Leading Article: Mr Brown's attempt to see the big picture

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The Independent Culture
LIKE SO many of the Chancellor's big speeches, yesterday's allegedly historic reform of the public finances had been so extensively pre-spun that it was difficult to tell which way up the finished article actually was. It is probably safe to say it was a judicious blend of Thatcherism and social democracy. The ending of the annual "spending round" ritual is the most significant change, although it had been advertised long in advance and, in practice, merely extends the system by which the Government decided simply to stick to the spending plans it inherited for two years after the election.

It is entirely sensible to cut out the repetition and duplication of arguing over the same square inches of bureaucratic turf every year. It was not just a waste of time, it distorted spending in favour of short- term projects because it was difficult to plan over a number of years. And the system of "bilaterals", by which each department's spending was fixed in a separate negotiation with the Treasury, actively prevented the Government forming an overview of its priorities.

Of course, the horse-trading between departments has not been abolished, and nor can it be. The fact is that the comprehensive spending review has got stuck in a number of disputes between the Treasury and departments. The Ministry of Defence is, for example, worried about its aircraft carriers. It seems that one of the reasons why Mr Brown came to the House of Commons yesterday and stole his own thunder from his Mansion House speech last night was to put pressure on those of his colleagues who have yet to agree their budgets. It had "always been planned" to announce the outcome of the spending review in two parts, said the spin doctors, although the omission of the actual numbers from yesterday's statement was curious.

It had no doubt also "always been planned" to leak the target of cutting the national debt to 40 per cent of national income to the Financial Times this week, as the spending negotiations drew to a close. Again, this was "spin music" designed to encourage a prudent outcome. A big fuss about the national debt helps draw attention to the fiscal irresponsibility of the previous Conservative administration and make sense of the Chancellor's "iron discipline".

However, if we clear away all the spin, a few facts do become clear. One is that Mr Brown is not "continuing to stick to Tory spending targets for the rest of this parliament", contrary to the claims of his detractors on Labour's left (including for these purposes the Liberal Democrats). Strong economic growth has given him room to manoeuvre, and he is doing the sensible thing which is to increase spending a little - in priority areas - and to pay back a little bit more debt than planned. The Liberal Democrat pounds 50bn "war chest", however, is a figment of speculative forecasting, being the cumulative amount of extra spending that might theoretically be available if the economy went on growing "beyond history" - in Alan Greenspan's resonant description of the American economic miracle.

The Conservative benches in the Commons raised ironic cheers for the Chancellor's announcement that the privatisation programme would continue. In fact, they should be embarrassed that Mr Brown could still find so many more things to sell off. For all the Chancellor's courting of the "Old" elements of his party, he cut a thoroughly "New" figure yesterday, linking new money to efficiency savings and "modernisation".

Mr Brown's reforms mean that the priorities of the spending negotiations, which will now take place more or less continuously, should be more long- term than in the past, and that the much vaunted "big picture" will be easier to see. That much is to be applauded. The consequence of the new system, however, is that the setting of priorities will be even more centrally controlled than before, with the Prime Minister and Chancellor effectively dictating to their colleagues, which makes the openness which Gordon Brown promised yesterday all the more important.