How dare politicians make promises on the basis that “government” will pay for them

February 09, 2015 11:09 AM

With 87 days to go until the general election, the Labour Party has today pledged that it would increase paid paternity leave for new fathers from two weeks to four weeks, with a hike in the level of statutory pay from £120 per week to £260.

John Longworth, the Director General of the British Chamber of Commerce, has raised concerns about the idea and its potential for piling costs onto businesses.

But listen to how Shadow Work and Pensions Secretary, Rachel Reeves, responded when challenged about this on the Today Programme on Radio 4 this morning:

That’s right, she said the policy “is going to be paid for by government, not by businesses”.

Excuse me?? Does the government have a source of ready cash that none of the rest of us know about?

Last time I checked, government can’t pay for anything. It can only spend money by taxing individuals and businesses, or by borrowing (which means taxing individuals and businesses further down the line).

This is a timely moment to recall one of Margaret Thatcher’s most powerful quotations, from a speech in 1983:

“Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay—that "someone else" is you. There is no such thing as public money; there is only taxpayers' money.”

As the election campaign hots up, I promise to call out politicians from any political party who dare to suggest that “government” can pay for anything – because it you, me and fellow taxpayers who foot the bill for everything that government does.

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