The Deficit Reduction Bill

Today Parliament debates the Budget Deficit Reduction Bill. Don’t expect much light to be shed on how this government would cut spending on the scale needed to halve the deficit as promised. Ministers use every opportunity to turn the spotlight on the Tories, avoiding any comment on their own black holes and redaction.

Public spending comprises three main blocks. There is spending on staff, spending on benefits, and spending on bought in goods and services.

Staff

The state employs 6 million people, around 1 million more than it needed in 1997. The aim over the next five years should be to roll this back to 5 million through natural wastage. We should replace teachers, nurses, doctors, and uniformed personnel when they leave. The remaining numbers of the establishments should be cut as people leave. People from within the public sector should be promoted to the posts that do need filling. Given the high turnover, removing one million posts over five years should be possible without compulsory redundancies. This would save around £30 billion a year by the end of the process.

MPs could offer some leadership. The current level of staffing allowance allows each MP to have three full time staff at public expense. For all new MPs that should be cut immediately to two, and for existing MPs it should be cut to two as and when staff members leave.

We also need to amend public sector pension schemes to cut future liabilities. The MPs scheme should be closed to new members, as a prelude to reform of the other larger public schemes. These should all be closed to new members, and as with the MP scheme reviewed to control other future costs and liabilities.

Benefits

The best cuts of all will be cuts in benefits to the unemployed because they have found jobs or have started to work for themselves. We need an enterprise package for all levels of income and activity. There needs to be an easier bridge from benefit to running your own business. You should not be penalised for trying to set up something that can provide you with a livelihood as at present. There needs to be lower tax rates on the higher paid and the entrepeneurial so more stay here and more venture their time and money here. We also need to review tax credits, and stop generous tax credits going to people on higher incomes in the future. The best way to reform benefits is to allow existing beneficiaries to keep what they have all the time they remain qualified for them, but to change the rules and qualifications for new potential claimants.

Bought in goods and services

We are often paying twice for the work the public sector wishes to do, paying for the civil servants in the area concerned and then for external consultants whom they hire to do the job. A new government should make it clear it will only use consultants when they save the public sector money or when they do things that no-one in house is qualified to do. The saving on the use of consultants could be large and immediate. There are also savings to be had on public procurement, especially in an area like defence.

This is in addition to all the specific areas and programmes identified in previous articles on this site for abolition or reduction.

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47 Comments

  1. Mick Anderson
    Posted January 5, 2010 at 10:42 am | Permalink

    Be more pro-active in cutting the staff costs. For example – all MPs to only have two funded staff members, from the next election, no exceptions for sitting MPs. If they really want to keep a third, MPs can pay the salary from their own pocket. Alternatively, arrange a fixed staff allowance that can afford only two full-time staff. If three are "needed", find people who are prepared to work for 2/3 wages. Remember that your constituents will judge you by your actions!

    Private sector companies have to cut costs just to survive; in many cases this leads to redundancies. It's horrible, but that's life in the current climate. Don't forget, the global problem has been exacerbated in the UK by choices made in Westminster. Why should MPs be allowed to hide behind "natural wastage" to avoid having to make genuinely tough decisions.

    As for the consultants – lack of job security goes with the territory. I've lost consultancy work as my private sector clients cut back due to the recession (projects were postponed), so why should those paid for by the taxpayer be any different?

    We not only need to reduce the staffing to below five million – this number has to include all those "indirectly" employed through quangos.

    Regarding benefits, I have never understood why anybody earning an average salary should receive state money. Don't tax them and then return some of the money for social engineering purposes – just reduce and remove the taxes. The tax/benefit system needs to be simplified and streamlined.

    All of these things save money on administration. The Government of the day has to lead by example.

  2. Brian Tomkinson
    Posted January 5, 2010 at 10:56 am | Permalink

    Another phoney "debate" in prospect. The governance of this country is beyond parody and beneath contempt.

