Outline Radical Centre-Left Budget: Revision 1.

Summary: This is intended to be a strawman budget appropriate to a Labour government committed to ending austerity and investing in infrastructure and particularly social and affordable housing. The emphasis is very much on fairness, attempting to reduce some of the inequality in the UK. It is important to note that some of these estimates will be inaccurate because of the difficulty in finding appropriate statistical data with which to make these calculations. Readers are strongly encouraged to point out errors wherever they find them. However it projects a real deficit reduction over 5 years.

The underlying principle of this strawman budget is that it should signal an end to austerity and allowing the rebalance of the economy to try to achieve greater fairness. Inevitably this requires a transfer of resources from the wealthy to the middle and poorer sectors of our society.

For many years Labour has been characterised as being the party of “tax-and-spend”. That will not change, instead it will be “tax the wealthy and spend and the poor”. That is the only way that the increasing inequalities in British society can be dealt with. The wealthy will find these proposals hard but they have done disproportionately well over the last 25 years.

This budget will not simply reduce the cuts but by investing in the broad economy in a range of ways re-stimulate it, and enable much improved growth rate to lift the economy out of its present doldrums. There will be a real transfer of assets and resources from those who have done exceptionally well since the financial crash of 2008, to those who have been so badly affected by austerity. It will bring back hope of improvement and encourage aspiration for all, not just the wealthy.

This budget basically consists of reversing the substantial cuts to the NHS, social care, tax credits and education budgets that have happened in recent years. That will be paid for by introducing an infrastructure charge (also known as an Alternative Minimum Corporation Tax) to be paid on all multinational profits in proportion to their turnover within the UK, also by increasing the higher tax rate to 50% for those earning over £100,000 taxable, and cancelling the planned reduction in corporation tax and inheritance tax.

In a separate strand, the grossly inadequate rate at which houses are being built will be tackled by setting up a new UK Housing Authority. It will have the ability to borrow money at the currently very low rates to fund a substantial expansion in housebuilding. These funds and the activity of the UK HA will relieve the extreme pressure on local government budgets allowing many of the petty cutbacks imposed because of extreme austerity on the social fabric of our country.

Each of the line items is in bold followed by a summary of the policy and some indication as to how the yield/cost estimates were obtained. Each line item has a cost estimate for the first five years of a Labour government assuming that it will start relatively soon. Thus each item will have five numbers in billions of pounds following it. The costs that are listed here are relative to the current spend as in the Treasury Redbook. Therefore all the costs are essentially differential rather than absolute. At present the budget suggests that there might even be a gradual reduction in the budget deficit.

Cost of reversing existing cuts to NHS and social care:

The NHS is uniquely important to British citizens. It is currently suffering from a substantial shortfall of between £15 billion and £20 billion. Social care funding also experiences a significant shortfall of probably between £3 billion and £4 billion. A major injection will have a massive effect on the functioning of these services, and on the quality of healthcare and social services delivered in the UK.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -12, -14, -16, -18, -20.

Program to integrate social care and rebuild mental health services:

Significant money must be injected into efforts to integrate the NHS with social care and to develop mental health provision so that it matches the level of provision for physical health. Lip-service has been paid to this for years. Labour will make sure that something is actually done.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -8, -5, -5, -4, -4.

Restore bursaries to fund training of nurses:

One of the most extraordinary decisions of the present government is to remove the funding for nurses during their training and require that they take out loans as do university students in order to complete their studies. We have a desperate shortage of nurses in the UK and simply cannot find the numbers to fill available spaces as it is. There cannot be any sensible economic or healthcare argument for not doing everything to encourage young people to take up nursing as a career. At present the NHS is greatly under stress. The knowledge of the working conditions in British hospitals combined with the new substantial cost to any young person wishing to train as a nurse will ensure that shortage continues and increases rapidly. Labour will restore the bursaries and other funding for student nurses. More details in the last paragraph of: http://outsidethebubble.net/2017/03/03/british-higher-education-system-failing-the-young-and-the-uk/ .

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1, 1, 1, 1, 1.

