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Wednesday, 27th May 2009

The choice Cameron faces now that we're over the cliff

Fraser Nelson 11:56pm

British politics is currently suspended in one of those strange Road Runner moments, when we’ve run over the cliff but haven’t looked down. From April 2011, spending on public services will start to fall by a cumulative 7 percent over three years, according to Budget 2009. And given its fairytale economic assumptions (trampoline recovery, etc) the real cuts could be far greater. If the Tories protect health (as they say they will), then the cuts will be a cumulative 10 percent over transport, defence, education, police etc. This will dominate the next parliament. Huge schools cuts, huge military cuts – and all the time at the risk of the credit rating agencies pulling the plug. We don’t have to wait for the Tory manifesto, we know the parameters. The only variable is whether this 10 percent cut over three years will be more like 15 percent. This is not insider information, but a basic economic fact, apparent to anyone with p226 of the Budget and a calculator. Sure, you have to factor in extra debt interest (as the IFS did), but the implications are clear, and huge. Yet, as far as I can tell, it has not entered the political narrative, anywhere.

In a piece for the Daily Telegraph tomorrow, I look into Cameron’s future a little bit. He is going to be hated, because no one can cut to the extent he has to and be liked. His first term will be a war with the unions, who by then may have taken over the Labour Party entirely. It seems impolite to say so, but he is going to be a hatchet man. Not out of choice, but because he has to – at a minimum – carry out the cuts of Budget 2009. And if he wants to assuage the credit rating agencies, who will be the true masters of Britain, he’ll have to cut still further. It doesn’t matter if his heart isn't in it; it doesn’t matter if he and Steve Hilton would rather be sharing the proceeds of growth. Events have overtaken them. Their options narrow by the month. The hatchet is waiting, behind the door of No10, and – like it or not - Mr Cameron will be judged by how effectively he wields it.

I’ll leave CoffeeHousers with a parting thought. Cameron knows that these cuts are ahead of him, knows he has a Thatcher-style mission with about a quarter of the preparatory time that Thatcher had. (Sure, he’s been leader since Dec 2005, but the scale of fiscal surgery only became clear over the last few months). So what’s his strategy? Does he shut up about it, and not let talk about Tory cuts enter the election narrative? You can see the temptation: no-one wants to talk about how they’re going to get into office and impose the sharpest education and home office cuts in postwar history. And you can bet that Brown will keep quiet about the cuts which Budget 2009 committed him to, if he wins.

But if Cameron does keep quiet now, and springs the cuts agenda on the public after the election, it could look like a discretionary move that the Tories embarked on for fun. In my view, he needs to make three things clear:

1) That these are Brown’s cuts, needed to clear up the mess that Brown made. The Tories aren’t doing this for a jaunt.

2) The alternative to making the cuts will be even worse – i.e. national bankruptcy, losing the AAA rating, debt for our children, IMF bailout, the works. The threat is abstract, but needs to be made real.

3)
That only the Tories can clear up this mess because they will level with the public about the state of the finances. It’s the Tories job in history: to clean up the mess Labour made.

Cameron could start talking now about the cuts, so the public aren't surprised when the hatchet comes down in the first Tory budget. Or he could keep quiet, then take a "Oh my God, you’ll never guess what we found in Brown’s Budget - oh, we have to cut - let’s unleash Hammond" mock-surprise approach. So what should his strategy be?  Cameron does, of course, read Coffee House, and this will be one of the trickiest questions he faces. So, suggestions please.

UPDATE: I should have been a little more specific in the question. It's not so much how Cameron cuts, but how he manages to convey to the public that these are Brown's cuts, made necessary by Brown's failings. Defining your opponent's past record is a crucial task for a new government, and Brown powerfully caricatured the Major years as the Long Black Wednesday. So Cameron needs to say: "Brown has taken us to the brink of collapse, these cuts are to save us." How does he best get this message across, and should he start now, during the campaign or after the election?

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Grumpy Old Man

May 28th, 2009 12:38am Report this comment

Keep it straight. Keep it honest. Keep his Manifesto promises. Keep the Unions where they belong-getting the best possible deal for their members, not attempting to mount a coup by force. Use FoI to make sure that everyone in the country realises just how 12 years of Labour has wrecked the UK. And clean up Parliaments' expenses.

Steve Green (Daily Referendum Blog).

May 28th, 2009 12:48am Report this comment

Tell the truth. The people have had twelve years of lies and they are sick of being treated like fools. The lies are bad, but thinking we are falling for them is worse.

The truth will earn respect. If the situation is crap tell us that it is crap. It's good to know where you stand and you can trust someone who tells you the hard truth.

Austin Barry

May 28th, 2009 12:50am Report this comment

Cameron will have five years to cleave the fat from the engorged State. Best to get the pain over quickly. Start with foreign aid. Cut it back to zero, zip, nada. The bleeding hearts will go into extreme vapours, but the pragmatic British public will enjoy the real politic of the move: let's not keep funding kleptocracies. Then go after the welfare scroungers: they won't leave their fetid, crisp-strewn nests in front of the plasma tv to complain. Then recall the forces from Afghanistan - pacifying the Pathans is a job for Sisyphus. Then cut and run from Europe. These initial moves would, I believe, be welcomed by Joe Public as they address his fuming resentment at the misdirection of his taxes to the undeserving. Will it happen? No, of course not. After all, how can the ruling elite justify these cuts to their chums at Primrose Hill soirées? They would look like callous brutes.

Jon Rosenberg

May 28th, 2009 12:58am Report this comment

Honesty. If the rhetoric about individual empowerment via constitutional change is to mean anything, then Cameron has to be completely honest about the financial situation and the necessity of cutting the budget. Tell the electorate the facts, say what has to be done if Britain is not to be bankrupt. Being empowered to make a choice means nothing if you are not given the information to make that choice an informed one. After 12 years of jam today from Labour, Cameron's Conservatives have no honest alternative to that of pointing out that it will be gruel tomorrow and for several years to come.
Fights with every public sector union are guaranteed, but the reality is that Britain cant afford not to have these fights if we want to have a prosperous future. We just have to hope to hell that the electorate is thinking clearly enough when it comes time to vote to acknowledge these current truths rather than simply buy into old lies of Gordon Brown.

