Civilians will outnumber soldiers at the MoD

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Liam Fox’s announcement that the army will be cut from 101,000 regulars to some 82,000 by 2020 means, on current numbers, that we will have more civil servants fighting for us, or maybe themselves, than we will have soldiers. At the last count, we had 85, 781 civilians in the MOD. Of course some of those are deployed with service personnel and it is argued that we have civilianised more service roles than other countries.

Civilians cost less per head than service personnel but the trouble with that argument is that it reduces the jobs for soldiers when they are not fighting or training. Roughly speaking, military personnel spend on third of their time in each of the three roles, namely active service, training and recharging the batteries at home. And reservists are cheaper because their employers pay for the third role.

The MOD/armed forces comparison is complicated by the civilian deployment with the services and the converse: service personnel driving desks. Every MOD administrative job seems to need a military and a civilian staffer to supervise each other although that is not as bad as it was. In Germany, the 19,710 service personnel are assisted by 7,190 civilians. Grossing that up gives about 35,000 civilians with the armed forces leaving 51,000 at the centre.

The difficult question to which the Defence Analytical Service and Advice people do not seem to have the answer (their website is excellent by the way) is the number of service personnel doing civilian jobs. And where does one draw the line between headquarters required by the army (Andover) and other MOD offices?

One thing is obvious: the ratio of civil servants to armed forces is wrong. We do not need one civil servant for every soldier. Dr Fox should cancel the cut in army regular active forces and cut the desk drivers, both civilian and military, instead – starting with the most senior.

Let us opt out of state services

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David Cameron will today announce the introduction of a right to choose for individuals who receive state services. Its effect might be similar to parents’ existing rights that force councils to provide a choice of schools. But why not go further and allow individuals to opt out of state services altogether?

Outside organisations will be allowed to ‘bid’ for the provision of public services such as health, child care, and education. Those outside bidders could include mutual companies formed by public sector employees are based on the John Lewis Partnership which is owned by its staff. Outside bodies would be paid by results, giving them a financial incentive to deliver.

These plans are certainly a massive step in the right direction. They will however not include the right for individuals to decide which services they wish to receive, and which ones they want to skip altogether. Local, regional, or national authorities will still decide which services are provided to you - even if you don’t want them. The change will be in the choice of providers.

Why not go further and truly liberate the masses from state control? Why do I have to pay and receive services which somebody else decided I needed? It shouldn’t be too difficult to provide an annual council order form, on which you can tick the boxes of services you want to receive. You would than pay council tax accordingly.

Paying the council for the chosen services for the whole year would essentially be a subscription. Non-subscribers who suddenly decide they need the public service after all could still purchase it with a one-off payment (they could privately insure against that risk) – or they could purchase it elsewhere. Paying for the services you need already exists, for example parking charges, or "pay as you throw" systems. It makes perfect sense to extend this logic to many more state services.

The MoD cock-up

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At an obscenely delayed event I attended last year, a small, piqued man came on the mic to explain that the wait was due to “what can only be described as a massive cock-up”. The tragicomic line came back to me while reading of the apparent misplacement of Ministry of Defence assets. Some £6.3bn of equipment has simply vanished. Adding to the farce was the BBC’s title for the story, which described MPs as “alarmed” by the news. Yes, well, one would hope.

The Defence Select Committee released the news, quoting the £6.3bn figure from a 2010 National Audit Office (NAO) report. The lost assets include £183m worth of battlefield radios (bizarre) and even more in firearms (dangerous). This comes on the heels of a 2008-9 audit that found discrepancies between recorded inventory and stock count at 29% of locations. Indeed, last year the NAO refused to approve the MoD budget for a fourth year, citing “failure to adhere to the accounting standards required of government departments”.

This is unacceptable. Some “spillage” in the form of minor theft would be serious in itself, but £6.3bn seems to go far beyond that. It appears to speak of institutional sclerosis and endemic carelessness. Adding to the impression of mind-numbingly cumbersome bureaucracy is the timeline for resolving the whole mess. The MoD has 845,000 lines of stock across 78 IT systems, and sorting all that out may take anywhere from two to four years. After losing £6.3bn, that kind of wait is just offensive. Taxpayers should be apoplectic.

Liam Fox, on the other hand, may have reason to be quite pleased with himself. Last week, he announced plans for a shake-up at the MoD, a “radical new approach to the management of defence”. This will involve removing the heads of the three services from the Defence Board and eliminating 25,000 civilian and 12,000 military posts. Shadow Defence Secretary Jim Murphy has said that this is “going too far and cutting military capability too quickly”. That remains to be seen. What is clear is that some streamlining of the MoD is essential, and Fox’s plans could not have come at a better time.

It's not just the newspapers that have been corrupted

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First it was 'cash for honours' and the scandalous way that MPs used their expenses. Then the activities of the banks, and the shortcomings of the regulators, that gave us the financial crisis. Now it is the inhuman behaviour of our newspapers, and the police apparently taking bungs for information. Can we trust any of our great public institutions?

