Want to cut taxes? First cut spending. Here’s how

B

Here's a modest proposal. Let all public/quango/local govt employees who recieve in excess of, say, £100,000 re-apply for their jobs, with a proposed salary. That old chestnut of 'this is what I'd get in the private sector' could easily be tested by those who failed in their application. Lots of money saved, only fat cats suffer.

Ray

A Cameron government should also offer practical incentives for ordinary public sector workers to identify the waste they observe in their jobs every day.

Those whose ideas for cutting it are taken up could have their names placed in a draw to receive a worthwhile share of the first year savings as a cash prize.

If necessary, this could be awarded anonymously so that their managers need never know who spilled the beans on their bloated empires.

john problem

Excellent suggestions! Alas, one knows that political will in the public interest is usually out of stock. Further our leaders are not terribly good at math. So no matter what they say or promise unerringly know who is going to pay for their grand economic strategies in the end. Joe Public. If he's got any money left. Imagine if debtors still went to prison like in Little Dorrit's day. Most of the country would be in the Marshalsea. Except our leaders of course who would still be ranting on about saving the economy, and the Masters of the Universe who would still be asking Brown for more money - from their yachts in the Caribbean. It's time for a revolution in the streets, French style. Sign painters would be employed again doing placards, hot-dog vendors and chestnut sellers would be back in work, ways of fending off debt-collectors would be shared, new friends would be made - beats the heck out of paying taxes to befuddled politicians. Once the revolution accomplished then thinkers such as Mr Nelson could speak and be heard.

Huw Thornton

Sure Fraser - but with all respect it is easier to write about it than for George Osborne to make policy proposals. Contact with senior civil servants will not help either. Are they really going to be helpful in slashing Government expenditure?

There is always a dilemma for oppositions which make spending cutback proposals. If the proposals are light on detail, the government will produce their own alleged details about what the cuts would mean. If the opposition produces details, the government can produce all kind of lurid allegations about the unexpected consequences of those precise cuts.

And how would DC have looked yesterday about poor Baby P if he were simultaneously suggesting big cuts in local authority expenditure?

Most reasonable people know that there are huge cuts that could be made, with no impact on services delivered. The Tories however have a particular problem in making this claim, being always vulnerable to a government allegation of cutting essential services.

Also, in proposing tax cutting, the Tories would be supporting those who have arguably suffered least in the economic dowturn - that is, people who have kept their jobs.

Andrew

"Bogus pressure groups could be abolished, such as Postwatch (£15 million) the National Consumer Council (£3.5 million) and Energywatch (£15 million)."

Agreed. But - by the way - haven't they been merged?

J. Finigan

Gordon Brown's tax are akin to the Captain of the Titanic announcing that the drinks at the bar are free.They would do nothing to save the economy. We're all doomed!!! - not even the Good Gord Almighty can save us now!!

Bob Wallis

I'd like to know what percentage of public sector jobs have been given to immigrants from the third world and eastern europe in the last few years. Of course, we will never be told.

Simon Stephenson

This is a well written article, but, as Huw Thornton comments, any proposed reduction in state spending is going to be represented by the government as a cut in services.

This is the skirmish that the Conservatives need to have, and to win, before they start the argument about spending cuts. Labour has been able to cement in people's minds the concept that every pound of public spending is necessary and efficient, and until this is exposed as a myth, the Conservatives will have an uphill struggle to prevail in a spending debate.

Tom Osming

Don't be such a wimp. Saving 10% of the cost of QANGOs is pathetic. Disband the lot. Save sixty billion quid (on your calculation) one hundred billion on every other estimate that I have seen.
While you're at it, put a cap of £100,000 pa on ALL government posts (including the BBC). They get massive pension rights. Let them try their luck in the real world if they're so sure they're worth more.

Christopher Chantrill

You could call this the Newt Gingrich strategy. Don't cut, just cut the rate of increase.

The trouble is that it doesn't ask the big questions. Britain spends 5.6 percent of GDP on state education (from ukpublicspending.co.uk). It's a system conceived a century ago by and for the liberal elite and its preferred life trajectory.

But what about the rest of the nation, especially the majority who learn by doing?

Trouble is that we are probably a generation away from asking that kind of question.

David Short

"Politically and economically, his [Gordon Brown's] task is easy"

Ha!

This entire piece reads like a student essay.

Ask BoJo why he can't get even his simple changes through.

Colin McQuade

For inspiration, see Estonia.

All it would take is a little courage and integrity from our politicians.

