Was the spending review really ‘promising’?

The Church of England’s lead bishop for economics and business, Helen-Ann Hartley, and the Bishop of Manchester, David Walker, have broadly welcomed the federal government’s latest spending review, describing it as “promising”.

In particular the bishops praised the federal government’s decision to place more cash into housebuilding and the NHS, adding that they hoped the federal government’s aim of distributing wealth and opportunity across the country would indeed come to fruition.

It’s perfectly comprehensible for a Christian bishop, and indeed the odd man and woman on the road, to be in favour of homes and hospitals for everybody, but I actually have to query if simply throwing money at a problem really is one of the best solution.

Let’s take housing for instance. If you watch a programme like BBC Question Time and the problem of house prices comes up, the argument typically goes like this: the left-winger on the panel would likely say that the issue just isn’t enough houses being built, while the right-winger would say the problem is something like an excessive amount of migration.

Basic economics tells us that the worth of something, be it a house or a bar of soap, is set by supply and demand. The left-winger is correct when he says there usually are not enough houses – the provision is just too low. The right-winger can be right when he says there are too many immigrants – the demand is just too high.

Last yr net migration to the United Kingdom was over 400,000 people. In the ultimate years of the Tory government, it was nearly 1,000,000 a yr. Can any government construct that many homes annually? Would or not it’s desirable, even when it were possible?

If we move on to NHS funding. Every yr, for so long as I can remember governments of each parties have continued pouring money into the NHS with no discernible signs of improvement.

One Thatcher-era Tory minister is alleged to have remarked on one occasion that if the additional money poured into the NHS for a given yr was publicly burned, it could each please the general public (as extra investment!) and could be just as effective as if it had actually been utilized by the NHS.

If we would like higher health outcomes on this country, it is perhaps time to contemplate whether sticking with a model designed for Forties Britain is de facto probably the most effective way of taking good care of our people – especially given Britain’s eye-watering debt levels. 

One area where the bishops were less effusive of their praise was the federal government’s plan to scale up arms manufacturing, suggesting as a substitute for greater emphasis on development and diplomacy.

“We shouldn’t neglect our duty of care to a few of the poorest people on this planet, including many throughout the Anglican Communion.”

The bishops are right to notice that the federal government has a responsibility to safeguard national security. I might go further than that to say that the job of the British government is at the start to guard the interests of the British people. But undoubtedly a militarily secure Britain is in a greater position to take care of the poorest people on this planet and help countries like, say, Ukraine. Defence spending might not be popular but opposing injustice on this scale just isn’t low cost and might only occur after we ourselves have the military capability to accomplish that. 

The bishops are right to argue that a few of the government’s priority must lie in addressing the basis causes of conflict through development and diplomacy. As we’ve seen lately, there’s a limit to what number of incomers even wealthy and comparatively stable developed countries can absorb. We simply cannot absorb unlimited numbers of individuals – irrespective of how much we may feel for his or her plight – without fracturing the material of our own society, a situation that leaves no one higher off. 

One final point. Britain’s total government debt is around £2.8 trillion, representing around 100% of GDP – compare that with the 2000s when it was below 40% of GDP. At some point this money may have to be paid back. We cannot proceed spending money we should not have indefinitely.