Public spending – 20% off?

According to the polls which modern politicians normally follow slavishly, the public wants a quick 20% off public spending, so we get back to living within our means.

The public are right that that is the order of magnitude if we wish to curb the borrowing. 20% off this year’s spending – or next year’s – would not quite get us into the black, but it would eliminate most of the growth of the national mortgage.

The politicians are still far behind the public. They are unlikely to do this, preferring on this occasion to argue with the public and the polls because they will not like the message.

The politicians are unlikely to come up with anything so radical. The government is still in spend, spend , spend mode. They are still telling us that it is all essential, and that cruel cuts would hurt. Any MP who has the audacity to say to us now that all public spending is necessary should be greeted with a chorus of two words – “MPs expenses”.

MPs expenses are just the visible small top of a massive iceberg of wasteful and needless expenditure. The CEOs of Councils, quangos and Whitehall departments preside without the same scrutiny over collosal self serving and wasteful expenditure of a kind no competitive company would support.

I will be setting out in further “Wasteline” pieces what can be done about this. The first 10% off public spending could be painless for the public and popular. The tragedy is the government still does not get it. They still have not even offered to cut their own MPs expenses, let alone get to grips with the rest of the monumental waste. We need a recovery team to move in, versed in the skills of company turnround, to control spending before we hit national bankruptcy.


  1. Lola
    May 11, 2009

    Of course New Labour don’t get it. A cynical mind might come to the conclusion that they are deliberate employing a scorched earth policy since they are unlikely to win the next election. Of course I wouldn’t think that, as I know that all MP’s are hnourable people and always think of the good of the country before party or themselves. But others, not so clear headed, might think otherwise.

    1. John Dunham
      May 11, 2009

      Scorched Earth Policy indeed.


  2. Ian Jones
    May 11, 2009

    Unfortunately we have a Government who know they will lose the next election so will spend as much as possible to make the incoming Government’s policies as painful as possible in order to get re-elected in 5 years time with still a significant public sector they can rebuild. its a scorched earth policy and with a little help from the Bank of England they should have an inflation fire roaring away as well.

  3. Cassius
    May 11, 2009

    Absolutely – and (in the near term and as long as recession means that public spending is to some extent plugging gaps in the supply of commercial money) redirect at least half of the savings into cash schemes which encourage day-work among the unemployed – no matter how short or long the period of unemployment.

    I was shocked at the state of the streets on visiting the UK recently. If somebody had handed me a pressure washer I would have been sorely tempted to clean them myself. I am sure that there are plenty of unemployed – both new and old who would prefer to be doing something rather than moping at home – and every town must have a list of potential community projects which would make it’s residents proud.

    A daily cash payment of £40? – to be paid on site each day as a supplement – with no impact benefits or tax and therefore no bureacracy – would give a little hope to those out of work, encourage the working culture amongst those who have been unable to work, and provide an almost 100% efficient boost to local economies at their roots whilst revitalising the private sector.

    1. Janet Child
      May 11, 2009

      At the top of the unemployment queue could be ex-politicians of all parties who are thrown out at the next election! Make them do a real and useful job for a change and see what it’s like to live on a low income. Could you add litter-picking to the list?

      All these jobs would be good for the soul….Chairman Mao had a point with his cultural revolution and re-education of the intelligensia.

  4. mikestallard
    May 11, 2009

    Down here at the very bottom of the New Labour Pile, we can soon see who has been visiting their constituencies.
    In the Labour Party, Kate Hoey, and, surprisingly, Hazel Blears do seem to be reflecting the scorn and anger which most of us feel for the fat cats at the top of the New Labour Pile.
    Is it too much to hope, in view of the Telegraph at last getting round to exposing the Tory expenses, that David Cameron will be any better?

  5. DavidNcl
    May 11, 2009

    The tragedy is not that the Goverment fails to realise the need for serious cuts but that the Conservative Party fails to realise or at least articulate such a need. When Cameron has the guts to explain that we need to make real, deep cuts – and spouting “do more with less” is not what I mean – then I’ll have some hope.