ChrisD

May 28th, 2009 2:03am Report this comment

"Cameron could start talking now about the cuts, so the public aren't surprised when the hatchet comes down in the first Tory budget. Or he could keep quiet, then take a "Oh my God, you’ll never guess what we found in Brown’s Budget - oh, we have to cut - let’s unleash Hammond" mock-surprise approach. So what should his strategy be? Cameron does, of course, read Coffee House, and this will be one of the trickiest questions he faces. So, suggestions please."

My suggestion would be for him to follow the current strategy that is so clearly set out.
UKplc's DEBT burden is at a record high, been accumulated under this government, and is simple unsustainable.

Did I miss something? But I thought the Conservative party's strategy was pretty clear cut already, and gave quit a clear message to the voters already?
That and the fact that Brown and his government are trying to hide the scale of the problem while setting out Cameron's stall in the most negative and misleading way possible.

I also got the impression that the present economic situation had in fact given Cameron and Osborne the green light to be as open and honest as they would like to be about the tough tasting medicine that will have to be swallowed to address our current debt problems.

At least two media sources have now indicated in print that the stark choice facing the UK is down to two contenders. The Conservatives or the IMF.

Verity

May 28th, 2009 2:22am Report this comment

Austin Barry - I can subscribe to your foreign aid programme. Nada. I like it.

For the welfare class, as I have said before, remove their vote from the computer. If they're not contributing to the country, there is no reason why they should have a vote on which party gets to decide their future emoluments.

'Cut and run' from Europe. You say it won't happen. Why not? This is a genuine question. Given that the British overwhelmingly want to dump the EUSSR, why won't it happen?

Who will stop us? David Cameron?

Because they won't be "given" (it's ours by birthright) a vote? Who sez? Who are these lordly distributors of votes? And why are they distributing them to non-citizen parasites? This whole destruction of our Britain and our citizenship goes deep.

Paul B

May 28th, 2009 2:29am Report this comment

I agree with Jon Rosenburg. DC has to marry the spending cuts with reform. Nothing should be ruled out-including health spending. The country is in a mess, but good can come out of this. Power can be decentralised and the state shrunk on all fronts, it makes total sense to approach the problems as one. I believe DC should start to level with the public on the size of the problem, but it would also to be fair for him to say he needs to see the books first as well. I believe the public are ready for straight talking. DC could fairly point out, that if we want our MPS to honest in their dealings, then its only fair that we the public are honest in our expectations on what the state can do for us.

Kevyn Bodman

May 28th, 2009 4:23am Report this comment

Tell the truth.

When is perpetrating deceit on the electorate the right course?
That is the alternative to telling the truth.And it would be wrong.

Tell the truth,gain support and have the right to implement the necessary policies; or tell lies or allow the electorate to form the wrong impression, which amounts to the same thing, and have the same economic problems with added social problems and violence on the streets.

I can't see a credible alternative to this strategy and am pleased that earlier commenters have advocated honesty.

I have no desire at all to see a change of government based on lies and I reject any argument based on the idea that the incoming government might be a bunch of lying scum but at least they are our lying scum.

Simon

May 28th, 2009 5:22am Report this comment

If these cuts are applied in the right places they could lead to a positive improvement in our quality of life. Imagine no more Highways Agency idiots closing the motorways at the drop of a hat, no more smoking police, no more fake charities nagging us about smoking and drinking.

There is a long list of cuts that could be made which would be welcomed with open arms by most people.

Kevyn Bodman

May 28th, 2009 6:00am Report this comment

Since my earlier comment on this thread I've visited a couple of blogs that have put up Cameron's interview with Andrew Marr, the bit about the referendum on the Lisbon treaty.

To see Cameron squirm and slither, and in my judgement, lie, about this makes me abandon hope for honesty from him.

And is he fool?
Almost guaranteed election winning statement:
We will have a referendum on the Lisbon treaty within 3 months of taking office, irrespective of what has been done by other EU members.

But he's not a fool.
He doesn't want a refrendum, he wants the EU. But he hasn't got the cojones to come out and say so.

I have more respect foe EU philes who admit it than I do for this man who has now, incontroveribly, revealed that he will not tell you what he believes.

TomTom

May 28th, 2009 6:20am Report this comment

It isn't going to happen. This economic disaster started with North Sea Oil which lubricated Thatcher's destruction of the manufacturing base and import-bingeing. The petro-currency status let The City borrow abroad and lend abroad using the country as a convenient island - a giant Jersey or Gibaltar - and now the sector is loaded with guarantees taxpayers cannot afford.

To cut Services to pay for Lloyds bank or RBS guarantees is explosive. The route is inflation and Cameron will not cut significantly. This is a structural problem unlike any before - imagine 1946 WITHOUT Marshall Aid - imagine the 1920s when 40% government Spending was DEBT INTEREST

This problem will be extant when Cameron retires at 70. It is very, very BIG

Common Place

May 28th, 2009 6:44am Report this comment

The Nada Aid option is supported by Dambisa Moyo in her book 'Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa.'

In a recent interview Moyo quotes a friend, 'Africa is to the World Bank what Mars is to Nasa.'

Perhaps politicians can take another look at the World Bank, once they have sorted themselves out that is.

David

May 28th, 2009 7:04am Report this comment

There is nothing he can do. Talk of cuts will be electoral suicide, no matter how framed.

