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What austerity?
Facts4eu and GB News have recently published charts showing the big increase in government spending in recent years. Here is my take on the numbers and their revealing findings.
In 1996-7, the last year of Conservative government before the Labour landslide win, the UK public sector spent £314.7 bn. (127 page 1997 budget book). By 2010 when Labour left office spending reached £671 bn (260 page 2009 budget book). Annual government borrowing rose from £33 bn to £175 bn.So spending was up 113% in cash terms and borrowing up 430%.
Inflation ran at 27%, so spending was up 86% more than prices.
In 2023-4 spending hit £1190 bn with borrowing at £159 bn, so the Coalition and Conservative governments put up spending by 77% and borrowing down by 9%. Inflation ran at 50% so spending was up 27% more than prices.
Rachel Reeves has put spending up by a further £88 bn this year, with borrowing planned at £118bn but in danger of over running.
So we see this century the public sector got a large real boost in spending power under Labour, helping the financial collapse in 2008-9 when government and private sector borrowing was excessive. It got a further boost under the last government averaging almost 2% a year after allowing for inflation. What austerity?
The truth is the explosion of spending, up 306% since 1997, has not been well spent. Lots has gone on inflated costs, low productivity, and on population growth of 20%. Borrowing has soared , helping drive the inflation higher.
Every year since 2010 we have heard of cuts, and some cuts have been made. Yet overall the surge of spending has been relentlessly upwards , with every public sector budget and body demanding more.
If my income had been as high as £31,000 in 1997 and was now £128,000, a cash increase of 306 %, I would have thought I had done well and could afford a better lifestyle. That is what has happened to the government’s spending multiplied by ten million, so why do they not feel better off?
Remembrance Sunday
Today we remember all those who lost their lives in conflict. They died to defend our freedoms and to allow a better world. We need to remember their sacrifice. We need to strive to defend and enjoy the freedoms they fought to preserve.
Too many rules and taxes
Being an MP and maybe a Minister is a privilege. Any law or tax you disagree with can be removed if you persuade enough colleagues to vote with you to get rid of it.
Being an MP also brings with it plenty of accountability for your own actions. As an MP who wanted fewer taxes and rules I was very conscious I needed to ensure I obeyed all the ones I disagreed when I could not get them changed.
I set up a system of personal diary alerts to ensure I did not miss Council tax bills, tax returns, vehicle licensing, Congestion charge compliance and all the rest.
When parking I poured over the parking rules to ensure I had paid the right amount. I worried all the time about complying with so many rules and tax requirements. I did not think I would get much sympathy if I had made a mistake, with some bound to assume I had deliberately failed to pay or comply. I avoided any error.
Labour MPs should find compliance easier, as they are the ones who campaign for more rules and higher taxes. There should be joy in their heart that they have to pay more tax on making a profit on their home, or have to buy an expensive licence to rent it out. They should be model landlords always putting their tenants first if they have investment houses.
It is strange three Ministers have tripped up over these housing related issues where their government is so keen to boost tenants, regulate landlords more and tax people more who make money on their homes. We know the Chancellor was well aware of the landlord licensing schemes in general as she was promoting them. We know the former Deputy PM was keen on taxing better off people with property more as she argued that case. We know the former Homelessness Minister knew about landlord regulation to stop bad landlords as she managed that as a Minister.
Express article on too much change, published Thursday
Free lunch or magic money tree? How to pay for public services.
Time for Ministers to own their problems
From the moment you are appointed a Minister you are on duty, on risk, and have powers to improve or prevent things that are wrong. The present government 16 months in still behaves like a dissatisfied guest in Hotel Government, blaming the previous managers for things not working. They are the managers now.
Worse still they are the managers whose actions to date are making things much worse, not improving them. Take the most sensitive issues where people wanted change for the better. Illegal migrants have increased a lot instead of smashing the gangs. Inflation has nearly doubled as they put up energy bills, water hills and the costs of employing people. The number of people wrongly let out of jail has more than doubled. The deficit has been greatly increased by a big increase in public spending with no matching improvement in service.
So why? Ministers have done things that were bound to make things worse – increasing prices and costs, removing past attempts to cut ilegal migration, cutting sentences that have to be served, giving more money without seeing what it will buy, hitting business, entrepreneurs and savers with penal taxes.
Ministers have proved incapable of leading their officials. David Lammy instead of taking the blame and working with officials when there was the first high profile wrong release, denounced his staff in public and announced a new way to release without getting buy in from the people doing it. No wonder there was another big embarrassment a few days later.Rachel Reeves has pencilled in big numbers for more efficiencies and productivity gains in future without setting out a joint work programme with departmental managers to deliver the savings. Wes Streeting has announced the abolition of NHS England without thinking how to pay the redundancy bills or get the work done that will still need doing.Ed Miliband Announces unrealistic targets then refuses the blame for the rip off costs and prices needed to try to hit them.
Ministers need some training on how to do these demanding jobs. Mouthing press releases about what they would like to do jars when reality is so different.
Rachel Reeves is right that our poor productivity is no puzzle, but is wrong about how to put it right
Government IT programmes
As this government embarks on a large AI investment programme in digital technology we should remember past disasters and learn from them. The infamous nationalised Post Office computer programme Horizon led to the false imprisonment of staff and haywire accounting. Taxpayers are picking up a huge bill for bad computers and big compensation.The contracts have cost around £2,5 bn with £1.4 bn on compensation and legal defences of the PO.
We should also remember the Blair government launching the very large £6.2 bn digitalisation National Programme for IT in the NHS. Doctors and hospitals found a centralised solution did not work for them so the system development was abandoned in 2011.
The Home Office Emergency Services Network has experienced large delays and cost overruns. Their eborders system had to be terminated.
The government has so far failed to set out how it is spending its budget of an extra £3.25 bn for AI over three years. What will we get for this? How will the contracts be drawn up? How will it be distributed between departments and Agencies? Will it be carried through without the extra costs and stress of redundancies? When and how will the staff savings be achieved?
Past experience of too many programmes is cost overrun and sometimes big project failure. Both the expensive National Programme for IT for the NHS and Post Office Horizon started under the previous Labour government and had to be terminated/ remedied under a successor government.
Crimes of violence
There are too many crimes of violence. Knife, bomb and gun attacks against people on the streets, shopping, at entertainments or on public transport naturally alarm many people.
Much of this is also now being seen by the public through the lens of the failure of governments over all too many years to take the Pakistani rape gangs seriously and to follow up for the children and young women who suffered in many towns and cities. That has led to distrust of the various authorities including Councils and the Home Office who should have pursued the allegations properly.
The current Home Secretary needs to get better at handling these tragedies. Yesterday she did not tell us anything about the man being arrested for the woundings of many people even though he was apprehended at the scene of the crime and is presumably being charged with attempted murder.Her long silence meant people could speculate about who carried out the atrocity and why, in ways which could make false allegations about groups who were not to blame.
The Home Secretary needs to keep the public informed. She needs to stress how justice will be applied impartially. She needs to work on policies more likely to deter people from random and wanton violence.