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Wednesday, 11th August 2010

This is no time for salami slicing

Eamonn Butler 5:56pm

You can often achieve a lot more by doing things a bit at a time rather than attempting one bold and sweeping reform.

In the 1970s, for example, the trade unions had extraordinary legal privileges; strike votes were done on a show of hands at works meetings (usually late at night when everyone except the Trotskyists had gone to bed); there weren’t even secret ballots for union elections.

Edward Heath took the unions head on with his all-embracing Industrial Relations Act. It was a disaster: there were widespread demonstrations and strikes, and one of these confrontations forced him from office. Margaret Thatcher learnt from this and took things much more slowly. First, the government offered to pay for unions to hold postal strike ballots (which the ordinary, non-Trotskyite members rather liked). Then the same for union elections. Then secret ballots became compulsory. And so it went on, the unions’ special privileges gradually being eroded, but in steps too small to bring everyone out on the barricades.

My colleague Dr Madsen Pirie even coined a name for this approach: micropolitics. And using it, we went on to privatize countless industries, and to reform health, council housing and (partly) schools. So it’s a big turn-around for me when I say that today, our situation is entirely different. Government has become so big and bloated that we need to re-shape the whole thing.

This is not something that you can fix a bit at a time, especially when government spending accounts for more than half of the country’s spending. We all know that government as a whole needs to be pruned back, but equally, we all enjoy at least some of the goodies that it hands out, and we don’t want our particular goodies to be pruned.

Just suggest to the well-off middle classes that they should lose their tax credits. Or give up their children’s free milk. Not only do you face the howls of indignation from the people who actually enjoy these benefits. Everyone else joins in the howling too, because they fear that their own special freebie could be next on your hit list.

So the only way to make real changes is with a comprehensive package of reforms. As former finance minister Jens Henriksson says of his own experience in bringing Sweden’s budget under control, you need to show that you are not partisan or singling out particular losers. A vocal interest group can derail even the smallest programme cut, he says; but you are much more likely to succeed with a comprehensive package of reform that gets everyone complaining. People are more likely to give up their special privileges if they think that everyone else is sharing the pain as well.

Canada too turned round a massive budget deficit by packaging its reforms. Nothing was ring-fenced, so everyone knew that the pain would be spread. That made possible a major rationalization of government. The lessons for the UK’s Comprehensive Spending Review in October are pretty obvious. Try to avoid contention by limiting your reforms, and you will fail. Court contention with a major restructuring plan and you have a good chance of achieving something really important.

Eamonn Butler is Director of the Adam Smith Institute

Filed under: Canadian model (2 more articles) , Coalition (1869 more articles) , Economy (880 more articles) , Margaret Thatcher (42 more articles) , Post-bureaucratic age (71 more articles) , Public finances (703 more articles) , Public sector (112 more articles) , Public service reform (340 more articles) , Spending cuts (600 more articles) , UK politics (4903 more articles)

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Chuck Unsworth

August 11th, 2010 6:09pm Report this comment

Yes, the critical thing for any government is not to destroy public optimism. Where we are right now is the edge. We cannot avoid pain, but we must also know that the pain is finite. Better to rip the Elastoplast off in one go rather than slowly peel it away.

The Clouds

August 11th, 2010 6:50pm Report this comment

What concerns me most is not the nature in which the cuts are made but that "salami slicing" is becoming the new "elephant in the room".

Gary Williams

August 11th, 2010 6:52pm Report this comment

Another advantage of the one-fell-swoop method is that it makes it practically more difficult for any one special interest to complain that its own sacrifice is too great. With so many other sacrifices happening at the same time, there is always another interest that may appear to be sacrificing even more.

The Government really does need to articulate a fact that is unappreciated: In justifying a proposed cut, there is a tendency for cutters to make a black-and-white argument against the area in question, as if any expenditure on it were entirely invalid. This is specious and undermines the Government case.
The reality is that pretty much every expenditure benefited someone to some extent. In a nation of 60 million, if 0.01% have benefited from something that is about to be axed, there will be 6,000 legitimate plaintiffs ready to make their pleas on Newsnight.
The Government must acknowledge that most all the stuff to be cut did do at least some good, in at least a narrow sense, but that the nation simply cannot afford to spend as much as it has done to generate that amount of benefit.

Truth Vibrations

August 11th, 2010 7:03pm Report this comment

Interesting that you mention Edward Heath and salami slicing - he being the Prime Minister responsible for the start of the campaign of subterfuge and duplicity which has gone on for forty years and led us to where we are with the European Union.

Strange that you failed to mention that.

Yes, let's have branch and root reform. Repeal all of the European Union acts, restore British sovereignty, be hundreds of billions of pounds better off, regain control of our borders and immigration.... can't hear many howls of opposition from the majority of the British public there.

And a few hundred more prosecutions for MP expenses fraud should help restore some faith, too.

Verity

August 11th, 2010 7:34pm Report this comment

I see everyone else in the room is dressed in business attire, including a jacket, except Dave. Patronising git. Probably afraid of making "the little people" nervous with too much formality.

Scary Biscuits

August 11th, 2010 7:47pm Report this comment

In The Prince, Machiavelli said that if you slap a man in the face he will slap you back. However, if you kill him and his family then they are simply dead.

So, for example, if you pare back the BBC they will be more motivated to use their remaining budget to attack you. On the other hand, if you close the whole thing, or refranchise it to another supplier, they have lost their means of retaliation. The same applies to all the quangoes currently plotting to undermine the Coalition's cuts.

yank

August 11th, 2010 8:15pm Report this comment

You make a good case, and it sounds good, but any time you hear the word "comprehensive" associated with legislation... run.