Cancelling the bedroom tax:

The bedroom tax (under occupancy charge or spare room subsidy) is a reduction to the housing benefit entitlement if you live in a house or council property deemed to have one or more spare bedrooms. Given the great shortage of small houses in the UK this tax is not something that individuals or families are likely to be in a position to take any action about. It is particularly iniquitous because it disproportionately targets disabled people who need additional space to store the equipment etc that they need. Labour will eliminate the bedroom tax.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -0.3, -0.3, -0.3, -0.3, -0.3.

Reversing some of the benefit and tax credit reductions:

Major reductions in the current levels of a number of benefits and tax credit payments have been promised since 2015. They are now about to hit in and the evidence is that the poorest families will be particularly badly hit. Part of this is a consequence of the Universal Tax Credit system simply not being ready and indeed probably not even fit for purpose. It is very important that the poor do not bear the brunt of the current economic slowdown and so we propose to look again at the whole range of benefit and tax credit payments and rebalance those so as not to unfairly penalised poor working families.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -3.75, -3.75, -3.75, -3.75, -3.75.

Increased funding for education:

During the lifetime of the two Conservative governments spending on education will have dropped by more than 7% by 2020 in terms of money allocated per pupil per annum. Between 2010 and 2020 the percentage of GDP spent on education is planned to decline from 6% to 4%. The education budget is currently around £85 billion per annum in 2017. These cuts that disproportionately affect those in state schools must be progressively reversed. Over the lifetime of a parliament it should be increased by between £10 and £13 billion per annum. Private schools are currently classified as charities and exempt from VAT. This VAT exemption should be phased out. This proposal was originally made by former Tory education secretary Michael Gove. He wanted to be able to fund policies that will benefit all children and not just the privileged few.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -10, -12, -12, -13, -13.

Education: other changes proposed:

UK schools are under a very great amount of pressure. Funding per student has been progressively reduced and the demands of central government that schools manage rapidly changing curriculae, a complex and invasive testing regime together with excessive reporting requirements has made our schools places of great stress. Labour will undertake an extensive review of the demands made on schools with a view to simplifying and reducing what they have to do in addition to actually teach children. Competition between A-level/GCSE boards has led to many of the A-level standards being eroded over the years. Labour would require each A-level subject to be offered by a single board. Labour would also review the use of the baccalaureate which appears to provide a broader education for many. This would enable a long-term view about the overall direction of English education. The changes that Labour would make would be to reduce the complexity of the requirements made by central government on schools in order to simplify their lives and allow them to devote more of their energies and resources to teaching and the support of the children in the care.

Housing authority set up and running activities:

Labour should propose to set up a UK wide Housing Authority to work with local authorities to ensure that housing is built where it is needed in the quantities needed to allow effective and efficient growth throughout the country. A piece that can be found here: http://outsidethebubble.net/2016/09/27/a-fairer-deal-solving-the-housing-crisis/ shows that it is unlikely that the necessary building rate can be achieved without very substantial effort to train craftsmen and tradesmen to carry out this work. It also will be necessary to establish a very substantial programme to develop modular housing systems that allow good quality housing to be built rapidly. This will need the establishment of training centres and creating the environment for the development of centres to manufacture the modular housing components. The centres should be located in regions suffering from deindustrialisation to provide good quality long-term employment in disadvantaged parts of the country. All this would be funded by the UK Housing Authority.

The UK Housing Authority would work with local authorities to ensure that each accept its share of the houses that need to be erected in each region. Land with existing planning permission that has not been used quickly should be purchased compulsorily at a rate corresponding to its value when planning permission was granted. It may be necessary exceptionally to permit building on greenbelt land but only provided other nearby areas may be designated as greenbelt in their places.  The UK Housing Authority would also be responsible for ensuring that Colleges of Further Education were expanded to provide the training and courses necessary to enable a nationwide housing plan to be implemented successfully. There are large numbers of skilled people in these areas who have retired but would greatly welcome the chance for a few hours of employment. They could must be encouraged to provide training under these courses. Their expertise would be particularly valuable as it comes from many years of actual experience.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -1, -2, -2, -1.5, -1.5.

Housing construction by local authority agencies:

Inequality is perceived widely in the UK to be widespread and growing. It is most evident in the housing market where young people with good jobs find that their capacity to buy a house with a mortgage gets less every day as house prices grow well beyond income levels. The key problem is the shortage of housing of all sort but particularly of affordable housing. By affordable housing we mean housing that families on average incomes can actually afford. For many years housing supply in the UK has been running way behind the level needed to keep up with demand far less begin to catch up with the backlog. A more detailed account can be found at: http://outsidethebubble.net/2016/09/27/a-fairer-deal-solving-the-housing-crisis/.

