Category: Politics

NHS England Scrapped and Fundsmith Annual Meeting

The Prime Minister has announced that NHS England is to be scrapped and its functions will revert to democratic control under the relevant Minister. There are over 15,000 people employed in NHS England and this abrupt dismantling of a system introduced in 2012 to give more independence and hopefully improve the performance of the NHS is to be scrapped. It clearly has not helped and has led to duplication of functions and muddled responsibilities. But there are going to be large costs involved in reverting to political control of the NHS.

Such reorganisations of large bureaucracies cost money as some staff are made redundant and then simply rejoin a new organization doing similar jobs. Offices need to be closed and opened, staff relocated and new IT systems installed. In the short-term this change will cost many millions of pounds, not save it.

As a big user of the NHS I wonder how this will make my life better. I doubt it will. It’s surely a case of moving the deckchairs on the Titanic. Unless the management and culture are changed, nothing will be altered.

I spoke to my sister, Baroness Murphy, about this news and she was of the opinion that little would change. She used to chair an NHS Trust so has first-hand experience of the defects in the NHS bureaucracy. She happens to be in hospital at present – but not an NHS one of course.

There is more information on this change in a Guardian article here:  https://www.theguardian.com/society/2025/mar/13/why-has-nhs-england-been-abolished-and-what-does-it-mean-for-patients . It includes a link to an NHS England article that explains what it does.  

Fundsmith Equity Annual Meeting

Fundsmith recently held it’s Annual Meeting for shareholders. A recording is now available here: https://www.fundsmith.co.uk/tv/ . Fund manager Terry Smith is always worth listening to. Witty and informative at the same time.

As a holder of the Fundsmith Equity Fund I am happy to stick with it during the recent under-performance against the World MCSI index. The market is very distorted at present by the over-concentration on large tech stocks.

Terry quotes John Bogle about the distortions created by the increasing dominance of index funds. I am happy to stand back from this ill-informed popularity.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Tariff Wars and Reform In-fighting

The Investors Chronicle editor (Rosie Carr) led with an article this week on the tariff wars that have broken out – headlined with “Facing up to America First”. High tariffs (i.e. taxes on imports) are certainly extremely damaging and should be avoided if possible. They reduce trade and raise the cost of products that cannot be easily replaced by domestic production. Inflation tends to rise as a result.

She concludes with this statement: “Even if these fears are overdone, lack of diplomacy and disregard for consequences do not bode well”. But I just see it as the consequence of ignoring the trade imbalances that have been allowed to rise in recent years with unfair tariffs and taxes imposed on US products by other countries.

For example, UK car exports to the US attract a 2.5% tariff, while US exports here face a 10% tariff. This is one reason why there are not many US manufactured cars on UK roads and that has been the position for many years. With this price barrier, it is not practical for US car manufacturers to build European model cars as the market is simply not large enough.

In other words, Europe and the UK have brought US attempts to rectify the imbalances upon ourselves. Donald Trump has been right in taking steps to rebalance the situation even if he has done so rather abruptly.

The Japanese and Europeans almost destroyed the US car industry in the last 50 years by lower costs and technological innovation while protecting their own home markets by tariff and other regulatory barriers. This needs to be stopped. Other products and markets have been corrupted in similar ways.

Reform Party In-Fighting

As a supporter of the Reform Party, I am somewhat dismayed by the latest spat among the leadership. Rupert Lowe, M.P., has been making public some of the issues. But having a public debate on them is not the way to behave for a Party that wants to be seen as being a responsible organisation.

They need to all calm down and resolve their issues and complaints in private! If Rupert Lowe cannot follow the leadership he should depart to other pastures.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Lower Thames Crossing – An Example of UK Planning Ineptitude

The Lower Thames Crossing tunnel has been under consideration, but not actual construction, for many years. It would relieve traffic congestion on the A2 and M25 by allowing traffic to avoid the Dartford Crossing. Many people, including me, would benefit, but this is what the FT had to say recently on the planning impediments to getting the project moving forward:

“Lower Thames Crossing has cost £1.2bn even before construction starts. The scheme to build a 14-mile road and tunnel to connect Kent and Essex has become a totem of Britain’s snarled-up planning system, in which ventures are tied up with years of delays and mountains of expensive compliance documents.

