Budget And Autumn Statement Theatre Is No Way To Run Modern Britain

Homer Simpson - George Osborne - Budget - Annual Statement

The way British governments set budgets and tweak spending plans is a recipe for bad, short-termist decision making

Forget tax credits for a moment. Forget Right-To-Buy, stamp duty, beer duty and the tampon tax. MPs may still be debating George Osborne’s 2015 Autumn Statement, but step back for a moment and look at the broader picture.

Twice a year – once in the annual Budget and once in the Autumn Statement – the Chancellor of the Exchequer gets to his feet and delivers a refreshed set of economic policies in a big, set piece speech where he is essentially forced to favour tomorrow’s headlines over optimal long or even medium term decision making.

Nationally significant policies from every government ministry live or die by the concessions that their ministers are able to wrangle from a Chancellor who is forced by political reality to be more concerned with tomorrow’s Daily Mail headline than the state of our public finances in a year’s time.

Spending decisions are made based on economic forecasts which are sunnier than a warm day on Venus. Questionable political decisions are defended to the hilt, because to question them in light of new data would be to commit the gravest of self-inflicted political wounds, the U-turn. The government of the day rolls out a “smoke and mirrors” act worthy of David Blaine, and all to glam up the fact that they have slightly re-arranged the deckchairs on the Titanic.

And for what? To draw the public in to the political process? To high-mindedly arbitrate complex questions of economic policy? To astutely position Britain  vis-à-vis our global competitors, ensuring that our tax code, infrastructure and labour market are the most attractive in the world?

No. We do it just so that the government of the day – or a nimble opposition (remember those?) – can score political points. And, of course, because it is traditional.

Some traditions – like MPs not clapping in the Commons chamber – are antiquated and affected, but do little real damage. Others – like MPs having to leave the Commons chamber through a specific door in order to vote, rather than availing themselves of fast electronic voting technology – are an irritant, a brake on the smooth running of our legislature.

But some traditions belong in another category – things that do real, actual harm, not just to the running of our Parliament but to the political outcomes which we then have to live with every day. Some traditions actively harm our democracy.

I would submit that the Budget and Autumn State set-piece theatre events fall into this latter category. Politically astute chancellors (like George Osborne on a good day) may relish them because they provide an unparalleled opportunity to draw red lines and create traps for the opposition. The Westminster media may like the status quo, because if nothing else, these events can be moments of real political drama.

George Osborne - Chancellor of the Exchequer - Budget

But besides savvy chancellors and the established media, it is hard to tell who else benefits from the current system other than the cause of Big Government.

Having two occasions each year when an already-powerful chancellor like George Osborne in an already-centralised country like the United Kingdom gets to play with nearly all of the controls and levers which influence our economy – as though he were Homer Simpson at the controls of Springfield Nuclear Plant – only encourages meddling and tweaking of things that should properly be left to local government and individuals.

When you have direct, ultimate control over which families deserve help buying a house, which people should keep or lose their benefits or how much a person pays in sin taxes for their guilty pleasure, the temptation to use those powers is irresistible. And because of the ratchet effect, it is the easiest thing in the world to give away new perks to favoured interest groups, but nearly impossible to ever claw them back without being exposed to political attack. Even under this nominally conservative government, budgets and autumn statements have often been a one-way ticket to bigger government – or at least more activist state.

No system is perfect. One needs only look across the Atlantic ocean at the United States, with their unseemly debt ceiling fights and government shutdowns (oh, to have one here) to realise that you do not need a Westminster parliamentary-style system to sow budget chaos. But the flaws in our current system are obvious, and have been staring us in the face for years – yet nobody has proposed the slightest alteration, choosing instead to cheer when their side “wins” and whine when the other side is in power and sets a budget with which we disagree.

People did not elect a Conservative government only to have George Osborne sit at the control console of their lives, Homer Simpson-like, flicking switches and adjusting dials here and there in order to manipulate our mood so that we vote Tory again in 2020. If conservatism still means anything, it should mean a healthy scepticism of the state and its power to influence or police human behaviour.

Surely at some point our desire for smaller government and a smarter state has to outweigh our devotion to the dusty tradition of a man standing on the doorstep of his house, waving a red box around.

Autumn Statement - George Osborne - Conservative Government - Man at Control Panel

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Don’t Congratulate George Osborne For Stealing Labour’s Living Wage

George Osborne - Budget 2015 - Living Wage - Minimum Wage - Conservative Party


We are in danger of getting so carried away praising George Osborne’s tactical genius in commandeering Labour’s compulsory national living wage that we forget to notice his total betrayal of conservative principles.

On a purely tactical level, George Osborne’s Budget of 2015 – the Conservative Party’s first for nineteen years – was a masterstroke.

At the nadir of Ed Miliband’s dismal attempt at being Leader of the Opposition, the Labour Party attempted to wow voters with their feeble plan to increase the minimum wage to £8 per hour – by the year 2020. And yet despite having defeated Labour resoundingly in the 2015 general election, it seems that the Tories were only just getting started – they have now twisted the knife by neutralising Labour’s main line of attack against the budget with their secret weapon, a re-branded “national living wage” of £9 per hour by 2020. With Tories like this, who needs the Labour Party anyway?

