<p>Gordon Brown ran the UK budget reasonably well for??his ??first three years, and then ran it wastefully for the next five years.</p>
<p>Today he is trying to bring spending back under control, by imposing much tougher limits on pay increases,and by trying to implement the Gerschon reductions in civil service manning. I wish him well with that task.</p>
<p>He is discovering that it is difficult to reassert control after you have recruited too many people and created too easy an atmosphere over pay and spending. It took a few years to give the public sector the idea that all they needed to do was to spend. It will take time to change the mood sufficiently to create an atmosphere where people seek value for money.</p>
<p>In the meantime Gordon has a leadership election to win. He looks very confident about that, as no serious challenger has emerged, and still no-one looks ready to take him on. A prolonged period of uncertainty, combined with a higher probability of a serious challenger, would be particularly damaging to the country. It would limit Gordon’s ability to rein in public spending, which effectively means reining in powerful public sector Unions who will have a big say if there is a leadership vote.</p>
<p>Maybe we are lucky that no??Cabinet or former Cabinet member??in Labour is bold enough to pitch for the main job. It gives us some chance of seeing the outgoing Chancellor put some pressure downwards on public spending after the wasteful years. The main present ??source of inflation is the public and monopoly sector (rail, post, Council Tax,Congestion charge,airport tax,student fees), and the amount the government wishes to borrow is one of the main reasons we are paying higher interest rates than our principal competitors. It would be good for jobs and growth if the Chancellor can control public spending better.
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