Public spending

 

             I stand accused of being unclear on public spending. Let me try again. The quicker the government can cotnrol the excess of spending over income, the quicker the economy will perform better.

              I do not set out alternative spending targets or numbers to the Chacenllor, as experience has taught me that always leads to Labour claiming I wish to sack teachers and nurses to the specified value of the cuts. As this would be untrue there is no need to offer them the chance.

              Instead I have come up with a positive series of proposals to reduce spending in specified areas. Recent examples include

              early withdrawal of our trooops from Afghanistan, leaving enforcement of the UN resolution in Libya to the Arab League and the NATO neighbours of Libya, not replacing so many Whitehall back office staff as they leave service, not spending any money on the  HS2 train proposal this Parliament, declining to pay for increases in the EU budget, cutting out overseas aid to nuclear weapons countries, voting against any bails out to Euro members,  and lowering the rate of price inflation by a better monetary policy to control the costs of inflation proofing.

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34 Comments

  1. lifelogic
    Posted March 26, 2011 at 7:01 am | Permalink

    All those and many, many more: closing down the equalities and human rights nonsense and the huge number of other departments, quangos and areas that do more far harm than good. Reducing transfers of wealth from the responsible to the feckless. Charging to see a doctor/hospital when they can pay, reducing the BBC to a genuine entertainment and education service rather than a green, left wing, pro EU propaganda organisation.

    Reducing tax rates and simplifying taxes to raise more actual tax and encourage growth. Paying the trustee of the BBC about 10% of what they get and getting sensible people to replace the current ones.

    Getting rid of the the misguided green nonsense and using extra insulation or new technologies only when it actually pays or makes sense without subsidy.

    But far more can be done by leaving the EU, reducing regulation, planning, health and safely nonsense and the rest. An overall defense of “if the regulation is daft or impractical
    then it is not binding should be brought in. This would get rid of some 80%.

    Getting rid of mainly pointless layers of government and duplication, much or the devolution and regions and the EU.

    Stopping all state job creation schemes though fines, licences, inspection charges, late fees, and the like. Getting rid of all sex equality nonsense people should employ the best for the job regardless of sex.

    Introducing easy hire and fire.

    Finally get some proper competition in banking to get lending going.

    • Matthew Reynolds
      Posted March 27, 2011 at 10:42 am | Permalink

      lifelogic that was one of the most sensible set of proposals that I have ever read.Those spending cuts could pay for lowering tax rates and by moving money from the waste of the client state to the productive,job creating private sector.You would get higher revenues owing to greater business investment & productivity and less tax dodging.If the coalition want shorter dole queues and higher disposable incomes in order for political success at the polls in 2015 then this sort of policy might help.

  2. alan jutson
    Posted March 26, 2011 at 7:27 am | Permalink

    John, any news on the progress being made, or action being taken in the light of the report on waste and spending by Sir Richard Greene ?.

    All seems to have gone silent.

    Has anyone been put in charge of taking action, making progress etc ?

    Reply: Cabinet Office are meant to be following up. They say they are buying things better. I will make enquiries in due course about that.

    • alan jutson
      Posted March 26, 2011 at 11:22 am | Permalink

      Thank you for your reply.

      I await results with interest.

  3. Stuart Fairney
    Posted March 26, 2011 at 8:03 am | Permalink

    All sensible policies. If I may, if we assume the OBR’s growth forecasts to be accurate* at what point will the budget again become balanced? A linear projection would assume about 2020, so we will be running budget deficits for a decade! Even this snails progress maybe interupted by a Labour adminstration, another oil shock, war, recession etc

    Isn’t it true that the Chancellor is letting inflation erode the debt and refusing to raise rates purely out of self (ie government) interest? **

    *I am dubious because setting aside anything else, this figure includes retail growth and I fail to see how buying goods from China, borrowing the money from China to pay for them, then selling them to ourselves can in any sense be regarded as economic growth

    ** In no sense can I blame you because you are on record as calling for higher rates for some time now

    Reply: The aim is to get to budget balance by 2016. I called for higher rates more than a year ago to stop the inflation we are now in.

    • lifelogic
      Posted March 26, 2011 at 11:16 am | Permalink

      No reason not to balance the budget now – just fire the people doing nothing useful or worse (and get rid of huge state sector redundancy payments first).

      They will be happier and more fulfilled doing something useful anyway – do them a favour.

