David Blackburn

D-Day (plus one)

D-Day (plus one)
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Cuts are here. The most important news of the weekend was the G20’s official backing for spending cuts. It was a significant volte face, and doubtless the sight of violent uprisings in Greece concentrated minds. Finally, George Osborne has been vindicated; but having convinced finance ministers, he must now carry the coalition and the country with him.

The first thing to do is ignore Nick Clegg and his claim that cuts will not be savage. Cuts will re-configure government in Britain, the current invasive Leviathan will be dismantled; but the process will be painful in the short-term, it must be. Osborne has been influenced by the Canadian model, which turned a deficit of 9 percent of GDP into a surplus between 1992 and 1997 with 20 percent cuts on average across government departments. Britain’s deficit is greater.

Today, David Cameron will deliver a speech outlining the ‘momentous decisions’ to come. His task is made harder by being in coalition with a party that represents a number of underprivileged constituencies, and by having pledged to ring-fence certain budgets at the expense of others. Protected NHS and international development spending will place an added onus on other departments – up to 25 percent according to some estimates. Realistically, cutting the deficit without reducing NHS spending (worth roughly 10.5 percent of GDP according to Reform) is not credible. The Lib Dems campaigned against ring-fencing; perhaps they have influenced government policy?