Monday 24 May 2010

The first cut should be the deepest

When the governments of Sweden and Canada in the mid-1990's needed to make huge budget cuts, they realised that this would perhaps not be the most popular move. So with good political instincts they made them deep and early in their administrations. Thereby winning time to have an election many years hence.

Today the new chancellor George Osborne is announcing a downpayment of £6 billion in cuts to Government spending. Really this does not even qualify as a rounding error (indeed the most recent published PSBR was more off target than £6 billion).

There is a budget next month to go for the real deal, but when £60 billion needs to be taken out of public sector and away from future taxpayers debt burden, speed is of the essence. I can only hope that the government realises that death by a thousand cuts is a form of torture and not a successful political strategy.


Budgie said...

There are so many areas of government that can be cut that the task is easy. Some, like DfID, can be completely removed. In others, like education, only one layer can be removed (the LEA). Great swathes of middle and upper management can be cut from all government departments. Ask the people who really do the job where the cuts can be made and they will tell you.

CityUnslicker said...

Will they Budgie? I think they will protect their own, the answer is harder to find than you think. Sir Humprehy would never allow actual cuts.

I am coming round, depressingly, to the view that most of the deficit will be eroded by tax rises. far more than 80/20 cuts to deficit - at the moment I am guessing more like 50-50.

roym said...

why is int. development ring fenced?

i dont wish to be cruel, but what is the point of donating borrowed money. it cant help long term can it?

Mark Wadsworth said...


Re what Budgie says, let's scrap DFID, BIS, DCMS and DECC first as a matter of urgency.

Electro-Kevin said...

Moderate unionists like me, who voted Conservative, would have taken these cuts without murmur in return for the scrappage of the Human Rights Act and a retreat from European integration.

For these things I would have made a stand against union dinosaurs at meetings and even breached picket lines to break strikes in support of my government and my country.

As it is I feel betrayed by Cameron and his sell outs and that these cuts will do nothing to redress the iniquities brought by welfarism, immigration, criminal justice etc.

I guess I'll just be going along with my 'brothers' when it starts to kick off.

Steven_L said...

The first cut's going to be temps like me. Now if only the lazy sods would hurry up and get my coursework marked so I can beat the rush!

As for Sir Humphrey, I'm not sure what he can do once a finance bill is passed. From what I've heard Humphrey has been banding around a figure of 15% for months now.

Robin Smith said...

I see little talk about cutting THE BIG THINGS here. Seems a common blog activity since the coalition of the feckless brainwashed us into believing "change" was about to happen. You sound a bit like warmenists talking about unplugging mobile phone chargers when not in use to cool the planet. Where are your spines ?

I'd cut financial services first and save the country about £60 billion annually.

Now that is a big thing. It could be done in the morning. And given current banks are utterly useless to society no harm would be done.

none said...

DfID and Trident are simply for maintaining Britain's status on the UN security council... whilst DFID could be subsumed back into the FCO, not replacing Trident with something tasty will embolden the likes of India and Brazil to put tangible pressure for changes to the UN Security Council membership.

My view is that we are yet to slide down into the trough of this depression, and that all this talk of "double dips" is delusional... we're on a fake peak... the eye of the storm.

Only a revolution is going to steer things away from the public sector going Greek.
The LibCons obviously fear poll tax riots, but I totally agree that if they are serious, they are going to have to hit this and hit it hard and fast... I think they need to announce something brutal in the next two weeks.

It needs things that won't happen... we need to put interest rates up to 7% to enable banks to turn a profit on a loan, and set up a part-equity buyout scheme (a bit like "Cottars Laws") to enable large numbers of subsequent mortgage defaulters to stay in their homes, but as tenants; and put a moratorium on immigration and axe most of the welfare state in fast phases. It means withdrawal from the EU, so obviously, it't not going to happen; for that reason I also agree that they will bottle it, and drag it out as long as they can, which is going to be a nightmare for the whole of this decade... just like the 90s, but longer.

Cameron is a cock with no balls... there's no actual ideology or fervour about the man - he's simply not prepared to put everything on the line to win... the country needs a PM with a pair who is prepared to issue the country, and particularly the public sector, an ultimatum.