Why Philip Hammond MP should resign


Conservatives need a reform minister, not a Scrooge.

That ol' pre-budget announcement time is here again, where the UK government tells us all the things it would like to spend money on, before telling us in the spring how it is going to raise the money from us to pay for them. It's no way to run the public finances, and it is one of the reasons why we are in such a financial mire. Even on the government's own figures, the public debt will reach a figure equal to three-quarters of our income. But many economists reckon it may even end up bigger. The government is, after all, borrowing a further £175 billion this year – equivalent to £3,000 for every man, woman, child and infant – and still more next.

So I have a new job for Philip Hammond MP. Currently he if the Conservatives' spending spokesman, and what he doesn't know about public spending isn't worth knowing. But he needs to become instead the spokesman on public service renewal – and minister for that if the Conservatives win the election.

You will never streamline the public sector by Treasury ministers bullying departments over money. Instead, you need a complete review of what government does, what it has to do, what it can do better, and what can be done better by other people and by the public. All departments need to buy into that, and it needs a reform, not a finance minister in charge if everyone is going to trust the process and be a part of it. After all, the process may find that spending in some areas should be increased, even if other departments are found to be doing a lot of pointless stuff.

The good news is that this reforming approach worked for Canada, which reduced annual borrowing from 9.1% of GDP in 1993 to zero just five years later – and has been running surpluses for most years since. Our black hole this year, at 12.4% of GDP, is deeper, but I reckon Philip Hammond is up to that job. He should resign his Treasury brief and instead demand to become Shadow Secretary for Public Service Renewal.

Dr Butler's book The Rotten State of Britain is now in paperback.