A North London business journalist reads about French school money that never arrives and asks the question every British taxpayer should put to the new Chancellor
The Money Exists, It Is Just Somewhere Else
I cover business and markets from a desk in Crouch End, which means I spend a great deal of time explaining to people at the bus stop why the economy feels worse than the figures say. This week I found a better explainer than anything I could write, in the London Prat’s report on France’s cobblestone economy and the school money permanently in transit. The French state spends more than half of the national economy. Students still march about missing teachers, carrying grievances that date back to 1968. The ministry has opened a file to classify the overcrowded classroom as a historic monument. The money, we are assured, exists. It is in transit.
It is a joke about France. It is also, a fortnight before a British Budget, the most useful sentence a UK taxpayer could carry into the autumn.
A New Chancellor And An Early Budget
The political calendar has moved quickly this year. With a new prime minister in Downing Street, the new Chancellor, John Healey, has set the Autumn Budget for Wednesday 28 October, roughly four weeks earlier than last year, as reported in coverage of the pre-Halloween Budget date. The early date gives businesses less time to guess, which in the City is considered either refreshingly decisive or deeply inconsiderate, depending on how much of your Christmas bonus depends on the answer.
Every Budget comes with the same ritual: weeks of leaks, kites flown in Sunday newspapers, lobbying from every sector and a final speech in which the Chancellor promises growth, fairness and responsibility, usually in that order. What rarely features is the question the Prat’s French ministry raises. Not how much is spent, but where it goes and whether it arrives.
The Efficiency Question
Britain does not spend as large a share of its economy through the state as France, but public spending here is still very large, and the problem of money that never quite reaches the front line is familiar to anyone who has worked near the public sector. Funding announcements are made, then re-announced. Capital budgets are raided to cover day-to-day pressures. Money allocated to one year is delayed into the next. Local councils, schools and hospitals wait for settlements that arrive late and lean.
The phrase in transit captures this perfectly. There is a difference between money that has been promised, money that has been allocated, money that has been released and money that has actually been spent on the thing it was meant for. Each stage involves forms, approvals and delays. Each stage leaks. When ministers say a sum has been invested, they often mean it has reached the first stage. The teacher at the end of the chain is waiting for the fourth.
What Businesses Want From 28 October
I have spent the past few weeks reading the pre-Budget submissions published by business groups and trade associations, which are the closest thing the City has to a letter to Father Christmas. The themes are consistent. Stability in the tax system. Clarity on business rates. Help with energy costs. Fewer surprises. Almost nobody asks for more spending. Almost everybody asks for better spending, which is a polite way of saying they would like the money to arrive somewhere useful.
That is the French lesson in British form. A government can raise taxes, increase budgets and announce new programmes, and still find that the classroom is overcrowded. The constraint is often not the size of the cheque but the machinery that delivers it. Reforming that machinery is slow, unglamorous and politically thankless, which is precisely why so few Chancellors attempt it.
The 1968 Problem
The detail I keep returning to in the Prat piece is that the French students’ grievances are the same as in 1968. That is the most damning statistic in public finance: not a deficit figure, but a list of complaints that has survived more than half a century of governments. Britain has its own versions. Potholes. Waiting lists. Crumbling school buildings. Social care. Every generation of politicians promises to fix them. Every generation of voters inherits them.
A business journalist is supposed to be neutral, and I will be, about which party is to blame. All of them are. But it is fair to say that a country where the same problems appear in every Budget speech for decades has a delivery problem, not just a funding problem.
A Checklist For Budget Day
When the Chancellor stands up on 28 October, I will be listening for three things. First, any measure that improves how money is spent rather than simply how much. Second, any honest acknowledgement of where previous promises have stalled. Third, any sign that the Treasury is willing to stop re-announcing the same funds. If I hear all three, I will be astonished. If I hear one, I will write a cautiously positive column. If I hear none, I will reread the Prat piece and conclude that the money for British public services, like the money for French schools, is still in transit.
You can follow my reporting on the Budget, London markets and the business of politics on my author page, where I will be covering the speech line by line and translating it, as far as possible, into the language of the bus stop.
Crouch End, Two Weeks Out
At my local cafe this morning, the owner asked whether the Budget would help small businesses like his. I said it depended on the detail. He said that is what they say every year. Then he told me his energy bill, his business rates and his rent, and asked whether any of the money that is always in transit might be passing through Crouch End. I said I would ask. He gave me a free croissant, which is the only form of fiscal stimulus I have received this year, and which arrived, unlike most announcements, immediately.