Do you seriously think the politicos get together and work out grand bargains that will work for all? And even if you believe that, do you think those trying to do good won't be leveraged by those trying to do well... for themselves and their buddies?

These grand bargains are impossible for the public to track, and if we don't do so, I guarantee the outcome will be less than acceptable.

Over here, the comprehensive word has been used for comprehensive health care reform, which translated into 2,700 pages of bologna that even its promoters are currently fleeing from. As the detail emerges, as it is now, our anger only grows.

And it's associated with comprehensive immigration reform, which amounts to open borders, citizenship and voting rights for the world, welfare state benefits for anybody with a pulse, and many without one. That's another few thousand pages.

And it's attached to comprehensive financial reform, which is another 2,000 pages of Wall Street giveaways and too big to fail corporate welfare. You will see another financial crisis out of Wall Street, and the preliminary analysis already seems to indicate this. They did not identify what went wrong, let alone firmly address it.

And everybody's friends get taken care of in these porkfests, with the nice little carveouts. Easy to hide, in the thousands of pages that only the insiders have access to.

Set a broad budgetary framework? Fine. Gain public approval for that, and then work down to the detail. But if you lot are as foolish as we here seem to have been, and actually think the honorables will be as surgeons with a scalpel, and do so in good faith, you're dreaming. They may each try to do so, and protect their lot, and the pages will metastasize like the consumption, but will you have what you want in the end? We haven't, it appears.

Set broad budgetary targets, and drop down just a couple levels below those, and bin up that level of financial targets. Get the honorables to swear a blood oath, and hold them accountable if they don't meet it. And I'm talking to the Tories here, not Labor. The worst liar is the guy you just voted for, most likely. Make them stop lying.

Tulkinghorn

August 11th, 2010 8:54pm Report this comment

Exactly
So why ringfence the bloated health budget
Smug Lansley needs to have his wings clipped and in the process a little DoH pain may mitigate Education and Defence butchery

TrevorsDen

August 11th, 2010 9:36pm Report this comment

Suppose the one fell swoop actually swoops on the wrong 'fells'?

What if the big decisions are the wrong decisions. Fundamental changes do need to be made, but by or through what process are these changes to be articulated?

There has been no election debate about this and no other debate since. How are we to discuss or decide?

Not that I do not think we do need to do something like what is suggested.

egh

August 11th, 2010 10:24pm Report this comment

I agree with Truth Vibrations. The singlemost priority is to cut the tube that drains our lifeblood from us.

Beyond that, surely we could start reversing the subversion of our culture - the communist infiltration that gave us Traitor Dave in the first place? One start would be - get rid of destabilisers like quangoes: unelected powermongers who take authority and money from the people.

denis cooper

August 12th, 2010 8:08am Report this comment

Yes, why should our contributions to the EU budget be treated as a ringfenced area of public spending? The EU member states are all cutting back their spending, to a greater or lesser degree, but not the EU itself - the eurocrats want to spend even more. Why not just chop 30% off our payments, and tell them to get on with it?

2trueblue

August 12th, 2010 9:06am Report this comment

denis cooper, like it, a lot!

One of our greatest enemies in our recovery is the amount of legislation from the EU, and our enormous contributions. It is unrelenting and demoralizing. We are not in the euro and this offers us advantages that a lot of the other member states can not use. It is stupid to stand by and watch bureaucracy grow out of all proportion for the EU when we know that is not the way we want our own country to go. So we all sufer the cuts whilst the Eurocrats sit and spend, spend, spend. We are ALL meant to be sharing the pain.

Verity, what did Dave do to you? It does not matter what he wears/does not wear. It is what he bloody does that will make the difference or not.
We had 13yrs. of Liebore who have changed all that was good in the UK and put no foundations for our, or our childrens future. We have a nation of young that just want to be famous, (with no sustainable skills to string a life together) and did Tony/Gordons attire meet with your approval? Did it matter? Not one bit. If they had done their job we would all be in a stronger position now.

Norman Dee

August 12th, 2010 10:56am Report this comment

Scary Biscuits, and Denis Cooper, combine the 2 and you get my ideal scenario, No EU and no BBC, what would we spend the money on ?

Verity

August 12th, 2010 2:45pm Report this comment

Norman Dee - Endorse!

Dennis Cooper - It doesn't matter what Dave "does or does not wear" ...?

Oh, yes it does! Every little pr box is ticked in Dave's mind, and he dresses down patronisingly because he thinks of the people he is mixing with as "the little people" and he doesn't want to make them feel nervous with his magnificence. It's the same reason he has styled himself and his wife as "sharp-elbowed middle class". He's saying don't be frightened, I'm just like you. (Except most men keep up appearances by wearing a jacket even it's not from Savile Row.) Dave - his brfand-new, self-styled ("I'm one of the little people, just like you!") nickname says it all - is a phony.

All this going around jacketless and tieless is patronising to the max. He would never go round dressed like that in private life.

Chuck Unsworth

August 12th, 2010 3:36pm Report this comment

I see Verity is up to her usual nonsense - "All this going around jacketless and tieless is patronising to the max. He would never go round dressed like that in private life."

Presumably she expects him to walk around in jacket and tie whilst at home - possibly even to go to bed in them.

Anyway, what's that got to do with Government policies?

Ex-Tory voter

August 12th, 2010 4:49pm Report this comment

I'd vote for an end to EU membership (and all the pettyfogging regulations and costs that go with it). In fact, I did. I switched allegiance to UKIP this time round. Dave is doing absolutely nothing to win me back, either. Out of the EU and free of the Beeb! Wonderful!

TGF UKIP

August 12th, 2010 6:22pm Report this comment

Trouble is that the Tory Emile Heskey couldn't win against a debilated Labour government led by a despised PM and all the whingers now find a very ready and a very loud voice in his new best friends.

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