The planning document for the project — the first wholly-new Thames river crossing east of London in 60 years — runs to 359,070 pages, while around 150 staff are employed on the project, as well as an eight-strong management team.”

Comment: This is a typical example of UK management incompetence with overpaid consultants creaming off enormous fees and delaying projects while environmental concerns are exaggerated by pressure groups.

See FT article here for more information: https://www.ft.com/content/917d4b7f-318e-46fe-ba44-664551ebcf13

Will I see it completed in my lifetime? It seems doubtful.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Political News and Defence Expenditure

Every few years, one wonders how our stupid political leaders managed to get elected. After Rachel Reeves actions to depress the economy by raising NI and other taxes, we have Keir Starmer saying that the UK was willing to put “boots on the ground and planes in the air” to defend any future Ukraine peace deal.

The PM said the UK and other European countries were willing to defend Ukraine militarily if a peace deal with Russia is agreed – that sounds like a defence agreement like Britain made with Poland before World War II which the UK had neither the resources nor geographic capability to uphold. An enormously expensive war was the result.

The PM might be trying to impress his fellow European leaders and they are probably quite happy to let the UK take the lead on spending money and killing soldiers in a war for Ukraine but it makes no sense to me. This tub-thumping rhetoric is plain daft to my mind. It will be a red rag to a bull so far as Putin is concerned.

The only positive is that shares of defence companies have soared on the prospect of more revenues and profits (for example, I hold QinetiQ – up 8% this morning). Taking the funding out of the AID budget makes sense but I would still prefer peace to war.  

I shall write to my Member of Parliament on this subject and encourage him to change the approach of his leader. I suggest you do the same. See https://www.parliament.uk/get-involved/contact-an-mp-or-lord/contact-your-mp/

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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BP About Face, Nvidia and Tesla, Ukraine Politics

The big news last week was that major UK oil company BP (BP.) is reducing investment in renewable projects and investing more in oil and gas. This is a reversal of previous strategy which I and many major investors such as Elliott welcome although it has angered some of the chattering classes.

As I have said before, I am a holder of BP shares but I have been selling the shares after profit forecasts declined and the share price fell. BP simply said it had been too optimistic in its decision to move to green energy when its rivals took a more conservative strategy.

Well it’s never too late to change your mind if a strategic decision proves to be a mistake. So congratulations to BP for making this decision. One of my stockbrokers now rates BP as a “buy” with a p/e ratio of 9.7x and a prospective dividend yield of 6.0% but I won’t be rushing in to buy back the BP shares I sold. I might even have to sell more to realise some capital gains tax losses before the end of the tax year that is looming. Turning around this giant is going to take some time. There may be better opportunities in US oil companies subject to less political interference. Now if BP was to move domicile and share listing to the USA, the story might be different……

There have been sharp falls in Nvidia and Tesla shares of late. Neither of which I held for reasons given below. There was a good article on Nvidia in Investors Chronicle the week before last. This AI semiconductor specialist is facing new competition from DeepSeek and other challengers while Tesla is seeing falling sales with Chinese competitors such as BYD moving into the electric car space with good products while the older car manufacturers are also catching up.

The big problem with shares in such technology companies is always that the competition can leapfrog with newer products and more advanced technology. It’s very difficult to predict what will happen and when. The only protection is to build an ecosystem of services around the products (as Apple have done to some extent) or have products that customers have come to rely on and are locked in with proprietary technology (as Microsoft has done). But the car market is still wide open to new and cheaper  competition.

On the war in Ukraine, it was fascinating watching the Trump/Zelensky press conference where they seemed to want to negotiate a deal in public. Trump was quite rightly in my view refusing to guarantee a Ukrainian peace settlement which he rightly said was a path to World War III. This was a big missed opportunity though to achieve some progress in halting the war.

Media comments in Europe unfortunately mainly supported Zelensky when the USA see him as the main problem, and so do I.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Ukraine and the Economy

It is good to see Donald Trump taking a vigorous approach to settling the war in the Ukraine. I have written on the subject of the Ukraine before – for example here in 2022: https://roliscon.blog/2022/03/08/ukraine-a-more-balanced-view/ . My view has not changed. There is now little chance of Ukraine winning the war militarily so they should settle for the best peace terms achievable. An enormous amount of money is being wasted on this war – including billions of pounds by the UK.