Flemingcrag

May 28th, 2009 7:18am Report this comment

History tells you that people never remember who got them into a hole, only the pain inflicted on them by those who sought to help them out of it.
Margaret Thatcher is reviled by certain sections of society to this very day but, much of what she had to do was forced on her by the mis-management of successive Labour Governments and Union Barons who thought they were the Government.
The people who hate her most cite the ill thought-out poll tax as one of her most serious "crimes". They hail from in the most the North of England, Wales and Scotland yet when it came to the "right to buy" and freedom from the tyranny of the Council landlord people from these parts were the biggest beneficiaries far outweighing any sense of grievance over the poll tax.
The next Conservative Government will fare no better press from the class warriors of Labour and their press mouthpieces like Kevin Maguire but, as has been said you don't have to be liked to get a Country out of a hole just good at what you do, even if the carpers brand your actions ruthless.

Moraymint

May 28th, 2009 7:34am Report this comment

Mr Cameron

Spend every waking hour from now until the election exposing each detail of the socio-economic disaster created by the Blair/Brown/Balls (B-Cubed) trio of political gangsters.

Be ruthless; spell it out; rub it in. Explicitly relate each horror story back to B-Cubed. A frightening proportion of the British people still have little idea just what a mess was deliberately and systematically conceived and implemented by B-Cubed. I know; I listen to them. The British people must become sick to death with the Labour Party in general and Gordon Brown in particular. We need to be absolutely furious at Labour's utterly dismal legacy and chomping at the bit to get rid of them on the basis that nothing could be worse than more of Brown's nigh-criminal incompetence.

Then, as other posters have said above, be honest with us. People really can take bad news if you treat them as grown-ups, tell them what needs to be done and how, lead them through tough times and be seen to share the pain. However, if politicians continue to live in a taxpayer-funded world apart, you (and we) are stuffed.

If we don't adopt a strategy something like this, the familiar British way of life will start to slip from our grasp as other external and difficult-to-control forces come in to play. Indeed, other internal forces (BNP/nationalism, belligerent unions, criminal types ...) would also rise up.

Finally, take a long, hard look at Hannan/Carswell's 'The Plan: Twelve Months to Renew Britain'; why would you not adopt many if not most of the proposals in this polemic?

Irate

May 28th, 2009 7:45am Report this comment

It will be a difficult for David Cameron to get and keep the support of the electorate for years of austerity when his m.p.s so clearly have no comprehension of the financial circumstances of most people, and can show no contrition for their grotesque binging on expenses.

the white dragon of olde england

May 28th, 2009 7:57am Report this comment

Look back for the future. Give Hospitals back to the local people to run, with a stipend from central government. Local charities could run them. People will subscribe to ensure good facilities. They would also demand the culling of administrative staff and their high wages.

Time to turn back the clock

mac

May 28th, 2009 8:03am Report this comment

Austin Barry's medicine is right, and I'd add to it a thorough demolition of the quangocracy.

Sadly, though, AB's conclusion is also accurate.

Country Mouse

May 28th, 2009 8:05am Report this comment

This the best post and some of the best comments that I have read for a long time.

The current furore about expenses and constitutional change are red herrings put about by Labour/Lib Dem. The last thing we want now is a rushed 'reform' of our constitution. It should take months even years of open discussion to change a thousand year old constitution.

Cameron should get the economy back on the agenda ASAP

Ken

May 28th, 2009 8:05am Report this comment

Put it all out there now, every wart and pustule, in a digital publication entitled "The Brown Legacy (200 pt bold) - Ruin on a Planetarian Scale"

Use the copious analysis you and others have already produced on the horrendous outcomes of 12 years of McBoom and McBust, the total cost of his on- and off-balance sheet follies, the absolute slash and burn that is required across the welfare state machine, public service, the NHS, the international aid budget, the quangoes, parliament, public sector pension schemes etc etc, and the onerous paths for a return to righteousness.

Campaign on this poisonous theme alone.

Nothing else is needed.

The incompetent marxist Bruin has left behind the most devastating campaigning platform in a century, all the facts and figures have been authored for you by James Gordon Brown and his Scottish Labour Mafia.

This is an historic moment to bury a wilful and evil pseudo-party for ever. Go for it, or the country is headed back to the 30s.

Roger

May 28th, 2009 8:06am Report this comment

Demonstrate a clear programme to reduce the PSBR to 40% or less ASAP. The NHS should not be protected and will need to show massive improvements in productivity. As well as changes in the Public Sector over generous pensions, they should consider a 10% cut in all salaries above £30,000 PA.

Andy Leeds

May 28th, 2009 8:12am Report this comment

Cameron should use a very simple narrative at every chance: 'Brown has bankrupted Britain'. That message will get home quite quickly and will stick.

Obnoxio The Clown

May 28th, 2009 8:13am Report this comment

I fear the boat will remain unrocked by the buttered new potato.

Lots of tinkering round the edges, but nothing of any importance will happen. Even Thatcher didn't have big enough balls, and Call Me Dave is not Thatcher.

Lance Grundy

May 28th, 2009 8:14am Report this comment

Quango, quango, quango.

Get a red pen, click here, print off the list and put a line through at least 75% of the advisory bodies and at least 50% of the executive bodies - more if you can stomach it.

Remember, that no matter how many of these damn things you pull the plug on, hardly anyone will notice and even less people will care.

Oh, and you could also look at Britain’s so-called ‘fake charities’ - you know, the ones who get millions and millions of pounds of taxpayers money which they use to campaign for left-wing causes.

If these people want the British public’s money then let them get out there and get it themselves. Get the so-called ‘Chief Executives’ of these ‘charities’ off their arses, out of their fancy offices and five star hotels and put them where they belong - shaking tins on street corners.

Boudicca

May 28th, 2009 8:19am Report this comment

Honesty. He should explain his strategy for cutting public spending starting with the obvious machinery of Government. MPs to be reduced way beyond the 10% envisaged - 400 would be ample. Cut the Lords into two camps: those with hereditary and honourary titles who cannot attend Parliament, vote or claim expenses and a small core of 200 Parliamentary Lords who can.

