This, That and The Other: a recipe for cutting state spending

We are seeing some very interesting suggestions about how government spending can be reduced but far too many of them fail to address what I consider to be the central point. The position appears to be that three main factors must be catered for. First there are substantial additional costs to the Exchequer caused by increased benefit payments to those who lose their jobs. Secondly, the money the government has borrowed, is borrowing now and intends to borrow over the next few years must be repaid with interest. And, thirdly, tax revenues are being squeezed by reduced payments in income and corporation taxes as well as Stamp Duty. The other day we read that Treasury officials are preparing briefing papers in which reductions of up to 20% in government spending will be examined. The current government is slowly abandoning its absurd suggestion that spending can be maintained or even expanded beyond current, unaffordable, levels and the opposition are trying to find ways of cutting up to 10% from departmental budgets other than health, education and (I know not why) overseas aid.

This week appears to be Quango week, with both main parties suggesting how they will reduce the cost of committees that undertake tasks delegated by government. So far the approach adopted appears to have been to find cheaper ways of doing what Quangoes do now. There is the same chance of this delivering serious savings as I have of becoming the next Chief Rabbi, and I'd fail the medical. In the next few weeks and months we can expect the debate to move on to other administrative issues with all eyes being focussed on finding better ways to procure paperclips and increasing staff contributions to the tea, coffee and biscuit fund from 25p a day to 27p.

There is no escaping the fact that, if a job is to be done, it must be paid for. Anyone brave enough to take on the public sector unions might try to reduce costs by imposing the sort of wages freezes / wage cuts that many in the private sector must endure if their job is to have any long-term prospect of survival. Such measures could undoubtedly save a nice chunk of cash but it will be a drop in the bucket of overall expenditure. The size of the problem needs something far more radical. The real question is not how government can undertake its present tasks more cheaply, it is whether the country can afford to have the government undertaking all its present tasks. I think there is an easy way to answer this question, which is to see what the current government considered affordable in previous years.

At every budget since Gordon Brown departed from the previous government's spending targets, he announced that things were going jolly well and the country could now afford to spend money on things it could not afford before. Previously it could not afford an extra £X million for This, £Y million for That and £Z million for The Other. Because, and only because, the Treasury was receiving more cash could these sums be spent. Prior to receipt of the additional tax revenues This, That and The Other were not essential they were optional extras. For so long as the money was there (or, to be more exact, appeared to be there) This, That and The Other were affordable luxuries, now that the money isn't there they are non-affordable luxuries. All we have to do is go back through past budgets to see the items Gordon Brown himself identified as being newly affordable. Had they been essential all along they would have been paid for all along and other matters would not have been funded, as it is they were known not to be essential. They remain non-essential today.

It is not enough to look at budgets alone because they don't define exhaustively what government does, they concentrate on how much will be allocated to each area. It is also necessary to ask whether tasks undertaken by government now (a great many of which were not undertaken ten, twenty or fifty years ago) need to be undertaken at all. My hobby horse in this regard is the army of people employed to tell us what not to eat, drink and smoke but there are many more. Why are taxpayers subsidising the cost of staging ballets, playing music to paying audiences and making motion pictures? Why are they paying artists to ply their trade? Why does the government contribute to charities? Why does the government pay for expensive television advertisements for its policies? Why is the government involved in domestic marketing of milk, meat and potatoes? Why is the government spending our money subsidising trade associations rather than leaving it to those who seek to make a profit from trading in a particular product to pay for their own "professional" body? The list can go on and on.

Would ballet disappear from the UK in the absence of taxpayer subsidy? You can bet your pointe shoes it wouldn't. It would go out and find additional sponsors like any other branch of entertainment. Maybe fewer ballets would be staged, maybe more, no one knows, but the number staged would be the number that can be afforded without Mr & Mrs Ordinary who struggle to fund their weekly evening in the pub having to pay for them.

These are all activities which cost not just the money they hand out to third parties but also the on-going expense of the bureaucratic infrastructure necessary to decide who should be the lucky recipients. Inevitably there are also costs involved in following-up to see how the money has been spent. One consequence of deciding that all of these areas of expenditure, and many more, are unaffordable luxuries is that the Quangoes involved will go; but if we just look at the Quango without also addressing the involvement of government in the field at all we can never achieve more than a gentle trim of costs at the edges.

