Web Analytics Trust People (once an Englishman in Philly): Welcome to Wonderland

Friday, April 08, 2005

Welcome to Wonderland

Richard, a good friend of mine seeks to attack the notion of opposing ever greater funding for public services over at Militant Moderate after my post yesterday suggesting it wasn't a sensible panacea for all ills.

"Here are my two 'leftist' (I would say 'non-rightist') assertions:
More money = better public services = tax cutting intrinsically undesireable
Good reform = better public services = identifying good reform desireable

Finding the balance of taxation so that our free market economy functions handily is the essential brake on the first, but I really don't think the current levels of taxation are economically oppressive. Certainly, the idea that once you improve a service's practices, you can slash its budget, rather than reinvest that budget in more nurses, more police officers, more teachers, seems ridiculous to me.

In waving the flag of reform as a key to tax-cutting, Ed is sugaring the bill of Tory service cuts very intelligently. However, I simply cannot see his base assumption that you can reform as an alternative to spending, rather than as a way of making every pound more efficient. I consider myself a liberal, in the British sense, so I am all in favour of retrenchment of the state in functions it should not be doing. But when the state, rightly, takes up the burden of health care, surely it should do it well- and that requires both efficiency (via reform to find best value) and proper funding for staff. Every pound you save through reform should be plowed into those extra public servants, not my tax bill, when we're doing fine as it is.

A 'leftist' ideological commitment to unlimited increases in taxation and public expenditure is naive doctrinal blinkeredness. Yet I see little different in a 'rightist' ideological commitment to reduce expenditure. Surely the first job is to define what the state should do; work out what it will cost to do it well, and the best practice for delivering it; and then temper it with efficacy of taxation (e.g: that 90% tax rate will actually be economically stupid). To begin from the point of 'find £x billion cuts' is ridiculous, when the money saved from reforms needs to be shifted to more frontline public servants."

Now there are a number of problems with this basic position, and I shall try to refrain from minor snipes at the slips in the piece. What matters is quality and level of service. The raw money which is spent is quite irrelevant to how well one is running public services. More money doesn't automatically mean better services, nor is it a sensible plan for the future of the service, with the depressing effect of a greater tax take on the economy and future tax revenues. Obviously, however, you need sufficient money to pay for the requisite number of personnel and requisite infrastructure.

The problem comes when the service isn't performing as well as one might like. Too often the "left", or the "not right", or whatever you want to call them, assume that the only thing holding back improvements must be that there is not enough money and that money can solve all the problems. Before you go to get more money, however, it must be necessary to ensure that all the money you currently have is being spent wisely. You have to ensure that you have accountability, efficiency and value for money in a system which is best designed to deliver the goals you want. Arsene Wenger is not going to be given a windfall for new players unless he shows that he really cannot work within the current wage structure and that David Bergkamp et al are in no way deadweight.

What Richard fails to highlight is that reform is spending. It is spending more taxpayers money on frontline processes which will deliver them what the taxpayers want. It is spending more money on things the country want money spent on rather than things bureaucrats and civil servants want money spent on or decide to spend money on.

The great problem with anything other than great caution in relation to increasing government expenditure through increased tax take is that it quickly erodes any responsibility to be thrifty, wise and cautious with spending taxpayers' money. It is easier to reach for more of somebody else's money than to take tough operational decisions about your department. Taking more money through tax becomes a panacea for solving everything - and one which seems not to have a limit either. Where do we stop? The fact is that before we take somebody else's money - which is, after all, what taxation is - we must be sure we will spend it properly and wisely and give the country that value back. You can be sure that when people spend their own pound they make damn certain they get at least a pound of value back. People don't give away value freely in their everyday lives - why should they be forced to through the tax system?

In order to believe in this though you need to have concern at dipping into that bottomless pot which is the taxpayers' money. You need to appreciate that taxation is actually taking other peoples' money and saying you know better than them how to spend it. Yes, it is necessary to carry out this undesirable act to ensure we live in the moral and just society we all want. It is also necessary to be cautious about the idea and to do so only where necessary. Where it is not necessary to spend money for the current service and where the country doesn't get £1 in value back for £1 taken then to take peoples' money is truly immoral. To take peoples' money under threat of imprisonment endows one with a serious responsibility.

Yes, some on the right become obsessed with reducing tax for the sake of it and for any cost. They are wrong. There is a role for taxation. Nevertheless, despite that minority, I know that many of those who Richard seeks to tag as "ideologically blinkered" are not committed to reducing taxation come what may. They are committed, quite rightly, to taking as little as possible for those goals we want to achieve, and for ensuring before it is taken that it is spent wisely. This is the only way the public can get value for money.

Richard asks when should the flag of reform be waved as a key to tax cutting? It should be waved when the same service can be provided, post reform, for less tax than the other party would take. It should be waved when the public have a clear choice to have less of their own money taken for no loss. Then lower tax can and most certainly should be promoted. Then it becomes a choice between which of the plans for management is most convincing.

At the root of this all lies a key question, however. Do you think that where possible Government should not take peoples' money? Or do you think that the Government has a right to peoples' money so therefore ought to take more while it can? Despite his rhetoric about being a liberal I see very little desire from Richard for the state only acting where necessary. Any real liberal must surely ask whether any given level or type of public expenditure is good enough to exhaust the duty of trust owed to the person from whom it was taken, to outweigh the wrong of taking what belongs to someone else. Useless public expenditure, or public expenditure which returns no gain or has a negative effect cannot ever justify money being taken by threat of coercion. For this reason we must exercise caution and be certain that greater taxation is the only way. So where reform can be carried out and savings can be made we have a moral duty to return those savings to the people from whom the money was taken unless there is a clear and sufficient return from alternative investments which can be made to justify its retention. We should also be entitled to ask why money wasn't being spent on that previously.

I should also point out that the Conservatives will spend just as much on healthcare and education as Labour. In key services there will be no difference or lesser expenditure. Money from reform will be ploughed back in. Richard's straw man does not stand. The problem is that too often the left, with little regard for the immorality of frivolous taxation, see more money as a solution to problems - with reform coming a close second. Let the Conservatives be proud to say they will only take other peoples' money through coercion when it is completely necessary. This was the point of my brief post. The first step is to show why the extra money is not needed. The second is to return it to its rightful owners.


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