Yorkshire Post

Out and about talking to people over the week-end, the clear message was “We’ve had enough”. Council Tax bills, income tax, threats of higher green taxes and public sector charges, energy bills and food bills – the squeeze is on, and much of it results from wasteful government.

We live under rip off government. They have piled high the parking charges, the fuel duties, the pensions tax, the extra National Insurance, postal charges and rail fares. Never has so much money been spent by so few to so little effect.

Polls show the public were prepared to pay more tax a few years ago. They wanted to believe that just a bit more tax would lead to better hospitals, and more successful public sector schools. No-one minded paying a bit more to have more police on the local beat, and more nurses and doctors.

Instead people were asked to pay hugely more, only to see the money dissipated on a stunning array of extra officials, more regulations, bloated quangos, more management consultancy contracts, big computer schemes and large pay rises all round for the senior people in the state sector. As a final dose of salt in the wounds, people discovered that the MPs appointed to oversee good value for public money were themselves keen to test the elastic In their system of allowances and expense payments.

In the last few weeks we have seen a government gorged on wasteful spending blow another £100 million or so on financial advice about Northern Rock, only to conclude that the taxpayer has to stand behind all £110 billion of its liabilities, guarantee the jobs and the pensions and agree to pay any losses from here. People in the North-west voted against regional government, so we are still lumbered with it throughout England. It means we are one of the most over-governed countries in the world, with Parish, District, County, regional, national and EU government in many places. Layers on layers of officials write to each other and pass the blame around.

Some asked me if it would be the same under the Conservatives. They were alarmed by the comments of Mr Lansley, misconstrued by some in the media. Let me explain why I am not concerned.
The Conservatives have said that in office they would share the proceeds of growth between extra spending and tax cuts. Let us assume the economy produces £1.5 trillion of output in election year. Every one per cent of growth means an extra £15billion of income, and an extra £6 billion of tax revenue on that activity.
If the economy grows at its trend rate of say 2.5%, that is an extra £15 billion of tax from just one year’s growth. So the Conservatives could decide that say £10 billion of that was needed for increases in spending in priority areas like Health, and £5 billion was available to start tax cutting.

The Lansley remarks said that by 2023, if Labour’s plans went ahead, the NHS would take 11% of national output, instead of the 9% today. He did not promise to increase it to that level. Nor, over that time period would such a level necessarily pre-empt tax cuts. If at the same time the civil service was cut by natural wastage, regional government abolished in England, ID and other computer schemes scrapped and the quangos cut back to size, it would be possible to spend much more on health and pocket some much needed tax cuts.

More importantly Andrew Lansley pledged that a Conservative government would work with the NHS to raise quality and productivity – we need to get more for what we are already spending. People may say, they’ve heard such promises before. The truth is that any sensible government now should work hard to achieve just that. Everyone is fed up with a system that gobbles the cash without delivering the results.

Conservatives need to promise service improvements that can be delivered, not large sums of money for any particular budget. If you let people know in advance there are large extra sums available, they will work out ways of spending that money as quickly as possible without pausing to think if that spending is both necessary and likely to bring worthwhile results. Similarly, it is not easy to carry out a successful pay negotiation, ending in fair settlement, if you announce in advance that you have plenty of money to meet more or less any request.

For too long we have watched as Ministers have failed to engage with the difficult managerial issues that dictate how well run a service is and how much it costs to run. Their fascination with media events and spin, and their strange belief that they are at the beck and call of media, has left them short of time and energy to chair the meetings, lead the officials, encourage the machine to deliver more for less. The private sector has been under the remorseless cosh of intense competition. Everyone in manufacturing knows they have to do more with less to stay in business. The worst parts of the public sector have got used to doing less with more. No wonder we all feel over taxed and overcharged.

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One Comment

  1. mikestallard
    Posted March 8, 2008 at 8:32 pm | Permalink

    I have been astounded recently when taking the dog for a walk. I meet other dogs and, while they are sniffing each other, I get talking. A prison warder is so fed up with tax, immigration (he loathes that) and unfair distribution of resources that he is about to go to a BNP meeting in Peterborough. "Because they alone of all politicians tell the truth."
    Thanks to this government, all politicians have simply lost credibility with a lot of working people.
    There was an "heir to Blair" moment with David Cameron. I am worried myself, whether it was not true. Loads of bright ideas come pouring out. He is utterly charming on the media too. But then, sort of, nothing happens. Just like Blair, actually.
    Did you read the week's Spectator about the reform of Brown's inner Cabinet? Terrifying.
    Couldn't you have a word?

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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