The cuts consensus
Fraser Nelson 11:38amJohn Rentoul today puts Trevor Kavanagh and myself in the dock for demanding "massive spending cuts" and concludes that if we "had any power" we would be "about as helpful to Cameron as Sarah Palin was to John McCain" but believes Cameron "will hold to his strategic course". I mean: massive cuts. How crazy is that? Surely only swivel-eyed maniacs would be planning cuts - real, hard-core ideologues - would plan that when the deficit is a mere 13 percent of GDP. Surely?
It struck me, reading this, that John is unaware of the massive cuts which Labour is planning (understandable, as they were in the small print and have still not been picked up by Fleet St). Darling is planning 10 percent cuts over three years, the greatest spending cut that will have been attempted in British postwar history. I reprint the table below. Trevor and myself - and, for that matter, Osborne and Cameron and Darling and Mandelson - are all on the same page here. Massive cuts are inevitable. Where Osborne, Cameron, Kavanagh and myself differ from Darling is believing that even harsher cuts are necessary. The question is: does anyone seriously advocate that there should not be cuts? I don't think a single Westminster party does right now. Perhaps John should set one up.
UPDATE: As Jennifer Aniston would say: here's the science bit (I think Murray Knight needs some help). All figures are nominal (ie, not adjusted for inflation) with the exception of the final column, which is shown in 2009-10 prices. It shows a decline of £38bn which is 10% of £386bn. Hence 10% cuts. The total spending includes soaring debt interest: this (plus dole costs) will squeeze what's left for government departments (aka public spending). Brown could claim that spending is rising, but that's only because the debt interest is on a one-way journey upwards: the bill being his one and only legacy. I'm grateful to Gemma Tetlow of the IFS for these figures.
UPDATE2: News just in: John Rentoul has joined the cuts consensus. His response to this blog says he directed his ire at those who demand ""bigger cuts than planned by either main party leadership". Like who? I hate to disappoint him (especially as he's having so much fun with the Sarah Palin meme) but I have no quarrel with the Tories on this. Osborne says we will have to cut deeper than Labour outlines. I agree. How much deeper? Osborne is careful not to say. Neither would I, in his position. All this is a shame as I enjoy sparring with John (he's a well-informed and authentic leftie who hates Brown more than any man or woman I know save for Guido). But he has misunderstood my position on cuts. My problem is on where the axe will fall. That the axe will fall I have no doubt: because it will be the bond market, not Osborne, who decides.
Previous
James
February 7th, 2010 11:48am Report this commentRent-tool is an idiot.
Adam
February 7th, 2010 11:52am Report this commentFraser this 10% figure you have isn't especially helpful. 10% cuts means 10% in one year (because that way it relates directly to the annual deficit). Adding up cuts to 10% actually makes them sound much more substantial than they actually are (regardless of one's view on how quickly deficits should be cut). Our deficit this year is well north of 10% of GDP.
Bloody Bill Brock
February 7th, 2010 12:29pm Report this commentFraser, your little article casts my mind back a few months. At the time I read comments in the Guardian and the Indy which were beyond belief and surpassed all understanding. Apparently, when you have lost your job and your house has been repossessed, thats the time to spend £180,000 on a new Aston Martin. I, as a member of the "stupid party" was, and am still, unable to grasp the concept.
Irene
February 7th, 2010 12:35pm Report this commentYou are wasting your time with Rentoul - he still lives on planet Blair!
Short the UK
February 7th, 2010 12:36pm Report this commentTea Baggers & Thatcherism :-)
There is the Kubler-Ross model for grieving:
1. Denial
2. Anger
3. Bargaining
4. Depression
5. Acceptance
The so called British tea baggers/thatcherites are basically through the grieving process and at Acceptance.
Mr Rentoul looks to be at the Bargaining stage. Whilst Mr Brown is still in Denial.
The public are probably stuck between Denial and Bargaining, it is up to courageous leaders to bring them to Acceptance.
Thankfully the internet allows people to share data and insight to bring the unenlightened to self awareness.
Tally-ho
denis cooper
February 7th, 2010 12:36pm Report this commentI'm still having a problem with "Total spending cuts under Labour's plans", unless that "-10%" actually means that the cuts would be negative, so that total spending would go up by 10%.
That'd be almost correct - total spending of £676 billion in 2009 - 10, add on 10% = £68 billion, that would come to £744 billion, compared to planned total spending of £752 billion in 2013 - 14.
So is it just a case of a rounding error, or of poor arithmetic?
Or is it the case the Labour is in fact NOT planning to make any cuts to total spending at all, not even negative cuts, but instead is simply planning to increase total spending from £676 billion to £752 billion?