Some Quangoes are capable of being beneficial, such as those that advise on how to address special problems like the current spread of swine flu and those that advise on prospective changes in the civil or criminal law. In relation to these there is one very obvious way to reduce the cost; albeit one that is mere trimming. I have never understood why their members are paid out of taxes to attend meetings. Membership of an ostensibly authoritative national advisory body is a feather in the cap of every person invited to form the panel. They can (and often do) use their membership to further their own careers and/or to secure private-sector consultancy positions. I doubt that many, if any, of them would decline membership if fees for attending were discontinued, not least because the world of academe is highly competitive and Professor Previously-Snubbed would readily step in to fill the breach when Professor Superannuated throws a hissy fit. Cover their out of pocket expenses (receipts required for every penny please), bung them an OBE after five years' service, a CBE for a decade, a chance to kneel at Buckingham Palace in return for chairing the thing for two or more years and Robert is your parent's sibling. It would also reintroduce the concept of public service to membership of these bodies. If no one is prepared to serve without being paid a fee the response should be to ask why, not to offer money. The answer will, I suspect, be that membership carries no prestige because the committee is pointless; all the proof you need that it should simply be scrapped.

On the more general point, reducing the scope of governmental activity will require politicians to give-up powers they currently have. This will require a public mood for getting government out of various aspects of our lives. With any luck the combination of the increasingly unacceptable surveillance state, excessive pointless nannying and the need to cut costs severely will provide that atmosphere. Oh well, you can't stop a fat boy dreaming.

British jobs for British taxpayers' money?

You want to build or make something and there are two rival bidders for the job, one a British based company and the other based overseas. Engage the former and hundreds of jobs are kept safe in the UK, choose the latter and Johnny foreigner is secure in garlic and offal while more Brits go on the sick to disguise rising unemployment. What should you do?

Normally I would argue that you should get the best value for your money. Those of us with vivid memories of subsidised British industries shiver at the thought of paying the inefficient to produce sub-standard goods simply to keep jobs within these shores. This week the government announced that it had contracted with a consortium for lots of expensive new trains, the manufacturer in the consortium is Japanese. There was all the usual guff about creating and preserving jobs in the UK, although it seems pretty obvious that placing the contract with a UK-based manufacturer would be likely to create or preserve even more. The value of the contract is said to be £7.5billion and the number of UK jobs preserved or created is claimed to be 12,500 of, if you prefer, £600,000 a job. The successful consortium said it will spend 70% of the value of the contract in the UK, leaving a mere £2.25billion to be paid by UK taxpayers but spent outside the UK.

As always, nothing is as simple as it might appear at first. The bidding documents issued for these major contracts include all sorts of provisions requiring each tender to comply with very detailed criteria, usually including a requirement that a certain percentage of the money will be spent in the UK. In addition there is a requirement on the government to treat all bidders fairly and judge their tender on its merits. Define the relevant merits too nationalistically and you risk high-quality overseas companies not wishing to be involved. The exercise cannot operate sensibly on the basis that the contract will be awarded to a UK manufacturer come what may, because an awful lot of money is involved and additional future expense arising from ordering the second-best rather than the best can easily outweigh any short-term benefit from keeping jobs at home.

All the usual suspects have lined-up to criticise the government for placing the contract with the Hitachi consortium. The Conservatives have aligned themselves with Trotskyite union leaders and similar Neanderthal extremists by calling for British Jobs for British Workers. The local MP for the area in Derbyshire which houses the UK's last remaining train manufacturer has expressed his disappointment in strong terms, something which does him great credit because he is a Labour Party MP and has put the interests of his constituents above those of his party.

What I find so difficult about the criticism of the government's decision is that, for once, they appear to have sought value for money. £7.5billion is a vast sum. Every penny of it will come from taxes and on a commercial decision like this value for money must always be paramount. There have been too many instances of taxpayers' money being spent to preserve jobs in marginal Labour-held constituencies, yet providing a boon for a Labour marginal was put to one side this time. It might be fair to infer that the Hitachi bid was markedly superior to that of the British based rival bidder. Were they neck-and-neck one would expect the British bid to be successful, if for no other reason than that keeping £2.25billion on shore is important in the middle of the deepest recession any of us will experience. It might well be that the government looked for ways in which it could justify keeping this contract at home, I would certainly expect them to do so with a view to electoral advantage. In the end they felt they could not justify placing the contract here.