Hold the Referendum on Lisbon and acting on the result, tell Brussels that we are no longer members of the putative Superstate and will not be contributing £40 million a day towards it.

Cut welfare: time limit benefits; cut child benefit to 2 children only; increase tax allowances for the low paid and reform/reduce tax credits; fund schools directly according to pupil numbers.

Tackle the asylum/immigration racket. No benefits whatsoever for immigrants until they have worked and paid tax for 5 years - including NHS, accommodation, education welfare. If they can't support themselves, they just get a ticket home. That should deter them from coming.

Extricate ourselves from the HRA and asylum system and immediately remove those who don't qualify.

Stop Educational Maintenance Allowance: kids who want to study shouldn't be bribed - instead encourage them to get Saturday work so they gain experience and build up a CV.

Cut public sector non-jobs: diversity officers; outreach workers etc.

Michael Booth

May 28th, 2009 8:22am Report this comment

Calm down dears - it may not be a commercial, but Ed Miliband has the answer to all our woes. He says that all Parliament has to do is get rid of their ceremonial costumes and "Kazzam!" faith in our institutions and politicians will be restored. It takes a genius to cut through so much crap and get to the heart of the matter, don't you think? More codswallop, anyone?

Ben Gladstone

May 28th, 2009 8:40am Report this comment

dave, come clean, we're done with dishonest politics. one positive thing you can do - give small business a cashflow boost and make the uk more attractive for startups by extending payment terms on vat and payroll taxes to 6 or 12m.

Nicholas

May 28th, 2009 8:49am Report this comment

Actually I look forward to an impoverished government. Less money means less opportunity to intrude into our lives and meddle. The problem has been a surfeit of "investment" allowing a state with nanny tendencies to indulge its nose poking on behalf of all those busybodies who like to form pressure groups for one thing or another.

Restore our historical gun owning and self-defence rights and the police can retrench too.

MummyLongLegs

May 28th, 2009 9:12am Report this comment

I think most people in Britain know that big cuts are on the way. Cameron needs to be honest about them now. He also needs to find out where the public are happy to see cuts and where they aren't. The Military budget must stay the same (or even increased to ensure adequate equipment and supplies reach the front line) until the whole mess has been sorted out. Most people suspect that top down cuts in the health care system will be long overdue. Most of us need to see a doctor or a nurse, not a 5 a day co-ordinator or a quit smoking advisor. NICE need to get their priorities in life saving straight aswell. We don't mind paying for expensive drugs but boob jobs, gastric banding and gender re-assignment is not something that 95% of the population is ever going to benefit from. The civil service could take a big hit too, there appears to be lots and lots of paper clip counters and drawer tidiers that could be better employed actually doing something that helps the people of this country. More police on the front line, less at the desk eating donuts and coming up with diversity plans. No bailing out of failed businesses be they car makers, banks or double glazing firms. Let those we have already bailed out keep the money, but give them back the debts they incurred for them to sort out. We will never get that money back so write it off. Better that Northern Rock goes under than the UK as a whole. Less welfare, less 'helping' more 'making' people go back to work, make it possible, with free childcare for single parents. If two adults in a household are unemployed only one can claim benefits. The possibilities are endless but must be done with the public in mind. Simplify the tax system and choose a rate that suits all. Lay out the cuts in simple terms and carry them out. That's all he has to do. We are fully aware that there is no way round the mess Labour have left us with. The only way out is to cut a swaith right through the middle.

BrianSJ

May 28th, 2009 9:12am Report this comment

Mountain to climb within DC's organisation. When you had Chris Grayling answering questions here, he didn't see any urgency to public sector pension reform. When front benchers are way behind the curve, the organisation is just not up to the job. I still have hope in DC but his government is going to be a disaster because too few of his team understand post-bureaucracy. He needs to use the expenses row to get some 21st century folk in.

Andrew Zalotocky

May 28th, 2009 9:26am Report this comment

David Cameron needs to accept the necessity for radical structural changes to the whole public sector. The truth is that government spending is monstrously wasteful, and with the right changes we could have better quality services and a lower level of government spending. That's the message he should focus on.

It's not enough to just cut the overall level of expenditure. Public services are already functioning so poorly that starving the machinery of fuel will only cause it to grind to a complete halt.

Nor should Cameron waste any time looking for efficiency savings or trying to change the culture of Whitehall. Governments of left and right have been trying those things for decades and they've never worked. The only way to cut wasteful bureaucracy is to abolish it entirely.

That is also the only way to ensure that most of the job losses are among central government bureaucrats rather than front-line staff. Significant job cuts will be necessary, but they will be a lot less unpopular if most of them fall on people the public considers unnecessary to begin with.

More importantly, job cuts won't have an adverse affect on the delivery of services if structural changes have already made those jobs redundant.

Cameron must also accept that there can be no "sacred cows" any more, least of all the NHS.

So what changes should he make?

[1] Reject the assumption that there has to be a state-run health or education system. State control leads to ever-lower standards at ever-higher cost. So privatize the whole lot, and give each citizen some vouchers to spend with the healthcare and education providers of their choice.

The disciplines of the market would make the service providers far more efficient and responsive, and drive down costs. Most of the health and education bureaucracy could then be abolished completely.

[2] Drastically simplify the benefits system. The current system is so complex that it is far more expensive to run than it needs to be, and far too vulnerable to fraud. Start by abolishing Tax Credits, Gordon Brown's totally unworkable system for micro-managing the lives of the poor. Ideally, adopt the most streamlined system of all, the Citizen's Basic Income.

Politically, items 1 and 2 can be promoted as an egalitarian programme that will most benefit the poor. For example, point out that only the well-off can send their children to private schools or move into the catchment area of a good state school while the poor get what's left. Force Labour to defend the inequalities in the current system.

