Peter Hoskin

The politics of ringfencing

The politics of ringfencing
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Jean Chrétien, the former Canadian prime minister, has acquired an almost mythic status in certain Tory circles for the way his government cut back public spending in the 1990s. So it's worth paying attention to his remarks about ringfencing departmental budgets last night. He didn't quite go so far as to say that withholding the axe would fatally undermine George Osborne's deficit reduction plan, but he did suggest that it would make the politics of the situation a good deal tricker:

"Jean Chrétien, whose tough fiscal tightening programme in the 1990s is seen by the Government as a model for Britain today, warned that everyone always came up with plausible reasons to be exempted from the pain. 'So nobody was exempt,' he said.

Making exceptions was a mistake, said Mr Chrétien, who acquired the nickname of Dr No because of his consistent attitude to requests for more money.

'Everyone builds a case to maintain his own empire. I felt if you gave one exception, everyone had a good case,' he said, although he declined to comment directly on Britain’s approach to the financial crisis."