      • lifelogic
        Posted March 26, 2011 at 1:02 pm | Permalink

        Start with Lord (Chris) Patton, Trevor Philip and Mark Thompson and thousands of others. Also introduce a windfall, state sector pension equalisation tax, on state sector pension. After Brown’s mugging of the private sector ones.

    • Matthew Reynolds
      Posted March 27, 2011 at 10:50 am | Permalink

      With your extra cuts they might be able to balance the books by 2015-16.Plus all the cuts planned for 2014-15 could be brought forward to 2013-14 so that we are not fighting a general election in 2015 with big cuts as the back-drop as the public may have tired of austerity by then and will be wanting to see some positive outcomes from our policies.

      The aim should be to get the public spending cuts largely done by 2014-15 so that we can reduce taxes significantly in 2015 just in time for an election.Plus all the tens of billions of privatisation monies not being counted on the books could also fund a big tax cut in 2015.We could say that we had balanced the budget and made people better off and that Labour had opposed the policies that had worked.We could say that progress had been made and that Labour would reverse it all.Sounds like the conditions for an overall Tory majority in 2015 to me.

      • Simon
        Posted March 27, 2011 at 10:09 pm | Permalink

        No flogging off the family silver or pre-election gimmicks please .

  4. Jose
    Posted March 26, 2011 at 8:07 am | Permalink

    Probably impossible to achieve without a true “peoples’ parliament” but what about reducing the number of MPs substantially (say 20%) and all of their hangers on. Implementing a fixed salary including expenses to do away with IPSA would also help.

    • lifelogic
      Posted March 26, 2011 at 1:33 pm | Permalink

      MP need to respond to voters interests not, as they generally do now, to their party, the EU, their personal careers and expenses, their consultancies or just self interest and job creation for their friends families and co-travellers.

      How on earth do we get from where we are to that rather happier position? I do not know. It looks very unlikely as turkeys do not usually vote of Christmas and the voters have so little input.

      Most of the misguided, proven wrong and failed individuals, but who toe the line, end up in with honours or in the House of Lords.

      Still sprouting the same proven nonsense like Baroness Williams, Patton, Kinnock, Howe or Jonathon Porritt and having learned nothing on their life’s journey.

  5. A.Sedgwick
    Posted March 26, 2011 at 8:07 am | Permalink

    Many of us would go much further with the EU, foreign aid, climate change, public sector pay and pensions, government bureaucracy and headcount. One example from the budget speech, after 4+years as Shadow Chancellor and nearly one year in the job you would think the Chancellor would have got to grips with the anamoly of income tax and n.i., no let’s have another review. His language was unclear but what I think he was saying was an amalgamation of the two taxes was not on the agenda just the two tax collection processes need to be synchronised. Political honesty would combine the two taxes in one rate, which would be less than the current two rates for most tax payers, and recognise the n.i. as a Ponzi scheme.

    At times I thought George had morphed into Gordon, no wonder Ken fell asleep.

    • Stuart Fairney
      Posted March 26, 2011 at 10:18 am | Permalink

      A small point, but if you or I fell asleep in work (assuming we had a real, private sector job) on a really important day, would be we expect to still be employed?

      • lifelogic
        Posted March 26, 2011 at 5:48 pm | Permalink

        If they slept rather more and stopped passing damaging regulations (like not being able to retire anyone or worse still bombing people) it might not be such a bad thing.

      • APL
        Posted March 27, 2011 at 12:25 am | Permalink

        Stuart Fairney: “but if you or I fell asleep in work (assuming we had a real, private sector job) on a really important day”

        You see Ken knows that the whole chamber could fall asleep and it would make not one jot of difference, since we have arrived at the circumstance that Ken himself longed for all those years ago where the British parliament had no more authority than a local authority council chamber.

    • Simon
      Posted March 26, 2011 at 12:18 pm | Permalink

      That may be political honesty but it legitimises the abuse of N.I. as general taxation and misses a real opportunity .

      People are living longer and the only “plan” our unimaginative politico’s have come up with (increasing the age at which the state pension kicks in) is not going to work .

      A big part of the problem is that people are spending too much of their money during their working life and not saving enough of it for retirement .

      To counteract this I believe it is neccessary to deduct enough from salary to fund a proper state pension which will pay out at a level which renders means tested benefits almost redundant . It would need an element of redistribution too .

      Politicians have lost the electorates trust forever .

      The money collected by N.I. should be put outside the reach of the Govt and in the hands of actuaries , healthcare professionals and not-for-profit organisations and let them decide how best to invest/spend it .