Local authorities would be empowered to borrow the funds necessary to build these properties. They would be required to have a relatively high proportion of affordable housing, perhaps in excess of 60%, but could sell commercially more expensive properties so as to produce a profit to plough back into the affordable housing programme. Properties built under local authority control would be required to meet minimum standards (space, energy efficiency, general construction quality) which are significantly better than many of the extremely small properties currently under construction.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -0.25, -0.25, -0.25, -0.25, -0.25.

Immigration compensation fund:

Even after Brexit it seems very unlikely that the UK can run its economy satisfactorily without fairly high levels of immigration. Some of the most recent estimates by Brexit supporting politicians are that there may be little change in the net level of migration after Brexit. There are many occupations that are inadequately served by our own training capacity. Nationwide shortages simply require that we import workers with the requisite skills for a wide variety of jobs. Many of these issues are covered here: http://outsidethebubble.net/2016/10/05/labours-elephant-in-the-room-immigration/ . One conclusion from that piece is that one of the biggest objections to immigration is that additional pressures are put on local services, particularly healthcare and education. Although immigrants pay taxes, local services are not compensated for the increase in numbers. The piece referenced suggests that a fund should be set up which automatically transfers £5000 per annum for three years for each migrant to the local authority area where that migrant is resident in the UK.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -1.6, -1.6, -1.6, -1.6, -1.6.

Increased training to reduce need for immigrants in the UK:

Labour will work to reduce levels of immigration by increasing the training in areas where the UK lacks enough skilled workers. Areas such as agriculture, building and construction trades, care assistants and health service professionals such as nurses would all be prioritised. Investing significant funds into further education colleges that offer technical qualifications will further reduce the need to import workers from overseas. The cost of this activity is included in the “Education” section above. Nevertheless we will still need experts from abroad. In time we expect to be able to reduce immigration levels by about 30% from their present level. There is more about changes to the way we educate our young that should provide an increase in the trained working population here: http://outsidethebubble.net/2017/03/03/british-higher-education-system-failing-the-young-and-the-uk/ .

Minimum wage:

The minimum wage will be £7.50 from April and will progressively increase to £9 per hour by 2020. Labour will as a minimum ensure that the minimum wage keeps up with inflation. As economic conditions allow the minimum wage will be increased above inflation towards the level of the living wage.

Cancellation of housing stamp duty land tax, integration into CGT on property sales:

At present stamp duty is a tax payable when you buy property in the UK. It is calculated on a sliding scale that runs for residential properties from 2%-12%. For non-residential property the rates only go up to 5%. You also pay a small percentage when you buy new non-residential or mixed-use leasehold properties of up to 2%. The problem with stamp duty is that it is another thing that makes getting on the housing ladder particularly difficult for young people. Labour propose to abolish stamp duty in its present form and replace it with a capital gains tax payable when a property is sold. By progressively increasing the level of the capital gains tax levied on property, it should be possible in time to substantially slow the rate of increase in property prices by taking capital out of the property market. All property, including ones principal private residence will be included in this. This tax could be levied on the increment above inflation for principal private residences. In all cases, including property sold commercially, the capital gains tax would be payable within 30 days. New build properties would be exempt from this in order to keep the price of affordable and social housing down.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 0, 2, 4, 6, 8.

State pension increments:

State pensions are subject to a triple lock introduced in 2012 that guarantees they rise by the highest of 2.5%, average earnings growth or price inflation. This is meant that state pensions have grown much faster than average earnings for several years. If the triple lock continues pensions will take an increasing fraction of the national budget. We propose to increase state pensions in future only in line with average earnings growth. Additional payment such as winter fuel allowance should be integrated into a single state pension payment.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): -3, -3, -3, -3, -3.

Final salary pension schemes:

Proposals to freeze or otherwise diminish the value of final salary pension schemes must be looked at very carefully. Companies which have failed to put an appropriate amount of money into their schemes while giving generous dividends to shareholders should not be allowed to diminish final salary pension arrangements. Companies in genuine difficulty should be looked at carefully. The interests of shareholders should not be assumed to be more central to the arrangements than the interests of pensioners. Any changes in the rules must not disadvantage pensioners unfairly.

