Andrew Lilico

The day of reckoning draws near

Tomorrow we finally move from generalities to specifics.  No need to argue any more about whether the losers will be up in arms or will it all be a damp squib.  Tomorrow we get the gory detail.

At the time of the Emergency Budget we were told to expect cuts in non-ring-fenced departments of 25 percent.  Then we heard that departments had been asked to provide scenarios for 25 percent and 40 percent cuts.  That was always going to be necessary because Defence and Education (the two largest departments apart from the ring-fenced Health) weren’t ever going to be cut by that much.  After today’s Strategic Defence and Security Review, we now know that Defence is being cut by 8 percent (through measures such as delaying Trident and not equipping the new aircraft carriers with planes). And education will perhaps be cut by 10 percent.  That means cuts of more than 35 percent elsewhere.

Achieving cuts that large will mean pruning back right to the base those departments, such as BIS, CLG, and DECC, where there is considerable discretionary spending. Plausible cuts are likely to involve budgets for after-school and breakfast clubs, science research, the Olympics, Higher Education teaching, the Technology Strategy Board, and the policing budget.  There may also be unpalatable cuts — such as cutting the local government grant by a quarter to a third; the prisons budget by a blunt 20 percent; and policing budgets by as much as 20 percent.

Some additional cuts to welfare budgets have been announced, but at present it is expected that these merely compensate for the extra cost in early years of Iain Duncan Smith’s welfare reforms.  Could the government yet finally bite the bullet and cut the ill-directed winter fuel payments despite Cameron’s denials last week?  Might Child Benefit be cut for over-16s?

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