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HomeNewsCerberus: Want to shrink the useless, bloated State? Then quit the EU

Cerberus: Want to shrink the useless, bloated State? Then quit the EU


Cerberus will be writing a blog every Monday on the state of modern Britain.

So what is the biggest issue facing the country? According to the pollsters, the list is pretty much unchanging: the NHS, the economy, unemployment, education. Only in recent times, as Polish builders and Lithuanian waitresses have flocked to these shores and as the migrant crisis has dominated the media, has immigration (code for unease that a whole way of life is under threat) moved to the top of the list.

But there is another way of addressing this question. As the recent general election – the dullest of modern times – demonstrated, our politics is stuck. The differences between the two main parties were marginal, centering as they did on which one would borrow or spend fractionally more or less. Superficially, the advent of Jeremy Corbyn heralds a far greater clash of ideas with the hard left being pitted against the free market right. But will Corbyn last and will he ever develop a coherent alternative to the so-called austerity politics of Cameron and Osborne?

The reason politics is stuck like a gigantic pile-up on the M25 is the size and nature of the State. The modern British State consumes a vast amount of cash – nearly half of the nation’s output – and has done for years. It also employs a vast number of people, nearly 7 million, with many millions more – pensioners and welfare claimants – dependent on its largesse. Against this glacial background, nothing much can change. For all this Government’s rhetoric about cutting spending and taxes, eliminating the deficit, starting to pay down the £1.5 trillion national debt, the State, a vast creature like a Hydra growing more heads as soon as one is cut off, blocks off any reform. No wonder politicians are not trusted and held in contempt. They are impotent in the face of the monster they have created.

We should be grateful for the Institute of Economic Affairs, one of our oldest think-tanks and one that has fought a lonely battle on behalf of free market economics since the advent of the post-war welfare state, for its latest attempt to focus our attention on the scale and ambitions of the State. Its Paragon Initiative, a bid to chart a route to effective government, begins with some sobering numbers.

  • Britain has run deficits for 52 out of the past 60 years
  • The national debt, £80,000 for every family, is at unprecedented levels outside wartime
  • State spending as a proportion of national output has grown from 10 per cent in 1900 to 47 per cent in 2014 – higher than in any year between 1947 and 1979, the supposed high water mark of big government consensus
  • State spending on welfare, health and education takes up two thirds of total government spending; it was less than 2 per cent in 1900 when non-state organisations, such as the church and charities, led the way
  • The results of all this state spending are appalling with Britain near the bottom of international league tables on health indices and exam passes. Six million people live in a household where no one works

It is as if the Thatcher years (which saw spending fall from 45 per cent to 35 per cent) never happened. As the row over tax credits and the current bloodletting in Whitehall over the next round of cuts in unprotected budgets demonstrates, Cameron and Osborne are still in thrall to the mighty Hydra.

The State does too much, spends too much, borrows too much and meddles too much. The combined number of pages of Acts of Parliament and statutory instruments has grown twenty-fold in the last 100 years.

As A.J.P. Taylor put it, most law-abiding Englishmen in 1900 would only encounter the State through the Post Office or by passing a policeman on the street. Today, you cannot put out your rubbish, smoke a cigarette or unlock your car door without potentially breaking the law.

Not that we are alone. According to the OECD, supposedly freedom-loving countries, such as the USA, are operating at our levels of government spending or above. To take the 2013 figures, the UK was at 45 per cent, compared with 39 per cent in the USA and 42 per cent in Japan. Get to cradle to the grave Europe, and the figures vary from 40 per cent Ireland to 45 per cent Spain and Germany to 57 per cent France and 58 per cent Finland.

In other words, right across the Western world, but especially in Europe, the State gobbles up half of national output – or more.

Big, bossy and incompetent government is all the rage, with only a few outliers (South Korea 32 per cent; Switzerland 34 per cent; and, most striking, 18 per cent Singapore) bucking the trend. India is at 27 per cent and China at 24 per cent.

Britain is right there in the middle of the herd, plodding along with a big fat public sector and positively dreadful outcomes, as one might expect from a still strike-prone empire with chronically high levels of absenteeism and sickness among its cosseted workforce.

Just look at the front pages of our newspapers. Day after day they record a litany of state service failure, from lethal hospital words to third-rate schools and useless social services departments. Back in Thatcher’s era there was a debate about the size of the State and alternative ways of funding and running public services. No more. Instead, politicians fall over themselves to proclaim their adoration for our dreadful NHS. Nurses, dressed a la Florence Nightingale were the poster girls of our Olympic celebrations.

One final point. We are stuck with spending and tax levels at least as high as today – and higher still when the statist Left eventually grab the reins of power. There is one solution. To kiss goodbye to German, French and Scandinavian levels of state spending, taxing and borrowing and quit the EU. Then we could compete with our real global rivals. The lean, keen machines of the Far East, India and China.

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Cerberus writes a blog every Monday on the state of modern Britain.

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