Margaret Hodge gets it right, mostly

After Rachel Reeves’ bizarre assertion yesterday that the government was going to pay for a policy, it was refreshing to hear a lecture from Margaret Hodge, the Chair of the Public Accounts Committee (PAC) at the Speaker’s House last night.

Unlike some parliamentarians and campaigners, Mrs Hodge understands that it’s not the government’s money that it spends, but taxpayers’.

“However, when we spend the taxpayer’s pound there is a doubly important duty on all involved, to ensure value for what is other people’s hard-earned income.”

It’s because of this understanding that she is genuinely angered when this money is wasted on botched IT contracts, dodgy PFI deals and golden goodbyes.

photo_2.JPGChairing the PAC isn’t an easy job and is a sure fire way to make some powerful enemies. As Mrs Hodge said last night, there have been more assassinations of Chairs of the PAC than of Prime Ministers.

Being of the left of the political spectrum and a believer in the power of public spending makes her claim to have been “truly shocked” by the extent of the waste encountered all the more alarming and credible.

Whilst the TaxPayers’ Alliance and Margaret Hodge may have very different ideas on the amount of taxpayers’ money the government should spend, it’s important that cutting out waste is supported across the political spectrum.

Whether or not you think Universal Credit was a good idea, surely nobody is in favour of writing off at least £140 million worth of IT assets due to poor planning and management?

Also raised was the problem of civil servants receiving big payoffs only to be reemployed by another public sector body shortly thereafter. The example she gave of Neil McKay who pocketed £1million when his job disappeared as part of the health service reforms only to land a job chairing the cardiac management board for two NHS foundation trusts in Manchester was particularly egregious. The same can be said of the BBC’s decision to award Mark Byford £500,000 more than he was entitled to in order to keep him focussed on his job.

On the tax side, the committee has a lot of hard work ahead.

Mrs Hodge was also right to raise the problem caused by mountains of tax reliefs – but until Chancellors of the Exchequer stop trying to micro-manage the economy with elaborate tax reliefs for films and orchestras, we’ll be reading plenty more about the likes of Jimmy Carr and Gary Barlow.

Calm, considered questioning of expert witnesses on arcane aspects of international taxation may not grab any headlines outside of a few Have I Got News for You guest publications, but its merits shouldn’t be underestimated.

There needs to be a better understanding from politicians that they can’t expect to add reams and reams of highly prescriptive legislation to our mammoth tax code and expect everything to work out.

It doesn’t matter how much Mrs Hodge or George Osborne admonish Google, Amazon or Starbucks – without fundamental reform these companies will continue to pay top lawyers and accountants to minimise their liabilities. After all, their primary duty is to shareholders, not the UK government.