A fair question. But given George Osborne’s shameless appropriation of a flagship Labour policy, here’s another equally valid question: why bother voting Conservative ever again, either?

The national minimum wage – state control over the wages and employment conditions of over one million people – is a thoroughly un-conservative idea. What’s more, George Osborne’s rush to embrace the living wage makes a mockery of conservative arguments against government-controlled pay – either the Chancellor is deliberately riding roughshod over conservative orthodoxy, or he genuinely believes that conservatives were wrong about the minimum wage all along.

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Budget 2013 Drinking Game – The Results

Well, Budget 2013 is now behind us, though the frenzied analysis continues unabated.

We heard George Osborne’s more-of-the-same speech.

We heard Ed Miliband’s “I would do roughly the same, but make things slightly worse” rebuttal (despite the deputy speaker’s unfortunate rhetorical question asking Labour backbenchers why they didn’t want to hear their own leader).

It’s time to check our scorecards and see how we fared in the Semi-Partisan Budget 2013 Drinking Game!

Semi-Partisan Budget 2013 Drinking Game - The Results!
Semi-Partisan Budget 2013 Drinking Game – The Results!


Well, the results are in and it looks as though I have done rather well.

The most magnificent triumph, of course, was my correctly predicting that George Osborne would have a “Marco Rubio” moment mid-speech, and urgently grasp for a glass of water. I awarded myself extra points for that prognostication.

Some, of course, could not be proven one way or the other – the ridiculous rules which still govern the filming of Parliament mean that you rarely get to see a full shot, so I’m not sure who was throwing their order papers, or popcorn, or kicking the seat of the MP in front of them.

But I will take 18/25 as a good result any day. The middle square, of course – an actual sensible policy proposal – was always out of the bounds of possibility, and needless to say did not come to pass.

I hope that you had fun playing, and I would be very interested to hear of any other similar Budget (or other politically) related games that readers may know about. Please do share them in the Comments section underneath this post, or send them to me @SamHooper.

A “fiscally neutral” budget. Rearranging the deckchairs on the Titanic (to use a very tortured metaphor).

Happy Budget Day, everyone!


Semi-Partisan Sam


Semi-Partisan 2013 Budget Drinking Game

If, like me, you plan to watch Chancellor of the Exchequer George Osborne present the UK coalition government’s 2013 budget to Parliament today, you might like to use this handy tool to pass the time. You can treat it as either a bingo card or a drinking game, depending on how pessimistic you feel about the budget contents…

The Semi-Partisan 2013 Budget Game
The Semi-Partisan 2013 Budget Game

30 minutes until showtime. Enjoy!

If you do not already do so, please consider following me on Twitter @SamHooper.

Happy Budget Day!

In Praise of David Laws

David Laws


Yesterday I recently read some of the most refreshing words on economic policy to have been uttered by a British politician in recent months, and they came not from a Conservative but from a Liberal Democrat MP.

In an interview with the Sunday Telegraph, David Laws, briefly Chief Secretary to the Treasury but now a lowly backbencher, made the case for reduced tax rates, deeper (but more wisely targeted) cuts in public spending and reform of the public sector:

… Mr Laws said the share of the economy accounted for by the state was “out of kilter” with the amount of tax the public were willing to pay.

Only spending on health, education and pensions should not fall as a share of GDP, the MP said.

The former chief secretary to the Treasury’s views will alarm many Lib Dems who have opposed the Coalition’s spending cuts. However,

Mr Laws argues that cutting state spending would be in keeping with the founding fathers of the Liberal Party.

“Even after the existing fiscal consolidations, state spending will account for some 40 per cent of GDP, a figure that would have shocked not only Adam Smith, William Gladstone, and John Stuart Mill, but also John Maynard Keynes and David Lloyd George,” he says.

“The implication of the state spending 40 per cent of national income is that there is likely to be too much resource misallocation and too much waste and inefficiency.”

Too much resource misallocation and too much waste and inefficiency. Yes!

I have found it irritating beyond measure to see minister after government minister talk about the need to reduce the ridiculous proportion of national output accounted for by government spending as a sad necessity resulting from the economic recession rather than as something desirable as an end in itself. When critics accuse the Conservative-led coalition government of using the recession as a trojan horse to impose ideologically-inspired reductions in the size of the state, I actually wish that they had the impetus to do just that – but this accusation greatly overestimates the political savvy and core convictions of the current Conservative Party leadership and instead, government spending continues to increase in real terms, and no big-name Tories are speaking out in favour of a leaner public sector.

David Laws (together with other likeminded libertarian-leaning types such as Michael Gove MP) is one of the few politicians to actually come out and make the case that the British public sector has grown far too large and bloated, and that reducing its size is both necessary and worthy, not just because of the present economic difficulties but because it is the right thing to do.

But why do we only hear this call for a  from a backbench Liberal Democrat MP and not from a frontbencher in the Conservative party, who should hold these views just as dearly? Why isn’t David Cameron acting as head cheerleader for shrinking government and making the case that important services can still be provided – often to a higher standard – when the government does not have ownership of them? Where is George Osborne, and where are the urgently-needed supply-side reforms so glaringly missing from his last Budget?

In short, why did I campaign for and help the Conservative Party fight the last general election, when it has fallen to a Liberal Democrat to make the case for a small, lean state and for economic liberty?