It is not often that fate hands you what appears to be a total moral and political victory. But this one looked like a slam dunk. As some of the world’s most self-important people descended last week on the World Economic Forum in Davos, I was delighted to find myself on the same plane as Peter Mandelson, President of the Board of Trade, deputy prime minister and Lord High Everything Else.
I was thrilled, that is, because my colleague and I were travelling steerage, in keeping with the new spartan regime at City Hall. Mandy and his entourage, of course, were flying sharp end; and as we struggled on down the aisle they subjected us to a certain amount of jocular raillery. They would send us some food, they scoffed, and perhaps a glass of champagne.
Boris continues: “In a spirit of glorious self-righteousness, we shouted back over our shoulders that this was the difference between Labour and Tories. Ours, I bragged, was the approach that the recession-battered public wanted to see. We were the ones who were being frugal with taxpayers’ money. This was how an incoming Tory government would run the economy, I cried, and it was with considerable nostril-flaring satisfaction that we eventually found our seats. They may have been narrow. They may have been located near the loos in the tail of the plane. But they unquestionably occupied the moral high ground.
It was only then that the doubts began to set in. Which of us – Mandy or I – was really doing the right thing by the British economy? It is a question that perfectly illuminates the state of the debate between the parties today. Consider the plight of British Airways – namely, the cabin crew strikes they are facing and the worrying decline in revenues from first and business class travel.
Imagine if tomorrow there was a ban on all public sector officials flying in first or in club. Imagine if the Tories came in and decreed that every taxpayer-funded ticket must be an economy ticket. What then? What would be the corporate impact on a business as precariously perched on the cliff edge as the coach at the end of The Italian Job? What if that great company was suddenly pitched – by the abrupt and unexpected withdrawal of this concealed taxpayer subsidy – over the edge?
Think of the carnage. Think of the thousands of unemployed staff, the cabin crew, the handlers – and think of the bill we would all have to pick up in benefits. Think of the catastrophic loss of British prestige if our flag carrier went under. What would the markets say then?
Yes, I thought to myself. Maybe that is no ordinary champagne being guzzled by the staff of Lord Mandelson up there in first class. Maybe that is the golden elixir that is keeping British Airways airborne and the economy moving. They are not just a group of politicians and civil servants on a first-class jolly. Perhaps they incarnate the very fiscal stimulus that is necessary for recovery.
And for a moment or two, I flirted with the logical progression of this thought – that Labour could even be right about the economy as a whole. If we cut too fast and too soon – if we are not sensitive in the way we withdraw that fiscal stimulus, as the actress said to the bishop – then Labour says that we risk a double-dip recession. With a sudden fiscal contraction, a withdrawal of state spending, we could deal a blow to business confidence; we could be hammered by renewed unemployment.
Perhaps there really is no finer investment for society than pouring taxpayer-funded champagne down the gullets of Mandelson’s team, I thought despairingly.
Perhaps, in fact, it was my moral duty to fly first class myself! And then lunch came round. Refreshed by a cup of water and something called a Frusli bar (all we were offered) I had the answer. Listen, I reasoned to myself, this isn’t proper free-market thinking. In fact, it is the economics of the madhouse. If BA’s business model depends on large numbers of state officials travelling first class then BA has the wrong business model. It needs to get more private-sector people to use its more expensive services and put the black back into its balance sheet.
And how are we going to get more private-sector people to be able to afford to travel first class? We need to ensure that they have the confidence to hire good people and pay them good salaries, and fly them in every comfort from A to B. And how will they have such confidence? If they think that they are not going to be clobbered by high taxes and high interest rates. How do you ensure that British interest rates do not soar, as the market extorts an unbearable cost for our colossal national borrowing? You show that you have the guts to cut public spending.
And what kind of early and vivid sign could you give of your willingness to cut public spending? You could kick Peter Mandelson out of first class. And how do you cut corporation tax and give business the leeway to pay for its staff to fly at the front of the plane? You cut the costs and perks of the state and you kick Peter Mandelson out of first class.
It is time to bring an end to all the pointless status differentiators that have made the British public sector as bloated and burdensome as the bureaucracy of fourth-century Rome. There is no advantage to the UK economy in us all paying for state officials to fly first class and swig champagne. Those cakes do not represent a vital fiscal stimulus. They are just the sign of an anachronistic desire on the part of top public-sector officials to be segregated from the rest of the plane. Mandy’s champagne is not the way to get the country out of recession; it is the way to prolong the recession.
The servants of the people should travel with the people. And politicians should create the conditions in which British business, not British politicians, can afford to travel up front.”
This piece appears in the Daily Telegraph today