Is there anything left to say about Healey’s nothingburger budget? Everyone gets that the poor fellow had to tread a tightrope, set high above his backbenchers, his boss’s vibe politics and the markets. The OBR tells us the outcome is a forecast of one percent total growth for all of the next decade. With no bread, we get the circuses of 1.5m houses promised by mid-2029, getting closer to Europe, growth in every postcode, Number10 North, ten-point plans and (heaven help us) ten-year plans. None of these is likely to survive contact with reality.
The truth is that this government is beset by the self-inflicted wounds of its anti-growth education, employment, energy and housing policies; plus problems that well antedate it, specifically: a bloated public balance sheet; an explosion of welfare spending on formerly unrecognised conditions and generally on young people; the fiscal and labour-market fallout of Covid; the “good problems” of peace and prosperity, by way of entitlement and incumbency; low fertility leading to immigration and high dependency ratios; a machinery of government which has been shown up as dysfunctional; and the need to rectify a generation of underspending on defence; all coupled with the adverse circumstances of American recklessness and rises in interest rates and oil prices.
Some of this has been recognised in reviews due next year, eg, on the Civil Service (Cabinet Office), Defence Investment (MoD), Disabilty (Timms), Spending & Devolution (Treasury), and Youth Inactivity (Willets). But this is very much mañana and anyhow, if the past is any guide to the future, most of these thousands of pages of official paperwork will be born to blush unseen.
So is it hopeless? Are we destined to serve as sacrifices on the altar of Jean-Claude Juncker’s gloomyaphorism that “we all know what to do, we just don’t know how to get elected after we’ve done it”?
Absolutely not. First, Juncker’s premise is mistaken. So far from “we all know what to do”, there is (as there should be) energetic debate about policy. For example, Rachel Reeves believes we should get closer to Europe for growth; others see this as magical thinking.
Second and more to the point, it is the business of democratic politicians to engineer electoral constituencies for the policies they advance. Margaret Thatcher got new votes from the Sids who bought shares and the council tenants who bought their houses; she also sidelined or stood up to the blockers of her era.
How to achieve this, in present circumstances? Let us take four big wins, one addressing the machinery of government and three relating to the public balance sheet, borrowed unashamedly from my joint-authored Sovereignty without Illusion, published in the spring.
- Shower acclaim, bounties, gongs, and (if wished) retirement on full pension, to civil servants coming up with material savings in public expenditure. (And (smaller) bounties, discretion and compulsoryretirement to civil servants standing in the way.) This should be a no-brainer.
- Share proceeds of the appreciation of green-belt land with local authorities, neighbours and HMG. The scheme in the paper uses a capital instrument, but let’s not get hung up on that; it’s the principle which matters. This should end up as c£940bn to the public coffers, also unlocking uncalculated growth and consequent tax revenues. It would be a sorry business to decline such rewards, for fear that they reinforce the nation’s powerhouse, London.
- Transfer the liability for unfunded public-sector pensions to the private sector, secured by the current regime, tapering to full employee contribution. This is akin to (but less back-end risk than) the PFI schemes advanced by Gordon Brown and worth c£375bn at the outset, with reduced outlays thereafter:no reason not to take it up.
- Pave the way to turn healthcare from a public liability to an asset, with tax-breaks for private treatment, including co-pay and overseas; cultivation of UK and European insurance companies, international healthcare providers and other interested parties; sideline cheerleaders for legacy arrangements, eg, the King’s Fund; plus roll out AI diagnosis and robotic surgery to bring down costs, improve quality, and stymie the blocking power of the Royal Colleges. No secret that this argues with a mighty Labour - and popular - shibboleth. But let’s do the maths: it’s worth £290m to the public purse at the front-end and slashes future outlays.
But guess what? None of these big wins will happen on Burnham’s watch. His government is lost in a fever-dream of back to the future, with no strategy for growth and none to reform the state.
Maybe my figures are awry, maybe my mechanics are amiss, maybe the immediate blowback is irresistible, but make no mistake: something has to happen with a civil service that doesn’t deliver, land-use that stifles growth, public service pensions that are out of control and healthcare that is as bonkers to non-Britons as the Second Amendment is to non-Americans.
This means that what I’ve called the big wins (or something like them) represent a large part of the way out of our current troubles. And that’s how democratic politics is done: not by throwing up our hands in despair, but by recognising interests and issues, doing the sums and getting down to the hard yards. Anyone notfancying this should look for a new line of work.
Miles Saltiel