Out and about talking to people over the week-end, the clear message was “We’ve had enough”. Council Tax bills, income tax, threats of higher taxes and public sector charges, rail fare rises, energy bills and food bills – the squeeze is on, and much of it results from wasteful government.
Some asked me if it would be the same under the Conservatives. They were alarmed by the comments of Mr Lansley, misconstrued by some in the media. Let me explain why I am not concerned.
The Conservatives have said that in office they would share the proceeds of growth between extra spending and tax cuts. Let us assume the economy is Â£1.5 trillion in election year. Every one per cent of growth means an extra Â£15billion of activity, and an extra Â£6 billion of tax revenue on that activity.
If the economy grows at its trend rate of say 2.5%, that is an extra Â£15 billion of tax from just one year’s growth. So the Conservatives could decide that Â£10 billion of that was needed for increases in spending in priority areas like Health, and Â£5 billion was available to start tax cutting.
The Lansley remarks said that by 2023, if Labour’s plans went ahead, the NHS would take 11% of national output, instead of the 9% today. He did not promise to increase it to that level. Nor, over that time period would such a level necessarily pre-empt tax cuts. If at the same time the civil service was cut by natural wastage, regional government abolished in England, ID and other computer schemes scrapped and the quangos cut back to size, it would be possible to spend much more on health and pocket some much needed tax cuts.
We need spending discipline to get value for all the money being tipped into public services including health . We need to promise service improvements that can be delivered, not large sums of money for any particular budget.