[3] Simplify the tax system. Tens of thousands of staff could then be cut from HMRC and the costs to British business would be significantly reduced.

[4] Cut overseas aid as suggested by other commentators above.

[5] Have a bonfire of useless quangos. I suspect that the country can probably survive without the British Potato Council.

[6] Cut the budget of the largely useless British Council.

[7] Abolish the television license fee to give every household an instant tax cut. It is an indefensible anachronism, and the BBC is far too dumbed-down, biased and complacent to deserve any kind of public funding whatsoever.

Remember also that the left-wing statist BBC will automatically oppose any real cuts in public spending, especially by a Conservative government. The best option would be to abolish the BBC entirely and sell its assets to the highest bidder. Just imagine what the commercial broadcasters would be willing to pay to own hit shows like Doctor Who, or the old classics in the BBC archives.

[8] Abolish the Department for Culture Media and Sport. These things are none of the government's business.

[9] Slash or abolish all forms of subsidy to the arts. The luvvies may squeal, but they have no right to a free ride at our expense.

[10] Take Britain out of the EU. We lose far more from membership than we gain, and not just in financial terms.

[11] Once we have left, seek to join NAFTA to form a Transatlantic Free Trade Area without the EU.

[12] Abolish the Union Modernisation Fund. It's little more than a way for Labour to recycle public money into donations to the party.

[13] Reduce the amount government spends on advertising. Start by cutting those threatening TV adverts that tell us there's no escape from road tax etc. They are the epitome of Labour authoritarianism.

[14] Pull out of the Airbus A400M military transport project with its ever-increasing costs and delays. Buy some more Hercules or C-17s instead.

[15] Repeal the Climate Change Bill and get rid of all the bureaucracy it requires for monitoring and reporting. The targets it sets are totally unrealistic anyway.

[16] Eliminate all spending on "renewable" energy sources, especially wind power. None of them can provide more than a small fraction of our energy needs, and they all require huge subsidies to be even remotely competitive with fossil fuels.

drakes drum

May 28th, 2009 9:43am Report this comment

Honesty? Clean? from a British politician?

Cameron cannot come clean on the question of the EU and the Lisbon Treaty. So he has failed before he starts.

David Bouvier

May 28th, 2009 9:45am Report this comment

Crucially, the cuts are in the budget documents - Labour have to be nailed as already planning cuts. The question is how much more damage is done before we start fixing Labour's mess.

1. Cuts are already in the budget - Brown is planning them. CRUCIAL TO NAIL THEM ON THIS.

2. Labour has broken the economy, the country is on the brink, so yes there has to be austerity.

3. But they are trying to hide this until the election - trying to buy the election on credit and leaving the bill to the next government.

4. Labours economic forecasts tend to be optimistic - so it is probably worse than they say.

5. Time for a general election, so a new team can fix the mess Labour made.

oldtimer

May 28th, 2009 9:53am Report this comment

First Cameron has to establish the case. He needs to do so now by charging Brown and co as "the do nothing government" to deal with the funding black hole revealed by the budget. Brown is ignoring the elephant in the room.

There was a revealing survey on Politics Home on top stories last week. The S&P downgrading of the UK outlook ranked about fifth or sixth - Martin and MPs expenses dominated. See here:
http://page.politicshome.com/uk/resignations_top_impact_tracker.html

It revealed significantly different opinions between Conservative (30%) and Labour (7%) voters whether this ranked in the top three stories. Overall 17% of those polled thought it worthy of the top three.

Just after the budget Hamish McRae commented that, over time, taxation of c37% of GDP was the tolerable limit in democratic societies. Given this reasonable assumption it is inevitable that there will need to be massive cuts in government spending. The arithmetic is relatively simple. McRae spelled it out in his article. He concludes:

"No government for 30 years has sustained tax receipts above 37 per cent of GDP. Yet we are now proposing that spending rises to 48 per cent of GDP, almost as high as the mid-1970s when the IMF came in. It went to 44 per cent in the early 1990s. The electorate cannot have that level of spending, or anything like it, if it won't pay more tax.

Governments of both parties have failed to make that clear. It is almost as through they have been complicit in the deception. Yesterday the scale of that deception became clear, and that is why it is the end of an era."

mark c

May 28th, 2009 9:53am Report this comment

dont let politicians anywhere near executing the plan, all the things in ealier comments apply but to manage it and make it happen fully will need him to hire a decent team .. none of the current numpties on his team, Cleggs or Broons are up to the task. Thats not because of the expenses row or any bias ... its simply because they are time served career politicians not experienced, hard bitten, manage at the front and understand how tough it is management people who wont bow to lobby and single interest nagging. Churchill and Thatchers biggest strengths were focus and tenacity and we'll need that in spades

Liz Brown

May 28th, 2009 10:01am Report this comment

Definitely cut foreign aid - it causes far more harm than it does good. Take us out of Yurop - we'd easily cut the burden of debt - get rid of ID cards, NHS computer and other ridiculous IT schemes, eliminate quangoes and Consultants - Cameron is starting to talk the talk and now's the time for total honesty with us

Simon

May 28th, 2009 10:18am Report this comment

Honesty has got to be the best policy. People are really tired of the manipulations and lies that seem to dominate politics. Its very important that the story of where we are is repeatedly told and re-told with the supporting evidence. I guess this is the challenge that Cameron has.

IdlingAway

May 28th, 2009 10:26am Report this comment

As most of the comments above mention, the British electorate will respond to openness and honesty about the state of public finances and will accept the budget cuts if they are presented as (a) vital to reducing public debt and (b) as part of a reform agenda. The “shift in power” speech from earlier this week was extremely important in this respect and, I think, touches a raw nerve with the public as it describes the type of social and political reform necessary.