      • lifelogic
        Posted March 26, 2011 at 5:50 pm | Permalink

        They already collect enough money they would just rather spend it on pointless things and wars rather than pensions.

        • Simon
          Posted March 26, 2011 at 9:39 pm | Permalink

          They spend absolutely every penny they collect and then some by running up debts in the form of borrowing , PFI and writing U.O.T.’s for the next generation .

          I’m advocating using the N.I. system to collect money for pensions but getting professionals to decide :-
          – the contribution level required to provide a decent funded primary pension
          – how to invest it
          – how much can be distributed .

          This is a job for competent mathematicians ; actuaries and fund managers , not amateurs who have never held a proper job in their lives .

  6. zorro
    Posted March 26, 2011 at 8:13 am | Permalink

    Good comments John, but this government is not listening. It is making voluntary redundancy packages available at high cost instead of controlling staff recruitment. It is posturing in foreign wars and giving covert support to Islamic extremists for no national benefit (except maybe BP) It is also beholden to the EU and will not confront it.

    Zorro

  7. forthurst
    Posted March 26, 2011 at 9:32 am | Permalink

    Does the government really understand what the Civil Service is up to? Is it not time to do independent auditing of government departments to find out how they spend their time and our money.

    A. Sedgwick raises an interesting point about why governments like to retread old ground when formulating policy, but does not the Civil Service refuse to pass on policy papers from previous governments? Is this not an example of deliberate Civil Service obstruction. After all, one would expect the major input to policy formation would be factual analysis. Of course it would also be of interest for ministers to see the policy papers relating to the Labour goverment’s decisions to abolish their intended offences of treason and to (increase the numbers of -ed|) third world immigrants. Perhaps though the Labour government bypassed the Civil Service entirely; their total incompetence would certainly suggest that?

  8. Richard
    Posted March 26, 2011 at 9:51 am | Permalink

    I’ve just listened to a lengthy interview on Sky News starring Len McClusky the TUC leader who is bringing 250,000 anti-cuts protestors to London today. (nice for tourists)

    He was saying that the “huge cuts” were threatening “the very fabric of our society”
    He was calling for mass resistance including people power as in the Middle East and mass co-ordinated public sector strikes, to force the Goverment to “properly fund our vital services”

    Just like the BBC the Sky interviewer made no challenges to his views nor the statistics he stated.

    My point is that we , the people, have voted, and it has resulted in a Coalition goverment and Mr Cameron and Mr Osbourne can only do what is politically possible.
    If they had a large working majority then maybe things would be done differently but they havn’t.
    Like other contributors on this site, I could think of many other savings in public spending that could be made, but even the modest reductions being introduced are already causing a rising level of protest and resistance.

    Perhaps this Government is being as radical as it can assuming it has an eye to the next election?

    • lifelogic
      Posted March 26, 2011 at 5:57 pm | Permalink

      You say “Perhaps this Government is being as radical as it can assuming it has an eye to the next election?”

      The next election will be won if they have achieved a good recovery from Brown’s mess. Radical lower taxes, lower state spend and waste and cheaper energy is what will do that.

      People may say they want to save the world and pay more tax but they really want something that will work and they can afford.

      The last election was a sitting duck and was lost entirely due to Cameron appearing to be a green, pro EU, socialist as indeed he seems to be.

    • Simon
      Posted March 26, 2011 at 6:25 pm | Permalink

      The Govt has rather exacerbated matter though .

      The Conservative party have form when it comes to flogging off the family silver and they scored a predictable massive own goal with their transparent asset sale/land grab plan .

      Then there are the undeniable injustices and excesses that people see and a political and financial elite which have become completely disconnected from the masses .

      Perhaps if those worker expecting bonuses in banks which were bailed out by the taxpayer had to do a couple of weeks voluntary work in say Doncaster in order to get it they would feel some degree of empathy with people struggling to get by on less a week than they will spend on a meal out .

      I actually think the coalition are getting the ball rolling on a few long overdue issues and would even consider voting for them again if they offered an in/out referendum on Europe .

