Either Gordon goes, or I do
Christopher Fildes says that the Chancellor has done nothing to solve the problems he has created, and will regret his stubborn refusal to try another Cabinet job Oh, please, not another Gordon Brown Budget. Is this really his tenth? I don’t think I can stand it. Either he goes or I do. It could be a close call, for he, too, must be tiring. On that glad confident morning when he first strode up the Treasury’s staircase, applauded all the way by his sycophantic officials, can he really have supposed that, after all this time, he would still be plodding through his over-familiar routine? Another year, another Budget, another statistical handbook with a sanctimonious title and another fat Finance Bill bringing up the rear. Another blustering speech, full of selective arithmetic. Another scatter of small change for popular causes research, the aged, eco-friendly fuels, youth and community facilities, or was that last year’s list? Who could possibly remember? The taxman’s secret weapons are camouflaged in the small print of HM Revenue and Customs’ notices. No need to mention them. Meeting and mastering global challenges, as dutifully trailed in the Financial Times. All the difficult decisions put off for another year. Steady as she goes, as Sailor Jim Callaghan liked to say when he was Chancellor. In the end, of course, he capsized. At least his successor has remained afloat.
Gordon Brown could claim that this has been his achievement. Every previous Labour chancellor — and there were seven of them — had run into a crisis and was blown (as Sailor Jim would say) off course. Then, on one black and breezy Wednesday, it happened to a Conservative chancellor, and the pound and his policies sank with all hands. Never mind that these had been Labour’s policies, too. The new Shadow Chancellor spotted his chance. If this crisis had shown the Conservatives up as financial and economic incompetents, he could put himself forward as Labour’s new model crisis-free Chancellor. He prepared for the role. Prudence would be his guiding light and leading lady. His first act at the Treasury was to put monetary policy out to contract to the Bank of England. He limited himself to his predecessor’s spending plans. He made rules of his own, setting limits to his borrowings. All this was designed to establish his credit, and so, indeed, it did — but not just to win himself an Eagle Scout’s badge from the financial markets. This credit was there to be used in support of good causes, one of which, naturally enough, was to win the next election.
In his third year he turned the taps full on, and flooded the public services — most of all the National Health Service — with money. The election was won, and he must have expected his reward. Surely the Prime Minister would be as good as his word and move over? This promise to pay, though, was and still is a cheque with no date on it.
Now, six budgets later and with another election behind him, the Chancellor is still left to wait in expectation, and in all this time the taps have been running. He may yet be the first Chancellor to see public spending double under his stewardship. Year after year, he has had to borrow more than he had bargained for. (This time he has come out more or less on target, and it was his estimate for growth that missed by miles.) His trouble now is to demonstrate what all this money has bought. Much of it — most of it — amounts to running on the spot. The public sector has its own inflation rate, which is higher than ordinary people’s, just as its productivity is lower. His critics would say that he has been shifting resources into the less productive parts of the economy. A betting man might say that he has doubled up on losers. That is an expensive way to bet, and the odds will now begin to shift against him.
Ruth Lea is an old Treasury hand whose criticism has been known to needle this Chancellor. When his grumblings reached the Institute of Directors, she was pushed out of her job there and her boss was coincidentally rewarded with a knighthood. Now she is director of the Centre for Policy Studies, and still needling. She calls him a spender who has gone from famine to feast and is moving back to famine. His review of public spending has been put off from this year to next, and no wonder. She says that on his own estimates, even if spending on health and education slows down, spending on other services will be hard pressed to grow at all. That will have painful effects. Already Savij Kutz, the Hungarian bogeyman, is sinking his teeth into overspent hospitals. Just wait until he gets going.
Behind that facade of glowering assurance, Gordon Brown must wonder how wise he has been to stay on and on at the Treasury. Of course, he has made it his power base, a great Whitehall fortress now expanded to accommodate the taxmen. At the same time it has made him a one-subject minister, and his off-subject ventures proposing a new bank holiday, for instance — can look staged and awkward. Sailor Jim advised Nigel Lawson to become Foreign Secretary: ‘It’s a doddle.’ Mr Brown, it is true, does not have much time for foreigners, unless they are poor and a long way away — when Europe’s finance ministers meet, he prefers to stay at home and send Dawn Primarolo — but these instincts might prove salutary at the Foreign Office. Its last one-subject Secretary of State was Anthony Eden, and what a disastrous prime minister he made.
Sooner or later — and sooner, for choice — some Chancellor will have to tackle the Treasury’s unfinished business. Next year’s review of spending is only the start of it. Carefully kept away from the Budget arithmetic is the huge prospective liability for public sector pensions. If they had to be funded, as private pension schemes are, they would double the National Debt. As it is, they are a tax on posterity, and the cost has gone up as the public sector has swollen. We already work for the taxman for the first five months of each year, and from now on this sentence of forced labour will increase. More and more our economy has come to look like its neighbours on the Continent — high public spending, high borrowing, high taxing. Until now he has held them up to us as warnings. He himself came to office as a tax reformer, taking an opportunity which came, he said, once in a generation. What he has done with it is to make the system far more complicated and intrusive, drawing more and more people more tightly into the net. Someone else will have to disentangle them. Let this be the last of the Gordon Brown Budgets.
He might fairly retort that what is sauce for the Chancellor is sauce for the commentator, and that he will move over when I do. We might even collide on the way to the exit. Keep watching this space.