Friday, 9 April 2010

Conjuring up numbers

I have considerable sympathy with Gordon Brown's response to Cameron's extra £12billion of savings. It seems clear that faced with a need to offer an unsustainable reduction in income by promising to cancel the NI increases, Cameron has been forced to pluck a figure out of the air and claim that he will 'cut waste' to achieve it.

The problem with Brown's argument, however, is that his own starting figure of £15billion is as arbitrary and unfounded as is Cameron's extra £12billion. And if one of them can just pluck figures from the air, why shouldn't the other do likewise?

Everyone wants to 'cut waste', of course. But it's impossible to simply put a figure magically on how much waste there is available to cut. And the phrase 'cutting waste' conceals a multitude of sins. As we saw in the coverage of the IoD/TPA report recently, the word 'waste' can be used to refer to any government expenditure with which someone disagrees.

So for the IoD/TPA, free bus passes seem to count as 'waste'; for the Tories, 'free prescriptions' is a form of 'waste'. Politicians - of any party - who claim that they are going to fund spending pledges by 'cutting waste' need to be challenged far more robustly over what they mean by 'waste' than seems to be happening currently.

6 comments:

The Druid of Anglesey said...

As total public spending this year is planned to be around £655 billion, I think its fair to say that either £12bn or £15bn (1.8% and 2.3% respectively) can be cut without anybody noticing any difference. We see public sector waste everyday - who should we believe? You or our own eyes?

John Dixon said...

Druid,

I think you've missed the point, on several counts.

Firstly, the £12bn (Tory) and £15bn (Labour) aren't alternatives. The Tories figure is on top of the Labour figure, and thus they are arguing that they can make savings of £27bn (or 4.1% on your calculation). Perhaps you think that's reasonable too. But why not 4.2%, or 4.3%, or some other figure? Because...

Secondly, I didn't say that the government could not cut expenditure by those amounts; what I said was that the figures have been plucked out of the air, with no real science behind them. Cutting budgets by those amounts is easy - but what neither of those two parties have fully spelled out is what the effect is.

And thirdly, as for "We see public sector waste everyday", my response is that whether it is true or not depends on what one calls 'waste'. Waste is like sin - it's easy to be against it.

For some people, free prescriptions is 'waste'; for others it is a vital part of the NHS. I'm as strongly in favour of cutting 'waste' as anyone else is - but I doubt that I'd define 'waste' in the same way that you would. So any meaningful debate about cutting waste needs to move away from the rhetoric and define what is actually going to be cut.

The Druid of Anglesey said...

John - I appreciate you took the time to reply in detail. Whether the total amount is 4.1% or a similar figure, I think common sense dictates that it should be possible to cut this amount without affecting front line services.

Its true that neither party has yet told us exactly where the axe will fall. Understandably (but perhaps inexcusably) neither Labour or the Tories want to spell it out before the election for fear of scaring voters. Yet, as the government has refused to hold a comprehensive spending review before the election it is impossible for the Tories to be much more precise - it is hypocritical for Labour to continually attack the Tories for not being clear when they themselves strategically decided not to hold such a review.

I agree, neither you nor I am privy to how those figures have been derived. Yet because of the size of the structural deficit and debt, cuts need to be made. At least the debate has moved away from Gordon Brown's 'Labour Investment v Tory Cuts' foolishness.

Free Prescriptions are a red herring. As health is a devolved Welsh Assembly area - its not something which Westminster can directly cut, unless they decide to reduce the block grant to Wales. In which case, anyway, it will be up to the Assembly to decide whether free prescriptions should be prioritised over other items. That's the kind of choice a fully autonomous Welsh government will have to make anyway.

John Dixon said...

Druid,

"neither you nor I am privy to how those figures have been derived"

Not strictly true. They have been derived in order to match the total of the spending/ tax reduction commitments being made. I.e, in the Tories' case, they have decided that they want to stop the NI rise, and have said that they will fund it by arbitrarily cutting 'waste' in the total amount required to match the commitment. I.e. plucked out of thin air.

"Whether the total amount is 4.1% or a similar figure, I think common sense dictates that it should be possible to cut this amount"

I'm not saying that it isn't possible; but I don't think that 'common sense' dictates any such thing. Common sense dictates that there is genuine waste or inefficiency in any large organisation, but putting a figure on it requires more than that.

"Free Prescriptions are a red herring"

In the sense of being devolved, yes. But I could have picked any one of a number of other similar proposals from the IoD/TPA report and made the same point. Is EMA waste? Are free TV licences for pensioners waste? And so on. My point is that there is a valid debate to be had about whether these are the 'right' things for gpvernment to be doing, but to describe them as 'waste' which can just be cut is disingenuous to say the least. It's playing with words to give the impression that spending cuts are nothing more significant than cutting out waste and inefficiency.

The Druid of Anglesey said...

John - there is not really much point arguing whether the figures have been plucked out of thin air or not. One party announces a spending pledge, the others (and the media) immediately say "its not costed" or "the sums don't add up". Its hardly surprising that parties therefore look for soft options like 'cutting waste' to counter these accusations. All political parties only have themselves to blame for this as all proposals made by another party are treated with derision rather than constructive comment.

However, I agree with you that the sensible thing would be to have an adult discussion regarding what should be cut and what should be saved. However I fear the practical consequence of doing that would be would be vast public sector strikes just before the election - something both main parties want to avoid.

Before we can get to the position of rationally discussing these kinds of matters (as you rightly advocate) all of our political parties need to grow up a little.

John Dixon said...

Druid,

Not much that I can disagree with there!