Pulling off a public finance rescue mission

This is the next of our posts with Reform looking ahead to the Spending Review. Earlier posts were on health, education, the first hundred days, welfare, the Civil Service, international experiences (New Zealand, Canada,Ireland) and Hon Ruth Richardson’s recent speech and selling the case for cuts to the public.
 
George Osborne was right to frame the forthcoming UK Spending Review as a once in a generation opportunity to reshape government.  While it is convenient to see the current fiscal debate as cyclical, the truth is that heavily indebted countries such as the UK have a structural problem rooted in the overreach of government. So Mr Osborne will succeed if (and only if) he changes the four ways in which government intervenes – as spender, tax collector, asset owner and regulator.

New Zealand is an example of what can be done.  The Fiscal Responsibility Act, which I introduced in 1993, made it the first country to subject the government accounts to private sector disciplines.