Another voice
Thoughts on the Budget
Auberon Waugh
An unusually winsome photograph of our .M1.new Chancellor which appeared in Monday's Times accompanied the an- nouncement that Mr Lawson has been con- verted to the view that the Treasury must lead a more open debate on the prospects for public spending and taxation in the 1990s; This means, I imagine, when one trans- lates it out of the discreet language of the parliamentary lobby and applies it to the Alcazar-like corridors of the Treasury (whose walls are hung with velvet that is black and soft as sin, and little dwarfs creep out of it and little dwarfs creep in), that Lawson is in favour of publishing the Treasury's secret projections for public ex- penditure in 1986 and beyond, assuming the rate of growth in public expenditure which has applied throughout the life of this Con- servative administration.
We all know the broad outlines of this secret report, from various hints and leaks: by 1986 or thereabouts, if Mrs Thatcher continues on her spendthrift way, public ex- penditure will be 250 per cent of the Gross National Product, requiring a basic income tax rate of 500 per cent, a VAT rate of 2,000 per cent and an annual capital levy of 150 per cent on all savings purely to service the National Debt, long before any wages can be paid to the 14 million people who will by then be employed by the National Health Service, or engaged on such vital work as investigating the social circum- stances of one-parent families. Is there anything to be gained by boring us with the details?
Mr Lawson obviously thinks there is. Perhaps he imagines that the cold figures will have the sort of effect on the country's economic thinking that the shooting down of a Korean airliner may have had on its at- titudes to the Soviet Union. At the moment of writing, not even John Pilger has dared to suggest that the Korean airliner might, indeed, have been spying, or that if so, it was rather irresponsible of the Americans to use a commercial airliner, loaded with Korean and American civilians, for the pur- pose. One might as well appeal for the free exchange of paedophile information in schools. But I am not convinced that the release of Treasury projections on public expenditure would produce the same revul- sion, if it had any effect at all, apart from stupefying boredom, it would be to per- suade everyone that the Government's declared policy of cutting public expen- diture and reducing the public sector had failed. Those natural Labour voters who turned to Mrs Thatcher last time round would go back to nice Mr Kinnock, while an enormous number of ditherers would begin to convince themselves that the SDP should be given a chance.
All Conservative supporters and most voters in the country know perfectly well that public expenditure is out of hand. Many people have been persuaded that they have already made huge sacrifices in obedience to a ruthless programme of government cuts. If the only claim the Government can make is not that it has reduced government expenditure, or re- duced it in real terms, or even reduced its rate of growth, but that it has succeeded in producing a slightly smaller increase in the rate of increase than would have applied under any alternative programme — Labour, Liberal, SDP, Communist, Workers' Revolutionary Party or Strict and Particular Dog Lovers' Party of Great Britain (anti-Jewish) — then it had really better keep quiet.
The chief problem in controlling public expenditure is not that public opinion is opposed to cuts but that the civil servants — without whom politicians are no more than gasbags in the wilderness — can manipulate them so as to pass all cuts to the consumer, rather than absorb them within the gigantically inflated administrative system. The way to frustrate this process is not to create yet another army of civil ser- vants to supervise cuts and feed on itself. It is to give the Departments more, rather than less, autonomy and let them go bankrupt. Then — but only then — can one sack half the labour force, send most of the administrators to prison, and hang the Per- manent Under Secretary. If there is to be any end to open-endedness, the Depart- ments must simply be given a sum of money and told what targets they must reach. They must be turned into some equivalent of the building industry 'rump', with departmen- tal administrators in the role of contracting employers. Within every Department, the running of it must be put out to tender — with suitable penalty clauses, and civil redress in the case of failure to deliver the goods.
That is the minimum requirement for the success of the Government's declared — and highly necessary — policy of containing public expenditure. To imagine that it can impose effective restrictions on the present structure is laughable. The Departments will simply cut down on their functions until evepy penny of their budget is spent on their own wages, office establishments
and perks. But it is scarcely the business of Mr Lawson, in his first Budget, to reform the whole administrative system. That Is something he must leave to his colleagues' having created the necessity for reform hY refusal of supply.
Discussion of public expenditure has the additional subversive effect of turning everY Tom, Dick and Harry into his own Chan- cellor of the Exchequer . No doubt it is quiteall enjoyable thing to dispose of other people s money to the tune of thousands of millions of pounds. It is a pleasure which Nigel Lawson has earned the hard way
studying economics, kissing babies, ntaitlhb googly eyes at Mr Heath and Mrs Thatcher. His Permanent Under-Secretaries may al?' be said to have earned the right to an ()Pt" nion on the matter, by attention to thelf duties over many years. But if he .e°' courages members of the public in the , sion of having some say in these matters' encourages the accursed error by wit° socialists — and also, I suspect, Treason' civil servants — see personal savings as part of the nation's, and so the government s' wealth, personal incomes as something eh' joyed only on the state's sufferance. It is this attitude of mind — adopted, (Or some reason, even by financial journalists — which sees any reduction of tax in terms of 'relief' or even 'gift'. One can under.. stand that Treasury mandarins fall into this error. Lawson, at least, should try to remember what it was like when he was a° honest wage-earner in the private sector. , In case he has forgotten, or is now so well surrounded by mandarins mumbling about Ml, M2 and M3, I propose to remind hum His whole future depends on this Budget' So, in the longer term, does the future of as all. The economic survival of this counttY does not rest exclusively on money suPPIY't Over-supply can wreck the economy, bit controlled supply cannot save it. The key to economic survival lies in personal taxation policy — partly towards incomes, but chief' ly towards savings. The present capital tax structure is grotesque, calculated to destroy all private savings within ten or 20 years. It derives, from a perverted sense of social justice and a profound misunderstanding of hulhall nature, supposing that envy can ever be a stronger force than greed. From the simPie proposition, in equity, that the broadest shoulders should bear the heaviest burden
already catered for adequately enough within the 30 per cent basic rate of ineotoe tax — has grown this huge battery of tor- ture instruments to discourage the simple human desire to be rieh.
If Lawson can embolden himself not ohlY to abolish all punitive and discriminatorY taxation but also to compose a But!get speech which will declare in the most r1ng" mg tones his reasons for this course of a' tion he will have earned himself a Place in the nation's history. If not he will disaPPea' with a dull plop, and the best epitaph °.n him will be that he should have stayed in Fleet Street.
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