  3. BrianSJ
    Posted January 5, 2010 at 11:12 am | Permalink

    I don't see why it is a unilateral cut of the consultants (full disclosure: I am one). If civil servants and consultants are interchangeable then put it out to tender. The bids can be reviewed by a HoC Committee (who can then monitor the outturn). Why are the civil servant so sacred?

  4. Steve Tierney
    Posted January 5, 2010 at 11:13 am | Permalink

    Remind me again why you aren't in the cabinet? I hear nothing as sensible or clear from them.

    • Stuart Fairney
      Posted January 5, 2010 at 12:08 pm | Permalink

      It takes a great leader, indeed it is the mark of a great leader to appoint someone more talented and capable than themselves.

      QED.

    • John C
      Posted January 5, 2010 at 12:12 pm | Permalink

      I think the reason that John Redwood is not in the shadow cabinet is due to his perception by the great British public. Remember the '90s under Major and the challenge from the right? (At least John Redwood had the courage to stand against Major – unlike Portillo.)

      The media at the time gave the right a very bad negative press (Euro-sceptic 'nutters') and I think this has stuck in the memory for a lot of people. I think Cameron is, for the moment, trying to keep those images away from the electorate.

      I've been reading this blog for months now and, IMO, John's principles and policy ideas reveal a more rounded individual than the stereotypical one portrayed in the media (e.g. Matthew Parris).

      I just hope that, if the tories win, Cameron will use John Redwood's talents in an important department.

      A similar thing happened to Iain Duncan Smith. He has done excellent work in the last few years and I hope Cameron will use some of his ideas (or even the man himself) to address poverty and the 'broken society'.

    • alan jutson
      Posted January 5, 2010 at 12:32 pm | Permalink

      Steve

      Sadly there can be only one reason.

      Our Hosts face, policies or thoughts do not fit in with the leaderships present thoughts or policies.

      That is a huge problem for most (small c) Conservative type thinkers and supporters at the moment, and probably why Dave is less popular than he should be, with the Country in absolute chaos.

      We seem to get some sense and reality on this blog, both from our Host with his thoughts and ideas, and from most who comment.

      Compare this to the actual situation of Government thinking !!!!!

      Just heard from someone in the teaching proffession, why Schools close when the weather is bad.

      If they do not close, and only half the pupils turn up, then the school is adjudged to have 50% absenteeism, and it is marked as such on their report/targets.

      If they close completely then there is no absenteeism, so they retain full marks for attendance.

      Just like clearing Pavements (comment from a Council surveyor). If the Council do not make any attempt at clearing the pavements then you walk at your own risk.

      If the Council attempt to clear pavements, and then someone falls over, then the Council would appear to be at risk, as it would be deemed that they did not do the job properly.

      With more bad weather on the way, expect more schools to shut,and more pavements to be left iced up.

      Recent comment seen on the news from Scotland. Do not use the roads at all in bad weather, we are running out of salt.

      How can you run a Country like this ??????

      Probably not in your area John, but perhaps you should write to Royal Berks Hospital (which serves your Constituancy) to find out the amount of increase in broken bones due to falls outside in the bad weather. I am given to understand it was very, very significant, so much so that nurses were being called off of Wards all over the Hospital to plaster people up, such was the flow.

      Politicians please, please OPEN YOUR EYES and see whats going on, you are steadily destroying this Country with your policies, and eventually people will start to revolt, if nothing is done to stop it.

      How do you equate the cost of a few tons of salt, with someone who may have broken a pelvis/back leg arm wrist or similar, and may have destroyed their independence for a few months or even worse for life.

      • Paul S
        Posted January 5, 2010 at 10:42 pm | Permalink

        The third best thing the Conservatives could do (1. Try to fix economy 2. Properly sort out the immigration policy) is get the Great Repeal Act through. Get rid of the Human Rights Act, Legal rights to housing and a multitude of other laws that have placed too much power into the hands of the legal profession, jobs worths and serial claimers. The GRA is not much heard about at the moment. This would begin to restore public faith that Government had powers to really sort out some of the rediculous stories by Alan above. There would also be a lot of redundant mediocre legal types and that has to be a good thing.