    Even Thatcher/Howe didn’t face the need to make these kinds of cuts.

    Truthfully, John, do you belive that the current leadership are facing up the bleak facts of our situation yet?

  6. Simon D
    May 11, 2009

    My recipe would be to start at Westminster.

    1. Cut the number of MPs to 400 with commensurate boundary changes to divide the country into constituencies of equal number. Only British citizens should have the vote.

    2. Cut the Lords to 250 with a use it or lose it provision.

    3. Introduce a credible expenses regime for both houses.

    I cannot begin to explain how wildly popular it would be if the Conservatives put 1 and 2 in their manifesto. The public appear to have had it up to neck with politicians. New Labour has caused the problem: why shouldn’t DC take advantage of it?

    Reply: Mr Cameron has pledged to cut the n umber of MPs (not as much as oyu would like) and to prevent MPs claiming for furniture, food and personal items.

    1. Janet Child
      May 11, 2009

      Good idea…get one’s own house in order before meddling with everyone elses!

      How about secret ballots in votes too; no more whips so MPs vote on behalf of their constitiuents instead of on behalf of their party line.

    2. Denis Cooper
      May 11, 2009

      Cameron should focus on quality, not quantity. Cutting the number of MPs would at best be a distraction from the real problems with our parliamentary system, and at worst it would significantly exacerbate those problems.

  7. A. Sedgwick
    May 11, 2009

    You wrote that Mrs.T. was the best boss you ever had and I would guess that one of the reasons is that she is a grandmaster of the blindingly obvious. Her grasp of the simplicity of economics is needed by all remotely in government. By comparison Brown is principal of the economics madhouse. Any person,family, business hitting hard times cuts spending to maintain the basics of their existence and it should be the same for the state.

  8. Brian Tomkinson
    May 11, 2009

    Do the Conservatives “get it”? Listening to many of your frontbenchers fills me with gloom as they seem as addicted to wasting our money as the ruinous crowd they hope to replace.

  9. TomTom
    May 11, 2009

    It would appear we now Borrow the equivalent of the NHS + Education Budgets and pay Interest on this amount greater than the Defence Budget.

  10. Robert
    May 11, 2009

    Virtually every family in the country is having to live on less income. Any business faced with a downturn will slash costs to survive. If they don’t, they will fail (unless they are a UK bank). But when, in our glorious “democracy” a bunch of ruthless incompetents get their hands on the levers of power and are faced with a squeeze, what do they do? Spend more, tax more, borrow more and inflate more. Anything to massage the figures so they can squeeze a little more time playing with the controls.
    Do these people never look in the blogosphere? Can anyone see any commentary from voters saying they want more tax and public spending rather than less?
    At risk of offending Tory supporters on this site, it was only six months ago that Mr Cameron was talking about “sharing the proceeds of growth” when what is needed is urgent excision of tracts of the public sector. Thank goodness a senior Parliamentarian has put a number of 20% on what should be saved. How about something more radical. How about putting out a big signpost saying “UK – home of enterprise.” Remove corporation tax altogether (it only raises £50bn a year) halve income taxes and tell the rich they are welcome. Ditch the Elf & Safety lobby and let each citizen off the leash to do what they do best when given half a chance – work hard so they can support themselves, their families and their communities.

  11. Donna W
    May 11, 2009

    Public spending should be drastically cut and in order to send the right message to the main spending Departments, it should start in Westminster.

    We don’t need 646 MPs. (We certainly don’t need them claiming the levels of inappropriate (polite version) expenses they’ve been getting). 450 MPs would be ample, 350 even better.

    We also don’t need 800 Lords. The Lords should be divided into those with an honorific title (including Hereditarys) who cannot attend or vote in Parliament – and a second class of Parliamentary Lord – preferably voted in by the electorate and unaffiliated to any particular Party.

    Expenses for both Houses should be drastically reduced; as should pensions.

    When Westminster has put its own Houses in order, then it can start asking for savings from the rest of us.

    1. Denis Cooper
      May 11, 2009

      Well, why not go further, and just have 72 MPs?

