Spend, spend and spend again

On his way to power at Number 10 Gordon Brown was keen to associate himself with the ever larger sums of public money the government decided to raise and spend on public services. I remember grasping just how single minded and professional he was about the use of public money when I went to a briefing on FE colleges one day.

I went because my local FE college had asked me to take up a matter for them. I was invited along with every other MP because Ministers wished to use the Civil Service to help them with the organisation of the meeting, so it could not just be a Labour party affair. I went expecting the HE/FE Minister or maybe a Junior Treasury Minister to take us through the detailed numbers of individual FE colleges and answer our queries. To my surprise we were greeted by no less a figure than the then Chancellor himself, who showed great grasp of the detailed numbers of each FE college constituency by constituency. Most of the MPs present were Labour MPs, and Gordon Brown was good at either showing them just how well their FE college was already doing, or promising them theirs would do better next year whilst thanking them for their interest and good work as constituency members.

It was a virtuoso performance which told you half of what you need to know to understand how Brown governs (The other half is when in doubt throw the kitchen sink at your opponents, never sparing the vilification). He believes that people vote for you if you associate yourself with spending large sums of money in their town or district. In this view all public spending is good. Big public spending is better. Lumps of money buy votes. Conservatives can be regularly condemned for not having spent as much, or for probably not spending as much in the future,whatever their true intentions.

Watching the PM I think we should expect more of this simple combination of bash the Tories and spend the money. The fact that the government has spent far too much and is getting such shocking value for what it is spending will not concern him unduly. The fact that the more he spends the more unpopular he becomes will not be a thought which crosses his mind. The fact that the hugely overborrowed public sector is now the main cause of poor UK economic performance will not occur to him. The limit on new debt and borrowing placed by the high levels of total debt outstanding and of new debt being drawn down will be ignored. Instead the PM will order Ministers to spend what it takes – in the naive belief that more spending will in the end win through.

First World War Generals in the first couple of years of the war, safely encamped well behind the front trenches and far back from the shellfire, ordered yet more men over the top and across No-Man’s Land in the belief that it was just a matter of time and numbers before they won. The PM takes a similar approach to public money in the face of adverse opinion polls. This week we have seen the offer of £1.5 billion to Manchester for public transport schemes, and £3000 a day to anyone wrongfully detained under the government’s lock up anyone suspicious scheme. In recent weeks we have seen £2.7 billion for the Crewe by-election problem of the abolition of the 10p tax band. The fact that Crewe did not say “Thank you” for the extra does not seem to have led to any rethink on the strategy.

This generosity is unlikely to extend to constituencies where Labour have no hope. Do not expect a generous package of infrastructure money for Henley this week to help the by-election there.

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8 Comments

  1. wonderfulforhisage
    Posted June 11, 2008 at 9:19 am | Permalink

    "…..and £3000 a day to anyone wrongfully detained under the government’s lock up anyone suspicious scheme. "

    Thirty pieces of silver adjusted for inflation?

  2. Brian Tomkinson
    Posted June 11, 2008 at 10:23 am | Permalink

    Whenever ministers are asked about an issue they routinely trot out how much they have spent or "invested" with no thought or recognition of whether that money has been well spent. Any fool can spend someone else's money. The consequences of this profligacy have inflicted long term damage to this country and its people. When will the Conservative front bench stop talking about matching Labour's spending forecasts?

  3. Mark Wadsworth
    Posted June 11, 2008 at 10:56 am | Permalink

    This whole tax'n'spend strategy works because local voters are getting 'somebody else's money', ergo the only way to counter this is more local taxation.

    For example, if people want a better FE college, and having exhausted the cost-free ways of improving it (selection, streaming, better co-operation with local employers etc) it is agreed that the FE college really needs more money, then it should be local voters (who benefit from it) who pay for it. That puts the onus on spending bodies to prove they are getting value for money.

    And, as has been pointed out before, the best form of local tax is a property based tax – if that spending makes the area more desirable, then property values go up. If the money is wasted on five-a-day-advisors, then that doesn't make the area more desirable and the council soon runs out of money.

    Getting back to the original topic, more local taxation would mean that the central government could not shamelessly buy votes in this way and skew central government grants to Labour-controlled councils so that Tory and Lib Dem councils have to charge much higher council tax just to make ends meet.

  4. Neil Craig
    Posted June 11, 2008 at 11:46 am | Permalink

    One of the powers which the Scottish parliament has is to increase or reduce income tax by 3p. ALL parties have always been to frit to use it though there is certainly the opportunity (it has been calculated at £870 million annually & we spend nearly a billion subsidising windmills). If the Scottish Conservatives were to screw up their courage & campaign for a 3p cut if think they would do well, it would improve our economy & from the Westminster point of view, would put the possibility of tax cuts rather than more spending on the public's mind.

  5. steve-roberts
    Posted June 11, 2008 at 8:09 pm | Permalink

    Be fair to the WW1 generals, John. Inside three and a half years they had developed the innovative tactics and equipment – walking barrage, tanks – which broke the German armies in 1918. Labour has had three times as long and is still stuck in the trenches.

  6. mikestallard
    Posted June 11, 2008 at 9:36 pm | Permalink

    In newly independent Ghana in 1958, I was travelling along a road from the capital, Accra, to Kumasi, the second city. It became full of pot holes. I asked why they didn't bother to repair the roads. "Well, these people are not of the government party." I was horrified. "That would never happen in England," I said.
    A better parallel, perhaps, would be Brezhnev? Totally ineffective and unable to reform the system. Brown looks a bit like him too.
    All this tax'n'spend goes awfully well in 2007. It does not look quite so good in the current crisis, though, does it. In the end, it means that more and more taxes are sloshed onto the rapidly impoverished population.
    Gratitude was never a strong force – let alone in politics, I should think.

  7. Adrian Peirson
    Posted June 11, 2008 at 10:42 pm | Permalink

    I Know I've asked this before, but why does the Govt 'Raise and Spend' rather than Print and spend.

    If the Govt wished to raise £1 Billion, it can Borrow this by issuing bonds at 5% which are Snapped up by the International Bankers.
    We are Taxed and this Tax Money goes to pay the International Bankers their 5% Interest.

    Alternatively Govt could simply Print £1 Billion at no interest.

    Why does it choose the former.

    The Money Masters http://www.youtube.com/watch?v=OnwLgrSJZKs

  8. Steven Whitfield
    Posted June 13, 2008 at 1:44 am | Permalink

    Well said Mr Redwood and I salute you for your good sense.
    But please explain to me why both Mr Cameron and Mr Osborne have pledged to match Labour spending levels ?.

    Surely if an individual believes in re-distribution of wealth from the hard working to the idle and that health and social problems can be eradicated by massive public spending then they would be more at home in the Liberal or Labour parties.

    If we can't trust the Conservatives to stop this wasteful spending madness who can we turn to ?

    Reply: Mr Cameron made a good speech about getting rid of waste, and has not pledged to match Labour spending levels next decade when he has a chance of being in power.

  • About John Redwood


    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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