  5. Richard Jenkins
    Posted January 5, 2010 at 12:04 pm | Permalink

    John, your thoughts on reducing public sector employment are uncharacteristically unrealistic.

    It is nice to believe that we could make a 17% reduction in public employment over five years just by painless natural wastage – only refilling “essential” vacancies – but sadly, it is nonsense.

    Let us leave on one side the endless bureaucratic argument as to what is considered essential: a nurse working in a casualty department, obviously, but what about a casualty nurse promoted to a Regional Health Authority to co-ordinate the training of casualty nurses? What about his/her boss in the RHA?

    As I say, let us leave that aside, only noting that any manager with any experience of administering even a temporary headcount freeze knows that an enormous amount of effort is diverted into arguments about what is or is not essential.

    If one could, in theory, define one million non-essential positions, to lose that number by natural wastage in five years would require an attrition rate of more that 20% (rising to 100% in the last year). This will never happen

    The only way that such a large and necessary reduction would be achieved is through very determined and thorough management, looking at structures and functions, having the courage to make a judgement on where cuts must be made, and applying compulsory redundancy.

    Of course, compulsory redundancy schemes cost money. But the cost of such a scheme achieves vastly more savings than natural wastage ever will.

    • Richard
      Posted January 5, 2010 at 6:51 pm | Permalink

      If we suffer a hung Parliament which is looking increasingly likely, this present weak and disingenuous Government may cause us to end up banging on the doors of the IMF. The IMF will insist on massive and draconian cuts in public sector spending. Remember Harold Wilson's Government in 1967?

      We may then wistfully look back in a few years time at the missed opportunities to cut spending at a controlled rate.

      Of course there is also the worse prospect of them simply printing money. We may scoff, but they have tasted it and nothing has yet happened to remind them of just how bad things will get if they continue down that road. If anyone is in any doubt about how bad things can get, just look at Zimbabwe, or Germany in the early 1930's. It was that period that propelled Hitler into power.

    • Robert
      Posted January 5, 2010 at 10:11 pm | Permalink

      I agree , the question should be is it really necessary to survive – if not chop it! We just have too much state employment – it is just East Germany !

  6. Lola
    Posted January 5, 2010 at 12:23 pm | Permalink

    Many years ago, in the '70's, when I was unable to get a 'job', I was offered and took some unemployment benefit which was paid fotnightly partially in advance, I think.

    Through a contact I was then offered some part time casual work which I did – about three or four days at a weekend I recall – and did it without thinking.

    Within two or three days I was hauled in front of some agressive apparatchik who threatened me with all sorts of dire punishments if I dared to take work when offered. I wondered aloud which planet he lived on and things went downhill rather. I asked just why he couldn't simply deduct the pay from the next two weeks benefits. He said the system wasn't set up for this.

    I bet things haven't changed.

    (BTW it all ended up in a stand up row and I did not bother to claim any more benefits. It was just not worth the hassle).

  7. FaustiesBlog
    Posted January 5, 2010 at 12:54 pm | Permalink

    We also need to slash red tape for startups. Starting a business is tough enough without all the regulations and paperwork it now entails.

    Even opening a bank account is a nightmare – something which used to take minutes, a few decades ago.

    The key is simplification in all things. Ask yourself "Do we NEED to do this?". If so, find a simpler way of doing it.

    • APL
      Posted January 6, 2010 at 12:37 am | Permalink

      FaustiesBlog: "Even opening a bank account is a nightmare – something which used to take minutes, a few decades ago."

      Blame money laundering laws.