      The same number as the new (post EU enlargement) number of MEPs to be elected in the UK.

      And we could use the same PR method, based on euro-regions, with closed party lists, the order of the candidates on the lists being rigged by the party leaderships, and all.

      Then some of us, a few of us, could go along and vote for one party, or another party, and then the results would be announced, and then we could more or less forget that they exist until the next election.

      Daniel Hannan MEP claims that it would take him 35,000 years to canvass everyone in his South East England euro-regional constituency:

      But I think this is a gross exaggeration – I calculated that if he stuck at it for ten hours a day, 365 days a year, and had helpers to go ahead and knock on the doors to see if anyone was in, then he could speak with at least one person in every household in as little as 48 years, allowing an average of 3 minutes in each case.

      And if the 10 MEPs sensibly divided the task between them (they’re different parties, but no matter), then someone in virtually every household could expect to exchange words with an MEP once every five years … assuming, as I say, that the MEPs were doing nothing else but going round meeting their constituents.

      But then who really wants some MP turning up on their doorstep, saying “Hello, very sorry to disturb you, but I’m your elected representative in the supreme law-making body of your country, and is there anything you’d like to ask me, or tell me, about the way your country is being run?”

      Ridiculous idea: we don’t need or want to know who they are, or what their names are – the name of a party, or for those of us who can’t read, a recognisable party emblem, is enough information, if we can be bothered to vote – and we would certainly never want to have any personal contact with any of them.

      What do people think this is – a representative democracy?

      1. Donna W
        May 12, 2009

        The average constituency consists of around 80,000 people. MPs don’t go knocking on doors …. I have lived in Mole Valley for 16 yeaers and never once met mine.

        Constituency sizes were set in the days before email; before most constituents even had cars. With modern communication methods, there is no reason whatsoever why Constituency sizes couldn’t be increased to an average of 120,000 or even 150,000 people.

        If the next Parliament is going to be demanding austerity from the rest of us and cutbacks in Public Spending ….. all entirely necessary …. then it should start with Parliament.

        1. Denis Cooper
          May 12, 2009

          If modern communication methods solved everything, there’d be no reason to stop at 150,000, would there?

    2. ManicBeancounter
      May 11, 2009

      MPs Expenses are (highly symbolic) distraction. If each MPs cost us £300k each, 650 MPs cost £195m, or 0.03% of total government expenditure. A 50% saving on MPs cost will be less than 0.1% of the total we need to save. We should be Machiavellian in this. David Cameron should remove the party Whip from the 3 worst offenders (according defined criteria, including failure to recognize their waywardness), forgive the rest (after appropriate admissions and apologies) and move on. That would set a clear precedent for the Prime Minister to follow.

      1. Lynne Gill
        May 12, 2009

        If you think the furore over MPs’ expenses is a mere distraction you have no idea of the outrage felt by the rest of the population. Removing the party whip and asking for admissions and apologies from these miscreants is only the beginning of the process.

        Their behaviour is morally repellent and conniving, and in many cases criminal – but I guess it’s going to be deemed ‘not in the public interest to prosecute’, eh?

        The very least they should be expected to do is pay back what they have stolen from the tax-payers pockets. How about putting their ill-gotten gains into a fund for, oh, lets say refurbishing the almost-slums some of our service personnel are living in, between putting their lives in danger at the behest of these gross pieces of work.

        1. ManicBeancounter
          May 12, 2009

          I profoundly disagree with your comment. I believe that in politics, as in other areas, you should give people a chance to make amends and move on. This is what David Cameron has done today, setting a precedent for the government to follow.
          If we start an inquisition it will go on for months. At this time when we need better government to sort out the economic mess we are in, not to turn parliament into a Roman Circus to watch good people being thrown to the lions.
          Further, most MPs have acted within the existing rules. They have not “stolen” money, but that have acted dishonourably.

      2. Donna W
        May 12, 2009

        Sorry, but it is going to need much more than punishment of the 3 worst offenders.

