Friday, 27 March 2015

Ignore anything under £500 million

If you are thinking about the Budget, that is.

"commentators on Budgets used to have a rule that you could safely ignore any measure which cost less than £500 million because it was too small to make a difference.

It used to be the case that Chancellors followed that rule themselves. In the 1970s when Denis Healey was in No.11 Downing Street, 96 % of his measures related to sums of more than £500 million (in today’s money). By Nigel Lawson’s time in the 1980s, the heavy content had come down to 58%.

But the rot really set in in Gordon Brown’s era when he consolidated power in the Treasury and felt this gave him the right to pronounce on policy right across Whitehall. So the measures worth £500 million accounted for only 28% of Brown's content — and gave him his reputation as a tinkerer and micro-manager.

Interestingly, however, it is worse now. Osborne is even more addicted to flannel than Brown was. In his recent speeches, less than 15% of the measures concern sums of substance.

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