Ok. This government seems to think that it would be acceptable to raise taxes going into a possible recession. Well I don't. What about making the public sector share the proceeds of economic pain come the downturn?
With that in mind, I've decided to draw up a starting list of where we should aim to have a 0% increase in spending after 2011 and the benefits that could be had - not just tax cuts - by 2015.
1. The Regional Development Agencies - are amongst the most indefensible creation of the Blairite era, yet they continue to pump them full of money. Worse, the government even knows they don't work. As the government's own report said, RDAs "appear to have made no discernible difference to long-run patterns of uneven regional development in England". RDAs face a huge internal contradiction. On the one hand, their role is to accelerate development in a certain region. On the other, their job is to equalise regional economic disparities with other regions. Success then in one objective undermines the other. The idea that you can equalise the distribution of economic growth through Soviet-style planning is asinine. England's 9 RDAs received an additional £335m in 2007. From 2011-2015 there could be a saving of £1.2bn.
2. Network Rail - received £4bn in subsidy in 2006 and approx. £5bn in 2007 and they want more. I gather from many sources that the performance of NR in commercialising its stations and property assets is very poor. It's certainly self-evident - apart from city centres, most rural train stations look no better than they did 10 years ago. Train stations should become retail outlets and NR should be adding extra car parking but it won't happen on their watch. What we need is an auction between Rail Operating Companies like Virgin who will bid to commercialize them and return our railways to the least bad system of all - vertically intergrated regional monopolies. From 2011-2015 there could be a saving of at least £4bn.
3. The BBC - I used to be quite ambivalent about the Beeb and honestly was (still) impressed with their researchers who quite unlike the newsreaders, earn very little. And yet the basic problem is that this Corporation is schizophrenic - is it a public service or a business?
In recent years, it has become much more of a business. Why else would you pay Jonathan Ross £6m a year, spend £100m acquiring Lonely Planet , develop the iplayer, and sell sponsorship for contractual verbal and visual credits on BBC One?
Evidently because this is a tax-funded business in pursuit of market share with scant regard to crowding out the private sector. The license payers contributed an additional £200m in 2007. One could estimate a saving of at least £800m in 2011-2015 and the saving should go direct to the license payer in lower fees.
4. The annual grants by Central government to local government - essentially the formula and specific grants - about £70bn in 2007/2008, up £3.5bn on the year previously. New localism will only really work when councils are forced to raise more of their own revenues - or not - and engage people in local politics. By freezing these grants or limiting their growth to say, 1% p.a. councils should then be left free to raise revenue in which ever way they see fit. They might also think twice about some of the non-jobs they create, the endemic wage inflation and the duplication of effort with other layers of government in areas like "inward investment", "outreach" and the setting up of new quangos. I don't doubt that smaller and more efficient local government will be the winner.
5. The EU - Britain is doing a tremendous job of almost single-handedly solving the youth unemployment problems of Central and Eastern Europe, our retiring expatriates are recapitalising rural France and Spain and who could overlook the priceless contribution the UK's Armed Forces makes to Europe's future security in Afghanistan, Kosovo and Iraq?
Time to start swinging the handbag and aim for a new rebate. Not only will a positive confrontation with the EU be popular, we may even enjoy the spectacle of of embarassing Tony Blair in his pompous new job as EU President. In 2006 the UK's net contribution to the EU was £3.9bn rising to £4.7bn in 2007. Potential saving 2011-2015, in the region of £2bn, maybe more.
All in all, total potential savings from the public sector sharing the proceeds of recessionary pain; £23bn - easily enough to wipe out a big swathe of taxation.
Anyway, I've spent enough time on this. I'd like to invite others to add to the list and see how high we can get it!