Kevyn Bodman

A wealth of good ideas in the article and the comments.
The problem is the lack of forthrightness coming from the Opposition.
Much more controlled aggression is needed; that's where they are failing.
Cameron should revitalise his front bench and then let them loose.
Of course there will be a coubnter-attack but so what? Take it on.

Kevyn Bodman

@ Colin McQuade at 2.15am:

Can you say a bit more about what happened in Estonia?

Hereford

"This is why the Prime Minister may soon come to regret declaring a competitive war over tax cuts. Fought properly, this conflict should have only one natural victor."

Only if the Tories get going on, and go public on initiatives like this Fraser. Osborne acts like someone who is hiding his plans because he knows they are flawed. He needs to be bold and, heaven forbid, take risks.

Politic is inherently risk averse at the moment. And it has become stifled as a result.

cuffleyburgers

I have suggested before on these threads - all public sector jobs with a salary over say 70k should be subject to annual public pay review compensation propsals having to be voted through at public meetings.

This would mirror best practice in the private sector. And is arguably more important in the public sector for the obvious reason that whilst shareholders can walk if they don't agree with executive compensation, tax payers can't.

Overall Fraser, another top post, I am desperate to see some of your passion for this vital issue being replicated on the opposition front bench.

Ray

Tom Osming's post has some validity: experience during the Thatcher years ought to tell the Conservatives that when it comes to slashing government you are as likely to be damned by Labour for making nibbling cuts as for slicing out whole departments.

Better to bite the bullet, be bold, and be hung for a sheep as a lamb.

Frank Barlow

Interesting.
However, I can just about understand the case for some inflation. What I can't understand is why 2% is better than 1% and also better than 3%.
How is it that the 25% inflation since 1997 is claimed as success. Is it because inflation benefits those in debt that we are in this mess ?

Michael H

You missed out the most important bloated over-remunerated quango of the lot: the BBC. Now nothing more than the propaganda arm of New Labout, it should be sold off and the licence fee abolished.

Mike O'Callaghan

Fraser...I despair sometimes at the themes of questions posed by David Cameron at PMQs. At this time his theme should be the scandalous government waste since it came to power. Next week DC should stand up and ask 6 separate questions all asking for comments for 6 different examples of government waste. No point in wasting 6 questions on one example because you will not get a answer. So on each question just identify an example in different areas of government. Make statements rather than questions and then ask for Gordon's comments.

Diversity

Mr Nelson,

Your exasperation with a Tory leadership stuck a long way behind the curve is proper and right; but the LibDems practicing zero-sum economics? Have they ever in the decades of the life of their party? Certainly not in their current proposals.

The first thing country needs in economic mangement is competence; and the only name of competence appears to be Cable. A second thing it needs is clear-eyed, sustained management of public expenditure to deliver value for money - in your terms cut some of the fat and turn the rest into muscle. That takes time as well as effort. One of the lessons of New Labour still unlearnt by the Cameroon is that crash efficiency programmes crash, expensively.

Is preaching to this Conservative leadership a satisfying use of your considerable jounalistic ability?

Bewick

"They get massive pension rights. Let them try their luck in the real world if they're so sure they're worth more"

Do you know - I DID and found that the private sector would pay me at least DOUBLE for just a fraction of my skills!
So from a highly stressed 12 hour a day deputy chief officer position in a MAJOR local authority, I went back to basics working only 8-10 hours a day and with NO management responsibility.
True that was 18 years ago and some of the salaries NOW paid in LA's frighten me. The pay levels in the public sector were supposed to be set lower to offset the "good" pension scheme and the "job for life" Ha ha MY public sector career ended after 28 years through REDUNDANCY and by the time my "gold-plated" pension was paid it had MASSIVELY lost value vs current pay levels
Now though they have it all - VERY high salaries AND a "gold-plated" pension AND bonuses and "perks". Blame Blunkett for that.
Salary levels are SUPPOSED to be reward for doing the job to the specifications - NOT an attendance allowance!Plus of course we also have the OBSCENE allowances now paid to part-time unqualified Councillors. £6k - £30k+.
And if someone RESIGNS or is legitimately sacked they should NOT be entitled to a pay-off. Another forgotten golden rule.
I could go on but will not except to say that my job was internal management consultancy - to improve efficiency and also to control the establishment and prevent salary "drift". That was obviously not as important as extra "non-jobs" and MY salary would pay for at least a couple of those.
Consultancy is now bought in at commercial rates!
And oh I REGULARLY resisted demands for upgradings where the argument was "they could get more outside". My response was always "well let them". Very few did even then. I was one of very few who ACTUALLY managed it. You are correct - hardly ANY would be able to manage it now.