The very fact that this contract was placed with an overseas bidder at this time suggests to me that it was probably the right decision to take. The trains in question will have to remain in safe and efficient service for a long time. The better quality they are, the lower their maintenance costs and the longer they can run all contribute to future savings compared to buying a lesser product.

Although I can see a benefit to modest protectionism in difficult times, everything must be placed in context. Where there is no real difference in quality between what can be bought here and what can be bought elsewhere, by all means buy in the UK to bolster British jobs and British businesses. Where, however, you are dealing with vast sums of money which have to provide a benefit for many years to come, long-term value for money must always prevail.

385 parts per million, an encore

A few days ago I tried to get my head around the concept of 385 parts per million (here). Relating it to tangible things I can measure I calculated that it is equivalent to one drop of wine out of a 75cl bottle or a single 14-point letter "O" on a sheet of A4 paper. These are very very small proportions and, in my final substantive paragraph, I suggested that it casts doubt on the AGW Armageddon theory. As well as providing me a prime supporting role in the antipodes (here), my efforts also elicited comments from some of those who seem to have no difficulty in the concept of disaster springing from tiny increases in the already tiny quantity of carbon dioxide in the atmosphere. I am not a one to dismiss an argument without careful consideration, so I thought I should weigh their views and see whether they appear to have merit.

Nice Mr O'Dwyer observed that very small quantities of cyanide and polonium-210 are fatally toxic, presumably to illustrate that it is not the quantity per se that matters but the effect that quantity has on the things it affects. A perfectly fair point, as I would always expect from Mr O'Dwyer. But we must keep apples and oranges in their respective places or we will probably be in breach of an EU fruit purity directive. I have no difficulty with the concept of a tiny pinch of cyanide being enough to render my flabby frame lifeless and fit only to be turned into soap. The reason I can accept that concept is not because I have any scientific knowledge about what cyanide is or how it works, but because Agatha Christie said so many times. Equally, I don't need to understand the science in order to accept that ingestion of any substance in sufficient quantities can be fatal. The first rule of toxicology, or so I understand, is that it's all about the dose. Even apparently harmless substances can become deadly if consumed in bulk. Take my pint of choice, Gaymer's Olde English Cider. Three pints won't touch me, four and I'm ready for a drink, after five it starts to take effect, nine's a fair evening out and fourteen are likely to reappear all over the back seat of a taxi on the way home from the Dog and Duck. Yet put a sherry glass full in a baby's bottle and you're off to the big house for a well-deserved life sentence.

I'm no scientist, but I can be reasonably sure that even the nuttiest doomsayer does not rely on toxicology for his hysteria about atmospheric carbon dioxide. The case that is put is one of physics rather than chemistry. It is said that 280 parts per million by volume was good and natural and pure, whereas 385 places us on the verge of an abyss and 500 will result in world-wide disaster. It is said that this additional minuscule quantity will kick-start an unstoppable physical chain-reaction. My first question when faced with a physical argument like this is whether I can envisage such a physical (rather than chemical) reaction. That requires me to look at the actual stuff involved, including the quantity of it.

Another commenter, Mr W, suggested I might be helped by envisaging splattering 35 litres of paint around my kitchen (here). I initially thought the relevant quantity was actually 350 litres, but he has pointed out my error so I am happy to accept it is 35. In any event it does not matter to me because I cannot envisage the effect of either 35 or 350 litres of paint being sprayed more-or-less evenly throughout the air in my kitchen. He then added that I might find it useful to think of adding 15 litres of strong dye to a 40,000 litres swimming pool (here). The problem with both these suggestions is that they give rise to exactly the conceptual difficulty I was seeking to eliminate. I do not have the faintest idea what 15 litres of dye would do to a 40,000 litre swimming pool. Not only do I not have a swimming pool of that or any other size but I have no way of assessing the visual impact 15 litres of dye would make because the whole exercise is far outside my personal experience. If he spoke of one bladder of used cider emptied in a municipal pool, it would be easier but that probably wouldn't help much either.

Interestingly, the two examples Mr W gave illustrate not only the conceptual difficulty I was trying to overcome but also the misleading nature in which the proportion 385:1,000,000 can be expressed. 35 litres of paint! Oh my ears and whiskers! That's an awful lot of paint, imagine that being thrown around my kitchen, what a horror. Strong dye in a swimming pool! Sheer vandalism and a breach of goodness knows how many health and safety edicts. They appear to be nasty things because they are suggested for use in a manner for which they are not designed. Talk of 35 litres of paint when the bare plaster walls of a room need two coats of duck-egg blue emulsion and the nastiness disappears; as it does when 15 litres of black dye are used in a fabric factory.