        This is Cameron’s chance to clear the Party of the Old Guard – the Squire-ocracy who have no understanding of ‘normal’ peoples’ lives.

        If he let’s them get away with claiming expenses for swimming pools, moats, chandeliers, horse-manure (how apt); domestic servants etc ….. then the Tory Party will sink like a stone.

        He should be demanding they all pay back the money they have mis-appropriated, seek resignations – and if they’re not forthcoming, withdraw the Whip.

        1. ManicBeancounter
          May 12, 2009

          Your comment about Cameron demanding that money should be paid back is valid, and is exactly what Cameron has done today. However, Cameron has broadly followed my line. Draw a line in the sand to those who recognise their error and move on. To do as you suggest – essentially sack those the toffs, or those you dislike – is poor leadership.
          Political parties are essentially coalitions, and the leaders need to keep a large range of people on board.
          As John Redwood has stated, the Conservatives in power will have much bigger battles to wage. Today Cameron has shown he can fight those battles much more effectively than the current Prime Minister.

  12. Nick Leaton
    May 11, 2009

    20% doesn’t do it.

    Look at the Tractor Production Numbers from Darling, and you and I know they are over optimistic as always.

    Take his figures and its 26%.

    It’s either that, or even bigger cuts in the future.

    That is, unless you can get growth higher than the cost of borrowing, and that’s not going to happen.


  13. B.Evans
    May 11, 2009

    There is a world of difference between the grasping, greedy and borderline criminal activities of a depressingly large number of MPs and the vast majority of modestly paid civil servants who would be the victims of a 20% cut. Unlike MPs, the nurse, teachers and customs officers do not get to vote on their own pay and expenses regimes, although they are the ones who will feel the squeeze for the failures or politicians of all parties.

    And yes, of course it is not the job of taxpayers to subsidise public sector employees. But, they are not overpaid – no one joins the civil service for the money; they are efficient – have you ever tried interacting with the bureaucracy in France, Spain or Italy? and they are necessary, as even the bankers and free marketers now admit in a stunning u-turn, blaming all the financial ills on a lack of regulation.

    Reply: There are some good public officials, but in total government employs too many and does too much. That is why we recommend removing regional government, scrapping Id cards etc.

  14. hsutreal
    May 11, 2009

    What an ingenious idea. The political class loot the treasury of funds that like all taxes are in principle meant to be used for the benefit of all society and John Redwood’s creative response is to use this as a justification for the very intended beneficiaries to be deprived of part of the social wage.

    You can always depend on a Tory to turn any adverse circumstance into a justification for an attack on working people. As usual the rule is they plunder, we pay the consequences.

  15. figurewizard
    May 11, 2009

    It would be interesting to read a poll where the question had been asked ‘Do you support cutting pubilic expenditure for as much as is necessary to bring down national debt?’ I suspect that a majority would say ‘Yes’.

    Are the Conservative’s own polls showing this?

  16. Neil Craig
    May 11, 2009

    I don’t think politicians follow polls slavishly. It is much more like Sir Humphrey Appleby’s treatement of Hacker – they say they agree with us & then go away & do whatever they originally intended. They do, quite often, follow lobby groups but we are only just coming to see how often lobby groups are quietly funded by government to push what Sir umphrey wanted in the first place.

    The Poll Tax would count & perhaps Brown’s about turn on the 10p tax rate but I can’t think of anything else of importance where they have turned, (rather than slowed) because most of the public were consistently opposed.

  17. Stuart Fairney
    May 11, 2009

    Well said indeed, 20% off more or less everything except immediate combat related defence spending. We could each of us manage such a reduction (and those of us made redundant manage a far greater reduction) why not government? especially one which has seen a massive growth in said spending.

    A puzzle for you if I may, as a businessman, would you rather paying UBR and endless other taxes and getting “advice” from local councils on how to run your business, or would you rather them sack the entire economic development team and many other optional extras and refund the money in reduced taxation?

    I do not know of a single real businessman who values the council “advice” let alone at the cost of their taxes

    1. alan jutson
      May 11, 2009

      Just been asked to fill in a survey by SEEDA (South Eastern Development ??)

