are now in Dearing’s world, a world of multiple and confusing bureaucracies (a civil servant paradise).’
The introduction of student fees in 1998 could have seen universities gain independence from the state. The opposite happened. Fees were proposed in the Dearing Report, which broke with the ideal of learning for its own sake and cast a managerial blight over higher education that has only spread since. It's time to escape Dearing's shadow. Read More
Nimbys: no skyscrapers anywhere – even Vauxhall
James Ball
‘People object to high-rise buildings when there are none in the area, because it will “change its character”, so surely you can’t turn around now and say we can’t have more skyscrapers in the area because there are enough already?’
Lambeth Greens are objecting to a skyscraper in Vauxhall, of all places. If built it would be the second tallest residential building in the UK. These Nimbys argue that a skyscraper would break the area’s character, even though Vauxhall is full of high rise buildings. The developers have done everything right and still just got all the usual blowback from the Nimbys. Read More
How to make local government more efficient
George Killeen
‘Devolution will succeed if it is done well – which must start with acknowledging the faults of the current parish and town council system.’
Local parish councils are the only tier of local government able to raise a council tax precept with no statutory ceiling. This has meant that parish taxes have doubled since 2013 with no discernible benefits. An efficient council size is like Goldilocks looking for the right porridge bowl. Too big or too small, the council is ineffective. Grouping small councils with its neighbours is a win-win cost saving strategy. Read More
Stat of the Day
Best of the Web
John Healey’s ‘industrialisation’ fantasy
Michael Simmons, The Spectator
‘Without addressing the reasons British industry currently is totally unviable, any hope of reindustrialisation is for the birds.’
The Chancellor John Healey spent much of his speech today talking about the UK’s dire fiscal situation. It’s a good sign that he wants to get spending under control. But the rest of his message retreated to the fantasyland of reindustrialising the country. Our industrial energy costs alone make this prohibitively expensive, let alone our regulatory environment. Read More
Burnham’s omni-solution is more taxes
Adam Smith, The Telegraph 🔒
‘Once the state goes beyond paying for catastrophic protection and pays for every pound of care required by every person in the country, it ends up subsidising those who could comfortably have met some of their own costs.’
Andy Burnham is trying to set up a second NHS to provide social care. He’s not thought it through. Social care isn’t a genuine market failure: the market is missing because insurers don't want to write policies for liabilities with no upper limit. Andrew Dilnot estimates a care service would cost at least £18 billion, and scrapping the triple lock won’t cover it. The only way to pay for this will be eye-watering tax increases. Read More
Voters don't want a return to British Leyland
The Capitalist: the past was worse than you think
And if you want more...
– Is there really room to raise taxes? (X)
– England’s education revolution (The Freeman)
– Humility is civilisation’s price of admission (The Daily Economy)
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To be honest, I was amazed at how little idea Healy and Burnham have on how to fix our monetary predicament! It reminds me how we all thought Starmer should give it a go because he told his ministers to plan for government and they should hit the ground running! They had no idea then either!!
The problem is simple! If only they had a clue!!
Our economy had been underfunded for decades. This underperforming economy gives our government insufficient tax revenue. Because of the total amount of money that is out there, only a small fraction is being used! Only a small amount is being Spent and rotated.
It’s not difficult to understand, yet they continually try to look at it through two dimensional glasses when our economy is a four dimensional system. So no wonder they can’t see the answers, they can’t even see the cause!!
Look, any economy has to have two basics. Sufficient, MONEY and SPENDING. You have to have both for any economy to work.
At present it’s very clear we have insufficient MONEY being SPENT.
We know that because our tax take is insufficient to give our Government enough tax revenue.
And it’s the fact that these politicians can’t see that our monetary system isn’t a two sided bookkeeping exercise or a household budget!
It’s not a 2D money in money out balancing act! Our economy is a cycle! Money has to return, it has to go around again in fact time and time and time again. The same money had to rotate because we all rely on the SPENDING of others to give us our MONEY.
And we need to SPEND to give others our money that we received from others SPENDING so in turn we must also SPEND our incomes.
It’s that cycle that gives our economy 3D. And because it’s a time critical economy, we need MONEY every month then it has to be a 4D economic picture.
So every time politicians or pundits or economists start looking at two sided bookkeeping I throw my arms in the air! And start shouting at the TV.
Why can’t they see that!!?? Money has to return. It has to be spent to resupply our need for money in ourselves. In fact money can only be passed on by SPENDING.
Take that fact with how taxes are triggered and you can start to see the bigger picture.
ALL TAXES are triggered by SPENDING!
Yes, it’s a little know fact that all taxes are triggered by SPENDING, even income taxes and Nic.
When an employer SPENDS the wages on an employee income taxes and Nic are triggered.
Vat and Duty are also triggered by SPENDING.
So the big four taxes are triggered by SPENDING but in fact all taxes are triggered by SPENDING or having to SPEND or required to SPEND.
We know this because NOT SPENDING MONEY TRIGGERS NO TAX, NONE. NONE WHATSOEVER
Yes it’s SPENDING that triggers tax.
So it’s easy then to follow that the reason why our government receives insufficient tax revenue has to be a lack of MONEY being SPENT in sufficient weight snd speed to supply sufficient tax revenue.
And the reason why we have too little MONEY being SPENT is because we have too much money UNSPENT unused, idle, hoarded in bank accounts here and abroad.
Yes, all that money that is not used keeps us devoid of sufficient to SPEND.
So we constantly miss the target to avoid borrowing. And by the way, the money we borrow is the very money withheld by those who don’t SPEND it.
We can’t afford to maintain that position. It’s not that our government SPENDS over its means, it’s simply that we can’t make the means we should make!!
If all money were to be spent then that tsunami of SPENDING would exponentially give us so much turnover that we could do away with all taxes bar say one, VAT. Yes from more SPENDING we could be taxed less and still achieve surpluses. All from full SPENDING.
It’s that simple.
Healey wants growth well he isn't going to get it as long as we've got Milliband anywhere near the seat of power which to an Idiot called Burnham he is totally against growth as long as we've got labour in power we are being run by Arseholes who couldn't run a piss up in a brewery.