The need for new units of account – let’s try “rocks”

Under this government you don’t get much for £1 billion these days. You can soon blow a £100 million on fees for advice on a financial matter, and can get through many times that on a centralised computer contract or good pay rises all round for public sector workers. I expect the political classes will soon be looking for a new unit to make it sound more reasonable.

So I have come up with a modest proposal. Why not account in “rocks”. We can’t be quite sure how much a rock is, but it is probably around £110 billion. It breaks down into 2 Granites, a smaller unit of account which works well offshore.

Recasting public spending, the total spend comes out at around 5 rocks. The Health Service is a snip at just 1 rock, whilst you can have all the armed services for a year for well under a granite and keep them mainly working offshore.

Total stated public debt is only 5 rocks. Even adding in unfunded pension liabilities, borrowings by a nationalised bank and railway, PFI and PPP you still come up with a very easy sounding 12 rocks of total public sector liabilities.

This could well catch on, and make it easier for the government to carry on spending as if we had all the money in the world.

(Based on a speech given to a dinner in the Great Room of the Grosvenor House Hotel on Tuesday night of this week)

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6 Comments

  1. Matthew Reynolds
    Posted February 29, 2008 at 7:27 pm | Permalink

    How come Labour can magic £110 billion out of thin air for a bank in their political heartland & how can the Tories wave a magic wand and produce £28 billion for an NHS that already wastes money while the sick suffer and yet cutting taxes is according to both irresponsible & unaffordable ? It is just bizzare for the Treasury teams of both HM Government & Opposition to throw money at problems while the City frets over a public sector costing 45% of GDP that harms economic performance . Ever bigger government did not stop a recession between 1989 & 1993 and has not worked since 2000 as public expenditure increases have hardly made transport , health , education , law & order and poverty much better . We should seek to downsize QUANGO’s from the £140 billion plus level of waste so that the budget is balanced allowing economically desirable tax cuts to be sustainable . The nation needs better value for money on the vast sums spent since 2000 rather than lots more waste . Our competitors are not following the policies as being offered by the political classes – is that not worrying ?

  2. Matthew Reynolds
    Posted February 29, 2008 at 7:27 pm | Permalink

    How come Labour can magic £110 billion out of thin air for a bank in their political heartland & how can the Tories wave a magic wand and produce £28 billion for an NHS that already wastes money while the sick suffer and yet cutting taxes is according to both irresponsible & unaffordable ? It is just bizzare for the Treasury teams of both HM Government & Opposition to throw money at problems while the City frets over a public sector costing 45% of GDP that harms economic performance . Ever bigger government did not stop a recession between 1989 & 1993 and has not worked since 2000 as public expenditure increases have hardly made transport , health , education , law & order and poverty much better . We should seek to downsize QUANGO's from the £140 billion plus level of waste so that the budget is balanced allowing economically desirable tax cuts to be sustainable . The nation needs better value for money on the vast sums spent since 2000 rather than lots more waste . Our competitors are not following the policies as being offered by the political classes – is that not worrying ?

  3. Posted March 1, 2008 at 12:14 pm | Permalink

    On Tuesday Richard Rogers, architect of the Millenium Dome, & his partner said on TV that building it cost £46 million. Only 7% of the public bill. Presumably the rest went on those £100 million fees & general paper shuffling.

    If this is reflected across the country & I have to assume it is the degree to which we are damaging ourselves by such expensive dithering can hardly be overestimeted.

  4. Deborah
    Posted March 1, 2008 at 8:05 pm | Permalink

    What a brilliant concept.

  5. mikestallard
    Posted March 2, 2008 at 8:38 am | Permalink

    I am just reading the excellent Niall Fergusson on the British Empire. The WHOLE THING was run for just £40 million a year in 1900! I think there were only 3,000 Civil Servants in India too……….

    I like the idea of rocks. Does that mean the entire private indebtedness of the people of the UK (£1,300,000,000,000) is 13 rocks (1 rock = £100,000,000,000)?

  6. Freeborn John
    Posted March 3, 2008 at 7:23 pm | Permalink

    I recently returned from India which always seems more accessible to a Briton than its East Asian neighbours due to the excellent English-language media. However, any article about finance is rendered almost unreadable to me by the use of Lakhs and Crores as units of measurement instead of millions or billions. I can look up that a Lakh is 100,000 and a Crore is 10 million, but actually remembering this while converting currency at a rate of 80 rupees to the pound is more than my brain is up to. When I hear that 793 Crore has been spent on a new transport link I have absolutely no idea if that sum should be enough to pay for a bus stop or a road stretching from one end of the country to the other.

    See for example: http://www.hindu.com/2007/11/14/stories/200711145

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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