Putting the cuts into context

Having been accused of being a “pain denier” by Tim Montgomerie yesterday, I’d like to quickly defend myself. In my News of the World column, I sought to put this in some perspective. I put in the fact that has been reported nowhere: that we know what the cuts will be. Total cuts to government spending will be 3.7 percent, spread over four years. It is debt interest which forces departmental cuts down to an average of 13 percent, again spread over four years. There will of course be real pain, for thousands of workers facing redundancy. For commuters facing a huge 30 percent rail fare increase. But when trying to assess just how big an axe Osborne has in the Treasury, one must point out that his consolidation is mild compared to those of other countries who have attempted spending reform. It’s mild compared to what the Irish are suffering now.

Sure, it will be painful for top earners to lose child benefit. But more painful for an Irish nurse to lose 20 percent of her salary: this is happening over there, but not over here. And yes, some 150,000 thousands of public sector jobs may go over this period. But this must be set in the context of the million private sector jobs that have gone since the recession. Osborne’s fiscal remedy means that the cost of lending is lowered, businesses can grow – and we’ll end up with about a million more jobs in the economy than we do today, according to Budget estimates. This is why Osborne is doing his Spending Review: its the quickest route to more jobs. The cuts are the fastest way out of the misery. But this argument – rather an important one – is one the government dare not make.
 
Why not? Because the debate about cuts is being infected with what I call “the crazies” – when perspective goes out of the window. My point: this is a story about economics, so the odd figure would not go amiss. We know how deep the cuts will be, it was in the small print of the Budget, and the outside world should be told about it. If these figures were included in just some of the reporting – alongside phrases like “most savage cuts in our lifetime” – then people might be better-informed about the extent of this fiscal consolidation. The numbers, for anyone interested, are below: you won’t read them in the newspapers.