No, we can't. Unfortunately we have a system of government that is no longer fit for purpose. As Peter Oborne explained in his book The Triumph of the Political Class, politicians and journalists have more interest in building themselves up with each other than they have in representing their constituents or getting at the truth. And as I pointed out in The Rotten State of Britain, they are not the only members of this elite political class: bankers, big business, officialdom and even the police have rushed to join – losing sight of their customers and their public in the process.

The MPs in the majority party in Parliament owe their place their to the Prime Minister and party bosses. Around 100 MPs directly owe their jobs (and pensions, and chauffeur driven cars) to the patronage of Downing Street. Another 100 or so toady up to the whips because they would like one of those jobs. On the opposition side too, the focus is on career progression. Parliament simply does not represent the British people.

Instead, it represents special interests. There is no shortage of groups, from the environmentalists to industrialists, throwing energy and money into lobbying MPs and ministers for new laws, taxes, regulations and monopolies that will either enrich them or force the public to behave as they believe we should. Their noisy demands drown out the views of the public. And each new regulation means a new bureaucracy and a new ministerial responsibility, such that the institution of government grows and grows and grows. As it becomes larger, the opportunities for patronage become greater. As they do, so do the opportunities for corruption – either straight back-pocket corruption or the more subtle corruption of mutual exchanges of favours between interest groups, officials and politicians.

There is no way such a system, dominated by and expanding to serve vested interests rather than the public, can give us honest politics, or journalism, or business, or officialdom. If you want to clean up the press, or politics, the first thing you must do is to reform our government system down to its foundations, limit what government can do, and make government represent the people rather than the political class.

Capping the national debt (and the rest)

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Over on ConservativeHome yesterday, Sajid Javid MP argued that the Britain should cap its national debt. Next month, he’ll be introducing a National Debt Cap Bill in the House of Commons to this effect. Bravo, Sajid!

I’m a big fan of the idea. The simple truth is that you can’t trust government to be fiscally responsible. Political imperatives mean they will almost always prioritize the short-term over the future. In spending terms, what’s a little more debt if it lets you carry on with the bread and circuses? The result is that governments tend to adopt a buy-now, pay-later attitude. All the incentives point in that direction.

That’s why rules are important. You need to impose limits on governments; you can’t just rely on their discretion. And a debt cap is the perfect place to start. But I’d like to see much more besides. Indeed, I’d like to see the government introduce a fully-fledged Economic Responsibility Act, like the one Eamonn outlined in this briefing paper.

As Sajid suggests in his ConHome piece, we should cap the national debt at 40 percent of GDP. We’re a little over 60 percent at the moment, so this cap should start as a binding legal target for, say, ten years hence – with clearly defined checkpoints along the way. Once we got there, the government’s hands would be tied.

We should cap the budget deficit – at 3 percent of GDP – and the overall size of the state – at one-third of GDP. Again, these should begin as legally binding targets, to be achieved by a specified date. We should also have clear rules on what the government can borrow for (capital investment) and what it can’t (current spending), and ensure that all government is transparent and ‘on-the-books’.

Finally, we should limit the government’s ability to raise taxes arbitrarily. I’d say that any tax rise not specifically detailed in a governing party’s general election manifesto should have to be approved in a referendum. That, taken together the deficit limit, would make it very difficult for future governments to ramp up spending the way Gordon Brown did.

Of course, it is true that – constitutionally speaking – Parliament cannot bind its successors, so these rules could always be changed at a later date. But the very existence of the rules, and the need to explicitly repeal or amend them, would act as a powerful counter-incentive against ever-larger government.

But that’s all some way off. For now, good luck to Sajid Javid and his National Debt Cap Bill.

Government should be about doing the right thing

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Forestry land sales, GP fundholding, you name it... the UK government has U-turned on at least a dozen important issues. Yes, it's reasonable that if you come up with a policy that raises widespread and unexpected opposition, you might think again. But equally, you shouldn't abandon policies that you know are right.

Now there is speculation that the government might water down its proposed reforms of public sector pensions. Many people who work for the public sector can start drawing their pensions five years before the rest of us, pay less in to get those pensions, and get much more generous, often inflation-proofed, pensions that private sector workers could only dream of. There is more money being paid out on public sector pensions than anyone knows how to pay for – a debt in hundreds of billions, and rising. It is our children and grandchildren who will end up having to pay this bill, but it is our generation of public sector workers who have got the benefit. This system is not just economically unsustainable, it is morally corrupt.

Politicians naturally have an eye on the polls. The Coalition has given itself a bit more breathing space by declaring that it will stick there in office for the full five years – instead of the normal practice of going early just in case. Even so, they worry that controversial policies, such as NHS reform, will work, but might not work fast enough for them to get the credit at the polls in 2015.

Perhaps this underestimates the voting strength of a large section of the population who don't come out in street protests, don't appear in newspaper columns and TV or radio interviews, and don't organise strikes – but who know from their own family and workplace life that the books have to balance. And perhaps it underestimates how much the electorate actually reward politicians for sticking up for things that are right.

Vote for Clint Webb!

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Now, in fairness, I don't think our politicians are quite this bad. Not most of them anyway. But you'll definitely spot enough similarities to find this video an amusing watch on a Friday afternoon...