Keir Starmer has announced he is “ready and willing” to put British troops on the ground in Ukraine to enforce any peace deal. What lunacy is this? He is pretending to be able to act like a world power such as the USA when we are not. Simply delusional. Our economy can simply not support thousands of troops stationed overseas. The British army only has about 75,000 full time personnel and the number has been falling for years. One wag suggested that with all these unaccompanied male illegal immigrants they should be conscripted into the army – a good idea. You give them the option – join the army or be repatriated to where they came from!

If we want to have a growing economy we need to have a peace settlement in Europe where we stop wasting money on military equipment and munitions, and reduce the cost of energy by consuming Russian gas.

The TaxPayers Alliance recently made a very good point. The country’s GDP figures may be slightly positive overall (so small to be within the range of statistical accuracy), but individually we are getting poorer – see their press release here:  https://www.taxpayersalliance.com/taxpayers_alliance_declares_personal_recession_in_response_to_gdp_figures

Our economy is in deep doo-doo in reality with Reeve’s rise in NI meaning many companies are reducing staff and profits are falling. High taxes are leading to economic doom as the TaxPayers Alliance frequently points out. It is an organisation well worth supporting. See https://www.taxpayersalliance.com/donate

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Educating the Young on Finance and Another Petition Rejected

Did you get a basic education in finance at school? Most people do not. As a result, as soon as they have any spare cash, those new to investing put their money into get rich schemes, crypto coins, gold derivatives or other high-risk ventures. Finance and how the world works needs to be taught in schools, when the young are more likely to imbibe and hold on to their lessons.

There is a worthwhile Parliamentary petition you can sign on this subject which would make it a compulsory subject for schools. See https://petition.parliament.uk/petitions/701663  

Climate Change Act

The Government has rejected another Parliamentary petition calling for repeal of the Climate Change Act. See https://petition.parliament.uk/petitions/701600 . The Government has rejected this petition with this summary comment: “There is no ‘two-sided’ debate on anthropogenic climate change. The Government’s policy to support ambitious action on climate change reflects the overwhelming scientific consensus”. Meanwhile most of the rest of the world, including the biggest emitters of CO2 continue to ignore it while the UK incurs very substantial costs in trying to meet an impossible target.

The UK population have never had the opportunity to vote on this subject. Why not?

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Clamping Down on Disability Benefits

An article in the FT said this: “The rising cost of support for people with long-term health conditions — set to rise to a staggering £100bn by 2029-30 in cash terms on current projections — has become a huge source of pressure on the public finances for a government fighting to meet its fiscal rules”.

The rules on disability benefits are so complex I won’t even attempt to explain them. But clearly the cost of those benefits has been rising, particularly from mental health claims. There is a strong incentive to claim benefits on health grounds rather than simply being unemployed as the rewards are higher and can last a lot longer. And mental illness is easy to fake.

The Government would like to get everyone who can work (even if only in lower paid jobs with minimal skills required) back to work. But there is currently a strong incentive to create imaginary ills. Even the BBC reported that “Some people on benefits are ‘taking the mickey’, Work and Pensions Secretary Liz Kendall has said, as the government seeks ways to curb welfare spending.

Incidentally I am one of the beneficiaries of the generous Government support for disabled people. I actually get an “Attendance Allowance” worth about £290 per month from the state because I have a minor physical disability. But I am aged 79 now so I hope the Government does not expect me to go back to work, from which I retired over 25 years ago. There is no means testing of Attendance Allowances which might be worth reviewing but I doubt such a review would substantially cut the cost.

In essence this is a difficult problem to solve. If there is something for nothing then folks will exploit it. There is a feeling that recent immigrants are often claiming benefits with no expectations of actually working or repaying the state for its generosity.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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UK Politics and Stock Market Review

According to a report in the FT, the development of the Jackdaw gas field is not quite as dead as I suggested in a previous blog post, which was based on a decision in the Scottish courts. The FT says:

“The government is currently drawing up new guidance for environmental impact assessments in response to the Finch decision, which will be published in the spring. The guidance is expected to set the bar higher for fossil fuel projects. The energy companies will then have to resubmit environmental impact assessments to the Offshore Petroleum Regulator for Environment and Decommissioning, a quango which answers to Miliband.