      • Mark
        Posted January 6, 2010 at 11:59 am | Permalink

        I think of it as regulatory capture – by making the process of changing banks so difficult, it reduces competition for your banking business, and ensures that incumbents have a strong advantage.

  8. Alan Wheatley
    Posted January 5, 2010 at 1:03 pm | Permalink

    OK. But a word of caution about defence, having seen procurement from both sides of the contract.

    While I am sure there are many efficiency gains to be made within MOD(PE) I am also sure they will be difficult to achieve. This will be especially so with large value, low volume items, such as ships. Peter Leven replaced cost-plus contracts with competitive tendering and inevitably eliminated the competitors, so, at least as far as the UK is concerned, it has become a case of "last man standing".

    One area where improvement would be beneficial is being much more precise as to what is required. But knowing precisely what is wanted years hence is difficult, and even when you think you know it is actually quite difficult to define it precisely, contractually. That is one of the reasons "cost-plus" makes sense in some cases.

    • Robert
      Posted January 5, 2010 at 10:16 pm | Permalink

      Please note that over the last 15 years or so the MOD has wasted in excess of 20bn on projects that did not come to fruition! It like all things is not simply a question of money, but buying/procuring or producing/manufacturing the best and relevant kit for our soldiers and if we can't do it then we have to bite the bullit and buy off the shelf (why try and reinvent the wheel?). There are numerous examples of us not having the best kit and I speak as an x Serviceman.

      • Alan Wheatley
        Posted January 6, 2010 at 12:06 pm | Permalink

        I am sure the MOD could be more effective, but in fairness to them it is not easy. Sometimes government makes it additionally difficult for political reasons, e.g. the delays in preparing for the invasion of Iraq so as not to be seen to be presenting the "wrong" impression while so called negotiations were still in progress. Presumably they were not impressed by the old adage: "if you want peace prepare for war". As a consequence the troops did not get the kit they should have had when they needed it.

    • APL
      Posted January 6, 2010 at 12:47 am | Permalink

      Alan Wheatley: "One area where improvement would be beneficial is being much more precise as to what is required."

      Problem here is the military have been straddling two stools. Buying expensive 'blue sky' FRES equipment to fight the soviets in Central Europe. Hmmm.

      When in actual fact we end up fighting all over Africa and the middle and Far East.

      Now look at the Carrier force, they are already talking about cutting three to two. But the worst is if they ever build them and deploy them without the support ships and the surface vessels required to quarantine the carrier, and without the air cover they are supposed to carry, they will be nothing less than the biggest most prestigious target you could give an enemy. It will be a disaster!

      The cost of the three carriers is not the only cost, and Browns government is already talking about cutting those.

      The whole thing is already SNAFU

      In any case there is a case that such vessels are obsolete anyway. The new aircraft mounted laser weapons and rail guns can deliver an enormous bolt literally of lightening from up to a hundred miles distant with extraordinary accuracy.

      • Alan Wheatley
        Posted January 6, 2010 at 12:22 pm | Permalink

        Indeed. Of course MOD(PE) can only procure what is needed to implement policy as defined. Policy can change far more quickly than the procurement of large capital items. The Conservatives have been calling for a defence review, which seems to make sense as we need a re-definition of policy.

        As to the carriers, I would have thought a carrier is just what is needed to deal with the Somali pirates. We are told there is a very large expanse of ocean to cover, but surely they way to do that is with carrier based air power. When pirates threaten a ship shouts mayday and overwhelming force could be quickly brought to bear before the ship is boarded, or at least before the pirate craft depart. For this role the carrier needs only minimal support forces.

        Capital ships have always been at risk, which is why no new battleships have been built since WWII. Attack from a distance has been a problem for a long time – e.g. the Falklands.

        Your points are valid, and reinforce my view that it is not easy to do better. But defence of the Realm should still be priority No.1, and government should do its best to achieve it efficiently.

