Pace, Disruption and Progress

Another Rabbit Hole for HS2

In recent weeks, we have begun to hear both severe criticism and praise for President Trump, the dealmaker and the great disruptor. The deals haven't worked out in Ukraine and Gaza, and the beautiful tariffs have spooked the markets, prompting a spiral of inflation and a loss of American soft power. The pace of announcements has been relentless, causing significant disruption in the financial markets. It has become one of the tools of populism, challenging the post-war consensus on international agreements and the role of the deep state.

Admittedly, some things are getting done, like tax breaks for the wealthy, the return of illegal immigrants, the slashing of international aid and the closure and sacking of staff in federal agencies. Trump, the autocrat, has created an oligarchy that is fulfilling its lust for extreme wealth and a studied disdain for the American Constitution that had ideals of democracy, rights, liberty and equality. Elon Musk has been axed from the oligarchy for challenging Trump for abandoning the liberty of free trade.  He is promising to fund a new political party to break up the binary politics of the Republican and Democratic Parties. 

The Big Beautiful Bill is upsetting the markets, and according to a CNN survey, it is opposed by 61% of the electorate. The MAGA core is becoming tetchy about the President's relationships with Putin and Epstein, and his reluctance to release documents. These disruptions are damaging to the poor and oppressed in America and cutting off funding for the third world. Government departments and Universities have been subject to severe cuts in funding as Trump seeks to settle his prejudices against what he perceives as liberal institutions. They cost the federal government too much, in his opinion, as he tries to cut wealth taxes and impose his oligarchic tendencies on an increasingly tribal America.

Despite these problems, some lessons can be learned from Trump's mode of operation. Things move at a pace, and some disruptions, such as the funding of  NATO, have led to a reset of the partnership with greater costs and responsibilities transferring to Europe. Efforts by previous U.S. presidents to achieve this rebalancing had fallen on deaf ears, but Trump's threat to withdraw funding has led to a shift in Europe's willingness to take greater responsibility. We may despise the outcomes of Trump's disruptive methods, but the rapidity of change is in stark contrast with the UK's plodding attempt at change. 

The UK's response to various crises, such as the infected blood scandal, the post office IT scandal, the Grenfell Tower Public Inquiry or the Covid Inquiry, has involved years and in some cases decades passing without any outcome for the victims. The government has specialised in creating rabbit holes to avoid paying compensation, whilst building structural rabbit holes by caving in to demands for land compensation and elaborate designs for HS2, Nuclear Power Stations and airport expansions. These national infrastructure projects have been a cash cow for financial and construction consortia, even further enhanced as they identify constraints, run behind schedule and inflate the costs. 

The failure to tackle social care has been a dereliction of governance by successive governments since Andy Burnham, as Health Minister, tried to obtain a cross-party agreement in 2009. The housing policies since the Thatcher years have been a bonanza of easy money for the house builders, the estate agents, surveyors and bank lenders who have escalated prices whilst reducing the completion and specification of new houses. They are the modern middlemen with greedy girths and little social conscience. The same could be said for the private landlords, often middle-class investors, who have exploited their tenants by ratcheting up rents and, in many cases, being tardy with repairs and maintenance. Their ability to make money has been greatly enhanced as the supply of social rented housing has been depleted by the government's doctrinaire diminishment of Council Housing.

In the UK, we seem unable to make anything happen because of our obsessively antiquated procedures, poor-performing regulators and our uncodified constitution. Together with our excessively centralised governments at Westminster and Holyrood that operate with short-term visions and long-term actions, we are locked in a cycle of chronic stagnation and a growing disillusionment with our government.

It requires governments to up their pace and indulge in some progressive disruption. Think about Rachel Reeves' ill-thought-out proposal to build an additional runway at Heathrow. Leaving aside the environmental, transport and financial objections, the supposed justification is growth. When do we need growth? Now. When will it produce results? More than ten years in the future. A short-term vision and long-term action with unspecified costs and huge disruption to local communities and the M25. It is the result of ministerial weakness in the face of corporate lobbying for the 'Big is Beautiful' movement that fills company coffers and leaves the treasury picking up the tab. Think HS2, the Water Companies, the Edinburgh Trams or the A9 improvement. All are costing much more than anticipated and taking decades to become a reality, if they ever will.

So, what is the alternative? The Labour Government has been in power for a year, and despite campaigning under the banner of 'Change', there has been far too little progress. This has been celebrated with glee by the press, as well as being obvious to the electorate. Starmer believes that things are not broken, and Rachel Reeves has succumbed to the Treasury orthodoxy and made several poor decisions. Repeating ad nauseam that the £22 million black hole left by the Tories had to be fixed is a turn-off for most voters. They have been over-cautious, and some radical changes should have been put in place. 

Perhaps some focused disruption, rather than the constant setting up of inquiries, would be helpful. Equally, there must be a willingness to simplify or streamline procedures by eradicating outdated legislation, speeding up enforcement by regulators and government agencies. There would be benefits from simplifying and devolving some taxation, cutting out the financial middlemen of housing and construction. The government needs to trust in localities to drive the agenda for change, but this is palpably beyond the mindset of distant government departments and their ministers.  

A new, simplified written constitution would help, as would simplifying the income tax and national insurance regime to make it more equitable between the young and old and equalising tax and national insurance for PAYE and the self-employed. It would make it more difficult for tax avoidance through the extensive use of clever accountancy. Income tax and national insurance should be integrated into a more progressive personal taxation regime. VAT needs to be simplified and extended to some activities that are hugely damaging to carbon emissions, like air travel, and to unhealthy food and drinks. 

The housing market could be loosened by reducing or eliminating stamp duty, and what about encouraging factory-built sustainable housing instead of supporting the cost-cutting, space-denying, profit-maximising offerings from the volume builders? And it is surely time to develop a land taxation system that can fund local infrastructure investment rather than allowing huge profits to be taken by land owners and developers by the simple expedient of obtaining planning permission for a change of land use. This should be a public resource, not a private profit, as the Land Commission of 1969 intended before it was abolished by Ted Heath's government. 

A little bit of disruption would go a long way to speed up progress and create a vibe of optimism and growth, but it needs the government to trust communities, businesses and local democracy if it is serious about change.