Fred Goodwin has been vilified. Many entrepreneurs – bruised by the incompetence, bureaucracy and outrageous charges of the major clearing banks – will feel that he deserves to lose all of his pension, no matter what the legal position.
But what about another leader who has presided over intemperate spending, funded by reckless borrowing? One who is also due to receive a fat pension, only this time one index-linked and funded by the taxpayer. I’m referring, of course, to the prime minister. Should not Gordon Brown, too, consider giving some of his pension back, notwithstanding his contractual entitlement?
The scandal of public sector pay and pensions is just one issue that will need to be confronted by the incoming Tories, who will almost certainly shortly form the next government. It’s 30 years since the Conservatives ousted a Labour administration.
For those of us who remember the last time, the inheritance is depressingly familiar: rotten public finances, strikes, a crushing tax burden and a nation in which it was tougher and tougher for small companies to survive let alone prosper.
In 1979, it looked an almost impossible task to revive Britain’s economic fortunes. Yet, thanks to radical reform of the economy in the Thatcher and Major years, Britain’s global competitiveness ranking, according to the World Economic Forum, had reached number four by 1997, the year in which the ‘New Labour Project’ started. Now, 12 years later, we have slumped to number 12.
Government expenditure has shot up from 40.6% to 45.4% of gross domestic product, the biggest rise of any major industrial country. And, as every entrepreneur knows, the burden of regulation on business has reached suffocating levels. The British Chambers of Commerce has estimated the cost of New Labour’s red tape since 1997 at £77bn. The largest single item is the infamous Working Time Directive, costing £19bn.
In summary, New Labour has been a disaster for small business. So what will David Cameron do? Will he follow the cosy consensus politics, which characterised British economic decline between 1945 and 1979? Or will he be radical?
No one knows. He and George Osborne are keeping quiet about their intentions. An assault on public sector excess has not been signalled. Public sector prudence does not mean – as Labour would have it – fewer doctors, nurses and policemen, but getting to grips with an economy in which spending is higher than income. Just as in the private sector, this leads to bankruptcy. But unlike Labour ministers, small businesses do not have the prospect of an International Monetary Fund bailout.
Cameron urgently needs to tackle public sector pay and pensions. There are 68 heads of quangos on salaries larger than the £189,994 received by Brown. So the whole system is a busted flush. The MPs’ expenses scandal has caused public wrath. It reveals not just the venality of many of our senior lawmakers, but also the sheer lack of control in the public sector.
We entrepreneurs have a role: to tell every candidate and MP that we are expecting a radical change. We want less regulation, a lighter tax burden and a government that makes it easier for us to grow, not one that stifles our every endeavour.
This is not ideology, it is common sense. Cameron has already announced that he will abandon the wretched Identity Card, which the London School of Economics estimated might cost £18bn. That’s a start, but as Oliver Twist said: “Please, sir, I want some more.”