However, the one aspect that hasn’t been touched on so far is the human cost of this. “Cuts” aren’t accounting entries in public ledgers – they are real jobs and many, many public sector workers will end up unemployed as a result of this. Combined with the high levels of current private sector unemployment there will be vast numbers of unemployed. This causes real hurt and desperation amongst families and Cameron needs to offer a solution and hope to these people. These people are unwitting victims and they must be addressed.

If we are still employing record numbers of immigrants then mass unemployment coupled with huge numbers of immigrants employed in the UK will be social dynamite and Cameron will need to be tough on immigration (including from the EU). This is where immigration is now a live political topic – not immigration as a proxy for racism but immigration as an economic issue.

Redvers

May 28th, 2009 10:27am Report this comment

It's an interesting debate, and Cameron is in a tricky situation.

But remember, in the cartoons you only fall down once you stop running and actively notice that the ground beneath you has gone. This is GB's masterstroke, he is still running, faster than ever, and definitely not looking down.

Hugh

May 28th, 2009 10:34am Report this comment

Well done, Fraser, burning the midnight oil, I see.

Sharing the proceeds of negative growth will be painful for us all, but DC has a good team: he does not walk alone; and it looks as if there may be a large group of motivated younger helpers elected to help and support.
There is also an army of experienced people itching to help with spreading and softening the landing. Preservation of the purchasing power of their pensions is all the incentive many of them need to put their shoulders to the wheel.
The public sector Unions and public pensions will be a huge problem, as major beneficiaries of the last ten years they will be expected to fight hard, but democratic will is a powerful force.

Mr Green

May 28th, 2009 10:45am Report this comment

The average man and woman on the street knows what's coming. They expect tough times ahead and, in a strange way, they are looking forward to it. They want to wipe the slate clean and get some needed housekeeping done.
If David were to lie - they will know he is lieing and not thank him for it.
If David were to be honest, blunt, upfront and told it how it is - they will understand, tighten their belts, take a deep breath and accept it.

Now's the time to be brutally honest. The population no longer belives unbelievable good-news-stories.

Ian C

May 28th, 2009 10:50am Report this comment

There is a sense of panic in this piece Fraser, and the responses it has encouraged, that history tells us need not be there. Not that we have anything to be complacent about.

It took Thatcher from 1979 to 1983 to set the foundations, by being tough and unpopular but with a majority behind her that was only growing - once she had achieved an important victory, in her case, the unexpected Falklands war.

Cameron's job in his first term is to be credible with the markets and to build a momentum based on a clear and popular victory. The most obvious choice is Europe. There is noone I have spoken to in 10 years who thinks that the EU is a 'value proposition'. There are certain things that it does that requires us all to work together, but they do not justify the sort of monolithic bureaucracy that we are exposed to. This is an open goal and he should be put off by previous troubles on the subject.

So Cameron must pick his populist battlefield for his first term, present that as a major factor in our revival, which it is, while tackling the less popular measures necessary to bring down the debt and deficit.

Believing that foreign aid and benefit fraudsters will do this is to admit that you cannot use a calculator. They are minor items financially but totemic examples - like MP's expenses - of the malaise Britain (and others) are in.

The only route to financial stability is growth at levels above the norm of c 2.5% pa. All else is peanuts.

That can only be achieved by getting 35m people working instead of the 30m that are at present while carrying the deadweight of the other 5m.

Take low pay out of income tax (first £10,000 immediately), put up the threshold for the 40% band over a Parliament to about £65,000 and cut enterprise free - in both the private and the public sector.

Fund it from VAT at c 22.5 and cuts in what Gov't does - backed up by constitutional definition and reform.

Marina

May 28th, 2009 10:52am Report this comment

I think the public know that cuts will inevitably happen and what they need is an assurance that these won't be micro managed by government diktat. After ring fencing essential expenditure, particularly to protect the vulnerable or to ensure the achievement of long term goals, Cameron should make it clear that priorities will be determined at the level which is most informed about local conditions. Those making decisions at that level will be, wherever possible, democratically accountable.

Some decisions can be made at the level of the individual, e.g. a student can choose between a larger loan to meet the increasing cost of higher education or a period of 'national' service. Such service could be full time at a low but living wage or unpaid part-time voluntary work such as adult literacy programmes. Setting up a large, expensive quango to run this should be avoided and instead partners sought with existing agencies.

mick

May 28th, 2009 11:19am Report this comment

There is less time than he thinks. Everybody should be on an election footing now. If Brown goes after euro elections then things will happen very quickly.

Billericay Dave

May 28th, 2009 11:31am Report this comment

Great stuff but this needs to be got out to the rest of the population, most dont read the Spectator they read the tabloids and watch the BBC, the truth about what brown and co have done to the economy over the last 12 years has to be on every bill board and red top paper, Cameron has to be honest with all the population and attack brown at every opportunity especially PMQs where hes at his best and brown at his worst. Get brown to admit there are cuts in his budget (lets not be naive and think darling penned it) and show labour are just using smoke and mirrors to deceive the public in their desperate plan to hold onto power at any cost to the country.

Gavin

May 28th, 2009 11:36am Report this comment

Two more candidates for reducing unnecessary spending. 1) Tax Credits are hugely complex and inefficient, they are back-door redistribution and employ vast numbers of civil servants. 2) Child Benefit isn't needed anymore - England is full. And there's more civil servants and their pensions to be got rid of.

This is a rare opportunity to end unnecessary and costly benefits while reducing the state payroll.

Steve

May 28th, 2009 11:46am Report this comment

David Cameron should tour the country before and after the general election and connect with people and explain the need for cuts, and also be seen to be in the areas that will face cuts (the northern cities Liverpool and Newcastle etc) making sure the government is seen to be sympathetic to peoples concern, job losses etc. Mrs T is undoubtably the best post-war PM but she could never connect with people like DC can. She appeared cold and arrogant too often. DC has the opportunity of creating a consensus on low public spending through his popularity with the voters.

