Monday, April 13, 2009

Wanted: A Long List And A Steel Heart

Yesterday the Sunday Times ran a long piece updating us on how George's List of spending cuts is coming along (summary graphic above).

Confusingly headlined Alistair Darling swings the axe - we'll believe that when we see it - the ST ticks off a number of BOM's old favourites, including: mad mega-IT projects like the £20bn ID cards scheme and the £20bn NHS supercomputer; lend-me-your-watch-and-I'll-tell-you-the-time management consultants (£2bn+ pa); useless quangos like the £90m pa Carbon Trust and the £2bn pa Regional Development Agencies; the Scottish subsidy (c £2bn pa); and culture, media and sports subsidies (we'd save £600m from arts alone).

In truth, we'd add a few others, such as government advertising (£400m pa), and the BBC (put the £3.5bn pa telly tax into the general revenue pot).
The trouble is, even when you tick off all the old favourites, it's still not enough. Labour will be leaving the public finances in such a dire state, we are going to need some seriously brutal surgery - something that will deliver savings of £50-60bn pa.

The ST graphic shows what might be required for cuts of £41bn. Surgery includes 10% off public sector pay (saving £15bn pa) and one-sixth off tax credits and Housing Benefit (saving £5bn pa). That would be hard enough to achieve, but even more is needed.
In particular, roughly half of all public spending goes on healthcare and welfare benefits (so-called social protection). To have any hope of cutting £50bn, both of those areas will have to bear their share - whatever assurances Dave may have given in the past about the NHS being sacrosanct.
It's going to be horribly difficult. It's going to produce strikes and dire headlines. It's going to feel very lonely.
George needs to do a lot more work on his list, for sure. But what he needs most is to get himself a steel heart.
PS On R4 Today this morning I listened to Commissar Johnson telling us that Gordo has no need to apologise over McBride. Apparently that's because as soon a G found out what was going on, he sacked M. Funny - I distinctly remember an entire day's delay after the story broke before M tendered his voluntary resignation. Later, several Labour callers on the R5 phone-in argued that Gordo couldn't be blamed for the dirty deeds of a subordinate. You will immediately recognise the David Irving defence - Irving being the historian who argued that Hitler couldn't be blamed for the Holocaust because it was organised by over-exhuberant subordinates behind his back and without his knowledge. Final days in the bunker, indeed.

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