<<<	articles
Vanity among the statistics Samuel Brittan: Financial Times: 16/07/04 The eminent French statesman of the mid-1950s, Pierre Mendès-France, used to say "to govern is to choose". He proved too good for the French and his premiership lasted a year. In Britain both main political parties stand for the opposite principle: that political choices can be avoided. Years ago Treasury civil servants, when talking privately, would mock Conservative claims that tax cuts could be financed from efficiency gains or by reducing the number of civil servants. Now this claim is the mantra of both main parties. When politicians are reduced to basing their plans on efficiency savings, we know they are scraping the barrel. Some would say the difference is that the Conservatives would use such savings to cut taxes, while Labour would feed them back into "frontline services". But even this exaggerates the differences. Indeed the amusing aspect of an otherwise tedious debate is the way both parties copy each other. Labour came to office in 1997 with a pledge to stick to the first two years of the outgoing Conservative government's spending plans. Now the Conservatives have pledged themselves to stick to Labour's health and education spending totals for the next three years. The Conservatives have appointed David James, the corporate troubleshooter, to conduct a search for efficiency savings. Gordon Brown has already obtained a report on the subject from Sir Peter Gershon, former head of the Office of Government Commerce. None of these management types get round to specific money-wasters such as the Millennium Dome or the forthcoming British Olympic bid. Both parties also happily ignore the principle of treating any savings as a bonus if they materialise and not counting on them in advance. But although politicians are reluctant to make their own choices, personal choice in the public services has suddenly become the fashion - in which again the parties copy each other. They lose sight of the basic truth that if services are always to be free at the point of delivery, demand will exceed supply and some rationing or administrative allocation is unavoidable; and any extension of choice will therefore be very limited. I wonder if more than two dozen people in the whole country have read Public Spending Review 2004 from beginning to end; I doubt if most cabinet ministers have got beyond the parts relating to their own departments. But I must add that I find the chancellor's fiscal statements not only boring - which may be a venial sin - but also increasingly off-putting. They comprise strings of figures that veer unpredictably from real to nominal terms and from annual changes to changes over varying periods of years. They are delivered in an unappetising mixture of Labour-speak and management consultant jargon. They have no grace or magnanimity towards predecessors, but assume that the world began in 1997. Then there is the continuing misuse of "investment" to describe spending. (Public investment proper, as defined by the official statisticians, is not expected to rise above 2.2 per cent of gross domestic product compared with total managed expenditure of 42.3 per cent in 2007-08.) Above all, I wish somebody would tell the chancellor or his drafters that self-praise has a bad odour. It is one thing to praise prudence in general; it is another to praise oneself in every other sentence for having achieved it. There is no question that the public expenditure plans involve higher taxes. The Budget statement of last March shows that net taxes and social security levies are due to rise as a proportion of GDP from 35.9 per cent in the last financial year to 38.3 per cent in 2007-08. This amounts to an increase of more than £25bn and this is on the assumption that all goes well. Even then the main question is how far the tax burden can be increased through the automatic effects of a rise in national income on the tax take, known as "fiscal drag", or whether tax rates will have to be increased as well. With the collapse of the Soviet Union, the belief in detailed Gosplan-type central planning was said to have withered. But it still exists in the two-fifths of the economy covered by the British public sector. Nor, despite hints to the contrary, has the chancellor abandoned government by targets. By page 10 of the review, there are already 11 of them. An example is a pledge to reduce by 4 percentage points the proportion of people living in poverty in Africa. This is an excellent aspiration. But what arrogance to assume that this can be done by the expenditure of a tiny proportion of GDP by one middle-sized country and the wave of a wand. There is a serious issue raised by the chancellor's rhetoric. This is whether income belongs to citizens, from whom the government has to find good reasons for taking away; or whether it belongs to the government, which then has to justify tax remissions. We know what Mr Brown thinks.
<<<	articles
Site designed and managed by Andrew Heavens - andrewheavens@ftnetwork.com