More on the Tories and the myth of government “waste”

John Maynard Keynes pooh-poohs Sir Stuart Rose et al.

My NS colleague and good friend, the economist and former MPC member David "Danny" Blanchflower, has asked me to highlight this letter, published in yesterday's Financial Times, which he co-authored with Robert Skidelsky.

Sir, How many of those business leaders who complain that raising National Insurance contributions is a "tax on jobs" realise that the "efficiency savings" that they demand would destroy jobs just as certainly?

Raising National Insurance contributions attacks jobs by reducing profits per unit of output: an "efficiency saving" by government cuts costs by putting someone out of work. Both measures aim to reduce the government deficit at the expense of jobs. That is why the government has wisely postponed raising NI contributions and cutting "waste" until economic recovery is under way.

The general point is that expenditure that would be "wasteful" in normal times can be useful in depressed times. When an economy is growing strongly we need to cut out waste; when it is depressed, what is called "wasteful" spending can keep up aggregate demand, employment and sales. Keynes might have been thinking of our eminent business leaders when he wrote that "common sense" is apt to prefer wholly wasteful forms of public spending such as unemployment benefits to partly wasteful forms such as over-manning in government agencies.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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What the debate over troops on the streets is missing

Security decisions are taken by professionals not politicians. But that doesn't mean there isn't a political context. 

First things first: the recommendation to raise Britain’s threat level was taken by the Joint Terrorism Analysis Centre (JTAC), an organisation comprised of representatives from 16 government departments and agencies. It was not a decision driven through by Theresa May or by anyone whose job is at stake in the election on 8 June.

The resulting deployment of troops on British streets – Operation Temperer – is, likewise, an operational decision. They will do the work usually done by armed specialists in the police force protecting major cultural institutions and attractions, and government buildings including the Palace of Westminster. That will free up specialists in the police to work on counter-terror operations while the threat level remains at critical. It, again, is not a decision taken in order to bolster the Conservatives’ chances on 8 June. (Though intuitively, it seems likely to boost the electoral performance of the party that is most trusted on security issues, currently the Conservatives if the polls are to be believed.)

There’s a planet-sized “but” coming, though, and it’s this one: just because a decision was taken in an operational, not a political manner, doesn’t remove it from a wider political context. And in this case, there’s a big one: the reduction in the number of armed police specialists from 6979 when Labour left office to 5,639 today. That’s a cut of more than ten per cent in the number of armed specialists in the regular police – which is why Operation Temperer was drawn up under David Cameron in the first place.  There are 1340 fewer armed specialists in the police than there were seven years ago – a number that is more significant in the light of another: 900, the number of soldiers that will be deployed on British streets under Op Temperer. (I should add: the initial raft of police cuts were signed off by Labour in their last days in office.)

So while it’s disingenuous to claim that national security decisions are being taken to bolster May, we also shouldn’t claim that operational decisions aren’t coloured by spending decisions made by the government.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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