The reason I tried to illustrate what 385 parts per million means in real things we can actually get our heads around was to eliminate hysteria and shock. As I said the other day, by my calculations it is one drop of Rioja out of a standard bottle. To ensure no one, especially Mr W, would be offended by my refusal to spray paint the air in my kitchen with emulsion and throw a couple of buckets of black gunge into the local swimming pool during pensioners' hour; I decided to experiment using the measures I find useful. So I took 75cl of water and put it in a clear jug, then I added a drop of Rioja (wasteful I know, but it's all in the name of science) and stirred well. My eyes are particularly astute where fine wine is concerned and you know what? The addition of 385 parts per million of deep purple wine to the water was completely unnoticeable. Not the teeniest hint of purple could be seen because the quantity was just so small. No doubt it would be detectable by a finely tuned scientific instrument but in real terms, terms understandable by even the cerebrally-challenged like me, it's not 35 litres of paint or two buckets of threatening black dye; it's a tiny tiny speck, a speck so small I cannot even see it when it is mixed into the bulk.

And in all this we must bear in mind that it is not the 35 litres of paint, the 15 litres of dye or the drop of fermented Tempranillo grapes that is the threat. We know this because 280 parts per million is good and wholesome, it is natural and pure and untouched by filthy human hand. Only when we get above that arbitrary, once in a world-time, number are problems said to arise. Assuming we blame naughty people for the whole of the next 105 parts per million (which, as I understand it, is not the position anyway); we find that the air in my kitchen is permeated by 25.6 litres of paint that is fine and good and only about 10 litres need to be added to represent human wickedness. We also find that the pristine swimming pool is already enjoying the benefit of 11 litres of black dye and suffering nothing but pleasure, all we have done is add 4 more. My jug of water already has almost two-third of a drop of Rioja in it and the result is unquestionably wonderful because it was added by Bacchus and not by me, only the remainder of the drop is tainted.

When asking what 385 parts per million is, I find it useful to equate it to quantities I can actually understand by relating them to real life - hence one drop of wine out of a bottle of wine and a 14-point letter "O" on a sheet of A4. Then, when asking how this tiny quantity, and/or an increase of up to one-third in this tiny quantity, can cause a physical reaction of unimaginable nastiness I find I need more than a little persuasion. That is not to say the AGW Armageddon theory is necessary bunkum, but it helps to explain why I find it unconvincing.

Addendum
Mr W left another very helpful comment (here). He questioned my Rioja and water experiment because only a small part of the wine has a colouring effect. That, of course, is true and might mean I wasted a whole drop for absolutely no benefit whatsoever. Nonetheless, my central point remains undisturbed, namely that 385 parts per million is a tiny weeny proportion of the whole and that trying to make it sound a lot is potentially misleading. Whether it is one drop of Rioja or eight drops of water, out of the total volume of a wine bottle it is minuscule.

How we little people approach a subject on which we have no technical knowledge is almost bound to be affected by how the subject is presented to us. In an area where radical politics and science overlap it is particularly important, in my view, to put things in terms the little people can understand. Tell people that humans release so-many giga-tonnes of carbon dioxide into the atmosphere each year and it sounds a daunting quantity, it is quite natural for people to consider that worrying and potentially dangerous because it can seem such a vast quantity that we infer it must cause a massive shift in the balance of the atmosphere as a whole. Tell them that the total volume of carbon dioxide in the atmosphere is equivalent to roughly one-twentieth of a level teaspoon in a volume of one pint and they might look at it differently. Then tell them that current annual human-induced emissions are equivalent in volume to just a few percent of that one-twentieth of a teaspoon and the whole game changes. Suddenly our emissions are so extraordinarily small that it is hard to see why there is any fuss at all.

Perhaps it is no more fair to play down emissions by reference to a tiny proportion of a small everyday measure of volume than it is to hype them by reference to incomprehensibly large multiples of big everyday measures of weight. If, in fact, they are causing a major problem it matters not that they are a small percentage by volume. However, for so long as the supposed problem is measured in parts per million by volume I think it is relevant to have a comprehensible reference point for the measurements because the little people still have the final say (at least in theory).

