"I wouldn’t seek probably to give very much more detail .... You know, I was with Margaret Thatcher when she came in to Government in 1979, we faced a big public spending problem. It was terrible. It was a hard slog but she didn’t cut public spending. I was Chief Secretary between ’92 and ’94 – big public spending problem – I was trying to cut public spending; I did not succeed in cutting public spending. I don’t think the Tories will succeed in cutting public spending. Now this is what they won’t want to tell you. The reason they’re not telling you the cuts is that I think the cuts are almost impossible to make and what will happen, whoever wins the next election, is not so much that there’ll be public spending cuts, there will be restraint, but that there will be tax rises."
To my mind, the scale of the current crisis rather undermines Portillo's case. In 1979, general government debt was around 60 percent of GDP (with public expenditure at 45 percent). Between 1992 and 1994, debt was around the 45 percent mark (with public expenditure at 43 percent). Now, the expectation is that it will top 100 percent in the next couple of years (while spending approaches 50 percent) – and that's before taking any off-balance sheet horrors into consideration.
Yes, tax rises will necessary to deal with this – especially as many public spending measures take a while to trickle through the system. But the black hole is so big that placing the burden on tax rises would stunt the economy for decades to come. Public spending will have to be cut by necessity.
That doesn't mean it won't be difficult. It will be. But there is clearly enough wasted government spending to kickstart a cuts agenda.