Simon English: Brewster’s Millions should be Labour’s required viewing

IN BREWSTER’S Millions, a 1980s Richard Pryor movie, our hero has to spend $30 million in 30 days. Under the terms of an inheritance deal, if he succeeds he will land $300 million.

If he fails, he gets nothing. But he can only give away a little and gamble a little. And he has to get value for money with the rest.

This proves a far harder task than he imagined. Perhaps someone should show the movie to Labour’s front bench, presently proposing a £150 billion splurge in public sector spending should they win the election.

There’s nothing wrong with governments borrowing now to pay for what we want in the future, especially when rates are so low. Indeed, aside from declaring war, that’s about the main point of having a government in the first place. And full marks at least for ambition.

But it is going to be almost impossible to spend that cash in efficient ways. The idea of suddenly putting 10,000 guys on a big public project and telling them to crack on, price be damned, might be appealing. But the 10,000 guys don’t exist. They are already working on other stuff. And since the UK has the lowest unemployment rate for 50 years, there aren’t many idle hands, certainly not who are qualified.

M’learned colleague Simon French at Panmure Gordon notes: “The nearest parallel would be Roosevelt’s New Deal after the Great Depression but then the US unemployment rate was close to 20%, not the sub-4% we have today.”

Economists call this a capacity constraint. To deal with it you have to massively bid up wages, which in the end means you get terrible value for money and that one project is finished while another is left half-done. The only way that the £150 billion can possibly be set to sensible use is to encourage significantly higher immigration and farm the work out to foreign firms. This isn’t the way politics is going. And in any case may not go down well in Labour’s heartlands.