This week saw the spending review. This Is not a budget, more a statement of what priorities the government wants to finance first. So this statement looks at spending only, not how the government will raise the funds to pay for it all. That comes in the autumns.
A lot of it is pretty vanilla. Much of it we already know, but as is always the case, there are probably more questions that come out of this than answers.
For example, we know that defence spending will increase to 3% of GDP by the end of the next parliament, but the commitment to just 2.6% by the end of the spending review period (the end of tax year 2029/9). This merely leads to more questions about when we get to 3%, and the chancellor let slip that she will be including security services within that budget. We know that there will be more money spent on nuclear submarines – a good thing – but she is quiet about the fact that these submarines will be depreciated within the MoD budget. This means accounting practices take money away from front line services.
The Chancellor also spoke about finding money from efficiency savings, but was remarkably unspecific about that. We know the government is poor in this area. One of their first actions was to give junior doctors and rail workers inflation busting pay rises, but with no requirement to up productivity. So the same service costs more. And if course, the junior doctors want another inflation smashing payrise.
Which leads to the NHS.
The promise is to increase spending by £30 billion over the period, but with no apparent attempt to increase productivity. The NHS has had a wall of cash spent on it – up 28% over inflation since 2010, yet there seem to be few ideas about driving better productivity.
And so it goes on. There is a certain depressing repetitiveness about all this. The chancellor went on about the austerity years as if she completely failed to realise that this was brought about by the financial crises, enabled by poor regulation on the banks under the previous, Labour government. Have they learnt absolutely nothing whilst in opposition?
But one of their actions has resulted in a tax cut. The giveaway of the Chagos Islands to Mauritius has, I hear, resulted in the government of Mauritius scrapping income tax. Labour can cut taxes, but not here.