        • APL
          Posted January 6, 2010 at 9:36 pm | Permalink

          Alan Wheatley: "As to the carriers, I would have thought a carrier is just what is needed to deal with the Somali pirates."

          My point was not that we should not have the carriers, believe me I would like them. Rather, if we are going to have them then they should be fully operational which means a full complement of support and protection vessels for EACH CARRIER including of course the fleet air arm. That would imply at very significant increase in the Navy's inventory.

          Given the current environment where this government is already eying the defense budget in a predatory manner we will get the worst of all worlds.

          To do otherwise would expose very expensive capital ships and their crew to excessive risk.

          On the other hand, not sure I care about the Somali pirates, given that we hardly have any merchant ships anymore.

          Alan Wheatley: "For this role the carrier needs only minimal support forces."

          Yes, but by god I wouldn't want to send a 'half arsed' carrier force five or six thousand miles from the UK without knowing it could protect itself regardless of the threat it was sent to counter.

          What does it take? Two months to get on station? It has to be fueled and supplied while there and there are a lot of countries in that part of the world that would be prepared to pinch the nose of the 'little satan'. A half protected capital ship would be a very big prize.

  9. Norman
    Posted January 5, 2010 at 1:26 pm | Permalink

    On the way to the office yesterday I actually heard Stephen Timms (believe he is Secretary to Treasury or some such title) explaining on 'Wake up to Money' (MP's never normally appear on that programme, and on bank holiday too, the spin machine must have been working overtime!) how Labour would cut the deficit. He said that they expected to get £0.5bn more by closing offshore tax loopholes as well as another £1bn by a deal made with Lichtenstein.

    When the presenter derided those partly sums and stated one or two billion was a drop in the ocean Mr Timms replied 'a billion here and a billion there and that's how the deficit will be got'.

    That seems to be the mentality of Labour – deny that the deficit is out of hand and make token gestures (the 50% tax is another one) that they hope will somehow convince people that by being a little tougher on the richest members of our society all our problems will disappear with no pain endured by the rest of us!

    As usual a post of sense and plain talking from Mr Redwood. Glad to see there are at least some politicians who do know the scale of the problem we face.

  10. oldrightie
    Posted January 5, 2010 at 1:33 pm | Permalink

    Sir Humphrey love millions of serfs, he'll not let that happen. Yet another bloody Ombudsman announced today, by The Conservatives. What do civil servants actually do? Oh, right, they supervise the Quangos.

    • Liz
      Posted January 5, 2010 at 4:36 pm | Permalink

      You are so right about the supermarket ombudsman proposal – I was depressed even hearing about it – so un Conservative. If competition is not working in the food retail sector, no surprise there given the feeble competition authorities, then it is the Conservative's job to make sure it does work, not propose socialist solutions that will not work anyway. After the last few days I am wondering if the Conservatives really want to win the election as they seem intent on presenting themselves as no different from Labour or the Lib/Dems – so why should anyone bother to vote for them!

      • Stuart Fairney
        Posted January 5, 2010 at 9:20 pm | Permalink

        Did you see the communications champion who informed us that communication is "important" and that 50% of kids were below average in communication (or something!) and so specialist help (from her petty fiefdom) was essential. Thank God we have not just printed £200B to fund absurd government spending…

        • alan jutson
          Posted January 6, 2010 at 1:00 am | Permalink

          Stuart

          Yes it was an interesting report.

          I thought the solution would be as simple as turning off the TV and the Computer, and actually engaging with them in conversation over the dinner table.

          You know the sort of jaw movements that many of us learnt when we grew up from our parents, and from each other.

          Cannot/difficult or unabkle to read, then again turn off the sport on TV, and help them to read the football/cricket reports in the paper.

          Seems we now need a whole host of Government experts to show our children how to communicate. Quite what drivel they will be taught, I dread to think. Since all of the changes in education over the last 50 years seems to have lowered standards for many.