Tightening tax avoidance and evasion:

The principal job of the HMRC is to gather taxes from all sources within the UK. Tax avoidance and evasion are increasingly possible because of cuts to staff at the HMRC. Labour would permit HMRC to hire additional staff provided they can be justified in terms of the increased income the revenue would derive from their activities. A good multiplier test would be to make sure that the gross cost of a new employee led to an increase in the tax taken by 10 times the cost of that employee.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 2, 3, 3, 3, 3.

Tax havens:

There has been lip-service from the recent governments about requiring tax havens to become very much more open. In particular there needs to be full transparency as to the genuine beneficial ownership of companies that hold any assets in overseas territories. More than half the tax havens in the world are territories that the British government is legally and indeed morally responsible for. For many years there has been considerable pressure on changes in countries such as Bermuda. In addition there is a strong case to be made that the UK is indeed a tax haven because non-dom laws allow foreign nationals to live in Britain without paying tax on income derived from overseas.

The amount likely to be yielded by doing this is uncertain and so has not been budgeted in here at this stage.

Council tax: extending the upper band rate:

Council tax is levied on the rateable value of properties. The difference in rate between the least valuable and most valuable properties in England is a factor of three. Properties worth above £320,000 currently pay three times that on properties worth less than £40,000 in the same district. Labour propose property worth more than £320,000 should be subject to a tax in proportion to its value at a rate of 1.0%.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 3, 3, 3, 3, 3.

Business rates:

Business rates currently raise about £28 billion per annum and have recently been revised. The impact of these changes is not yet clear and until they are clear we do not propose any significant changes in business rates at this stage. However there is widespread unhappiness with the system as it is now and Labour will look actively at the way that businesses are taxed to make it fairer for all. One area that should be changed is the consequence for local authorities of having to provide significant amounts of infrastructure when new developments take place. It is proposed that for three years following the completion of a development 100% of the business rates levied should be retained by the local authorities.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 0, 0, 0, 0, 0.

Inheritance tax: scrapping £1 million tax-free allowance on principal residence:

The government has proposed a change to inheritance tax so that couples in £1 million homes will be able to pass them to their children and grandchildren free from inheritance tax. This change largely affects people living in London and the South-East. The number of taxpaying estates would then fall from 63,000 to 37,000 by 2020/21. It is predicted to cost the Treasury around £1 billion although other estimates suggest it might be much larger. Labour would reverse this change so that inheritance tax continue to be paid on assets above £325,000 for individuals.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1, 1, 1, 1, 1.

Infrastructure charge:

One of the big problems with corporation tax has been the ease with which multinational organisations have been able to avoid paying their share. We propose that an infrastructure charge be introduced as follows. Multinational companies produce audited accounts for their shareholders that identify the net profit of the company worldwide. We can calculate the share that each company should be attributing to the profits within the UK by using the fraction of their sales in the UK to give the fraction of the worldwide profits which should be taxed in the UK. The infrastructure charge might be set at 15% (three quarters of the current corporation tax level), predicted to give a yield of over £15 billion per annum. Such a charge could, of course, be set against the profits of the company. Corporation tax would still be chargeable. A more detailed look at this can be found at http://outsidethebubble.net/2016/10/20/fair-taxation-on-corporate-profits-2/ . A similar analysis from Richard Murphy on 30 September 2016 with a link to his article on Bloomberg dated 29 September 2016 entitled “Time for an Alternative Minimum Corporation Tax?” which you can find at: http://tinyurl.com/ho6yy73. It is interesting to note that the United States has a slightly more limited version of an AMCT already in use. Indeed that was the reason that Donald Trump paid as much as £25 million tax in his 2005 returns!

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 15, 17, 19, 20, 21.

