Most politicians naturally assume public spending is good and more public spending is better. They implicitly assume that you can buy votes with other peopleâ€™s money. This belief has underpinned the long upwards movement in public spending of the last hundred years, punctuated only by the odd financial crisis forcing retrenchment (e.g. 1976) or by the occasional political period of calculated â€œausterityâ€ ( e.g. 1981-3, 1997-2001) when spending has grown less fast than the economy.
It is strange politicians believe this, as there is plenty of evidence that big areas of public spending achieve the opposite effect to that desired by the politicians. The last few weeks have shown how spending or promising to spend huge sums to repair the damage of the 10p tax cut, to create jobs in Scottish ship yards, and to win votes in the Commons have not brought any joy or new support for the unpopular government writing the cheques.
There are fundamental reasons why a lot of public spending is unpopular. Public spending takes five main forms:
1. Granting money back to you.
2. Granting money to others.
3. Spending on the delivery of public services you might use.
4. Spending money on the delivery of public services you dont use.
5. Spending money on government itself.
Spending money on giving you money back is the most popular of these. It does ,however, lead some of us to ask why take the money off us in the first place? It means we are worse off than if the government did not take the money and then give it back, as two expensive lots of officials are involved in taxing us and giving us benefits. It also means our freedom is limited to some extent, as you usually have to live in a particular way to qualify for the money back.
Granting money to others can be very unpopular with those who have to pay the bills. Whilst most of us are happy to pay tax so that badly disabled people can receive an income and receive some comforts for their condition, many are not happy to subsidise the neighbour they think could as well get a job and pay tax as they are doing. MPs receive many emails and letters from people complaining that the benefit system is too generous to some. This phenomenon is even more common in the company sector. I remember as a Minister at BERR (DTI as it then was) how many letters we used to receive from companies complaining that we were subsidising their competitors with grant aid that seemed to them unfair. Only a minority of companies receive grants, leaving the majority cross that they have to pay more tax to pay for the grants to the others.
Spending on the delivery of services you use is usually popular. Most people want to know there are enough nurses and doctors in the local A and E in case they have an accident. Parents always want their local school to get plenty of money. It is not the same for services people never use. Some single people or people beyond the age of parenthood do complain about education spending, healthy people sometimes complain about health costs, and many people complain about the costs of quangos supplying services we could well live without. Who wants regional government in England, or more planning consultation documents where the replies will be ignored?
The most unpopular form of spending is spending on government itself. The fascination with the expenses regimes and salaries of Ministers, MPs, quango chiefs and local authority chief executives in recent months is a symptom of a growing frustration. People think the costs of government are out of control, and need to be cut.
This government has allowed people to become very sceptical of how much if any of the additional spending will get through to services they want to use, or will end up back in their pockets. People feel they are getting a rotten deal on public spending because they feel too much is going on government itself, or on transfer payments to people and companies that should not receive it, or on waste within public services that are needed.
People feel overtaxed because they are overtaxed. A government that still thinks all public spending is popular and that we need more of it understands neither the public nor the nature of public spending. Just as some people are jealous of high pay in the free enterprise sector, so many are now jealous of the winners from the government spending lottery, which favours those at the top of the bureaucracy and quangocracy.