        • Stuart Fairney
          Posted January 6, 2010 at 11:51 am | Permalink

          My mother tells me that when I was a child, she had Radio 4 on quite a bit. One day when I was nearly two, I asked her what 'reduction' meant. She asked where I had heard that word and I informed her it was on the radio. She was quite surprised as she did not think I would have been listening to an adult program, so it rather proves your point about turning off the TV !

          (The downside of course is that I am now 'encouraged' to have the radio on for my own new born son, but I am worried that Radio 4 will turn him into a raging socialist!)

  11. Mark
    Posted January 5, 2010 at 1:46 pm | Permalink

    I am pleased to see that once again your suggestions include some items of leading by example for MPs. However, I think that the current MPs' pension scheme should cease accruing benefits for any MPs as soon as possible. The Communication Allowance could be transferred into a pension contribution which MPs would be free to top up from their salaries, with MPs forced to find a private provider as other self employed people do. They might then be less inclined to vote for tax raids on pension schemes.

    The idea to cut MPs' staff could easily be implemented at the election – after all, many MPs simply won't be re-elected anyway. Few MPs will have three employees of long standing entitled to large redundancy payoffs, so LIFO could apply much as it tends to in the private sector.

    So far as consultants to the public sector are concerned, perhaps the departments that employ them should be required to manage them within their manpower budgets – so consultants are offered positions to replace the civil servant at the same or lower salary. You want to hire a consultant? Then consider that you are sacking yourself for incompetence. Of course, we probably need to sack quite a few incompetents as well. Maybe there will need to be areas where the numbers of jobs are cut sharply, with all staff required to re-apply for the jobs that remain.

    Other methods include using new employment terms on contracts where people accept a new job in the same organisation. That can be used to sharply cut redundancy entitlement for example.

  12. Mike Stallard
    Posted January 5, 2010 at 2:17 pm | Permalink

    One thing is for sure: the current ministers are going to do nothing to deal with this crisis. Yes, crisis. And they caused it. I cannot get out of my mind the once rich Icelanders standing out in the snow calling for their government to renegue on their debt to the Brooding Genius.
    Us next?
    Our problem is that we aren't hearing it from the Conservatives.
    They are excellent on the internet.
    But, on the BBC the message is muted. It goes something like this: "Tories say this, Labour says that, Libdems say the other. All are the same."
    The truth is that Labour are saying:
    "Crisis? What crisis?"

    Why aren't you in the cabinet, incidentally?

    • APL
      Posted January 6, 2010 at 12:56 am | Permalink

      Mike Stallard: "Why aren’t you in the cabinet, incidentally?"

      Interesting question, but you know the answer, a Loyal patriotic Tory like Mr Redwood is out of the Shadow Cabinet, (whilst disloyal and other unflattering words ) Clarke is in.

  13. Iain
    Posted January 5, 2010 at 3:01 pm | Permalink

    "The best cuts of all will be cuts in benefits to the unemployed because they have found jobs"

    Yet we still allow mass immigration to continue. Empoyers need to be confronted with the connection that their taxes won't fall if unemployment doesn't fall. For once employers interests are aligned with British people, rather than beggaring their neignbour in looking for cheap foreign labour, they have a financial interest to employ British people. Or should have thought this isn't shown by article in the Times has on the employment of foreign IT workers….

    "Almost 30,000 non-EU technology workers entered the country under so-called intra-company transfers last year, with the overwhelming majority coming from India.

    Most of those arriving came for low and mid-level IT jobs where there are not significant skills shortages among British-born workers, fuelling suspicion that British workers are losing out to foreign workers who are being paid lower wages."

  14. John Moss
    Posted January 5, 2010 at 4:18 pm | Permalink

    The MPs pension scheme should be closed to all members at the election.

    Sufficient funds should be taken from the existing scheme funds to cover existing liabilities to retired MPs and to any new ones created by MPs who wish to draw their taxpayer-backed, inflation-proof pensions – by not standing again at the next election.

