Autumn Statement 1

Proposals for the Chancellor of the Exchequer 

policy team

Introduction

This paper offers considerations to meet the Government initiative to develop ‘creative solutions’ for Treasury proposals in the 2023 Autumn Statement.

Reconstructing Ukraine

Ministers have already proposed the UK be among those nations involved in the rebuilding of Ukraine post-war.  The potential burden on the Treasury and British Taxpayer, as well as other countries, will be levied at a time of National expenditure constraints.

This promise should be shouldered without the Treasury and the Foreign Commonwealth and Development Office's financial contribution.

The proposal to fund these costs is the launch a national lottery specifically for the post-Ukraine war reconstruction.

This lottery is to be launched quickly to accumulate funds ready for post-war activity. 

This will demonstrate that the government is serious in its endeavour; is not going to lever more cost on the taxpayer and especially the poorest in the nation and will keep the issue in the minds of the electors.

 Energy storage now at no cost to the taxpayer

There is an urgent need for a big power storage investment. The solution so far is to build big (vulnerable) battery parks in the countryside to the chagrin of the local (Conservative) populous.  It is also a solution that will take a long time to implement.

An alternative is to use a proposed ‘windfall bond’. This bond will be available to organisations facing a windfall tax. These organisations will be offered a return on investment from constructing and locating, and connecting large batteries at electricity substations in the next financial year.

The freight container-sized batteries will be charged with electricity bought at the cheapest rate and returned to the grid at times of high demand and higher value. The revenues go to the companies.

The organisation will be able to put the batteries as assets on its books but will not be able to sell them until the end of a statutory term of 25 years.

In effect, the batteries will be a bond-financed from tax avoidance. 

(there will be a need to mandate planning authorities to fast-track approvals (the greenhouse impact is bigger than a local planning officer’s prejudices).

Whereas Windfall taxes are a disincentive for big companies to locate their HQs in the UK, this scheme will, in effect, turn taxes into an incentive to locate in the UK.

In addition, this scheme will provide a huge, distributed power backup network. It will be implemented at speed and will create jobs in the UK.

All this at no cost to the taxpayer.

No more NHS strikes

One of the big political issues is the reduced value of NHS staff pay.

This need not be the case. There is already an inflation-protected benchmark. 

The government established the national minimum wage to provide a basic income for work. Using this benchmark, NHS employees can be paid an internationally competitive percentage of the minimum wage set at a percentage above the minimum wage pro rata between Consultants and nurses etc. 

It will have to be progressively introduced. But would then take the politics out of the process for the future.

This is a concept that can be applied to other public sector employees.

Cut the cost of Defence

The UK now manufactures battle-tested armament. It is very costly, and there is a dependence on the US.  

There are corrupt actors involved.

The EU community is squabbling over who, what, and how much contribution will be made by different nations. It is not very helpful for a country like the UK that has global commitments and which can see how bad actors waylay defence equipment.

It is possible to track military equipment and munitions from the place of manufacture to its maintenance and eventual use. The process is to have a blockchain audit trail.

A Commonwealth consortium that could use such a scheme and  spread the cost of development and implementation could resolve the cost. 

Scrap Government Arts Funding

We live in an era when the metaverse can reproduce digital representations worldwide. By developing Virtual Reality versions of national and regional galleries, concerts, museums etc. These national treasures can be available on every high street, with vacant shops turned into walk-in VR studios. This would also contribute towards increasing high street/retail locations’ footfall.

The revenues generated from such studios (asking for a modest entry fee) can then fund this initiative and bring the arts and British culture to an audience that would not normally go to such venues (and often not travel to the cities they are located).

Such facilities can also be made available to schools and universities too.

Small towns worldwide (also with the problem of dying high streets)  can also take advantage of this cultural resource offering a franchise for distributing British culture and providing revenue (there are many ‘1000’s of small towns in the USA, Canada, Australia etc.).

Build 40 Hospitals

There are now many medical facilities that are offered in standard ISO freight container sizes. In addition, there are similar-sized hospital wards. They are manufactured indoors, away from the effects of weather on construction. 

Almost any warehouse estate can be converted into a hospital with clinics, operating theatres and all the facilities needed in a modern hospital. Warehouses take very little time to build compared to the construction of hospitals. Fitting out such a building can be incremental, for example, installing wards first to reduce the backlog and adding day clinics and theatres later.

Creating the manufacturing ISO container-sized manufacturing facilities capability to fulfil the need for 40 UK hospitals and exports of these facilities will need encouragement by the health service with a strong emphasis on UK manufacturers.

Massive battery storage

There is a need to be able to store energy to mitigate the vagaries of the weather when using green production capacity. There are also major issues with the supply of gas and other forms of energy.

In addition, big battery farms take a long time to install. We also must face the prospect of political actors disrupting big installations (think Ukraine). 

Furthermore, there are a number of storage capabilities which will require a nimble selection of the best storage facilities.

The need for building such a facility is a costly process for the government. 

A solution might be to offer energy companies a mitigation of new or increased taxes, such as windfall taxes, on the proviso that they fund the installation of batteries on or near transformer sites across the country. It will require local planning authorities to support and not object to such installations.

The participating companies will own the batteries, which will be developed to buy electricity from the Grid at times of low cost and sell it at times of high cost.

The batteries will be owned by the participating companies for 7 years (i.e. beyond the next parliament) but will be able to sell them thereafter. In effect, the battery initiative will be gilts.

At a time when these companies face high taxes across the world, this scheme will have the reverse effect and will encourage them to keep their headquarters in the UK.

Pothole Problems

Finding the revenues to fill potholes and maintain road infrastructure is a cost to the Treasury and local government.

There is also a need to reduce traffic speed for safety and environmental reasons. Enforcing such restraint is also hard and costly.

Increasing the fines for people found speeding and ringfencing the increase in revenue would be a welcome income scheme.  Part of this revenue will, in the beginning, be used to add more speeding cameras and automate collecting fines at no added cost to the government.

Conclusion

Autumn Statement 2 is already in draft.

It is possible to develop creative policies from such suggestions. The principle is to examine an issue and provide a solution at no cost to the Treasury.

There is a big BUT. Politicians (and notably MP’s), Governments and civil servants do not want to change. Still, if the Conservatives want to win the General Election, they must be radical and creative.