British justice: improving legal aid provision and increasing court charges:

Michael Mansfield, QC, has said “access to justice is a much broader concept than access to the courts and litigation. It encompasses a recognition that everyone is entitled to the protection of the law and the rights are meaningless unless they can be enforced. It is about protecting ordinary and vulnerable people and solving their problems.” In 2013 about £350 million was cut from the relatively small £2.2 billion legal aid budget. This has the consequence of making many areas of law inaccessible to those who could not afford their own legal representation. The courts are under considerable pressure and Labour will propose that the courts charge very much greater fees for many cases involving commercial law and company law. The money derived would be used to offset the additional cost of legal aid as well as allowing a range of other actions in areas such as employment law.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 0.5, 0.5, 0.5, 0.5, 0.5.

Income tax changes for the wealthy:

There have been significant tax reductions under the Conservative governments that have disproportionately favoured the wealthy. Labour propose to reinstate the  income tax increase to 50% for those earning over £150,000, cancelled by the Conservative government. This will yield approximately £4 billion per annum. As a temporary measure, Labour would also increase income tax to 50% for those earning between £100,000 and £150,000.That would yield an additional £1.4 billion per annum. Those most affected would be on £150,000 and above who would find their tax bill increased by £5000 per year. That is a very small amount of money for individuals on such a high income.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 7, 7, 7, 7, 7.

Introduction of 25% VAT rate on luxury goods:

Labour would introduce a higher rate of VAT on luxury goods, initially 25%.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1, 1, 1, 1, 1.

Reversing the reduction in corporation tax from 20 to 18%:

Corporation tax has been reduced progressively since 2008 when it was 30% to its present level of 20%. That is not very far out of line with rates in other European countries and we should resist lowering it any further as has been suggested by those wishing to make the UK more attractive for inward investment. Specifically the proposed falls to 19% in 2017-18 and to 17% in 2020-21 will be cancelled. One of the big problems with corporation tax has been the ease with which multinational organisations have been able to avoid paying their share. This concern is dealt with under the “Infrastructure Charge” section above.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1.3, 1.3, 1.3, 1.3, 1.3.

Patent box regulations:

The patent box regulations need to be reviewed and almost certainly tightened up to control inappropriate exploitation of irrelevant patents.

Cancelling the HS2 project, reinvesting in other rail and road schemes:

It is increasingly clear that HS2 is as much a vanity project as anything else. Labour would halt the construction of HS2 and devote a substantial part of the funds thereby released to improving rapid transport infrastructure in the north of England. Some funds would be used to improve the density of rail traffic on the existing north-south lines from London but the principal emphasis would be north of Birmingham. Labour would progressively bring back the privatised railway companies under government control. This is something that public opinion polls have shown to be very popular. It would produce an integrated railway system better matched to the needs of a modern country.

As existing franchises expire each will be purchased using funds generated by government bonds. The prediction is that this will produce a very much more efficient rail service with the capacity to expand its ability to move more and more people off the road and onto public transport.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1, 2, 2, 3, 3.

Prison reform:

The UK has a very large prison population, currently nearly 150 per 100,000 of the population. Cuts to the prison service (staff numbers reduced by 30% since March 2010) have meant an explosion in violence and the rates of self-harm. Prisons have been key in allowing the radicalisation of a small number of Muslim prisoners. Drug use is endemic and a number of prisons are simply out of control. The numbers sentenced to 10 years and more have increased by over 200% in 10 years. 36% of prisoners have a physical or mental disability. Comparison with many European countries shows that prison sentences in the UK are particularly harsh. For many years the running on this has been led by the right, emphasising punishment and not rehabilitation. The conditions in prison make any attempt at training that might lead to successful rehabilitation virtually impossible. Labour will review the sentencing guidelines for the full range of crimes with the intention of bringing it down. Non-custodial sentences need to be used to a much greater extent. Prison staff numbers must be increased to make prisons safe, and to reduce violence and drug use.

Much greater use will be made of intelligent prisoner tags that allow the location of prisoners to be followed in detail to ensure that they stay within the restricted area they are permitted to access. By making this quite restrictive prisoners would be released into the community to maintain their social contacts and continue employment. Such tags could also be used for remand prisoners who account for a significant number of the present prison population (about 13% or around 11,000). For prisoners considered not to be a danger to the community they could be released from prison and tagged after one quarter of their sentence. The tag conditions could be progressively eased as the prisoner demonstrates consistent compliance. The technologies that allow this to be done are already close to being rolled out in volume. The cost of this will be more than compensated by the savings on the cost of prisons.

