22 OCTOBER 1994, Page 30

Spending and saving

THE GREAT domed head of Robert Culpin glows with pure intellect. 'Real ones, Chancellor?' he asks. 'Or cuts in the projections? As you know, the Chief Secre- tary' — Jonathan Aitken wakes up and grins — 'is conducting a series of extensive bilaterals with the spending departments. And we could fiddle the contingency reserve again. And we've got a nice low inflation figure for upgrading benefits. But somehow the cost . . ."Awful. I know. Let's rub out a lot of dotted lines on the map and say we're economising on the road pro- gramme. And put anything else down to private finance. That all right, Steve?' Yes,' says Stephen Robson, whose speciality this is, tut we really ought to start doing some- thing. Anything. Alastair Morton's getting restless.' He's always restless. Savings, now. When I was a lad there was always a set piece about them in the Budget speech tribute to some old toffee-maker up in Hal- ifax who ran the National Savings Move- ment. Whatever happened to it?' Mr Hud- son starts burrowing into some files. 'Any- way, when we were in Madrid, Nigel and I' — Sir Nigel Wicks, the veteran sherpa, looks saurian — 'got the Group of Ten countries to set up a study of savings. There aren't enough, I told them. We need more. Dammit, I need more. There's Tessa, of course.' Mrs Keswick, his adviser, puts her teacup down. 'No, sorry, not you, the sav- ings scheme that the Prime Minister thought up — obviously we'll keep that going, but I need something new . Robert?' Mr Culpin is stroking his authori- tative beard, which gives off sparks. 'Chan- cellor, you remember asking the Financial Secretary — the previous one, that is — to make a study of savings and investment?' `And you found the file in his out-tray?' In his pending-tray, Chancellor. But we thought that with some adaptation and refinement . ."Go on, Robert, cough it up.' 'We thought that you might like to have a new regime to cover every kind of long-term saving. Reward the individual, levy the institutions, get your claws into the pension funds, start Capital Gains Tax at a million — it wouldn't cost you anything.' 'I rather like that. Where's the file?' In the safe, Chancellor.' I thought so. What else?' 'Well, Gus O'Donnell wants to know about monetary policy."Oh, yes, that's his neck of the woods now, isn't it? Change as good as a rest, eh? Well, I never hear a squeak from Tim Congdon, so I dare say our monetary policy's as right as rain. Just shows what comes of not having one.' Mrs Keswick sug- gests that the speech needs a reference to Gordon Brown and his contra-post-classical theory that modern economies, if not prod- ded, stop growing. 'We mustn't be political, Chancellor,' murmurs Sir Terence, 'but you remember what Nigel Lawson used to say — that if growth depended on neo-Keynes- ian stimuli we'd still be living in caves.'