      How do we find Business Link ?? are they useful etc ??.

      Think their days may be numbered.

      Perhaps the penny is dropping that all of these wonderful advice centres (as they are called) are usually a complete waste of time etc.

      Most of these organisations seem to employ failed businessmen as advisors, or at least that was my experience of years ago when I contacted them once for advice on a particular subject.

      If you are a successful businessman why would you work for one of these organisations on a lesser salary than you could make out in the big wide world, unless of course you were on wind down.

      I may of course be wrong, but that is my personal experience.

      1. Stuart Fairney
        May 11, 2009

        Mine too when I started a company recently, they rarely responded promptly, were able to offer only generic advice available free elsewhere, and made no practical contribution at all.

        But at least my taxes pay for non-jobs

  18. John Moss
    May 11, 2009

    The way to reduce overall public spending is to constrain its growth while making savings greater than the level of growth.

    Some public spending will increase, especially in a recession. but it is constraining that increase that matters. Labour have “saved” money through various efficiency drives, but they have failed to keep control of spending increases, resulting in ever increasing deficits since 2001.

    The easiest hit is a cash freeze in salaries. MPs first, of course, to lead by example, then the quango heads and senior civil servants, then the ordinary staff. Next, stop recruiting new staff and require justification of the need to fill any post that comes vacant. Then, reduce employer contributions to pensions, preferably after scrapping all final salary schemes for all members, again, MPs first.

    Next comes a cull of programmes like ID cards etc, but that is a short term gain. For real long term gains, systems have to be altered so that public spending is routed to users of services, not providers, so that competition can work its magic and control spending at the same time as increasing quality.

  19. richard
    May 11, 2009

    i have said it before, i will say it again. There is a gentleman available who is a master at cutting wastage. He could do the job for no pay (since he has a decent pension at our expense) . he is already less than popular, so his ego could handle it. Sir Fred ‘ the Shred’ Goodwin is the man for this job. A way for him to give something back to the country. With R&A membership on offer once he is successful. He should be a special advisor at the very least, if it is felt the electorate could not stand it.

    1. alan jutson
      May 11, 2009

      He was an advisor on Banking to Gordon Brown !!!!!!

  20. […] of the crew with him? John Redwood, the unreconstructed Thatcherite and leading Conservative, thinks we should be cutting about 20% off total public spending. Redwood is not in the current Shadow Cabinet, but is Chairman of their Economic Competitiveness […]

  21. Denis Cooper
    May 11, 2009

    Thank God the government realises that suddenly cutting public expenditure by 20% would send the economy into meltdown.

    1. Stuart Fairney
      May 11, 2009

      er, send into meltdown?

      Yes, thank god for the wise government….

      (Hint: probably best if you imagine that in an ironic voice)

      1. Denis Cooper
        May 12, 2009

        It’s not a case of “the wise government”. It’s a case of a bloody stupid, wasteful, government having got us into a dire position, but of having to proceed from where we are, not from where we would like to be. It isn’t possible to redeploy about 8% of the labour force from work that is funded by the taxpayer to work that is not funded by the taxpayer, except over a period of at least five years; so do you really want to just add all those millions, and some more, to the dole queue?

        1. Stuart Fairney
          May 13, 2009

          You would be quite amazed how fast the private sector can recover if it was left alone and untaxed. Lets consider facts.

          All state jobs are funded by sucking wealth out of the productive part of the economy. Ergo, cut these and more cash is available to actually increase wealth. Sure there wil be dislocation, but state jobs are not created in the “magic money bag” State spending comes from somewhere and it would go elsewhere (such as making credit available to companies instead of the government hogging it all).

          And it’s not like we have much of a choice to be honest, unless the Weimar republic beckons, and that didn’t really end well.

