Peter Hoskin

The year in cuts

The year in cuts
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As we’re still in that period of the year for looking back as well as forward, I thought I’d share with CoffeeHousers a political timeline I put together. It’s not everything which happened in the political year, mind – but rather the important events in the debate over spending cuts. This debate has, at very least, been in the background to almost every political discussion in 2009, and it will dominate the years ahead – so this kind of exercise probably has some posterity value. But, aside from that, you can also draw a couple of conclusions from the timeline (and I do so below).

Anyway, here it is, starting a bit before 2009 to get a couple of important entries in:

14 January 2008: ConservativeHome calls on the Tories to drop their pledge to match Labour's spending plans.

12 March 2008: Budget 2008 forecasts Public Sector Net Borrowing of £32 billion, and Public Sector Net Debt of £666 billion, in 2010-11.

15 November 2008: The Spectator's cover calls on the Tories to Cut, Cut, Cut.

18 November 2008: David Cameron abandons his pledge to match Labour spending plans: "we need change to defuse the borrowing bombshell, to start living within our means, and to set us on the path to permanent tax cuts in the future."

24 November 2008: Pre-Budget Report 2008 forecasts Public Sector Net Borrowing of £105 billion, and Public Sector Net Debt of £842 billion, in 2010-11.

13 March 2009: Cameron begins a series of speeches which are billed as ones which will clarify the Tory position on the public finances. In Birmingham, he doesn’t mention cuts, but says: "in the years to come, we will have to make more extremely difficult decisions on spending, borrowing, and taxation."

29 March 2009: Cameron speech in Cardiff.  No mention of cuts.  Indeed, he's still talking in terms of raising spending: "we're going to get the growth rate of spending down."

2 April 2009: Spectator/PoliticsHome deliberative poll shows that 72 percent of public support cuts.

17 April 2009: In an FT interview, George Osborne says that Labour's spending plans are "unaffordable," and possibly hints at cuts.  "I've mentally adjusted myself and David Cameron has mentally adjusted himself to the fact that we are going to have to take some very difficult decisions for the good of the country ....  You don't want to kill off the recovery with heavy tax rises that bring you back to square one."

22 April 2009: Budget 2009 forecasts Public Sector Net Borrowing of £173 billion, and Public Sector Net Debt of £977 billion, in 2010-11.

23 April 2009: The Institute for Fiscal Studies works out that the Budget implies 7 percent cuts over three years across all government departments. No mention of this was made by the government.

28 May 2009: In an article for The Telegraph, Fraser extrapolates from the Budget and the IFS working to find that – when you factor in their pledge to protect health spending – government departments would face 10 percent cuts under the Tories.

5 June 2009: Questioned by Fraser in the PM’s monthly press conference, Brown denies that there are cuts hidden away in the Budget. He lies: “Public spending is rising every year.”

10 June 2009: Speaking on the Today programme, Andrew Lansley presents the 10 percent cuts as Tory policy: “We are going to increase the resources for the NHS ... But that does mean over three years after 2011, a ten per cent reduction in the departmental expenditure limits for other departments.” This is a gaffe, rather than actual party policy.  Lansley personally apologises to Cameron afterwards.

10 June 2009: Labour launch their “Mr 10 Percent” campaign. Even though the 10 percent figure has its roots in their own Budget…

15 June 2009: The Tories say that there will need to be cuts – and use the word officially for the first time. In an op-ed for the Times, George Osborne writes: "It's ridiculous to pretend there won't be cuts". Coffee House calls this "the most significant article Osborne has ever written."

1 July 2009: Brown claims, in PMQs, that there will be a “0 percent rise” in public spending. Satire dies.

21 August 2009: Cameron pledges to set out the “fine print” on cuts before the next election.

8 September 2009: He doesn’t use the word "cuts", but Alistair Darling does say that there will have to be “hard choices” on public spending.

9 September 2009: Cameron delivers a speech on “cutting the cost of politics”.

15 September 2009: Gordon Brown gives speech at the TUC, where he uses the word “cuts” for the first time: “And we are doing the right thing to make sure that for the future as we move into a full recovery we will invest and grow within sustainable public finances - cutting costs where we can ... Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets. But when our plans are published in the coming months people will see that Labour will not support cuts in the vital front line services on which people depend.”

15 September 2009: Vince Cable suggests a range of cuts in a pamphlet for the think-tank Reform. Some confusion ensues about whether they are – or will become – Lib Dem policy.

28 September 2009: In his Labour conference speech, Alistair Darling attacks the Tory “ideology” of cuts.

6 October 2009: In his conference speech, George Osborne sets out plans to save £23 billion over the course of the next Parliament. This is under 1 percent of government spending. Still, his rhetoric was encouraging.

22 November 2009: In an address to the CBI annual conference, Gordon Brown claims that growth will be the best way of tackling the deficit.

27 November 2009: Philip Hammond claims that the government could have saved £60 billion a year, if the public sector had kept up with private sector efficiency gains. He announces a new board of advisors to help the Tories on productivity.

9 December 2009: Pre-Budget Report 2009 forecasts Public Sector Net Borrowing of £176 billion, and Public Sector Net Debt of £986 billion, in 2010-11.

10 December 2009: Alistair Darling puts in a bizarre performance on the Today programme, claiming that the PBR implies that departmental budgets would remain “pretty much flat.”

10 December 2009: The IFS works out that the PBR implies departmental budget cuts of around 19 percent over three years. And what about those conclusions? Well, the first is that none of the parties started talking about cuts until surprisingly recently (June in the Tories’ case) – even though it was clear long before that cuts would be necessary to deal with the fiscal crisis. Yes, yes, we all know that the Conservatives wanted to avoid being on the sharp end of Brown’s investment-vs-cuts dividing line. But, even so, the political class have rarely been so patronising towards the British public – and over a subject of such importance. Forget the expenses crisis: we deserve an apology for how freely they played – and, particularly in the government’s case, continue to play – politics over our public finances.

And, second, it’s striking just how quickly the government have rowed back from talking about cuts. There were a few months in late summer/autumn when they sounded a little bit more upfront on the subject. But, by the time of the Pre-Budget Report, it all reduced to Alistair Darling spluttering that departmental budgets would remain “pretty much flat”. Later that day, the Institute for Fiscal Studies worked out that they’d be cut by about 19 percent. This is straightforward, shameless, considered lying on the part of the government. And it’s the kind of thing which could – should – see them losing their jobs in the not-too-distant.

P.S. Do shout out if you can think of any more dates for the timeline.