“The real problem is not how much the government spends, but
how much it spends relative to what it takes in.”— Milton Friedman
This great country is in a rut. There is a growing sense that nothing works. There is
little confidence that any of the traditional parties can move the dial. Populists pander
to the frustrated majority but will only make matters worse. Even the current prime
minister has commented on “the tepid bath of slow decline.”
The root cause of many issues is money – how we generate it and how we spend it.
On one hand, we lack the ambition and creativity to unlock ‘real’ economic growth
(2.5%+). On the other, we are trapped by current spending commitments which act
as a drag on the economy and are politically difficult to change.
That word, ‘change’ – the most promised of all political promises. Outside of some
genuinely beneficial initiatives over the last 30 years, most ‘change’ has been
tinkering around the edges whilst spending more than we can afford. So much so
that we’ve built up debt on an epic scale, with the interest payments passed on to
our children and grandchildren, forever.
That’s not fair. In fact, it’s immoral. What is required is a genuine transformation of
our financial position.
I’ve spent 30 years in business transforming people, teams, and companies. No one
ever gave me a project that looked remotely like a golden goose, but rather, teams or
businesses in varying degrees of disrepair that needed fixing. Some of those
businesses operated in the public policy arena, both in Westminster and Brussels.
I’ve seen what works and what doesn’t. At a national level, we need to spend less,
spend more wisely, and invest more in growth.
This means we need leaders with the political courage to come clean with us, the
voters, who must share our part of the blame for our current predicament. We voted
for cake-ism and staked our children’s future on the magic money tree.
“It isn’t hopeless leaders or weak PMs but the denialism and
entitlement of the people who put them there.”— Matthew Syed, Sunday Times columnist
With government debt hovering around 100% of GDP, we are mortgaged to the hilt.
Worse, we’re adding to it at a rate of more than £300 million per day. Worse still,
there is no plan to pay it off – it’s an interest-only mortgage that future generations
will shoulder forever.
It’s wrong.
Only government can fix it, though over recent decades, it’s come up short. Failing
businesses can be turned around, but this is far more difficult at a national level −
there are no easy answers. Our country must marry fiscal responsibility with social
justice, especially protecting the most vulnerable, and political expediency (offsetting
pain or ‘winning the argument’ for those that lose out). No mean feat, but certainly
possible with some political will, ambition, and leadership.
A debate is already underway but is mostly constrained to a tight-knit group of
economists, journalists, and politicians. It sometimes feels that the voices of financial
probity are seen as cranks to be pitied for not understanding that the voters’ wishes
must be granted. The CRPF hopes to broaden this grown-up conversation to a
wider, national audience by creating a forum for some ‘back-of-the-napkin’ solutions
that could improve our prospects. That’s all. Then those more versed in public policy
and with the skills and attention to detail can make the case for economic renewal.
Rethinking public service delivery and materially improving our national prospects
must become a mainstream discussion about ‘the how,’ rather than the ‘whether.’ If
nobody does anything, then a tepid bath is all we’ll deserve.
A large part of the problem is that politicians are having the wrong conversation: “I
want to spend this, so I need to raise taxes.” These are not stupid people, but they
lack the courage to make and deliver an alternative argument, such as offsetting
additional spending priorities with reductions in other areas.
“For a nation to try to tax itself into prosperity is like a man standing
in a bucket and trying to lift himself up by the handle.”— Winston Churchill
As I write this, a government with a stonking majority has failed to deliver even the
most modest savings in welfare, and now rumours of a wealth tax abound. Yet, there
is another way.
One point on which our politicians agree is the need for growth. As the great man
once said, and as the current government is finding out, we can’t tax our way to
better public services. Growth takes investment, and our current fiscal position
means available funds are at a premium. In business transformation it’s always more
fun to allocate new investment to projects, but mostly we have to find that investment
within existing budgets. By reallocating resources (yes, this means redeploying finite
resources to where they are most needed), we can become more productive overall.
This fuels growth, which can lead to more spending.
To be clear – I do not believe in saving our way to prosperity. I believe in creating
prosperity so we can afford more, especially for those in genuine need of help. We
called this strategy ‘prune to grow’, but at a national level, the debate must move on
from ‘cuts’ per se – we need to rethink those public services that worked when they
were conceived 80 years ago, but don’t work now.
The non-partisan CRPF will be a forum for ideas how we can spend less, better, and
get the economy growing. Politicians can’t do it on their own – we voters need to
give them a mandate to make the necessary changes. Our first goal is to make
responsible public finances funded by a robust economy the number one issue at the
next General Election. We will build this mandate by sharing clear, transparent
information and laying out the available choices. Any political party with the courage
to make the tough choices will find more support than they think from a frustrated,
but generally sensible electorate.
I don’t want to start a debate about ‘sensible people’, but I probably will. For me, they
occupy the reasonable middle ground on most issues, but frustration occasionally
sees them flirt with ideas they don’t really support. They are alarmed at the
aggressive extremes at both ends of what often seem like marginal issues. They like
our country and broadly respect our institutions, despite their faults. They’re proud of
what we’ve achieved but recognise we could learn from our history: To be tolerant,
but fair; generous to those less fortunate, but within reasonable limits. Not to be
taken advantage of. A belief in civic responsibility and community spirit. When
meeting someone new, not allowing their responses to be guided by that person’s
skin colour, religion, gender or sexual preferences.
The CRPF seeks ideas and debate regardless of political persuasion. From us, over
the coming months, we’ll ask whether a ‘sensible’ Brit would be interested in:
- Dramatic reductions in current spending that reins in borrowing, accelerating
- the decline of national debt as a proportion of GDP whilst..
- Reallocating some savings to fully fund increases for the most vulnerable
- Fully funded tax cuts and a refocus on wealth creation
- Substantial progress towards net-zero, enabling the UK to jettison some of the
- more expensive and politically right-on initiatives
- Significant improvement in food and energy security
- A reduction in the trade deficit and the regeneration of areas most in need of
- business, investment and jobs
- Creation of a UK Sovereign Aid Fund of £150 billion+ leading to increased
- aid whilst reducing the burden on the UK taxpayer
- All the above lead to improved government revenues, a stronger economy,
- and lower debt interest
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