GIN

May 28th, 2009 11:49am Report this comment

He's got to be bluntly and brutally honest about what lies ahead and about just how grim the first half of the next decade will be. If the British public aren't prepared to sign up for Dr Camerons medicine, then fair enough. Cameron can sit back and wait for the country to go bankrupt in the next Parliament by which time people will be clamouring for the Tories to save them from the nightmare. But one way or another Cameron has got to leave the public in doubt about what awaits them, both under him, and under Labour, at the next election. Then let the public decide what they want to do.

Assuming he wins the election, one of the things he could do to help soften the blow of his cuts a bit when he gets in office is to have an independent, national audit of the nations books. This audit should look at not only the position we're now in and how we get ourselves out of the mess, but it should also look at Labours ENTIRE period in office and bring to the public the inevitable appalling wasted money - Our money - that has been squandered during this early millennium golden era. I'm sure it'd be as big an eye opener as the MP's expenses have been...

obangobang

May 28th, 2009 12:13pm Report this comment

Cameron, along with all politicians have a duty to be honest. That may not have stopped them from lying in the past, but they will find it far harder to hide their lies in the future, so anything but straight talking now will only store up problems down the road.

Since the media agenda continues to be dominated by the expenses scandal, all parties will find it difficult to push public attention onto the economy, as this will be interpreted by many as an attempt to avoid discussing troughing MPs. This is a particular problem for the Tories who, as time passes, become clearly the more obsecene offenders (moats, duck houses, staff quarters, etc.). Nevertheless, whilst Cameron will be obliged to deal with the ongoing expenses saga, there is no reason why his Treasury/economy team cannot start putting themselves about to discuss the deteriorating state of the public finances. People need to be reminded why they should not vote Labour back into office on a daily basis. Who they vote for, frankly, is of little importance to me (the Tories won't get my vote) but destroying the Labour Party as a credible political force for at least a generation ought to be the combined goal of every non-Labour politician in the land.

There appears an ever-increasing likelihood that venal Labour MPs in their panic and terror of the revenge to be wrought by the electorate, will discard the Crashmeister into the dustbin of history where he belongs, which will in itself will be the precursor to an early General Election, probably in September. All of the opposition parties must ensure that whatever their relative guilt in 'expense-gate', this cannot be allowed to distract the electorate from voting out Labour MPs by their hundreds.

Redvers

May 28th, 2009 12:37pm Report this comment

It's good that Cameron reads this blog, since you have solved the economic mess for him.

No more foreign aid, no more benefits, no more immigrants, no more EU. Simple.

Do you realise that these crackpot solutions exist only in your heads, in the letters page of the Mail and the Sun, and in the blogosphere?

I find it encouraging that no actual politicians, or journalists on this site, come up with this sort of deluded nonsense.

Alison C

May 28th, 2009 1:18pm Report this comment

He (DC) has to tell it like it is - and say why. Simple sums - Brown overspent X amount, we have to pay back X +..... To do this we have to cut Y.

For the last ten years myself and some friends have been muttering about the rampant tax and spend and wondering how commerce, hard pressed industry, was going to be able to fund the public sector bloat.

It was and is not sustainable. Time for a big old cuts.

Time to reduce red tape and help industry and help those who actually make money for this country and contribute tax - by reducing the state bloat.

Moraymint

May 28th, 2009 1:26pm Report this comment

I like the idea of Cameron telling it as it is and letting the people decide. If they (because I won't) choose another 4/5 years of The Brown Terror then, sadly, we all get hung out to dry. But the idea of the British people gagging to get rid of the Labour Party once and for all does have a ring to it. However, I fear that for now there are still plenty of people out there who hold some bizarre and/or ill-informed view that the Labour Party can undo the mother of all socio-economic disasters created by, er, the Labour Party.

John Moss

May 28th, 2009 1:38pm Report this comment

There is around £300 - £350 billion of value in the social housing estate, locked in because of the policy of funding builders to build homes and then forcing them to keep rents low.

Transferring the subsidy from building homes to households in need and allowing people to buy part-shares in their homes could unlock a substantial amount of that value without affecting home-building rates or penalising households on low incomes.

Ideas like this which generate income not currently budgetted for, or which acheive outcomes which are, but at lower cost, have to be at the heart of reform so we can chart a sensible course back to finacial stability.

But we have to start with a clear message. No growth in public spending for the entire first term. No pay rises, no new staff, no new pet projects, no new equipment. Do your job with what you have got now.

Publius

May 28th, 2009 1:48pm Report this comment

It's not as though the financial situation is a secret. Nor is it a secret what needs to be done. It's plastered all over places like this, and in the newspapers. So those who care already know.

So I really don't see what it is that Cameron need to tell people that they (who care) don't know already.

Of course, everyone will somehow expect someone else to pay. No amount of explaining will dispel that fantasy.

For similar reasons, Brown will go on to the end cynically pretending that no savings are necessary, that the binge can continue. And a lot of fools will believe him.

Verity

May 28th, 2009 2:37pm Report this comment

Inspired headline, Fraser, and excellent piece!

To all those posters above recommending, to David Cameron, "honesty", you're barking at the moon. Clock his endless equivocations and avoidances of discussion of the EU.

Steve York, Norwich

May 28th, 2009 2:48pm Report this comment

I think many, myself included are tired of 12 years of spin and lies that mask the truth.

If DC can tell us the truth, without the spin, I'm sure many will be behind him on the enormously difficult decisions he will be forced to make.

As others have mentioned, it's not as if he hasn't got the best of causes ... he can blame Brown to his heart's content, time for him to redress the balance over Brown's accusations of the "do nothing" party.

TrevorsDen

May 28th, 2009 3:06pm Report this comment

Your points 123 (or something like them) are sound.

I would only add that these announcements should be made within seconds of being elected. Well, within seconds of officially seeing the books and meeting appropriate officials.