What is 385 parts per million by volume?

Amid all the hyperbole and guff surrounding carbon dioxide one fact I have never been able to get my head around is how much of the stuff hovers around and above us. It seems to be asserted regularly by people who claim to know about these things that current levels in the atmosphere are something like 385 parts per million by volume compared to about 280 parts per million a hundred and more years ago. As I understand it, this means that for every million cubic centimetres of atmosphere, 385 cubic centimetres will be carbon dioxide and the rest will be other stuff.

My understanding might well be flawed because I have read the volume described as 385 parts per million after removal of water vapour (here). This suggests to my layman's brain that the actual volume of carbon dioxide compared to all other things might be a lot less than 385 parts per million for the simple reason that every million cubic centimetres of air will contain some water vapour as well as carbon dioxide and other gases. But let's call it 385 parts per million and leave water vapour to one side.

We read about so many billions of tons of carbon dioxide being emitted each year by human activity and the quantity involved seems substantial. We might have some idea what a ton of coal or compost or sand looks like and we can readily imagine that a billion tons is enormous. It becomes easy to persuade people it is a harmful activity when you talk of such vast weights. Although we cannot picture it directly, we know that one ton is big so a billion tons must be huge. Yet when it comes to explaining the quantity of carbon dioxide in the atmosphere the measurement changes from weight to density. Perhaps references to weight are used because it is easier to grasp concepts of weight than density, but we can be sure than weight is not of itself relevant because the doomsday predictions rely on certain densities of carbon dioxide and other gases being present in the atmosphere regardless of what they weigh. And therein lies my difficulty. I have been trying to understand what 385 parts per million means.

In a country where we like to measure height in Nelson's Columns, length in London buses, large land areas in Waleses or Belgiums and weight in elephants, it is not easy to envisage a million anythings let alone isolate 385 of them and see how they compare to the whole. More difficult still is to envisage comparative volumes. So I thought I'd see if I could find some comparators that actually make sense to me.

I started with the kitchen at FatBigot Towers as my basis for measurement. The kitchen is about twenty two feet by fourteen, and eleven high. I wrapped a cold towel round my head and converted these sound British measurements into flimsy foreign metric equivalents. I came up with a figure of about 91.5 million cubic centimetres. It seems an awful lot just for a kitchen, so I double checked:- 660 cm long by 420 cm wide = 277,200 square centimetres of floor area; volume of a room is floor area x height, so 277,200 x 330 gives the volume in cubic centimetres and I reckon it's 91,476,000.

It just goes to show, doesn't it, how very misleading large numbers can be? It's a decent sized room but it's just a room and now I'm telling myself it can be measured at nearly 91.5 million units. Mind boggling.

For every million units, 385 are carbon dioxide; so that's 385 x 91.476 = 35,218.26 cubic centimetres of my kitchen represents carbon dioxide and 91,440,782 are other stuff. It's hardly made a dent in the total. But the numbers are still just a blur on the page, what does 35,218.26 cubic centimetres actually mean? It just so happens that it means the washing machine. I know how insignificant the volume of my washing machine is to my kitchen, but you don't, so I turned to something less personal. What about booze? Yes, I thought, all sensible people know booze, that's a good one to use.

A standard bottle of wine is 75 centilitres 385 millionths of that is 0.028 centilitres or 0.28 millilitres; a level teaspoon is about 5 millilitres. 0.28 millilitres out of a bottle of fine Rioja is about one drop.

A barrel of beer contains 36 gallons, that is 288 pints or 5,760 fluid ounces. 385 millionths of the volume of a barrel of beer is just over two fluid ounces, equivalent to roughly half the foaming head on top of one pint out of the whole barrel.

These are quite extraordinarily small amounts. Do they seem any larger by looking at them two-dimensionally? A piece of A4 paper, just like those we all have in our printers, measures 21 cm x 29.5cm. Print a capital letter O in 14 point type on a piece of A4 and (if my calculations are correct) the area enclosed is about 385 millionths of the page. Colour it in to see the full effect. It really is a tiny proportion of the page.

None of this proves anything about the ability of a small increase in this tiny amount of gas to dominate the whole of the earth's climate, but it shows what an extraordinary proposition the AGW Armageddon theory is.

Makes you think, doesn't it?