Manifesto > Enterprise: The path to recovery (Introduction) | A Strategy for Growth and Prosperity | Low, Simple and Fair Taxation | Cutting the cost of the state | Deregulation: Industry, Employment and Incomes | Finance and Credit | Agriculture, Forestry, Fisheries and Foods

Enterprise: The path to recovery

Cutting the cost of the state

The government machine expands inexorably whenever it is given the opportunity and the vast expansion of the public sector has, once again, created additional waste. A dominant public sector adds to inefficiency, bureaucracy and cost. It also damages private enterprise and impedes public scrutiny.  We argue for a substantial reduction in the public sector in those areas where it delivers little of tangible benefit.

The massive increase in funding for the public services has achieved only marginal improvements whilst the number of people employed in the public sector has shot up by some 860,000 since 1997 – not the nurses, teachers or police officers that we need, but mostly bureaucrats.

There are now more than 6.5 million people dependent on state handouts, not counting pensioners. This is unsustainable if we are to prosper as a nation and avoid impoverishing the next generation.

A key step: the new Growth Rule

To achieve our objective of a low tax economy that encourages enterprise and initiative we need to set firm targets to reduce public spending. The New Party would adopt the proposal by Reform in which the trend growth rate of departmental spending should be at least 2 per cent lower than the trend growth rate of GDP. On current terms would still allow growth in spending in real terms of 0.75 per cent a year but would reduce the overall share of the public sector in our economy.

Our medium term goal will be to reduce the size of the public sector from over 40% to below 30% of GDP. For the most part this will be achieved by eliminating unnecessary and overly-expensive government programmes.

“Public sector waste is endemic. It burdens the taxpayer and undermines the economy. Any Government worth its salt would tackle it as its first priority.”  Ruth Lea, Director of Centre for Policy Studies and Advisory Council member of the Taxpayers’ Alliance

Accountability and audit

Over an initial five year period, we would reduce the size of the government’s central administration to below 1997 levels. This will be made possible by the reduced administration required by a simplified tax and benefit system. In addition, we would require all government departments and local authorities to undergo external audits and staffing reviews to maximise efficiency and guarantee best practice.

Local authorities would be required to undertake more rigorous competitive tendering to prevent the many abuses of recent years. Education funding as well as other services would be taken out of the hands of local authorities.

Evidence from the Gershon Report suggested that the government could make savings of £20 billion by cutting out waste and efficiency. However, this was based on the premise that the existing government policies would remain. By contrast, the New Party seeks to reduce the scope of government and would require much bigger savings which would take the James Report (which proposed savings of £35 billion “without breaking sweat”) as a minimum rather than a maximum.

Reform in the public services

Alongside controls on spending we propose far reaching reform in the public services to provide a more effective, people-friendly approach. Individuals and families alike will benefit from much greater choice and tailored solutions. The welfare state needs radical reform, not window dressing. Our proposals for welfare will address this issue.

See also:

• News and Comment: "Don't just do something, stand there", 15 April 2007. 

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