Rachel Reeves has vowed to “invest, invest, invest” as she prepares to ramp up borrowing to fund a multibillion-pound capital programme at this month's Budget.
If so, she should have been saying so on 6 July. But she wasn't, so I don't really believe her. She talked about bashing pensioners instead, supposedly to wow jittery financial markets, as if the winter fuel allowance made the slightest bit of difference to them.
She's still living in fear of markets, again, according to the FT
But the UK chancellor also sought to assure jittery markets, telling the Financial Times she would install “guardrails” and was not in “a race to get money out of the door”. “It's about making prudent, sensible investments in the long term and we need guardrails around that,” she said.
So, that's carbon capture then rather than really investing to make a change, because as I tweeted yesterday:
Someone needs to tell Reeves three things.
First, she sets the agenda now. Markets don't.
Second, climate change is real.
Third, we won't beat it by balancing the budget.
The trouble is she doesn't believe she's in charge; she does believe in fossil fuels, and she does think that balancing the budget is all she has to do to deliver everlasting peace on Earth.
How someone quite so wrong got to be in her position of power is a discussion that is ongoing on this blog. Right now, let's just note that she is, like Starmer, continuing to get almost every decision and every announcement that she makes wrong.
The odd mistake is forgivable, of course. We all make them. Continual misjudgment is something else. That comes from incompetence, seriously misplaced thinking, or both. I think it's both.
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What we do need right now though in addition to infrastructure is investment in the maintenance of what we already have.
Crumbling schools and hospitals, potholed roads and mouldy social housing are many of the things that need urgent attention.
I strongly agree with that
Although schools and hospitals with RAAC have to go, and we need green infrastructure.
The replacement schools should be built to zero carbon plus standards with a design life of 100 years. Instead of the current 30!
Hence the RAAC problem, good for 25 years or so 30 years ago…
By investing in schools and hospitals etc. there is dispersed input into the economy with large multipliers for local suppliers etc. It would lead to the growth she wants plus reducing carbon burning. So she won’t do it as the big builders will say it’s too expensive. Just like PFI was a sure fire winner for the taxpayer, to keep paying extravagant sums to maintainence cos for substandard buildings. The big main contractors lied then and I see no evidence they’ve changed.
Mark Temple
You suggest that schools and hospitals are built with a life of 100 years.
The hospital that my family used, Barnet General Hospital, became a hospital in 1920. It was converted from the buildings of Barnet Workhouse, that was built around 1835. Some of those original buildings from 1835 were still in use in the hospital when it was rebuilt around 2002. I assume they no longer exist, but I haven’t been there this century, so I am not certain.
But if we could build something in 1835 that was still functioning in 2002, 167 years, why can’t we do that now?
Good question
@ Mark Temple.
RAAC was used well back into the 70s, even for hospital expansion pre Thatcher.
My home hospital, opened in 79, has had progressive ward closures and transfers into temporary buildings for a few years now whilst they try to remedy their RAAC problems, in a building just about 45 years old.
However, there seem to be no templates for the design of new zero carbon schools and hospitals, and few constructional skillsets that will result in high quality low energy consuming public buildings.
The English Building Regs are appallingly low in energy efficiency IMO, and our Scottish version is little better, despite a 3yr revision process.
I designed our house’s energy performance in 2008 to be more than 2x the best Scottish standard, (plus being passive solar) and we’re still ahead of Scottish housing standards, almost 20 years later.
We don’t have any central heating, so scored very low on the rating system that gives 30% for gas fired condenser boilers, but we don’t expect to have to light our wood burner until after Halloween, or beyond early March.
What they’ve done in Scotland is to use air to air heat exchangers to try to lever decent performance numbers, but without really embracing really high insulation and ventilation standards, let alone orientation gains.
There are no requirements for integrated PV or other generating capacity in ALL new buildings, and there are no prescriptions for optimising solar gains via building orientation, even though the principles are childishly simple.
The building industry is absolutely dire for waste generation during construction and horrendous for materials recycling, and I’d suggest there has been a considerable element of capture of the government regulatory structure by large building firms, who are big party political donors. Privatising BRE was the thin end of the wedge.
The Grenfell enquiry highlighted some of the very worst regulatory issues.
I don’t see Reeves, or any of the departmental ministers as being capable of joining the dots here in terms of build life and longer term sustainability, and share your pessimism.
Schools that last 100 years do not make as much profit for neoliberals as schools made from poor building materials that last for just 25 years.
100 year-old schools are safer than 25 year-old schools.
Profits before people.
Cyndy Hodgson .
Relatively recently I drove over the Alcantara bridge , from Spain to Portugal, a magnificent Roman bridge , completed in 106 AD. It was damaged twice, in the 12th and 20th centuries, not by weather or wear and tear but war.
