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Building shield

The Labour leadership knows something that they’re not telling the rest of us – namely their spending plans. One assumes that they’ll come clean at some point before the next election, though so far they’ve been given a free pass by the media.

Will they try to match the fiscal pathway already set out by George Osborne? In a way it doesn’t matter, because whatever figure they put on their overall spending plans won’t be nearly enough to pay for the individual promises they’ll make (plus the general impression they’ll give that they can cancel – and even reverse – the ‘Tory cuts’).

To distract their critics, Labour’s Treasury team will make a big thing of the administrative savings they intend to make. It’s a tactic straight out of the Gordon Brown playbook – a show of fiscal rectitude (remember the Gershon Review) to conceal the fact that they’re going Greek with the public finances.

An important insight into what’s in store comes from George Eaton of the New Statesman:

If Labour enters power in 2015, with a binding target to eliminate the current deficit by 2020 and to reduce the national debt as a proportion of GDP, it will need to enact dramatic reform of the state. As policy review head Jon Cruddas noted in his speech on ‘one nation statecraft’ in June, ‘Labour will inherit a state that in many areas has reached the limit of its capacity to cut without transformational change to the system.’”

What does this actually mean? Eaton identifies two major elements – the first of which I don’t see getting past Len McClusky (General Secretary of Unite and editor-in-chief of the Labour Party manifesto):

“…devolving power downwards from Whitehall and reorienting services such as the NHS around prevention rather than just cure.”

However, the second element could be a big part of Labour’s fiscal narrative:

“…an even more radical step: abolishing entire government departments. Several shadow cabinet ministers have told me that they are actively pushing the idea as a means of saving money and of enhancing Labour’s fiscal credibility.”

Which departments do Labour have in mind?

“One influential member cited the Scotland, Wales and Northern Ireland Offices and the Department for Culture, Media and Sport as examples of those that could be cut entirely, with DEFRA also vulnerable.”

Can cutting the number of departments really be described as a “radical step”? Getting rid of a few brass nameplates along Whitehall would hardly make a dent in the size and power of the state bureaucracy. It’s a bit like those dodgy debt consolidation services – you may have fewer individual liabilities, but the overall burden is just as heavy.

In fact, if we reduce the number of ministers without reducing the scope of the state we only make things worse, because there’ll be just as much bureaucracy, but with less democratic control.

Nevertheless, George Eaton makes a powerful point on the appearances of the matter:

“One of the notable omissions of David Cameron’s time in power has been any significant attempt to reform the machinery of government, with no departments merged or scrapped. By taking up this agenda, Labour could blindside the Tories and demonstrate how it would seek to do more with less.”

Conservatives need to be ready with genuinely radical proposals of their own. By all means, let’s scrap and merge departments if that helps, but much more importantly let’s reduce their size and power.

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