  22. Adrian Peirson
    May 11, 2009

    What exactly do these people do apart from interfere in our lives.
    If Govt didn’t take taxes of Pensioners, they wouldn’t need winter fuel allowances.
    If Govt’ didn’t take taxes of people, they wouldn’t need family tax credit top ups.
    Even if by some chance a pensioner or parent did need money, if the Govt wasn’t fleecing their relatives, they would be able to help out.
    Get rid of the Income tax system, that is the problem.
    Ok let’s say we take £100 off Fred from his salary, does this £100 pound go to the Pensioners, no it can’t do, a few pounds goes to the pensioners, the rest goes on the Salaries of the civil servants doing the Redistribution.
    It’s all a scam, a way for the Cancer that is Govt, from keeping us enslaved to them.

    People shouldn;t have to work 40 hrs per week, live should be about spending with your friends and family, and if Big govt didn’t steal our wealth we wouldn’t have to.

    These civil servants should be out doing proper work with which we can trade with other nations.
    No I don;t mean teachers, police, armedforces and nurses, I’m talking about all the Non Jobs.
    I went for some carreers advice, so I went to one office, they told me to go to another office, who then gave me a list of organisations to contact like the bank of england, etc asking them for a JOb.
    so at least two offices were completely unnecesary.
    Big Govt is simply a way of keeping us enslaved and downtrodden, and controlled with regulations whilst stealing our wealth to pay for the priveledge.

    1. alan jutson
      May 11, 2009

      Big Government is all about Manipulation of the Country’s finances and manipulation of its people.

      It breeds State reliance which is what the present Prime Minister (a closet Commumist) wishes for as many people as possible, that is why I am convinced everything is made as complicated and as expensive and inefficient as possible.

      The problem that he is now finding out, is that there are now too few people who are creating real wealth to pay for it all.

      Hence we print money and borrow future tax revenue

  23. Grytpype-thynne
    May 11, 2009

    You have cut through the obfuscation with a scalpel.Cut the public sector by 20%.Your leader would have immense public backing if he had the courage to announce this as his economic policy.Most of us are practising this in our domestic budgets; the nation’s is the same writ large

  24. ManicBeancounter
    May 11, 2009

    Public expenditure cuts of 10% or 20% are not that easy.
    Three major components of costs are
    1) Transfer payments (pensions & other benefits)
    2) Salaries
    3) Subsidies and Regional Grants

    I suggest that cutting transfer payments is difficult – you would raise the shout of hurting the poorest (even when removing benefits from people on median income). Cutting the payroll of the biggest employers (NHS & Education) is also problematic when one goes beyond a few administrators. Cutting regional grants (even though they are a waste of money) is politically tricky (though the Tories have less votes to lose than Labour on this one)

    The major changes are long-term. A pay freeze, reduction in pension obligations and abolition of many quangos. But most of all, what is required is a fundamental change of attitude to government. It most be from the Socialist sole-provider of uniformity, to a financier of pluralistic solutions. The NHS & Education should be the biggest and first candidates for this.

    Finally, we should look at the productivity of the state sector, and the effectiveness of the provision.

    Reply: Cutting transfer payments can be easy than you suggest – by cutting them only for future applicants, not present recipients. Cutting business grants is the easiest,as these are very unpopular with all the competitior businesses not receiving them.

  25. […] MPs Expenses – Cameron should be Machiavellian 2009 May 11 by manicbeancounter Just posted the following comment to John Redwood’s Blog […]

  26. Tony
    May 12, 2009

    “The first 10% off public spending could be painless for the public and popular.”

    I think you’ve just demonstrated why the Tories will be a disaster, once again, in government. Everyone in the public sector – including doctors, nurses and teachers should fear a Tory government and losing their jobs.

    Reply: try reading what I write and understand the figures. No nurse, doctor, teacher is at risk from the Tories and to say otherwise is a typical Labour lie.

  27. […] bigger financial issues 2009 May 12 by manicbeancounter Yesterday I wrote a comment on John Redwood’s blog […]

  28. Fred Quangp
    July 14, 2009

    John, I hear SEEDA are now sacking staff, but unfortunately the waste does not stop there. In traditional Labour style, the QUANGOcrats are being allowed to carry over years of service from other local Government bodies which is resulting in some massive pay offs. This should be stopped now, and only the statutory minimum paid.

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