Fraser Nelson Fraser Nelson

The truth behind that 10 percent cut

Little did I imagine, when I calculated that the Tory spending parameters would involve a 10 percent cut in non-NHS departments, that it would attract such an audience. Brown repeaed it on Marr, as if it were an official Tory figure. But when Andrew Lansley mentioned it this morning as an official Tory figure then, I guess, it becomes Tory policy. A great battle ensured in PMQs: whose cuts are they? Tory cuts or Labour cuts? Real or fake? Brown loves such battles, thinking that no journalist can be bothered to go do the maths by themselves. He will be wrong here, I suspect, as the maths is pretty easy.

Budget 2009 proposed total real-terms spending falling by 0.1 percent a year for three years starting April 2011. Those figures Brown read out in PMQs represent a real-terms cut as any half-sentient economist will tell you.  The IFS spotted the complete trick the day after the Budget. Factor in the rising cost of debt interest and it implies that public service spending will fall by 2.3 percent a year. This makes a cumulative 6.7 percent over those three years. This is what Labour proposes to do if it wins the next election.

The Tories have (until today) given no figures – but they won’t spend more than Labour so their cuts will be at least as harsh. But David Cameron has indicated that he’d increase health, meaning that the burden will fall more sharply on other department.  In effect, this means cuts of 3.2 percent a year, for those three years – so a cumulative 10 percent. Crucially, this is a Labour cut, determined by the cuts spelled out in Budget 2009. Brown thinks he will win this debate, as the Tories will be honest about cuts – demonstrated by Lansley this morning – whereas he will be dishonest.

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