Miners’ pensions, indigenous rights, the shrill carder bee – parliament and the public have lost touch with the reality of public spending, writes Paul Ormerod
Early day motions (EDMs) are a longstanding feature of parliament. Some are tabled for local publicity for the MP, such as the one last week congratulating Peterhead on being champions of Scottish League Two.
But they are also a way for members to express their views about what should be done on a very wide variety of topics.
There appears to be no end to the ways in which elected members clamour to spend more and more taxpayers’ money.
Here is just a sample of demands which were made last week alone. More money for the miners’ pension scheme, more to be spent to end child poverty, funds to protect the shrill carder bee, cash for young carers, increased spending on a range of specific diseases. And a Lib Dem called Pippa called for vast amounts to be spent to save global forestry and preserve “indigenous rights”.
Of course EDMs inhabit a sort of fantasy land. They stand little chance of actually being debated, let alone implemented. But they reveal the mindset of MPs.
The public and parliament believe money is no object
The problem is that it is increasingly hard to distinguish this from the real world. Money appears to be no object.
Doctors, dentists, teachers and prison officers were awarded a pay rise averaging four per cent. But the recipients were hardly grateful. The National Union of Teachers has demanded more, and junior doctors will be balloted soon on strike action for more pay.
Ministers are apparently running scared from the minor reductions they have made in the £300bn annual bill for benefits and they may well be reversed.
This is against a background in which productivity in the economy as a whole, measured by output per worker, is barely one per cent above its peak level in 2019, six years ago.
This sets strict limits to what can be afforded, whether in increases in real wages or in the provision of public services. But the electorate do not seem to have grasped this at all.
Nowhere is the denial of reality greater than in the productivity performance of the public sector.
It cannot be stated too often that productivity in the public sector, measured by the Office for National Statistics, is no higher than it was in 1997.
There are perfectly valid reasons why productivity growth in the public sector will be lower than in the private. But there is no excuse for almost 30 years of no overall improvement in efficiency.
No excuse for pathetic public sector productivity
A vignette of the problem has recently been provided by the Criminal Cases Review Commission (CCRC).
The House of Commons justice committee has been critical of its handling of a number of prominent cases. During questioning of the CCRC’s chief executive and chief operations officer, it emerged that they only came into the office “one or two days every couple of months”. Even the Labour members of the committee were taken aback by this insouciance.
Angela Rayner may or may not have leaked her now notorious memo to Rachel Reeves in which she called for increases in several taxes. But the amounts involved are trivial compared to what could be achieved by even modest increases in efficiency in the public sector.
Suppose productivity had grown by only 10 per cent since 1997, a very modest annual rate of just 0.3 per cent. As an approximation, there would now be an additional £50bn a year available to the government. The existing services could be delivered for this amount less, taxes could be cut or more public services provided.
Of course the public sector unions will defend even the most egregious examples of inefficiency and restrictive practices. But there is a massive harvest of low hanging fruit available to any government willing to take them on.
As published in City AM Wednesday 28th May 2025
Paul Ormerod is an honorary professor at the Alliance Business School at the University of Manchester and an economist at Volterra Partners LLP
