Training | 2009.12.11
Public spending: The cuts to come
Here is a brief history of the near future; one that politicians in all three parties would rather you did not read. From 2011 there were deeper cuts in public spending than any Britain had experienced since the IMF gave Denis Healey a kneecapping in 1976. Hospitals and schools were spared the axe, as was Sure Start and foreign aid. But that simply meant other areas had to make even deeper cuts . Spending on public infrastructure was cut by nearly 20% every year for three years between 2011-12 and 2013-14. There were silver linings – the chaps at the Ministry of Defence no longer got to play with new aircraft carriers, those daffy NHS IT projects were switched off with no prospect of a reboot – but they were outnumbered by the clouds. All those attempts to improve Britain\'s creaky public infrastructure – the roads and electric-rail projects and new social housing – were mothballed. Higher education was squeezed hard, and so was environment. Indeed, all other areas of government spending faced cuts of nearly 6% a year for three years – a total of £36bn. There were mass reductions in public-service staff, and strikes galore. And by the end of the parliament in 2014, all of Labour\'s increased spending on public services from 2001 to 2010 was completely reversed .
That was the vision of the future given by the Institute for Fiscal Studies yesterday, based on an analysis of Alistair Darling\'s pre-budget report . No wonder that the chancellor on Radio 4 yesterday morning tried to duck the issue of the cuts to come. Not that George Osborne is any better. At the Conservative conference this autumn, in his war cry to go further and faster on slashing spending, the shadow chancellor airily talked of the £7bn-worth of cuts he had identified. As he well knows, that is the merest fraction of his self-imposed total.
When politicians and newspapers bay for deep cuts in public spending, they rarely identify what it is they actually want to get rid of. The usual joke titles in local government come up, and the accusations of feather-bedded bureaucrats is a lazy columnist\'s favourite. But the reality of low-paid binmen or vocational training for over-16s rarely intrudes. And yet the IFS analysis suggests just how grim the shakedown is going to be. Indeed, since both Labour and the Tories are unlikely to meet their fantasy estimates of harmless efficiency savings, it will almost certainly be a lot worse.
The other lazy, fashionable comment is that all the parties basically agree on the task in hand and will go about it in the same way – it is just that Mr Osborne is being more upfront. That is not quite right. Everyone – economists and politicians alike – agrees that the UK\'s exploding public debt needs to be contained and paid back in time, but there is a difference in how the two parties will do it. The Tories are clear that they will want to cut public services wherever possible. Labour, on the other hand, is trying to share the burden out more fairly between taxes and spending cuts. As the IFS points out, even in the April budget , Mr Darling had the burden of fiscal tightening split 80:20 between spending cuts and tax rises respectively; in this week\'s pre-budget report, that divide had been reduced to 67:33. Since it is always easier to design a progressive tax rise than a fair spending cut, this counts as a small move in the right direction.
Better than nothing, perhaps, but it is electorally risky for Labour. At the next general election, the Tory party will launch a full-frontal assault on Gordon Brown – the chancellor who relied on a bubble economy to throw money at a bloated public sector. The bubble addiction is certainly true; the wasted public investment is just amnesia about how neglected schools and hospitals had been under the Tories. Labour needs to defend its record better – and to talk explicitly about building on it even in hard times. Otherwise, it runs the risk of having its history rewritten by Mr Osborne.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]1/public-spending-cuts-to-come
