Taking an axe to public sector waste

September 15, 2008 12:25 PM
Originally published by UK Liberal Democrats

Government should do fewer things well, rather than many things badly, argues Vince Cable in his keynote speech to the party conference. Vince proposes that every non-front line public sector employee on £100,000 or more should be forced to reapply for their jobs.

Dismissing Gordon Brown as a "twitching corpse", Liberal Democrat Shadow Chancellor Vince Cable turned his fire on the Conservatives in his warmly received speech to the conference.

Vince described Tory 'fairness' as "the ultimate miracle" - "even people who believe that pigs can fly, struggle to get their heads round the idea that the Tories are the party of 'fairness'."

Faced with an onslaught of the Conservatives' "vacuous friendliness and all embracing emptiness", the Liberal Democrats had to offer a "more deeply rooted, more principled, alternative, a clearer analysis of why Britain faces a growing crisis; and a more honest statement of what the Government can and cannot do", he argued.

Turning to the current economic crisis Vince said that while the British Government did not cause it, it was guilty of hubris: "the delusional claim to have abolished the boom and bust cycles to which all capitalist economies are prone. They forgot that financial success breeds excess; unearned rewards feed greed; and overconfidence leads to folly."

"New Labour incubated a culture of financial gambling with other peoples' money which has contributed to the collapse of trust in financial institutions. It also bred a dangerous dependence on debt."

Vince warned that the Government must not try to prop up house prices which, he said, have to fall back to a sensible level which makes housing affordable for ordinary families. And they must not compromise the independence of the Bank of England by telling it to slash interest rates and generate another dangerous inflationary 'bubble'.

But, said Vince, social landlords should have more freedom to acquire surplus property and land to provide homes for those in need on housing waiting lists. Lenders must be stopped from pushing thousands of families into homelessness through repossession. And there had to be effective regulation to stop a repetition of the binge of irresponsible lending.

Turning to one of the hot topics of the conference, tax levels, Vince argued that it was not possible to have a sense of society "when hard-working families and pensioners pay through the nose while others don't pay their share and dodge taxes through tax havens or tax avoidance scams."

Taking on those who think the language of tax cutting is "right wing", he said he did not see what was "right wing" about wanting to cut the taxes of millions of people who earn less or barely more than the equivalent of the minimum wage.

"Tax cuts should mostly be paid for by those who currently don't pay their fair share," explained Vince. He said government should "declare war on the anti-social practices of rich individuals and companies who avoid tax."

There are, Vince said, some areas where more public money could usefully be spent: on schools, further and adult education; mental health; law and order; the state pension. But we also needed to challenge in a fundamental way many of the things which government spends money on. He cited industrial subsidies and payments to big farmers, the Child Trust Fund and means-tested tax credits for people on higher incomes, ID cards, extravagant defence contracts and subsidies to nuclear power.

Also, the "gravy train of management consultancy in government" needed to be stopped, and questionable government IT projects, and an axe needed to be taken to much of what he called "the overgrown thickets of quango land."

"The coward's way is to sack or squeeze the pay of low paid public sector workers," said Vince. "The correct way is to start at the top: require every non-front line public sector employee on £100,000 or more to reapply for their jobs. Those allowed back would take a cut in pay and public sector pension entitlement."

"And politicians cannot lead a crusade against self-servicing public sector extravagance unless they lead from the front; so MPs and Ministers must accept deep cuts in numbers and fringe benefits like pensions.

"The message must be that government should do fewer things well, rather than many things badly. And that will help to give us the resources to deliver Nick Clegg's commitment to handing money back to ordinary people."

Click here to read the speech in full