POLITICS
Those spending cuts in full: or not, as the case may be
SIMON HEFFER
Were you to seek the minister who most typifies the character of this Govern- ment, Mr John MacGregor, the Transport Secretary, would be your best man. Having worked closely with both Heath and Thatcher, he is a master of the art of non- ideological politics. He exemplifies the middle way of Mr Major's government. Mr MacGregor never intentionally gives offence; he is mild-mannered in the way of the refined Scot he is. He has a first-class mind, but habitually uses his cleverness to avoid problems rather than to calculate risks worth taking. Since Patrick Jenkin left the Cabinet, he is the nearest thing to a permanent secretary in high political office, and therefore perfect for a Government desperate to avoid controversy. His mem- bership of the Magic Circle is the only remotely non-anodyne thing about him.
There was, however, excitement in Mr MacGregor's life the other day, and it owed something to prestidigitation. It was one of those old tricks, familiar from Dr Keynes's Book of Magic. After years of fights with the Treasury, it has been decided to pro- vide £1.9 billion to extend the Jubilee Line on the London Underground from West- minster to the Isle of Dogs. The Govern- ment is doing this because, having assessed the likely financial return and with the spectre of Canary Wharf literally and metaphorically towering above them, pri- vate sector developers have decided their own funds can be put to better use; a mere £400 million of private cash will supple- ment the public largesse. As he takes this unnatural risk with the electorate's money, Mr MacGregor consoles himself and us with the news that 22,000 jobs will be creat- ed. Those not handicapped by a recent education will know that that works out at about £86,363.63 per job; lavish pay for a lot of chaps called Murphy just to dig an exceptionally big hole.
The other big hole — the one the Chan- cellor of the Exchequer, Mr Clarke, so cor- rectly noted a few months ago that the Government was in — is hardly helped by such extravagance. This week the Cabinet has been congratulating itself on complet- ing a tight public expenditure round — 'tighter than anything I have known in years,' said one Cabinet veteran. When the details are announced in the Budget it is expected they will show spending has more or less stood still; but has stood still in that only the 4 per cent increase projected last year has been approved. Inflation is under 2 per cent, and there is meant to be a pay freeze in the public sector (except for MPs, who feel they deserve a non-productivity related pay increase).
Despite the 4 per cent rise, there have to be some losers, since some departmental budgets will rise by a disproportionate amount. Even Mr `Marvo' MacGregor is said to be a loser: what he has pulled out of the hat on the Jubilee Line fails to match what he has lost on the road building pro- gramme. That some sacrifices are having to be made is being seized upon by the Gov- ernment as an example of successful toqgh- ness. More rigorous ministers and back- benchers, however, see no reason for smug- ness. They are already arguing that painful, but possible, options for spending cuts have not even been broached by the Govern- ment. Their contention is that the figure of almost £254 billion was already over-gener- ous and way beyond Britain's means, and should have been hacked back still further.
The £50 billion budget deficit seems to prove their point. The optimism of a few months ago, when Treasury insiders were hinting that supposed growth in the econo- my might allow the deficit to be reduced without further tax increases, has evaporat- ed. Now it is considered, among most Tories, that Mr Clarke, the Chancellor, will have achieved a good result if he holds the deficit at £50 billion. There are no expecta- tions of anything better. This may, though, be a ruse to make the Government look spectacularly good if the deficit is reduced. The main wish among those with majorities of less than 25,000 is that Mr Clarke should not raise taxes; but the feeling among min- isters is that, somewhere, taxes will go up.
Outrage about laxity is concentrated on two departments: Health and Environment. Both seem to present fairly watertight cases for brutal reductions. Mrs Bottomley has allegedly won favoured treatment because of a fatuous manifesto commitment to maintain expenditure on the NHS in real terms. This commitment did not allow for the fact that much of what is spent in the health service — particularly on the wages of bureaucrats — could be cut tomorrow without any harm to patient care whatsoev- er. The manifesto commitment is, effective- ly, meant to keep officers of regional health authorities in non-jobs and to use the huge sums (some estimates suggest more than £5 billion a year) spent in this way to justify the claim that patient care is being con- stantly improved. If anyone at the Treasury saw through Mrs Bottomley's justification of her budget, it was not translated into action. For a few weeks now ministers and officials at the Department of Health have been hinting that cuts in manpower are about to made. These cuts have not yet materialised. It is the job of someone at the Treasury to ensure that they do.
Mr Gummer is said to be chagrined that he has had to endure reductions in the local government budget. However, one only has to drive for an afternoon around England to see that many local authorities (including the surviving Tory-controlled ones) are still spending money as if Britain were booming — leisure centres, pedestri- an precincts, ornamental bricks in the pave- ments. Although capital projects are extravagant, the real waste comes in pay. The public appointments section of The Guardian, with its advertisements for local government officers whose job descriptions are beyond parody, should be compulsory reading for Mr Gummer. There is little evi- dence, though, that any more such jobs are being cut than regional health authorities are being closed. Since the Government claims not to believe in socialism, it must by accident have become as great a defender of the jobs-and-services principle as Mr Derek Hatton and his friends.
Mr Clarke said the other day that he wanted to cut public spending as a propor- tion of GDP from 45 to 40 per cent. This hardly dispells the impression that we are being governed by socialists. But Mr Clarke argues that this level of spending is neces- sary to maintain Britain's reputation for supporting the best welfare state in Europe. By this definition, though, Britain has the worst welfare state in Europe, because it does more to encourage the dependency culture than anyone else's. Mr Clarke had better realise, too, that this wel- farism of which he is so proud is inevitably directed more at the people who work for the state than those whom the state ts allegedly meant to serve. Perhaps by the next public expenditure round he will have seen the full spuriousness of the idea that the state can provide jobs; and that one does not need to be a navvy to dig very big and dirty holes.
Previous page
