"Waste not, want not'

This proverb spells out the link between waste and

impoverishment. Economic Perspectives 112 highlighted the

inevitability of massive waste of public money when government

expenditure is not susceptible to economic calculation. "Would

sanction this expenditure ifit was my money?" is the question that

should be emblazoned on the wall facing M Ps, councilors and

quango committees at every budget meeting, I could add: "f their

aim is the avoidance of wasting taxpayers' money, the need for

objective economic reckoning is both obvious and indispensable,

In the current state of our public finances Chancellor Rishi Sunak,

who still refers to himself as a fiscal conservative, should need no

reminding of this. Yet waste, the very antithesis of the frugality he

espouses, continues to despoil the fiscal landscape in the wake of

his Covid-related largesse

But what did it cost?

The Chancelor has had ample plaudits from rank-and-file

supporters over his readiness to issue quick-fire state handouts

but only now is the Treasury counting the true cost of

interventions such as the "Bounce Back Loan" scheme that, in its

first two months, loaned £47 billion to struggling firms. Now

however, MPs are told to expect that over a third ofthat, £17

billion, will never bounce back at all, almost £5 billion of it having

been stolen by fraudsters

Many caim this is a small price to pay for saving thousands of

small businesses from extinction, and that without it the economy

would now be in recession or worse, an argument we hear every

time the wisdom of dishing out public money is questioned not

by its recipients, of course, but by those who would have

benefitted from a different order of spending priorities The "seen" and the "not seen"

Frederic Bastiat, the 1 9"h Century French economist, addressed

this very issue in his treatise on " What is seen, and what is not

seen", citing the "broken window" parable. If a child throws a

stone and accidentally breaks my window, it may cost me £30 to

hire a glazier to replace it with a new window. A friend tries to

console me with the comment: "It's an ill wind that blows no good

-ifno one ever broke windows, glaziers would have no work". That,

of course is true - on the material level of what is seen: for

expenditure of £30 the status quo has been restored. I have a

window.

But on the subtle level of what is not seen, I might have had the

enjoyment of the alternate uses to which I could have put that

money - a few books, perhaps, a visit to a museum, or having my

old shoes repaired. I could have had those - and still have a

window. As Bastiat put it, to break, to spoil, to waste, is not a

productive use of labour; "destruction is not profit.'

Bastiat widens his example to the whole community with this

conclusion: "Society loses the value of things which are uselessly

destroyed." That loss is ineradicable. New wealth may be created

in its place, but what is lost, stays lost. And of course that is

equally true of loss attributable to waste.

"Staggering cost" to the taxpayer

The loans of £47 billion that didn't bounce back isn't exactly

chicken-feed. It exceeds our annual defence budget or what was

spent last year on transport and the Home Office combined. Even

the Public Accounts Committee (PAC), the Westminster spending

watchdog, notes in a new report that "business survival has come

at a staggering cost" to the taxpayer. It was money that "could

have been spent on improving existing public services, reducing taxes or to reduce government borrowing

alternatives.

Bastiat's "unseen"

Complacency and profligacy

As noted by the Telegraph's Ben Marlow, it's the PAC's charge of

"complacency" that reinforces "the impression of a Cabinet infected

by an inherent profligacy when it comes to taxpayers' money.

Indeed, Lord Agnew was so incensed by the scheme's abuses

such the inclusion of 1,000 companies on the list of recipients

despite the fact that none of them were trading when the virus

struck - that he resigned

The PAC's chairman, Meg Hillier, put it like this: "With weary

inevitability we see a government department using the speed and

scale of its response to the pandemic as an excuse for complacent

disregard for the cost to the taxpayer." Other examples abound:

the doomed "test-and-trace" scheme (£23billion); ineffective

personal protective equipment (£9 billion); the Chancellor's own

moronic "eat-out-to-help-out" programme, which probably

boosted the number of Covid cases (£850m) -not to mention the

flawed and uncosted vanity projects like the smart-meter rollout

and, always, HS2.

It will wreak lasting damage to Sunak's reputation that his

Treasury is spraying taxpayers' money around at the very same

time as inflicting National Insurance tax rises.

Holding the levers of government carries huge responsibility

Waste takes many forms, and propping up the deadweight of

worthless government bureaucracy is probably the single largest

drain of public resources. Subordinating the priority of service to

contemporary fetishes such as "wellness" and "work-life balance"

always for the benefit of civil service employees - is effectively a culture of "sod the taxpayers" who pay their high salaries and gilt-

edged pensions

Woe betide the professional firm that displays such blithe disdain

for the wishes of its clients. yet the civil service headcount is up

by 25 per cent since 2016, so don't expect to avoid the "call-

queue" any time soon

This scourge of inverted priorities will end in an implosion when

resources needed for recovery are no longer available, having

been wasted irreversibly. Only then will growth and wealth-

creation be restored as legitimate objectives in the economic

canon - just as the temporary perversions of cancel-culture, no-

platforming and historic guilt are now producing their own

counter-movements. Be patient and do not despair!