Wednesday, December 09, 2009

Shock News: Telegraph gets it right!

I don't usually agree with Op-Ed pieces in the Daily Telegraph.

This morning, however, there is a very good piece from Philip Johnston.

He points out that the repeated promises -over decades- from politicians of all stripes to make "efficiency savings" are actually impossible to deliver without a radical reform of the system of public expenditure.

The Civil Service is only interested in controlling the costs of expenditure in the current system. They are not interested in whether the system should be changed or even whether much of what government is prescribing is actually necessary at all.

What today's Pre-Budget report is going to show is that the British cupboard- apart from some mouldy crumbs of envy taxes- is totally empty. Unless we tackle the systemic costs of the public sector we are going to face even more rapid economic decline.

Over the long term, the burden of sustaining an extraordinary wasteful state sector is going to fall on a declining number of increasingly impoverished private pension holders. There is no option: in the 19th century, at the height of the British Empire, the state sector represented 10% of GDP, after the First World War it had grown to 20%. After the Second War, it was close to half. In the past year it has grown by 11% to just a shade under 60%, but that does not include a £500 billion unfunded state pension liability. The size of the British public sector is now quite close to that of a Communist state such as East Germany.

It is not sustainable.

We are reaching the end of the road.

4 comments:

Newmania said...

To be fair the Telegraph has been getting this right all along.

Dave B said...

The Conservatives did a series of events hosted by the CPS on the theme of the Post Bureaucratic Age.

They did seem to be asking the 'what should the role of the state be' question. I'll be very interested to see what crops up in the Conservative manifesto.

Writing in Standpoint, Oliver Letwin said:

"... the direction in which the programme seeks to take Britain is into a post-bureaucratic age. The ambition is to liberate the energies and reinforce the social bonds of our people so that they can achieve what has not been achieved and will never be achieved by the mechanisms of centralised bureaucratic micro-management.

it can reasonably be asserted (because it is true) that each of the reforms has been carefully crafted to ensure that none requires additional funding at the start. And it is also true that one of the aims of each reform is progressively to reduce demands on the taxpayer. This is to be achieved partly through the progressive strengthening of social responsibility and partly through progressively increasing efficiency — engendered by increased transparency, increased accountability and increasingly liberated enterprise.

In other words, the decentralising and de-bureaucratising programme aims to achieve substantially better economic, social and environmental outcomes for any given level of input — stabilising our public finances in the medium term in the right way, by getting decisively more bang for the taxpayer's buck."

Roger Thornhill said...

The role of the State SHOULD be zero.

Practically, you can argue for Defence, Police-Courts-Prisions as they are about enabling the law abiding to go about their business unmolested by State or criminal.

After that, the case for State run monopoly (and believe me, they hate to run anything in a true market) needs to be argued for, not argued against, i.e. the default is 'no".

The State is bad, the question is if it is the least bad.

Dave said...

D'ancona in the Sunday Telegraph:

"To really get to grips with this," one senior Cameroon told me yesterday, "we have to reinvent the relationship between the citizen and the state." That's exactly right. If the Cameron-Osborne revolution is to be real, it must be about more than the politics of cuts; it must be about weaning an entire country off the malfunctioning, bloated post-war state.

http://www.telegraph.co.uk/comment/columnists/matthewd_ancona/6798065/Gordon-Brown-has-failed.-Now-its-George-Osbornes-turn.html