Gordon Brown has cost the UK £3 trillion, run up a £700 billion budget deficit and forced a prospective Conservative government into making some tough decisions.
Yesterday marked the release of my new book, co-authored with David Craig, called Fleeced! How we’ve been betrayed by the politicians, bureaucrats and bankers…and how much they’ve cost us. It is the very first book to bring together the total cost of government spending, the bailouts, the banking crisis and Westminster expenses scandal in one comprehensive text and lays bare the terrible truth about Gordon Brown’s criminal miscalculations since he assumed control of the UK economy in 1997.
Yesterday also marked the start of the TUC conference. As Tim Montgomerie has noted elsewhere on this site, no one has taken much notice of this event for some time, but with public sector cuts now high on the political agenda and Labour floundering around for any support it can muster, the TUC has once again become worthy of media attention.
Unsurprisingly, despite the dire financial straits in which Britain currently resides, the unions are looking to protect public sector jobs, wages, expenses and gold-plated pensions from any planned cuts (which is ironic given that Unison has recently abolished their own employee final-salary pension).
Nevertheless, the TUC may not be alone in trying to block spending cuts by the next Government – there are other vested interests which the Conservatives (assuming they are the next Government) will come up against, and it could be politically expedient for the Party to take them on straight away.
First are the consultants, who George Osborne rightly highlighted in his conference speech last year as a source of spending cuts to off-set council tax rises. By our reckoning, consultants cost the British taxpayer £2.8 billion a year. The NHS, for instance, spends around £600 million a year on management consultants, a cool £15,000 per manager in an already bloated system.
That is why we propose in Fleeced! that no department should be allowed to spend more than 0.1 per cent of its annual budget on consultants. This eminently sensible cut would save the UK almost £2 billion a year, but will the Conservatives, who now have a division of consultants in their implementation unit, be prepared to trim from this area?
The second vested interest is the state-owned banks. Some estimates suggest that of the total £1.2 trillion made available to the banks, taxpayers could lose at least £200 billion. No one wants to see banks heavily regulated, but whether the banks siphon off our money directly in the form of massive government handouts or indirectly from charging us more for services and loans and paying us less interest on savings, it will be the British taxpayer that foots the bill for the hundreds of billions in toxic loans, credit default swaps, collateral debt obligations and whatever other financial schemes that the bankers mistook for easily accessible money in the boom.
It makes political and financial sense to be tough on the bonuses of the state-run banks. Bankers’ bonuses were hugely unpopular before the crash and they have become a matter of public interest since taxpayers’ money bailed them out from their own mistakes. If the government is to claw back any of that £200 billion, it means closely monitoring the spending of these banks to give them an extra incentive to end their reliance on state handouts.
Focusing more on these two areas would provide a counterbalance to the necessary cuts in other areas of the public sector, which the TUC are campaigning against. We already know that there are vested interests queuing up to advance their agenda and it takes a resolute politician to stick to their principles when so much is being offered. But if the deficit is to be reduced and UK plc returned to a state of fiscal health, these cuts must be spread across the board and we will all have to share a portion of the pain.
Matthew Elliott is chief executive of the TaxPayers’ Alliance and co-author, with David Craig, of Fleeced! How we’ve been betrayed by the politicians, bureaucrats and bankers (Constable, RRP £8.99 and available to order on Amazon).
