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BALLS Ed headshot facing left

BALLS Ed Spend canEd Balls’s speech on Saturday, like those of his mentor Gordon Brown, was full of trickery. We’ll examine just how much trickery on Thursday, when I write the latest post in ConHome’s Pinning Down Miliband series – but there’s one thing, in particular, that I wanted to highlight before then. It’s Balls’s use of the phrase “zero based”.

As we all know, Balls’s offer of a “zero-based review of public spending” is a key part of his fiscal offer. It says: look, look, I’m not going to increase taxes or borrowing to fund a shopping spree. Or, as he put it on Saturday: “By examining every pound spent by government from the bottom up, we will root out waste and inefficiency.”

Sounds good, huh? I suppose it does, if you can get past the fact that this examination of “every pound spent by government” has started whilst Labour is actually outside of government. A detailed review of public spending is something that ConHome has argued for for a while.

Oh, but there’s another thing you might have to get past: Brown, with Balls at his side, used to conduct zero-based reviews of public spending, too. That’s technically what the Comprehensive Spending Reviews were and are. And if you don’t believe me, here’s a passage from a Treasury Select Committee report on the 2007 Review:

“The characterisation of the 2007 review as ‘Comprehensive’ harked back to the initial Spending Review of 1998. Like that Review, the process concluding in 2007 was intended to consider spending from a zero base.”

They then quote Brown’s Treasury, writing in advance of the same Review:

“The aim of the zero-based reviews now underway is to renew each department’s baseline expenditure to reflect changing priorities a decade on from the first CSR. Whereas past Spending Reviews have traditionally focused on allocating incremental increases in expenditure, the process of setting new long-term objectives in the CSR provides an important opportunity—with many past objectives achieved and supporting programmes and spending potentially available for reallocation—for a more fundamental review of the balance and pattern of expenditure within and across departments.”

After all of that zero-based reviewing, here’s what happened next: total government spending rose by over £50 billion, in real terms, between 2007-08 and 2009-10. Even departmental spending – the part that’s easier to control – rose, as this graph from the Institute for Fiscal Studies shows:

Spending graph

Seems to me, the crucial thing that Balls has said about zero-based reviews came in September 2012. “With zero-based budgeting,” he explained, “you can test spending not on the basis of whether it is easy to slash, but whether it meets your priorities.” And whose priorities are those? Labour’s. Which certainly aren’t the same as the Tories’, and may not be the same as most taxpayers’.

8 comments for: Don’t let Balls kid you: “zero-based” doesn’t necessarily mean “spending restraint”

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