Project Volvo shows how out of touch senior politicians were

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Here is a press release from Volvo, reacting to the news that Ed Balls and other senior Labour ministers called their plot to get Gordon Brown into No. 10 "Project Volvo". Funny stuff:

Project Volvo - it just shows how out of touch senior politicians were.

Leaked documents labelled Project Volvo, revealed today, that outline a plot to unseat former Prime Minister Tony Blair show just how out of touch with reality senior politicians within the previous government had become with modern Britain. The reason for the name 'Project Volvo', according to reports, relates to Mr Brown's apparent character traits of being 'dependable, robust but ultimately dour'.

Clearly before labelling the plot, Labour politicians of the time hadn't acquainted themselves with the Volvo brand in the last decade with cars like the new S60 and V60 bringing a new dimension to the brand in terms of design and driver appeal.

Peter Rask, Regional President of Volvo Car UK, Ireland and Iceland, said: "If only the Labour party had been like today's Volvos - dynamic, agile and innovative - perhaps the UK economy would have been in a better place than it finds itself today!" 

Scotland isn't worth our money

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There’s no denying the historic significance of the surprising majority win by the Scottish National Party in Scotland’s elections last week. Hats off to Alex Salmond for playing both Labour and Conservatives for the fools they have been.

It was 35 years ago that the separatist Parti Quebecois also shook Canada’s political establishment with a majority win in Quebec’s provincial elections. The response over the next three decades by that establishment, whether the Liberals or Progressive Conservatives, was wholesale appeasement of separatist demands. Constitutional distortions and diverted revenue flows became the preferred techniques for trying to keep Quebec within Canada. Much political and financial capital was expended in ever more tortuous ways at great opportunity cost to the rest of Canada.

Prime Minister Cameron’s immediate response to the SNP win was a pledge to “campaign with every single fibre I have” to keep the UK together. Fine. Just make sure you’re only spending your fibre and not our taxes. 

Expect the SNP now to exploit this fear for the demise of the UK at every opportunity. And, if Canada’s experience is any indication, expect politicians in Westminster to accede to this blackmail. Scotland already takes more than its fair share of British government spending and the previous Labour government has left that once dynamic and resilient birthplace of Adam Smith ever more dependent for nourishment from the state’s teat. Like a spoiled child always getting sweets on demand, Scotland will be coming back for more, again and again. Mr Cameron will have to employ tough love if he really means to preserve the Union because appeasement won’t work. It will only perpetuate the blackmail at great political and financial cost to the rest of the nation.

So call Scotland’s bluff, Mr Cameron. Let it pay for its own army and navy, its own border police, its own tax collectors, its own BBC, its own foreign ministry and embassies and its fair share of education and health. Hell, it can even keep those North Sea oilfields to help pay its bills. Go ahead, let them apply for EU membership and sign up for the euro.

But, Mr Cameron, don’t ask the rest of us to dig deeper into our pockets. We have better things to do.

A referendum on Scotland is just what we need

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Now that the Scottish National Party (SNP) is in control of Scotland's Parliament, can we expect a referendum soon on whether Scotland should become independent and leave the United Kingdom? Well, no, we can't – but it might be good if we could.

The problem for SNP leader Alex Salmond is that actually, the Scots have a pretty good deal going for them right now. Under a decades-old settlement, Scotland is over-represented in the UK Parliament in Westminster. The Scottish Parliament at Holyrood decides its own policy in important areas like education and healthcare – though Scotland's MPs in Westminster can and do vote on how these same services are run in England and Wales. Financially too, the new Scotland Bill promises to give Holyrood over taxation and the management of Scotland's public finances. The number of people in Scotland who owe their living to the public sector is much higher than the UK average – and most of the tax that pays for that public sector is generated in England. Other covert subsidies mean that Scotland can scrap its university tuition fees and guarantee everyone free social care without worrying too much about the cost. And, of course, if Scotland's debts continue to mount up, England will have to bail the country out – this is a union, after all, and though Scotland is the much smaller country, it is still "too big to fail".

With all that going for Scotland within the Union, we should not expect Alex Salmond to rush into holding a referendum on independence. Why should any right-minded Scot vote for independence? Scotland presently has the best of both worlds – a fair measure of self-control, with English finance.

The former UK Secretary of State for Scotland, Michael Forsyth, says that it is time to call Salmond's bluff and let the Scottish people decide. The UK Prime Minister David Cameron seems to reckon that the decision about if and when to hold a referendum on independence is one for Holyrood and the Scots. But the fact is that it is of crucial interest for the rest of the UK, particularly England, whose taxpayers are picking up the bill for Scotland's socialist lifestyle. With the allegedly pro-independence SNP in power at Holyrood, it would be entirely reasonable for Westminster now to insist on a referendum. A Yes vote would force Scotland to face up to the facts and live within its means. A No vote would mean that Westminster could be far more assertive in limiting the extravagance which Scotland enjoys at England's expense. Either way, Scotland would have to become less introspective and more friendly to the private sector. And that would actually benefit the whole of the United Kingdom.