David Boycott

"When he cut the top rate of income tax in his famous 1988 budget, for example — a budget vociferously opposed by Mr Brown — the richest 1 per cent paid 14 per cent of all income tax collected. It has since soared to 23 per cent. The richest now shoulder a far greater share of the burden because Lord Lawson lowered their tax rates"

This is a non-sequitur, since you fail to state what has happened to the percentage of income that is claimed by the richest 1%.

More importantly, you have failed to address the issue of welfare head-on. This is disappointing, since it is the fact we have 1.8 million people unemployed and a further 2.7 million people on incapacity benefit that really undermines the British economy.

You rightly suggest that the best means of tax cut is to take poor workers out of tax altogether. This has the benefit of making low-paid work more attractive relative to benefits, levelling the playing field between black economy and honest workers and increasing the supply of jobs by lowering the cost of employment to the employer.

Getting people off benefits and into work will produce a virtuous circle of lower benefit spending and higher tax receipts. It should be at the heart of Tory policy.

jon Livesey

"There is a case for a period of stability, during which the system might digest the amount pumped in. "

I got as far as this comment about the NHS before I abandoned reading.

I am afraid I don't believe this author even knows what spending is. Organizations like the NHS don't stop and "digest" funding. They use funding to generate funding. They spend their budget to increase their budget. They employ people to discover new ways to employ people.

If you simply cut the NHS budget and do nothing else, you will find that delivery of services will decline, for which the Tories will take the blame, because the NHS will divert the usual share of whatever their budget is to the usual task of increasing their budget.

This author need to work in a large organization, where he will find that bureaucrats spend their time buying PCs on which to compose PowerPoint presentations to obtain grants to go to conferences to meet with other bureaucrats, to find even better ways to make PowerPoint presentations, in order to obtain an increased budget to buy more PCs to continue the process.

In large organizations, budgets are not "digested" so much as they feed on themselves.

Cutting budgets and hoping for improvements as a side-effect, is a fallacy on the order of Labour's idiotic ideas of setting numeric goals and hoping that they will lead to better delivery of services.

It's probably unwelcome news, but the only way to reform any large organization is at a retail level, one sacking at a time, one re-assignment at a time, one abolition of one pointless task at a time, one closing down of one redundant department at a time.

There are no silver bullets, least of all silver bullets that consist of cutting budgets.

Basil Griffiths

To be effective the cuts must be bold and fearless e.g. Ask 'do we really need to take a major part in costly overseas military adventures? What is the purpose of our military expenditure,what are our defence needs and how much can we afford?
What is the cost effectiveness of the vast sums consumed by such bodies as the Crown Prosucution Service which performs the task that was competently carried out by the police thirty years ago. What advantage has been acheived by its creation?
Within the police force there are now employed a host of 'civilian' highly paid experts e.g. Human Resource managers, Public relations Officers, Community Relations experts etc. Tasks once the responsibility of the now well paid senior police officers. Has all this really led to an increase in the detection of crime and the preservation of life and property? Other public bodies no doubt suffer from similar fadish activities.
The recruitment of a host of Police Community Security Officers paid almost as much the regular police. Has this brainwave contributed anything to public security?
Just how much does the existence of a ministry of Sport and Culture benefit the average taxpayer? Why not save money by abolishing such quango style bodies as the Arts Council and the like?
Wherever in public life government funded committees are set up let them be abolished and have the appropriate paid official make decisions and then held to account for the result.
Re-think the obsession with subsidising the over 60's, who for the most part enjoy a disposable income well above that of other members of the community i.e. most enjoy an occupational pension, own their homes outright and have families no longer dependant on them. Even the Duke of Westmister gets a £250 fuel allowance.
The above are just those instances of which I happen to have some personal knowledge. I am am sure there are those with knowledge of aother areas of public expenditure which could usefully be done aay with.
The Conservates would be well advised to set up a radical thinking group to urgently examine such savings, be specific where they can be made and then to go public as soon as possible.

wrinkled weasel

"The head of the British Waterways Board is paid £280,000".

Fraser, that's an irrelevance. The Government is reducing funding, year on year, to BWB (via Defra) by £60 million over five years and by £20 million last year, shaved off the Environment Agency contribution with the aim of making BWB self-sufficient.

It precipitated an online petition at number ten, because waterways users were outraged.

I don't call that an extravagance, I call it a bonfire.