    All existing MPs who are re-elected can then divi-up the remianing fund and reinvest their share in a private, money purchase scheme.

    All those elected will then be on the same terms from the start of the new Parliament.

    This is the only way Parliament will gain the moral authority to impose similar change on the rest of the public sector.

  15. Javelin
    Posted January 5, 2010 at 5:09 pm | Permalink

    Market closing for the day, hotels being booked up because global warming is going to cause heavy snow 😉

    I've been posting for the past few weeks that we expect LIBOR linked mortgage rates to rise when QE stops. It will stop next month and we expect some mortgage bills to rise before the next election. I said yesterday on Iain Dale that control of the economy is now in the hands of the markets and not the politicians. The only reason we don't realise that is that the Chancellor hasn't turned the steerring wheel yet.

    Like a car on the icy roads tomorrow the Chancellor will give the impression that he is in control. When he nears a corner and we all expect him to turn he won't be able to.

  16. Lola
    Posted January 5, 2010 at 6:38 pm | Permalink

    Right. Here you go. I am able, now, to provide two value adding jobs to two people who have approached us to work for me. One, is redundant and experienced and will make a financial contribution to our bottom line in about 3 to 6 months. the other is a recent graduate who will not make any contribution at all to our bottom line for at least a year, if then. He is a complete gamble.

    I could employ both. But I can't really do it without costing me income for my own family because of the tax and regulatory and other costs I have to pay.

    For example the graduate is absolutely not worth the minimum wage. I could take him on and I suppose he would accept about £500 a month, but he would cost me triple that in management time alone, let alone all the other on-costs. Time was when someone would be articled to a professional firm and a fee paid by their parents or themselves for the privilidge, or rather for the training. Now I have spend time and cash doing this. Why should I?

    But there you go. Two unemployed people I could employ if it wasn't for the stupid New Labour tax and regulatory system. Talk about wealth destruction policies!

    (PS. I'll probably employ them anyway, on the basis that in 6 months, you, Mr Redwood and your gang will do something about this madness and let me keep my money and develop my business as I want, and create wealth for us all in the process. Woe betide you if you don't – I am getting the barricades ready as we speak).

    • alan jutson
      Posted January 6, 2010 at 11:36 am | Permalink

      Lola

      Would not hold out too much hope of Help.

      The Sector Skills Council for Construction (Old CITB) wrote to me yesterday to inform me that their money was running out (they used different words) so they were not going to be able to offer as many Grants as they have in the past for training.

      Apparently Apprenticeships would still be ok, but many other forms of training were going to get much more stringent rules applied.

      Where does this organisation get its money?
      From the Construction industry on which it charges a percentage of turnover.

      So there you have its income is down, because construction is on the floor, so you get less of your own money back that you cannot afford to give in the first place, less of course their costs for all the administration.

    • JimF
      Posted January 6, 2010 at 4:34 pm | Permalink

      Lola
      Problem comes when the grad gets fed up because his mates are earning more in a large organisation, probably with HMG contracts, and getting 6 weeks holiday. This is a really tough issue in a small company, to get a joint sacrifice for joint long term benefit rather than it all landing on you. The real answer is of course for your taxes to not be subsidising your competition in the recruitment market….

  17. TimC
    Posted January 5, 2010 at 6:38 pm | Permalink

    Quangocide-lets kill off one a day for the first six months. On top of this stop making payments from government to 'Charities'. You have to do more than nibble at the edges though. JR is right at pointing at the increase in civil servant numbers but hitting Benefits is the way to make a big change.

  18. Ex Liverpool rioter
    Posted January 5, 2010 at 7:37 pm | Permalink

    John
    It might happen on Gordon's watch after all:- http://online.wsj.com/article/SB10001424052748703

    Mike

  19. English Pensioner
    Posted January 5, 2010 at 9:54 pm | Permalink

    Why do we need such a bill? All it seems to be is an instruction to the government to reduce the deficit, since when does it have to pass laws instructing itself what to do? It would be more use if we had a deficit prevention bill, stopping the government from borrowing money without explicit parliamentary approval on each and every occasion.

