"To what extent will the deficit fix itself, and how much more needs to be done? We don't have to do the full 13 per cent of GDP and the present government proposed in the Budget that it should cut about half, 6.4 per cent of GDP, of that over an eight-year period. Vince Cable, who seems to have become the nation's favourite financial GP, suggests an eight per cent correction over five years. Writing in a new pamphlet published by the think tank Reform, he suggests that the situation is more serious than the Government acknowledges and that some £110bn a year has to be saved. He sets out some ideas as to how this might be done. The main burden is on the spending side, with an overall freeze on public-sector pay with cuts at the top end, cuts in public-sector pensions, more efficiency in the NHS, scrapping Trident, and so on.
In terms of the broad magnitudes, that £110bn may be about right. But it is huge. To put it in context, we spent £35bn on defence last year. So suppose we were to have not just no Trident but no army, no navy, no air force. That would save only one-third of the money we have to cut. In truth, everything has to be questioned."
This is the reality which very few politicians have faced up to yet. Brown may have finally dropped the c-word, but he's still stressing that "growth is the best antidote to debt". While the Tories remain fully committed to real terms increases in the health and international development budgets. You suspect that the severity of the problem - and public opinion about it - will force both sides to set out some more radical solutions in the near future.