Follow the Money by Paul Johnson – reviewed by Paul Whiteing I nearly didn’t buy this book. I consider myself fairly well read when it comes to current affairs with a better than average grasp of economic affairs by reason of being an avid reader of the FT and The Economist. But I am glad I did buy it and what a well written and concise book this is. In just under 300 pages and a very engaging tone that you would expect from a pundit who pops up on our TV quite regularly to explain the meaning of detailed economic jargon, we get a complete overview of the UK economy in terms of where the money comes from and where it goes.
The book is broken into ten punchy chapters, the first two of which explain where the UK Government gets most of its money. Through these chapters Johnson superbly highlights the incongruities in our various income raising taxes as well as the rather large number of basic loopholes that exist.
Thereafter Johnson spends the remainder of the book explaining where these vast billions of pounds go and how successive governments have fiddled with our spending arrangements as well as pander to their various constituencies of interest to end up in a place that I can best describe as a complete muddle much of which has a history in Beveridge for whom Johnson has little time. He explains why.
I have a professional interest in healthcare policy and the chapter on this subject – and not least the vast sums we spend on the NHS – was one of the best I’ve read. Here, as elsewhere, Johnson’s ability to be dispassionate and independently minded about, in this case the NHS, is excellent. He makes the excellent point that we should not put the NHS on a pedal stool and idolise it in the way we do. Yes, of course, we should value it and the many lives it saves but many other healthcare services provided in advanced nations do equally as well and many do a lot better when it comes to healthcare outcomes and the overall health of the nation. He also makes reference to the needless harm that the NHS can cause, on which I know just a little. In this chapter, and elsewhere Johnson is critical of the last Coalition Government, as well as our current one, for cutting capital expenditure on things like new hospitals and other healthcare advancements. He explains why such decisions compounded the damage inflicted by “austerity”, a concept that I suspect will be judged harshly by future generations of historian.
Johnson’s last chapter, ‘Whereto from Here?’ is a good summing up and here he also considers the policy challenges ahead that are already flashing amber, if not red, on the Chancellor’s dashboard – namely climate change, the impacts of a rapidly ageing population and how to improve growth. Of the last of these three, how to improve growth, I thought the weakest part of the book as clearly without improvements to productivity as a nation, we will not get the growth needed to sustain the public investment needed if we are to retain a seat at the top table of the G7. Johnson acknowledges the political trade-offs involved in some of the policy prescriptions he offers to increase the UK’s level of productivity but offers no viable ways by which politician can find what, I believe, will be needed namely a new consensus about those trade-offs. And I for one believe that without some consensus around, for example, planning reform to build more houses and other infrastructure, then we will remain locked in the same policy loop as this Government has found itself since 2010.
But just as Johnson tries to end on an upbeat note, so do I. I have come to believe that our propensity to somehow “muddle through”, whilst sub-optimal in so many ways, has served us well for the last 200 years and may work for the next generation equally well. Fingers crossed!