Hawkeye
February 7th, 2010 12:36pm Report this commentOf course the have to be cuts - only a fool or socialist would believe otherwise.
You are right about one thing Fraser, 10% is not big enough, not nearly big enough. The Canadians had to make 20% cuts (some budgets were slashed by 50%) and I suspect we need to do the same here.
Dave B
February 7th, 2010 12:57pm Report this commentRe: Palin, she brought McCain votes, so she was an asset.
http://www.foxnews.com/story/0,2933,447364,00.html
TrevorsDen
February 7th, 2010 1:01pm Report this commentIf the debt does not go down the interest will rise even more.
But this is why it really is pointless wittering on about Tory policies. Every policy they might dream up will have to be kicked into touch on gaining power because an examination of the books will reveal a huge black hole in Labours accounting. Not least the amount of revenue they claim or hope to extract out of any growth they optimistically expect.
Tiberius
February 7th, 2010 1:23pm Report this commentSo what is hitting the voters between the eyes this morning?
Labour's claims for personal care in the home for cancer patients if they win the election.
I'm sure there is no need to go into the whys and wherefores of this on this blog, but politically, the Tories' position (and that poster) are looking quite smart.
oldtimer
February 7th, 2010 1:27pm Report this commentThe only question in my mind is whether the No 10 Brown trouser moment arrives before or after the election is called.
Fear of the international bond markets may prove more persuasive in deciding an earlier (than May) electoral timing than the opinion polls.
El Sid
February 7th, 2010 1:44pm Report this commentTrouble is that there's a significant group who haven't accepted the need for cuts - Unite and their mates. Interesting blog here on how union funding has gone from 40% of Labour income to 80% :
http://blogs.notw.co.uk/politics/2010/02/unions-75m-plot-to-seize-control-of-labour.html
Not only they are expecting a proportionate degree of influence over a post-election Labour party (whatever happened to the Post Office privatisation Mandy?) but they will be looking to cause serious chaos if threatened with cuts.
Verity
February 7th, 2010 1:58pm Report this commentFraser, I am astounded by this: "John Rentoul today puts Trevor Kavanagh and myself in the dock ...".
myself? myself Since when did you begin adopting ignorant, ungrammatical, maladroit NuLabour English usage? This is the kind of maladroit English used by Nulabour ministers.
The word you were looking for is "me".
I came over all faint and couldn't read the rest of the piece.
As I always say, "Don't cry for myself, Argentina" ...
Victor Southern
February 7th, 2010 2:52pm Report this commentIf anybody thinks that "cuts" of the size shown in that table will do any good they are sadly mistaken.
In order to be even revenue neutral one would have to accept the premise that the tax take will increase by an equal amount.
At some point in time people will have to understand that savage or swingeing cuts [terminology as used] cannot mean a reduction of 0.5 to 2.5% in a year.
"In real terms" is also inapposite terminology. We are looking at concrete amounts of money, not forecasting for inflation or deflation.
Cuts in civil service pay and perks will not occur because of Union counter-measures. Only downgrading the size of the civil service and quangocracy can work. Since that will be fought tooth and nail by the Unions and also by the Labour-appointed quangocrats it is clear that Osborne and Cameron have an uphill ride facing them. Better let Labour win again and they can fudge the figures as they always do - that will make everything better.
Nicholas
February 7th, 2010 3:41pm Report this commentHawkeye: "Of course the(re) have to be cuts - only a fool or socialist would believe otherwise."
Not mutually exclusive in my experience.
Verity
February 7th, 2010 5:27pm Report this commentBack to Palin, speaking at a recent Tea Party, she addressed Obama, saying, "How's that hopey changey stuff workin' out?"
Murray Knight
February 7th, 2010 5:32pm Report this commentYour figure of 10% cuts is rubbish
In 2009-10 total spending is £676b
In 2013-14 total spending is £752b
An increase of £76b or 11.24%
John David Barnett
February 7th, 2010 10:41pm Report this commentMurray Knight
Take another look at the table.
Derek
February 8th, 2010 12:39am Report this commentI see from the daily telegraph online today that "The Prime Minister will preach a “tough love” message for Greece and along with the other major leaders will urge the country to slash its spending over the next three years."
Hm.
denis cooper
February 8th, 2010 10:05am Report this commentThe point is simple: it's incorrect to say that under their plans Labour would cut total spending, when clearly they would increase total spending.
Tim Carpenter LPUK
February 8th, 2010 12:23pm Report this comment@Nicholas: "Not mutually exclusive in my experience."
I disagree. You can have fools who are not socialist; if they haven't heard of it yet.
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