Well, hello again, big spender James G.'s plans may come back next term to haunt him
CHRISTOPHER FILDES
Gordon Brown is the first Chancellor of the Exchequer to spend a billion pounds a day. Give him another term and he will leave that record behind him. By the time he has finished he hopes to be spending one and a quarter billion pounds a day, and there will only be one record left for him to challenge. This was set, just a decade ago, by a chancellor whose name always eludes me and who found himself committed to borrowing a billion pounds a week. That couldn't happen again? Not this time? Not to a chancellor whose middle name is Prudence? For that matter, his first name is James, but we don't hear so much about that. Well, yes, it could happen. Even the biggest of budget surpluses —and here, too, James G. Brown has set the record — can melt away. When it happened last time, it happened quickly. A government which had climbed into surplus decided that it could afford to stoke up public spending. It was wrong about that. A recession blew in, tax revenues faltered, the bill for benefits soared, and all the other bills for public spending came in punctually and grew exponentially. So did the deficit and so did the National Debt. Taxes followed. Even if James G. has abolished recessions, along with booms and busts, he is only in charge of the world's fourth largest economy. Of the big three, the United States has temporarily stopped growing, Japan is in trouble and Germany is slowing down. If he can avoid catching colds from any of them, he will do quite well. If not, his plans for spending will come back to haunt him.
Water everywhere
LAST summer, when these plans first saw the light, I proclaimed an ecological disaster. The Treasury's dealings with the spending departments of government had been compared, once and for all, by Sir Leo Pliatsky, to keeping elephants away from a waterhole: 'You drive them off, and drive them off, and in the evening, back they come.' Now, though, I said, the elephants were taking over. So they have. The wardens, on guard for so long, have relaxed, the mood has changed, and elephants with big ideas and thirsts to match are positively welcomed. Through the jungle of Whitehall the word spreads, and distant trumpetings proclaim that new demands are on their way. What we can now expect to see tested is the notion,
implicit in so much electoral rhetoric, that the quality of our public services will improve in direct proportion to the money spent on them. This must be false. As spending speeds up, money is used less selectively and less carefully, and suitably expensive projects work their way up the wish list.
It's unhealthy
PUBLIC spending on health has risen almost by half, in real terms, in ten years. If this were the right treatment for the National Health Service, it would surely have been seen to work by now. A more likely diagnosis is that the NHS has an inflation rate all of its own. James G. was saying this week that his colleagues would 'vigorously' tackle barriers to productivity in the public sector. The most obvious obstacle is that its services, with health and education foremost, are provided by publicly funded monopolies. The most natural way to reform them would be to admit competition and choice. The colleagues in their manifesto fiddle with this idea but stop well short of grasping it. Private finance may be called up to build hospitals, but the staff will continue to work for the NHS, already the biggest employer of labour in Europe.
Where strikes survive
EVEN a poor service is better than none at all, which is what the Post Office offered last week, and what is threatened for London Underground next week. There is something nostalgic about all these wildcat walkouts, provoked members, late-night talks and perfunctory expressions of sympathy to the public at large. Strikes and strikers used to come out like boils all over British industry — in the docks, in the shipyards, at Longbridge and Dagenham, and, of course, in Fleet Street. Nowadays the great British strike is almost extinct in its old habitats (some of the habitats are extinct, too) with the exception of the public sector, where the conditions suit it. Strikes still pay when they can find a monopoly to disrupt and a paymaster of last resort with a bottomless pocket. We have to accept them as part of the service.
Major road ahead
I WELCOME John Major back to the world of banking, where we first met. He has chosen his moment to switch from politics, handing over his safe Conservative seat (well, as safe as they get) and becoming a senior adviser at Credit Suisse First Boston, the investment bank. I interpret this as meaning a thoughtful presence and a topclass door opener. The clerk in the District Bank who asked for an overseas posting and was offered Halifax has come a long way. Standard Chartered was more sympathetic, posting him to Nigeria, where bankers learn in a hard school, and then bringing him back for a spell in the press office. He was genial and persuasive, and I may have given Standard Chartered rather more than the benefit of any doubt. I count on him to achieve the same effect for Credit Suisse First Boston.
Comment is free
THIS is worrying. On to my desk flops the general election issue of the European Journal, with a blank where the leader should be. A note explains that this is because of the Political Parties Elections and Referendums Act. This shabby and partial piece of legislation was designed to rig the odds in any referendum on the European single currency in favour of a Yes vote, but Bill Cash, the Journal's chairman, feared that the Act might be drafted sufficiently widely to trap him. He has been in Parliament since 1984, he is standing again, and he and his Journal are known to be on the No side. Hang on a moment, though. The Editor of The Spectator is standing for Parliament, he and his journal (or this column, anyway) are thought to be on the No side, the leader might give us the clue, but would it be safer to publish a blank? As a director of The Spectator, am I liable? Well, sometimes you have to run risks in this business. See you in the slammer, Boris.
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