Happy to report our first Passivhaus school completed in Perth last year. https://www.passivhaustrust.org.uk/news/detail/?nId=1220
However even with a Scottish Govt explanation I still get headache trying to grasp the maze caused by PFI ( Labour invention here ) for schools and hospitals which we don’t seem to be able to shake ourselves free from before my time’s up in this world!
https://spice-spotlight.scot/2018/01/30/private-financing-of-scotlands-infrastructure/
To be fair, PFI was the creation of John Major’s government in 1992. Many (well, me) hoped that Bliar (I didn’t vote him as I didn’t vote for Starmer: I’m a socialist and a pacifist. I can’t bring myself to vote for people who would launch nuclear missiles) would scupper it, but instead he jumped on board and made it a flag ship policy.
Reeves probably thinks that the investment cycle is a make of bike or something.
Went to Mansfield yesterday to pick up a new car. I don’t how I got it home in one piece – the roads are shocking – how long before we have to buy tracked vehicles to get ourselves about?
How much is second hand troop carrier these days?
I used to travel in France a lot in the seventies and I used to say that a sign “route deforme” should be posted at the exit gates at Calais. Nowadays a sign should be posted at Dover saying “Beware pot holes” and in France the roads are superb. A few years ago I observed the start of the construction of a new motorway south of Arras, and a year later I drove on it. Here, near me, some work constructing a cycle lane has started on a major urban road and apparently it is going to take 2 years with diversions meanwhile. What’s worse one of the diversions leads along a road that is itself diverted.
It’s simple enough Rachel Reeves like her boss lacks social intelligence. She fails to see that sucking up to the rich is a road to nowhere for the Labour Party!
How is this for a view:
It is not a lack of intelligence.
Rather it is the misapplication of intelligence brought about by corruption and high level favouritism.
These people whom we are relying on have been bought secretly / behind our backs but also in plain view.
And until we get angry about that, things will not change.
Plus ça change. After screwing children and pensioners the continuity Government needed a wildly expensive project that will run way over budget and deliver minimal benefits.
Thinking aircraft carriers and HS2.
My priorities are
1 Full-tilt green infrastructure; insulation, replacing fossil fuels asap, etc. and scrap stupid and expensive gimmicks like CCS.
2 Poverty, especially child poverty. Basically the poor need more money, the rich a lot less. Use tax and benefits.
3 The Health Service. Again the answer is simple – more money. “Reform” = syphoning off cash to investors in Private Health Care.
Off course there are other issues like housing, I would put controlling rents higher than new-build. But when I listen to people in the queues at the GP surgery and the supermarkets, they want 2 and 3 above all. It’s the government’s and our job to convince everyone that keeping our planet habitable has to be No, 1.
I think that barely rebadged Britnat exceptionalism (aka Breximania) has a lot to do with what passes for strategic ‘thinking’ with the Starmerites. Check out the ‘rhetoric’ in Starmer’s address on why the CCS anouncement was ‘good news’ for what even his first pre-speech trailers described as the “Great British economy”. It was all in terms of stealing a huge march on our competitors by being ahead in boosting the take up of this ‘new’ technology. Being ahead of the curve talk can be interpreted in more than one way; if others are not doing it – there may be rather good reason why not!
Groundnuts anyone?
Ed Conway, Sky News Economics reporter has responded to a convoluted and flaccid OBR Working Paper on infrastructure investment. The OBR work I shall ignore, and it would be easy to disagree with some of Conway’s analysis, but the important point is the sense of a slightly panicky recalibration of economic management by Government, commentators and acolytes, because it has half-dawned on them that they have created such an appalling mess with mad neoliberal ideology and absurd fiscal rules, that they have to find some kind of fudged compromise that allows them to change direction without the public noticing how absurd it, and they are. I have excerpted the core of Conway’s argument. Something is happening:
“So far we’ve been taking the fiscal rules quite literally but at this stage it’s worth asking the question: why? First off, there’s nothing gospel about these rules. There’s no tablet of stone that says the national debt needs to be falling in five years’ time. Second, remember what we learned from that OBR paper. Sometimes investments in things can actually generate more money than they cost. Yet fixating on a debt rule means the money you borrow to fund those investments is always counted as a negative – not a positive. And since the debt rule only looks five years into the future, you only ever see the cost and not the breakeven point.
Third, the debt rule used by this government actually focuses on a measure of the national debt which might not necessarily be the right one. That might sound odd until you realise there are actually quite a few different ways of expressing the scale of UK national debt.
The measure we currently use excludes the Bank of England, which seemed, a few years ago, to be a sensible thing to do. The Bank has been engaged in a policy called quantitative easing which involves buying and selling lots of government debt – which distorts the national debt. Perhaps it’s best to exclude it.
Except that recently those Bank of England interventions have actually been serving to drive up losses for the state. I won’t go into it in depth here for risk of causing a headache, but the upshot is most economists think focusing on a debt measure which is mostly being affected right now not by government decisions but by the central bank reversing a monetary policy exercise seems pretty perverse.
In other words, there’s a very strong argument that instead of focusing on the ex-BoE measure of net debt, the fiscal rules should instead be focusing on the overall measure of net debt. And here’s the thing: when you look at that measure of net debt, lo and behold it’s falling more between year four and five. In other words, there’s considerably more headroom: just under £25bn rather than just under £9bn based on that other Bank-excluding measure of debt.” (Ed Conway, Sky News, on Budget, 2024 and the fiscal Rules: 6th October)
The best bit is this:
“Might Reeves declare, at the budget or in the run-up, that it makes far more sense to focus on overall PSND from now on? Quite plausibly. And while in one respect it’s a fiddle, in her defence it’s a fiddle from one silly rule to an ever so slightly less silly rule.”
