How to Cut Spending and Frame the Argument

Tuesday, 7th July 2009

A characteristically interesting column from Rachel Sylvester in The Times today, in which she describes how the Tories are looking to how the Liberal Party in Canada managed to slash public spending a decade ago. As Sylvester describes it, our Canadian friends lopped 20% of their public spending bill and dismissed as many as a fifth of all state employees.

In other words, cutting spending can be done, even if it's never easy and always controversial. But unless you tackle welfare and the NHS then - absent a fundamental rethink of government needs and priorities - it's unlikely that many of the other measures - charging for museum entry! - will make much of a difference. Of course, the Tories say they are committed to that sort of Big Thinking.

Momentum is on their side. When even the Prime Minister is forced to retreat and admit that even a Labour government will be forced to cut public spending then the tide is running fast and true on the Tory station.

How to play it politically, though? The public may respect a tough love approach but they won't love it and some will certainly fear it. In that respect, John Major's intervention at the weekend - proposing that public spending be reduced by a third - was helpful, not a hindrance. For it opens the door to a vital argument against Labour: all this extra money spent and to what purpose?

As the ASI points out - and as I've blogged before - cutting public spending by a third would reduce it to £450bn and that is, in real terms, roughtly what the government spent in 2000. So, even these swingeing cuts only take usback to where were were lessa than a decade ago.

Put in that context, the Tories can counter Labour's "Tory cuts" agenda with the observation that we're only asking the government to live within its means and cut back its spending to the level it was three or four years ago. Framed like that, the spending argument begins to take on an almost trivial air: is that all it's about? But then that's also about all this exhausted, crippled government has left. The Tory cuts arguments supposes that the recent past was a grim and brutal place to which the Tories are eager to return us all. But it wasn't and people can understand that, just as families are enduring a period of spending restraint, so must th egovernment. Indeed, they have every right to expect, even demand, that the state adopt a similarly prudent approach.

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Ian C

July 7th, 2009 12:50pm Report this comment

John Major put it better on Sunday than you have depicted.

He said that the severity of the state of UK Plc's finances presents the opportunity to examine what gov't does and to get it out of area of our lives that it has no right to be.

In my view, this means that govt should run little more than the security forces and oversee roads and planning. To have gov't in edcuation has been a moral and economic disaster as families have lost control of their childrens' quality of learning and the nation has subsequently tailspun down the economic leagues while fooling itself that it can be a success with non-learning and non-jobs.

To have gov't in healthcare has prevented the development of a cost-effective medical system based on education and preventative action and care.

Welfare - need we say more?

The 2008-10 Depression is a prime opportunity to re-cast government to being an enabling and regulating institution that quietly gets on with the dull stuff while we only have to pay attention every few years for an election or two. In the meantime those involved are held to the highest personal standards in all aspects of life so that we know we can get on with our lives without watching them being used as canon fodder for tabloidised newspapers.

lawrence greek

July 7th, 2009 2:34pm Report this comment

Alex - the problem is, the government not only lies, but re-writes history. They have already started in fact. How often do you hear a minister say that the 80s and 90s were the dark days and only Labour has dragged us out? I hear it nearly everyday. Although patently untrue, if the Tories talk about rewinding the clock they open themselves to another line of attack.

ndm

July 7th, 2009 5:48pm Report this comment

-- But it wasn't and people can understand that, just as families are enduring a period of spending restraint, so must the government. Indeed, they have every right to expect, even demand, that the state adopt a similarly prudent approach.

And what are the predictions for GDP growth this year? I'm no economist but following Paul Krugmann I doubt this is the time to talk of massive cuts in government spending. Doing so favours ideology over country.

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