    Surely it's just to try to embarrass the Tories if they get elected.

    • APL
      Posted January 6, 2010 at 9:46 pm | Permalink

      English Pensioner: "Surely it’s just to try to embarrass the Tories if they get elected."

      I rather thought of it as a hostage to fortune for the Labour party.

      The bill is intended to hamstring the Tory party, but I can't see any problem with it myself, any time they cut and the lefty cry goes up, they just say, Gordon Brown made me do it, we are acting in the spirit of his deficit reduction bill.

  20. Martin
    Posted January 5, 2010 at 10:16 pm | Permalink

    John – you state we should "replace teachers, nurses, doctors, and uniformed personnel " when they leave. We have all known some of those who would not be missed. Isn't this just a sacred cow so beloved of the present government?

    Also the plan to let existing claimants keep their existing benefits isn't fair on new claimants. The worker newly sick with cancer gets more hassle from civil servants than those with bad backs who have been sick for years!

    Mr Duncan-Smith's think tank produced a document describing the existing benefits system. At first glance the benefits system looks like it might have been designed by fancy city accountants to let super rich folk pay tax somewhere very obscure. Might I suggest the next government do the Darwinian thing and go for an extinction and go back to a simple flat rate system?

    The planning laws have also been allowed to evolve into a monster – neither a sort of Socialist Central Planning OR Free Market. Another overdue extinction which would also give us some extra economic growth.

  21. Matthew Reynolds
    Posted January 5, 2010 at 11:30 pm | Permalink

    Well John you have got it right again ! Saving £30 billion by rolling back the size of the public sector workforce to 1997 levels within five years is surely doable.That I hope is what Mr Osborne and Mr Hammond will do should the Tories win the general election(as I desperately hope they will).

  22. Bob
    Posted January 6, 2010 at 12:34 am | Permalink

    From Old Rightie's Blog

    "I recently asked my friend's little girl what she wanted to be when she grows up. She said she wanted to be Prime Minister some day. Both of her parents, New Labour, were standing there, so I asked her, 'If you were Prime Minister what would be the first thing you would do? ' She replied, 'I'd give food and houses to all the homeless people.' Her parents beamed. 'Wow…what a worthy goal. 'I told her,' But you don't have to wait until you're Prime Minister to do that. You can come over to my house and mow the lawn, pull up the weeds, and sweep my terrace, and I'll pay you £50. Then I'll take you over to the local Londis store where a homeless chap hangs out, and you can give him the £50 to use toward food and accomodation. ' She thought that over for a few seconds, and then she looked me straight in the eye and asked, 'Why doesn’t the homeless chap come over and do the work, then you can just pay him the £50?' I said, 'Welcome to the Conservative Party.' Now her parents aren't speaking to me."

  23. StevenL
    Posted January 6, 2010 at 10:04 am | Permalink

    Why don't they just introduce a GDP Growth Bill too then?

  24. Lindsay McDougall
    Posted January 8, 2010 at 2:24 am | Permalink

    There is one huge danger with this Bill becoming an Act; that the government with submit it for approval to the European Union. The EU will then attempt to prevent an incoming Conservative government from reducing government expenditure to a greater extent than provided for in this Bill.

    During the Second Reading, therefore, there will need to be intense scrutiny of the exact wording of the Bill in order to ensure that this danger is avoided.

    Reducing public sector employment from 6 million to 5 million will probably not be quite enough. During the coming parliament, the total annual public sector payroll and pensions cost will have to be reduced by at least 20% in real terms.

    Reply: The Bill does not establish maximum reductions

    • Lindsay McDougall
      Posted January 8, 2010 at 4:50 pm | Permalink

      Yet

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  • 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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