There is more on how the system might work at: http://outsidethebubble.net/2017/03/15/fair-access-to-the-british-justice-system/

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1.5, 1.5, 1.5, 1.5, 1.5.

Pollution control: Increase in vehicle excise duty on larger, luxury and more polluting vehicles:

Labour will phase out the use of diesel vehicles as soon as possible and preferably within 10 years (private vehicles) and within 20 years (all vehicles needing to access urban areas, including delivery and public transport vehicles). And old vehicle scrappage scheme may be introduced, but manufacturers will be discouraged from marketing diesel vehicles in the UK for any purposes as a matter of urgency. Vehicle excise duty on larger vehicles, luxury vehicles and more polluting vehicles to be introduced on a scale up to £2000 per annum (forecast yield £1.5 billion). Local authorities given the ability to limit vehicle access to central areas on the basis of physical size and the pollution they might generate. Local authority car parks encouraged to provide electric vehicle charging points.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1.5, 1.5, 1.5, 1.5, 1.5.

National insurance changes: increases for self-employed:

The national insurance tax levels on self-employed would be increased to reflect their improved pension provision.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 2, 2, 2, 2, 2.

Increasing stamp duty on sales of shares and bonds:

The stamp duty will be charged on the selling price, not the purchase price in future but at a rate of 1%.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 3, 3, 3, 3, 3.

Removal of exemption of foreign source dividends from corporation tax:

At present foreign sourced dividends from an offshore subsidiary, for example, have been exempt from UK tax. This exemption will be stopped.

Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1, 1, 1, 1, 1.

Accepting British responsibility for UK tax havens:

About half of the top global offshore sectors are British Crown dependencies and overseas territories. These are places where British law is supposed to rule. The existence of these has been tolerated far too long by right-wing British government. Labour will require that they meet standards of openness and integrity irrespective of whether we leave the EU. It is notable that the EU are likely to designate many of these areas as tax havens after Brexit.

Defence: major concern about current procurement programmes being inappropriate 21st-century defence:

At present Labour propose no significant changes in the defence budget. There are, however, major concerns that the present procurement programme is simply inappropriate 21st century defence. Many of the current procurement programs are designed to deliver hardware that is highly vulnerable to the latest developments in missile and surveillance technologies. A longer piece of this may be found here: http://outsidethebubble.net/2017/03/16/britain-defenceless-in-the-21st-century/

Total Yield(Costs): years 1, 2, 3, 4, 5 (billion pounds): 1.9, 5.9, 7.9, 10.4, 11.4..

Un-Costed Outstanding Issues:

There are always additional items coming along which need to be addressed. This section briefly mentions them and suggests ways they might be managed.

School repair bill. Current estimates are that the Department for Education needs to spend at least £6.7 billion just to bring all school buildings up to a satisfactory state. At present a very substantial amount of money is being spent in the education sector on setting up free schools and very great expense. Often these schools are not located where they are needed. The expectation is that by shutting down the free school programme and restoring the creation of new schools to the Department for Education budget that much of the funds needed for the repair bill should be accessible to the Department. In addition, the substantial increase in funding for education will take some time to get going and at that stage it should be possible to catch up significantly with the school repair work so urgently needed.

Outstanding road repair bill. The repair of British roads has been neglected for some considerable time. Some estimates are that it will take about £12 billion to repair all the potholes etc. on our roads. In recent years the real cost of fuel has dropped markedly as the oil prices have weakened. A modest increase in fuel duty would pay for the outstanding road bill fairly directly.

Defence. The way that accounting has been done by the Ministry of Defence for a number of years has been rather creative. By postponing delivery into the future and not properly accounting for the increased costs involved in delaying equipment deliveries, a significant shortfall in defence funds has occurred. This is properly in the region of £1 billion per annum and may well be more, as creative accounting may be a continuing problem with the MoD. It may be necessary to cancel some of the capital hardware being purchased (F 35 fighter aircraft at over £100 million each, and 589 light armoured Ajax Scout vehicles). It may be necessary to trim the specification of the Type 26 global combat ships which are heading towards fairly substantial over specification and nearly 50% deadweight increase. For further details of these problems see: http://outsidethebubble.net/2017/03/16/britain-defenceless-in-the-21st-century/ .


Leave a Reply

Your email address will not be published. Required fields are marked *