I would eschew the usual entry into No.10 because there will be precious little to celibate. The whole image should be one of hard work and hard choices straight away. Go straight to parliament, make announcements from parliament not standing in the gutter in Downing St.

We had all that rubbish from Brown.

Verity

May 28th, 2009 3:46pm Report this comment

I see that most of the men above write aspirational advice, as though they thought that Cameron and his team hadn't already thought of "honesty" and rejected it.

TGF UKIP

May 28th, 2009 8:02pm Report this comment

"Sure he's been Leader since 2005 but the scale of the fiscal surgery only became clear over the last few months."

Absolute bollocks, Fraser, and you know it - just trying to make excuses for your inadequate, flyweight mate again.

The scale of Brown's spending and borrowing was already heading towards the trillion mark (£812bn forecast for 2012/13 which was hopelessly optimistic) and that was before the banking crisis and meltdown of H2 08.

It has been absolutely unforgivable that Cameron has refused to face up to what lies ahead, choosing instead to continue with his promises of spending growth - eg Marr interview Jan 09 - and including foreign aid as a sacrosanct ring fenced budget item.

Cameron will not have a mandate and nor will he deserve one and he will be an absolute disaster as PM.

Margaret Thatcher going into similar difficult circumstances in 1979 surrounded herself with serious, heavyweight political and economic men. Your mate Dave has Boy George and The Mekon, though I'm sure a lot more windmills will be of invaluable use in staving off the IMF.

The best result for this country at the General Election will be a broken-backed Labour Government with a minute majority which will be able to limp through before falling in 2012 by which time the Tories, having learned their lesson the hard way, will have got themselves a proper Leader.

The worst result will be a Cameron government with any sort of majority but worst of all a large one. It will destroy the Tory Party and conservatism for decades to come.

For God's sake, Fraser, you have real influence so stop being such an apologist for Cameron when you know full well he's not up to it.

lawrence greek

May 28th, 2009 8:43pm Report this comment

everyone saying 'tell the truth' is right, but they miss a crucial point - they understand WHY what DC would be saying IS the truth - most of the electorate are either too ignorant or partisan to recognise it's the truth. so yes tell the truth, but first DC must, must, must explain how and why brown got us into this mess. explain in clear language what the 2009 budget means, the amount of extra tax every ordinary worker will see disappear from their pay packets every month if cuts aren't made.

Verity

May 28th, 2009 9:11pm Report this comment

TGI UKIP writes: "he best result for this country at the General Election will be a broken-backed Labour Government with a minute majority which will be able to limp through before falling in 2012 by which time the Tories, having learned their lesson the hard way, will have got themselves a proper Leader."

I have been posting for the past six months that the best result will be a manky, skinny Labour victory. They will barely be able to stagger on for two years before a NEW (just to spell it out: Not David Cameron) Tory Leader calls for a vote of No Confidence, which the Tories would win.

As TGI UKIP notes, a Tory victory in 2012 and - depending on how managed the country is under the Tories - probably four more victories, by which time, if they have their wits about them, they will have destroyed and buried the socialists.

And, by 2012, expect the BNP to be bigger and expect there to be some BNP candidates who take their seats in Westminster. It is going to be a whole new ballgame. Sclerotic Labour won't be able to play it.

Archie

May 29th, 2009 2:08am Report this comment

Kevin Bodman and Austin Barry: I have questioned Cameron's commitment to his sundry pledges - or lack thereof - on the EU before, and on these very pages. The responses were by and large the triumph of hope over experience. I repeat: I'll believe it when I see it (and I'm not holding my breath!) Nice to see I'm not alone!

luke

May 29th, 2009 11:46am Report this comment

In answer to your question Fraser, I definitley think Cameron must get a mandate, which means being bolder than he is currently being pre-election.

He can make an argument that its all the Government's fault, but if he goes into the election saying one thing and comes out saying another, people will rightly put the blame for cuts more quickly at his feet than if he is open and genuine. His current lead in the polls should give him more confidence to do this.

What else does he need to do? Much more candour about his principles. Where will cuts be focused and how much is he prepared to temporarily raise taxes to limit cuts, at least in the short term.

He also needs to start talking to the public about temporary corrective measures. i.e. Some of the tax rises he will introduce should be clearly time-limited, and I think the same should be true of some of the spending cuts. He should create a real sense of short term action to correct a weakness, but at the same time articulate his longer-term vision for tax and spend which will presumably reflect all of his progressive conservative values.

John Page

May 29th, 2009 8:55pm Report this comment

Rather random order.

Consider engaging in the Cable/Field debate on strategic areas of spending to drop. University places?

Stop buying pointless high tech defence equipment. Make Richard North a defence minister.

Announce cuts people will approve of, e.g. quangos, fake charities. Not a review for goodness sake, the work should be taking place now.

Announce emphasis on localism within budgetary constraints, power for local communities over police, which will be radical and popular.

Similarly the education empowerment.

Announce both of these on the same day as the cuts programme.

Stress that cuts were in Brown's budget. I agree with much of what Boudicca and MummyLongLegs wrote but I can't see the green wimp having the guts to do it. So sadly I discount cutting aid and leaving the EU.

Osborne is of course underpowered. Ken Clarke has the genial brutality to make the cuts, and make them appealing. Two years may be enough for him.

Enough of the prejudices. What should Cameron do before the election?

Stress Labour sees the need for cuts despite Brown's dishonest rhetoric. Formulate simple explanation of why we can't afford current expenditure levels, then boil it down and repeat it ad nauseam.

Promise power to local communities as part of a 'new settlement'.

Tougher sanctions on benefit cheats, which would be popular and deter fraudsters. Fraud's running at £2bn a year. Not peanuts.

Abolish tax credits and raise tax threshold.

Sadly I agree cautious Cameron probably won't be up to the job, though.

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