  9. Brian Tomkinson
    Posted March 26, 2011 at 9:56 am | Permalink

    I do understand your dilemma but because the whole subject is being handled in such a ridiculously distorted way the stark truth about the perilous nature of our economy is being disguised. This government is planning to increase spending over the life time of this parliament and as a consequence it is planning for an increase in our public debt from £909billion this year to £1,359 billion in 2015-16 with interest charges on that rising from £40billion per annum to £65billion per annum, assuming that the markets don’t demand higher rates. Why should anyone want to see interest charges rising at such a rate? Despite this, today we shall see a demonstration in London, which will probably disintegrate into violence and destruction, based on the myth that this government is cutting too much and that there is no real economic problem just a failure to collect taxes from the rich and the banks.

  10. Bill
    Posted March 26, 2011 at 11:11 am | Permalink

    I just wish – the proposals that you outlined, were implemented.

    Again and again “Savage cuts” implies that spending is being cut – in absolute terms, when what is happening is that there has been a (modest) deceleration in spending – so overall the “balloon” is still inflating spending is going up (Much of the private sector is deflating- cuts in absolute terms)
    Gov does a lukewarm job in projecting this.

    I would add to your package

    0.5% increase in base rate, the £ should nudge up and reduce inflation of imports

    Reduce 50% tax rate to 40% – push enterprise

    Do whatever it takes to get the banks to lend modestly more – against the assets of the business, without PG’s being pretty universal.

    Take a good look at the police budget – why do they patrol – with a casual 2mph walk – the big shopping malls, near me in two’s?

  11. Nick
    Posted March 26, 2011 at 11:36 am | Permalink

    Cancel Crossrail. It’s never going to make any money.

    • lifelogic
      Posted March 26, 2011 at 6:00 pm | Permalink

      It will for the consultants and people who build it which is doubtless why it is being pushed through.

  12. Nick
    Posted March 26, 2011 at 11:37 am | Permalink

    Axe the house of Lords. 600 million at least over the next 5 years. Bunch of (questionable people-ed) that they are.

    Why did Michael Pownell investigate his own handling of Lords expenses and then make it a state secret?

  13. Neil Craig
    Posted March 26, 2011 at 1:36 pm | Permalink

    I would include cutting “health and safety”. building “planning” and nuclear regulatory bureaucracies by about 90%. However I realise that would be the sort of hostage to Labourites that you are talking about. Nonetheless removing even 1 of these burdens on the economy would get us into good growth.

    • lifelogic
      Posted March 26, 2011 at 6:05 pm | Permalink

      Quite right 10% fewer regulations would save industry and the state sector a fortune and enable it to grow and compete. Actually about 80% could usefully go. Think what that would do for existing business, anyone thinking of moving to the UK and general business confidence.

  14. Fox in sox
    Posted March 26, 2011 at 5:12 pm | Permalink

    While I am sympathetic to ending a lot of the health and safety, equality and unfair dismissal laws that make employers lives difficult, this is something that would prove very difficult. It would be better to limit the size of payouts so that it would not be so damaging. If the maximum payout was limited to one months pay per year of employment with fixed tarrif for lost limbs, eyes etc then the prospect of lottery win type payouts for secretaries with RSI is gone. Employers would no longer fear firing the deadwood in their organisations

    • lifelogic
      Posted March 26, 2011 at 9:25 pm | Permalink

      Agreed sensible injury pay out limits, standardised payouts, fewer lawyers and a sensible balance of legal action risks and legal cost limits. So it is not heads you loose tails you loose and win, win for the lawyers and loose loose for the country.

  15. Iain Gill
    Posted March 26, 2011 at 7:17 pm | Permalink

    agree with everything you say John

    id also disband speed camera partnerships

    id send cheques direct to head teachers and cut out the education authority overhead

    id stop funding the education of the children of work visa holders from outside of EC unless their home country offers reciprocal arrangements to British nationals working in their country

    id force all non EC work visa holders to pay full commercial medical insurance rates and stop treating them on the NHS out of the public purse, especially needed in view of the disproportionate numbers of seriously ill folk coming in needing very expensive treatment, unless of course British nationals in their home country are offered free similar quality or better treatment

    I would increase the tax and national insurance due from work visa holders and their families to at least as much as British citizens pay

    I would increase the price of work visas significantly, especially for large companies operating in this country with almost exclusively ICT work visa holder staffing profiles

    i would address some of the more blatant use of tax havens to avoid tax used by some multinationals

    so many measures that would be universally popular!

  16. Mike Stallard
    Posted March 27, 2011 at 6:50 am | Permalink

    One of the saddest things is that, although you are right, nobody seems to be listening. Instead, we get more and more drift as thedear old pound sinks. Out here in Saudi, and especially in Dubai, things which were once cheap as chips are now serious investments.

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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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