Thanks
I didn’t realise how much serious politics in Britain was best decided, not by sense, judgement or wisdom, but by a close appreciation of finely textured calibrations of silliness.
“Second, remember what we learned from that OBR paper. Sometimes investments in things can actually generate more money than they cost. “…
My gaster is truly flabbered …….wow, investmetns generate money……….what a sharp bunch of people wrote the OBR report………I really leanred something (snigger).
“Someone needs to tell Reeves three things. First, she sets the agenda now. Markets don’t.”
‘Labour MP John Hutton signed off thirteen NHS Private Finance Initiative (PFI) building projects as a Labour health minister in 2002 (he stood down as an MP in 2010). Last month (Jan 2024) he was appointed to speak up for private sector investors ahead of likely disputes as some of the earliest PFI contracts draw to a close. (Now Lord) John Hutton has been installed as the chair of the Association of Infrastructure Investors in Public-Private Partnerships (AIIP), a body specifically formed to represent the investors’ view. The private consortia are eager to head off the danger of legal battles over liability for repairs and other costs in the final few years of contracts when the private sector has the least incentive to upgrade equipment or carry out maintenance.’
https://lowdownnhs.info/news/ex-labour-health-minister-goes-in-to-bat-for-pfi-investors/
The sting in the tail of the already extortionate costs of PFI’s and it looks as though Freeports and SEZ’s will take the private control of government to a truly depraved level.
‘Rachel Reeves has refused permission for the National Audit Office to investigate England’s 48 SEZ’s and 8 Freeports despite a damning report from the House of Commons Committee in April 2024, citing lack of transparency, questions over value for taxpayers money, and ignoring of the Nolan principles.’
https://substack.com/@europeanpowell/note/c-64652467
Many senior MP’s have and will use their time in government to flaunt their availability to the private sector while they are MP’s and/or to use the revolving door once they leave office. It’s pretty clear who sets the agenda.
This is shocking corruption in all its outrageous glory.
While they have their limitations, a lot of Victorian schools seem to be doing the job they were designed for at the same time as being in reasonable condition.
I remember comments on how well some of the London schools of that period had been designed, for example no sharp edges.
Whatever their vices certainly The Victorians were capable of putting up buildings that not only looked very good but seem to have stood the test of time.
So why cant we build to outlast the pyramids and take pride in doing so?
In 2000 I was chair of governors at a Victorian school in south west London
I was told the windows needed replacing and it would cost £900,000
The school cost less than that to run fur a year as a I recall back then
I was asked to say how I could deliver the required upgrade in two years
I replied that the only way was to shit the school for two years but keep the funding
I heard no more.
Surely, to shut the school would have been a less physically challenging option……….
It’s still going just fine. The windows are still there.
I mentioned above Barnet Hospital buildings originally the 1835 workhouse. I attended Queen Elizabeth’s Girls’ (Grammar) school in Barnet, built in the 19th century and the original buildings still going strong
My mum lives in Edwards Court in Exeter, the only continental standard sheltered accommodation in the UK. I’d happily move there when decrepit. The gulf between the UK and Scandi standards has to be seen to be believed. Having said that, it is a public/private build with a private management based I Tamworth! We just can’t help ourselves, can we, too far gone.
Edwards Court must be the one exception. My other campaign is against Housing Associations which I consider to be a desertion of local authorities’ responsibilities. I live in a HA retirement apartment run by an outfit in the midlands and I have closely examined their accounts with help from Richard. They are supposed to be non-profit making but they record a very substantial “operating surplus” and the CEO is paid quarter of a million a year. I don’t suppose a Local Authority Housing Officer would be get that. Meanwhile many of their tenants complain about poor maintenance. Although to be fair I don’t experience any problem with that.
But there’s no point in councils building their own social housing because until now they are required by law to sell them to the tenants and receive only a fraction of the proceeds. Housing association houses are not owned by the state and so can’t be sold off. Perhaps more councils will build their own when the right to buy laws are dumped.
AFAIK housing association houses can be bought under Right to Buy or Right to Acquire legislation. ChatGPT confirms that.
I think that is true now. PSR will know.
There is right to acquire on housing association properties with a max discount of £16k repayable in part or full if the property is resold within X years, and all the money goes back to the HA. That’s a big difference to a 35-50% council owned house discount, only 20% of the proceeds of which go back to the council, the rest to national government. So no incentive for councils to build in a system that’s rigged against them.
Thanks.
Regardless of any commentary about reeves or any other red herring introduced.
Any Thatcherite fascistic delusional individual wanting to become the historical Labour version at any cost needs to be removed.
Starmer wont do it and will be replaced by her probably.
Starmer is weak and shows his economic and tactical naivety in allowing the austerity rubbish of any sort to continue. His political troubles and ultimate demise as PM all centre on that austerity stuff.
Look at what Harris is gaining in United States by peddling almost an exact opposite of the Labour austerity deal.