But Rachel Reeves said last week that ‘we were really clear in our [election] manifesto that we would honour all existing licences including at Rosebank and Jackdaw and we will stick by those commitments’”.

This is all very well but the companies involved are surely going to have difficulties planning future capital expenditure given the outstanding uncertainty as to whether Labour politicians such as Miliband will stick to their party’s commitments. Foreign companies and investors will surely be scared off by this duplicity and dissimulation.

The UK stock market has been trending down. Is this the post-Christmas hangover or just the trend following caused by index tracking funds? I don’t know as Paul Scott might say. He wrote a very amusing blog post recently putting the boot into an AIM company who shall remain nameless that claims to have a cure for erectile dysfunction. He simply said he had tried it and it did not work. I certainly recommend doing some shopping to try products and services before investing in a company.

Meanwhile, AIM continues to lose companies via de-listing or moves to the Main Market. The ones delisting are generally too small to be on AIM where listing and regulation costs are too high. They should rightly leave.

The ones moving to the Main LSE market (see GlobalData today) do not seem to justify the reputational problem of being on AIM compounded by the recently reduced tax benefits. The AIM market has a major problem and will continue to decline unless it is substantially changed with improved and tighter regulations. A change of name would also help.

The Reform Party is now on a roll and is leading in opinion polls. This may not last as people tend to support minority parties between general elections when their minds get more focussed on reality. But Reform is certainly proving more credible even if not everyone likes Nigel Farage. The Labour Government is even panicking to the extent of cancelling elections in some local councils on the basis that the pending local government elections will mean some votes will be wasted as boundaries are redrawn. They are also gerrymandering by proposing to reduce the voting age and allowing anyone who is UK resident to vote (i.e. not UK citizens alone). These moves are certainly very deplorable to anyone who believes in democracy.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Heathrow Expansion, Lower Thames Crossing and Just Stop Oil Sentences

The Chancellor is backing the expansion of London Heathrow Airport with a third runway. This has of course been proposed in the past but plans have always been thwarted by political and legal opposition. Rachel Reeves believes it would assist her plans to grow the economy, and it should be pushed through. Even if she manages to overcome all the hurdles it could be many years before we see the new runway.

Is it necessary and a good thing? The issue to my mind has always been the increased noise and pollution from expanding this airport in a London suburb. A much better plan has always been to build a new airport to the east of London on Maplin Sands or elsewhere in Essex/Kent.  

Other alternatives are expansion of Stansted, Luton or Gatwick airports, or even better, expand regional airports. Is it really necessary to have people travelling from all over the UK to Heathrow just to catch a plane to their ultimate destination? It is not and the financial cost of expanding Heathrow is enormous – for example it requires major alterations to the M25/M4 which will add months of disruption to key roads.

I have always opposed Heathrow expansion and will continue to do so because of opposition to the noise that it causes that affects a very wide area of London. Heathrow Airport is also one to avoid in my opinion by any sensible traveller.

Lower Thames Crossing

Apparently the Chancellor is looking at a private finance deal to get the Lower Thames Crossing built. This is a tunnel near Tilbury to divert traffic from the Channel ports to avoid them using the M25 and Dartford Crossing. This is a very worthwhile project that makes a lot more sense than expanding Heathrow Airport.

Just Stop Oil Appeals

Yesterday appeals were heard in the Court of Appeal over the sentences on Just Stop Oil protestors who blocked the M25 for 4 days. That included 5 years for Roger Hallam who helped to organise the protest. Were the sentences justified? Well the cost imposed on the millions of road users who use the M25, and the general inconvenience caused do justify stiff sentences in my opinion. That is particularly so after Hallam in April 2024 was given a suspended two-year sentence for attempting to block Heathrow Airport with drones. Basically he and his supporters are persistently attempting to disrupt normal life. These are not “peaceful” protests – they aim to cause the maximum disruption they can just in the cause of bringing their views into public attention.

I hope the Appeal Court will not be sympathetic.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.