Fraser Nelson Fraser Nelson

Those hidden cuts in full

The truth about the Pre-Budget Report was revealed today by the Institute for Fiscal Studies: the new National Insurance tax will hit everyone on £14k or over, not £20k – and there are implied 19 per cent cuts of some £40 billion in the “non-protected” areas. The event was sold out, because it now has the reputation as the only place you learn the truth about Budgets passed by this government. Yet again, Gemma Tetlow from the IFS has unearthed the cuts which the Chancellor felt he had to conceal from the public (and – unwittingly, I hope – lied about this morning on the radio). Coffee House showed you yesterday that the spending totals from April 2011 onwards would be flat – but that doesn’t include soaring debt interest and the cost of dole bills. Factoring them in is hard, but the IFS have a model of doing so. The result shows £35.7 bn of cuts over a three-year period: £15.4bn in year one, £7.6bn in year two, £12.9bn in year three. Here’s Gemma’s graph:
 

 
Now, let’s remember that Darling (again, I like to think, under duress) promised to protect “frontline schools” – whatever they may be – hospitals etc. This would mean that non-protected spending would be cut by 6.4 per cent each year for the two-year period (ie, 12.3 percent cut over those two years). Again, Gemma’s chart tells it all:
 

 
And if you extend this for a third year, says Tetlow, 19 percent is the “cumulative cut required for other DELs (by 2013-14) if you continue to protect health, schools, ODA, sure start for a third year. This amounts to about £40bn in real terms”.
 
The pain, she says, will likely be felt in defence, unis, transport, housing. Short of dissolving the army and opening the prisons, I’m not sure how Darling would achieve this.









Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in