Magazine article The Spectator

Call in the Grim Old Hungarian

Magazine article The Spectator

Call in the Grim Old Hungarian

Article excerpt

The best moment in a chancellor's life comes early. 'Mr Deputy Speaker, ' he says, 'we have examined the books. The position is grave. My first duty is to put the public finances in order.' He then sends for the Hungarian middle-distance runner, Savij Kutz.

This bogeyman, first identified by Alan Watkins, has been off the track for years but is making a comeback. Nick Clegg for the Lib Dems gave him a friendly wave. Gordon Brown mutters his surname through gritted teeth. David Cameron lets it be known that he wouldn't want Kutz to be confrontational.

He may not have the choice.

Public profligacy has seen to that. Public spending in this decade has outpaced every other major economy, public borrowing has struggled to keep up, and until the other day, the Cameronians seemed content to let this go unchallenged. They murmured instead about sharing the proceeds of growth. What growth, they must now wonder? What proceeds?

Today's Chancellor has budgeted to borrow £175 billion this year and, in the next five years, another £700 billion - if his creditors will let him. The next Chancellor, when he looks at the books, would be wise to expect to find something even nastier. Then, unless he is prepared to test his credit to destruction, he must send for Savij Kutz. The old brute knows what will work and what won't. He knows, for example, that rubbing out lines on a map is a spurious economy. Denis Healey tried that one, purporting to save money by not building an airport in the Thames estuary or a Channel tunnel. His credit ran out two years later.

Real economies have to be found not in one-off capital projects but in the public sector's current and recurrent shoppinglist - in the bills for what we do already.

Corin Taylor at the Institute of Directors has helpfully drawn up a counter-shopping list of things we don't need, things that don't work, and things that we could buy more cheaply. Go right through the list and we could save £50 billion a year.

Regional development agencies, for example, are paid £1.7 billion to do what local businesses could do for themselves if they thought it worthwhile. London has one with a nice new head office and an income of £417 million. That money would pay the interest on a bond sufficient to finance half the cost of Crossrail, which would be a more practical way to help London.

All the same, as his Hungarian adviser could tell the next Chancellor, making a list is one thing and making it stick is another. …

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