Douglas Carswell

24 DEC 2012

Government will have to get smaller and more efficient

That, at least, is the conclusion of a paper by the Boston Consulting Group, Ending the Era of Ponzi Finance.

Highlighted by Kamal Ahmed in the Telegraph, the paper makes for some sober reading.  It is not just that the West is up to its neck in public and private debt. The West's entire Big Government model is bust.

We can't go on like this, you might say.

The trouble is that few politicians seem to know what to do about it – UK levels of public debt continue to soar. Few appreciate the link between unsustainable debt and our disastrous monetary policy.  Nor do they seem to have much of a clue as to what a slimmed down state might look like.

Many SW1 types still see the argument for a smaller state in terms of sentiment - something that we may or may not want.  Our politico-media class has yet to understand that that less officialdom will become a mathematical necessity. No one in Greece voted to reduce the size of the Greek state – yet it is happening anyway.

Here in the UK, government spent something like £30,000 commissioning public services for each family this year.  What if next year there was only £27,000 or £19,000 to spend?

In my book, the End of Politics, I argued that public administration could be made vastly more efficient if we allow a system of self commissioning for certain services.  The digital revolution could allow us to get more-for-less.

At some point, may be in 2014, perhaps not until 2018 or 2019, the bond bubble will burst.   The borrowing will have to stop. The money that government was expecting to be able to spend the following month won't be there.

They may not be big on small government in SW1. But how we manage with less government will be one of the big questions in the months and years ahead.


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