The press is alive with the discussion of too much spending and too much borrowing by the public sector. There seems to be several sources of the noise.
The PM wants to highlight the issue to stress the contrast between government investment (his way of describing too much spending, and waste, as well as investment) and so-called Tory cuts, the damaging reductions in public services which he invents for the purpose.
The Treasury wants to demonstrate it does understand the dangers of too much spending and borrowing, and is leaving increasingly unsubtle hints that it does not agree with the current spending trajectory. We read today of “secret” plans to cut much more from budgets to head off a public spending and borrowing crisis.
The Oppositon – both Conservatives and Lib Dems – want to get across the message that current spending is not only unsustainable, but contains wasteful and undesirable elements as well as important service provision which should be protected.
Yesterday I did a re run of ideas for immediate spending reductions and more control over the main costs of running governemnt. These met with general approval. For the record, abolition of ID cards and regional governemnt is Official Opposition policy as well. All the other ideas are likely to be taken up in some form or other by whoever governs the country, as they are the least painful ways of starting to make the necessary adjustments.
Today I wish to reinforce two messages.
One, the quango state has increased, is increasing and ought to be diminished. In recent years too many new quangos have been set up. Too many quangos have employed too many expensive people. Too many quangos demand ransom money from government to carry on, and hike their fees and charges well above inflation to swell their revenues more. Many Ministers have failed to review corporate plans, to order cost control or to prevent unreasonable increases in fees and charges. There needs to be a repeal bill to get rid of some of these bodies altogether. Ministers need to go through every corporate plan and agree ways of cutting costs and improving efficiencies. The aboltiion should include the South East Development Agency and the South East regional planning and housing empires.
Two, the public sector rich list needs to be asked to cut its demands on a near bankrupt public sector. Many companies are asking their workforces to accept lower pay, or no pay for a period, to see them through the recession. I suggest that anyone earning over £50,000 a year in the public sector should be asked to accept a pay freeze – including MPs who should also receive an expenses cut when the new system is finalised. Anyone earning over £100,000 should be asked to take a 10% reduction in pay until the deficit is down to say 5% of national income, and anyone earning more than £200,000 should be asked to take a bigger cut to be agreed individually. If higher paid believe in public service, we should want to do it for less than we can earn in the private sector.
The public sector administrative and regulatory pay bill has to be brought under control. That requires fewer quangos, fewer functions for quangos, more efficient quangos, and more realistic pay for people at or near their top.