These crucial numbers are too difficult to follow and vast sums of money are easily missed in the confusionby Paul Wallace / September 19, 2019 / Leave a comment
One of the many regrettable consequences of the prorogation of parliament was that Sajid Javid was able to announce big increases in public spending for the financial year starting next April while dodging the detailed scrutiny that should then follow. In ordinary circumstances the Treasury select committee of MPs would quiz the chancellor of the exchequer thoroughly soon after his statement to the House of Commons. With so little time before parliament was suspended Javid was able to duck out of an appearance.
The chancellor’s avoidance tactics were in keeping with his statement to the House on 4th September where he was twice reprimanded by the Speaker John Bercow for talking politics rather than public finance. When Javid did get to the point, his main headline announcement was a 4.1 per cent real increase in day-to-day spending on public services, amounting to an extra £13.8bn between 2019-20 and 2020-21. However, the chancellor failed to mention that such expenditure was already set to rise by 1.3 per cent after inflation, because of the boost to the NHS under way through a five-year plan announced by Theresa May in June 2018. The specific impact of Javid’s measures was thus an additional 2.8 per cent, a figure we did not hear.
Public spending statistics are inherently complex, which makes it all the more important that they are presented as transparently as possible, spelling out the way that they have been put together. Instead, too often, they are confusing and obscure. Though Javid presented his figures in self-serving fashion, there is nothing new in chancellors doing that. A more reliable source is the Treasury’s accompanying report that sets out the full facts and figures behind the speech to MPs. However, on this occasion it was particularly tricky to follow.
Search for that headline number of £13.8bn and you find it tucked away in an annex where a table sets out departmental budgets for day-to-day spending this year and next. Only there will you find that Javid was referring to real increases in 2020-21 prices. The effect of using next year’s higher prices is to exaggerate the increase (a bit), but what matters is that anyone listening to the chancellor would reasonably have expected him to present it in today’s prices. This was for example…