Tuesday, April 27, 2010

We're not stupid - tell us where you'll cut!

Money isn't everything, but when the country's structural deficit is anywhere between £70 and £90 billion per year it's pretty important.

The structural deficit is the amount of money we borrow to keep doing the things we do at the moment - the revenue costs if you like. If we borrow to invest in something new that doesn't count. Gordon Brown's 'golden rule' was based on a similar distinction, the rules of which got helpfully tweaked at various points over the last decade.

All the parties say they want to reduce the Structural deficit between half and two thirds over a parliament and say they can eliminate somewhere between £7.6bn and £12bn of 'waste' in public services , but that still leaves some pretty big figures. Today's institute for fiscal studies report states that:
"Based on commitments made so far, the Liberal Democrats would need to cut an accumulated £51bn from spending on public services by 2017. Labour's plans would require a slightly smaller cut during that time of £47bn, the IFS said, while the Conservatives would cut by the largest amount - £57bn."

As I said. some pretty big gaps. Some will come in tax rises, but what about the rest?

Take a look at the BBC articles here and here for some more explanation. 

Last October at conference time it looked like the Tories were going to lead the way and be more honest with us about what they'd cut. But they ran scared as soon as the polls began to change at the beginning of the year. 

There's going to be massive cuts in the public sector. It's not going to be possible to protect frontline services - every single one of the nurses and teachers. I want to know what each party is planning to cut so that I can see their priorities. I want to see some honesty and leadership so that we can at least look back and say 'we know what we voted for'.

We're not stupid so tell us where you'll cut!

1 comment:

  1. This is such an important point. Ideally the structural deficit should be zero, and GB's Golden Rule was about managing just that over the economic cycle. It didn't work out. As you point out, the structural deficit is enormous and all the Govt is seeking to do is reduce the deficit. Meanwhile the national debt burgeons. It is a serious issue which to be fair to Cameron and Clegg, they have both tried to discuss. Cameron spoke of an "age of austerity". Clegg spoke of "savage cuts". They chickened out of that talk, but it merely speaking of the elephant in the room.