The national accounts
In 363 AD the Roman emperor Julian led his troops into Persia. Instead of finding the bountiful prize he expected, according to Edward Gibbon, Julian found that “on the approach of the Romans, the rich and smiling prospect was instantly blasted. Wherever they moved…the cattle was driven away; the grass and ripe corn were consumed with fire; and, as soon as the flames had subsided which interrupted the march of Julian, he beheld the melancholy face of a smoking and naked desert.”
Politically ‘scorched earth’ has usually been more prosaic. When Al Gore lost the election in 2000 disgruntled Democrat staffers went round the White House removing the letter W from computer keyboards. But as David Cameron moved into Number 10 he found Gibbon’s “smoking and naked desert”.
The catastrophic state of Britain ’s public finances under Labour was already well known. National debt doubled. Gordon Brown began running budget deficits back in 2002. The national debt is rising at over £5,000 per second. We have the largest budget deficit in the G20. By 2013 9p in every £1 paid in tax in the UK will be spent on paying the interest on this debt. Former Chief Secretary to the Treasury Liam Byrne was being accurate as well as crass when he left a one sentence long letter to his successor David Laws; “Dear Chief Secretary, I’m afraid to tell you there’s no money left”
During the election campaign Labour told us that this fiscal incontinence was necessary to fight the “global” recession (the one Gordon Brown had told us would never come). With borrowing this year of over £160 billion, Brown warned that even cutting spending by £6 billion, less than 1% of all government spending, risked tipping us into depression.
It was always (just about) possible to take a charitable view of the Labour government’s wild spending and acknowledge their sincerity. After all, they honestly seemed to believe it was a good idea to spend £1.3 billion on ID cards, now, thankfully, scrapped by the coalition. But in the last couple of days it has begun to look as though Labour adopted a Persian approach to the public finances.
In its last four months in office the Labour government signed off 60 projects totaling over £10.5 billion of spending. A couple of striking examples were given by The Guardian
“Ed Balls, who has spoken of his struggle with stammering as a child, approved £500,000 to support a stammering centre in West Yorkshire in March. Margaret Hodge, then culture minister, approved £200,000 to renovate the Jewish Museum in London and relocate the Wiener Library, one of the world’s most extensive archives of the records relating to the Holocaust.”
Worthy causes, but can we actually afford them?
Senior civil servants seemed to think not. Faced with this wave of new spending they took the unusual step of asking for written orders from ministers. According to The Guardian
“Such ministerial orders are rare and signify an irresolvable dispute between a minister and his most senior civil servant. Whitehall sources told the Guardian there had been five this year. Public records also show nine last year and five between 2008 and 2005…That marks a big increase on the previous decade. A list of these ministerial directions published in the House of Commons shows that they were issued at a rate of two a year between 1990 and 2005…The revelation adds weight to the coalition government’s claims that ministers were profligate in the final weeks of the last government.”
Jonathan Baume, the general secretary of the First Division Association which represents senior civil servants, told the BBC “When a permanent secretary asks for their letter of direction from a minister, it is because they feel that a serious decision is being taken, which they feel is not right. It’s not a decision that is taken very often to ask for such a letter of direction, which is why it is regarded something of a nuclear option. So when it happens it tends to be a big spending decision, where the civil service believes this is not the right thing to do.”
So why was it going on? We find ourselves back in fourth century Persia. The Sunday Times reported
“One former Labour minister told The Sunday Times: “There was collusion between ministers and civil servants to get as many contracts signed off as possible before the election was called”…One former adviser to the schools department said there was a deliberate policy of “scorched earth”. “The atmosphere was ‘pull up all the railways, burn the grain stores, leave nothing for the Tories’,” he added.”
If this is the case then it explains why Labour ran away when the Liberal Democrats sounded them out about a coalition. Having farted in the fiscal elevator Labour wanted to get out and take the stairs and were mortified when Nick Clegg invited them to ride up to the next floor.
As funny as the moronic Liam Byrne may have found all this it us, the taxpayers, who will be picking up the tab for this cynical bout of economic sabotage. As Gibbon reflected, such a ‘scorched earth’ policy could “only be executed …by the rigor of an arbitrary government, which consults the public safety without submitting to their inclinations the liberty of choice.”
Thank God they are gone.