Tag Archives: spending cuts

Tories seem to be shredding their claim to economic competence with each new spending commitment

The Tories have gone on about economic responsibility and controlling spending for long enough. It’s bizarre, then, that their list of dubiously funded post-election spending commitments is getting longer by the day.

It’s not enough to say that the NHS will get the £8 billion it needs out of the proceeds of a stronger economy alone as Jeremy Hunt did this morning. That’s like making a commitment on a foundation of fresh air and marshmallow.

Asked how the Conservatives would fund the pledge, he said the economy had been turned around and pointed to investment in the service during the last Parliament, when the government guaranteed an above-inflation increase in funding.

He said: “If you want to be sceptical about the commitment, look at the track record.”

It’s not as if the global economy is in a particularly robust position to be able to rely on that.

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Opinion: Who’s been hit hardest by the coalition’s cuts?

The budget on March 20th is likely to concentrate on growth, on avoiding an ‘omnishambles’, and on fighting the notion that Osborne has taken the country from triple A to triple dip. But it’s also the time to take stock of who’s bearing the brunt of (attempted) deficit reduction. This graph shows the combined effect of all the coalition’s tax and welfare changes, as modelled by the Institute for Fiscal Studies. It doesn’t look good.

Impact of modelled tax and benefit reforms since Jan 2010, by income decile group (Copyright of the IFS*)

The blue …

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Opinion: Liberal Democrats must not apologise for cuts

Occasionally Nick Clegg, or his speechwriters create a phrase which deserves to live on in the political lexicon long after the rest of the speech has been confined to the political dustbin. The pre-2010 General Election debates were transformed by Nick referring to the “two old parties” and asking voters to “do something different this time”.

While the phrases were memorable, they were hardly that effective. Voters did what they did the last time they faced a Labour government mired in staggering incompetence and a Tory party leadership tacking to the centre while the grassroots howled. That was in the 1970’s when voters gave Labour a kicking and the Tories the mandate of largest party in parliament but no overall majority. In 2010 the outcome was the same with Labour weakened and the Tories becoming the largest party, except that on this occasion, the Liberal Democrats, from MPs to ordinary members, voted by a huge majority for a coalition. But while the phrases used in the debates were clever and eye catching, it was another of Nick’s phrases which should help set the tone for the party in the future. Nick said there would be “savage cuts”, while Vince Cable joined his Tory and Labour colleagues in saying that post-election there would, under a Liberal Democrat government, be “cuts faster and deeper than Thatcher”.

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Opinion: Pick your horse in the grand recovery stakes

Moody’s, the US credit ratings agency, has put the UK on negative outlook, threatening the country’s triple A status. This came the day after three other organizations had also made their views known.

The CBI predicted that the UK would avoid a double-dip recession, the services firm BDO published the results of a survey suggesting turnovers were continuing to fall and the Chartered Institute of Personnel and Development reported that employers were more likely to lay off staff.

It is now four and a half years since the uncertainty of the credit worthiness of banks and hedge funds that were …

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Ian Swales MP writes: 12 CUTS Labour don’t talk about

The Labour party think they can win the economic argument by just wailing about cuts on behalf of their public sector union paymasters. They give no credible alternatives for what they would do about Britain’s economic crisis.

What they also like to ignore is some of the changes that are being made towards making this country fairer. Here is a list of cuts WE should be talking about because they are mostly happening through Lib Dem action and pressure.

  • The CUT from £250,000 to £50,000 in the maximum annual pension contribution to receive tax relief – clawing back a staggering £4,000,000,000 (£4bn) that Labour was giving to the rich.
  • The

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PMQs: Penguin in the menage à trois

The first big subject at Prime Minister’s Questions this week was Europe. Tory MP Andrew Rosindell asked if David Cameron would show “bulldog spirit” at the forthcoming summit. Later, similar points came from various Tory Eurosceptic MPs, including the Father of the House, Sir Peter Tapsell. He is always heard with great respect, despite his long-winded, rather pompous and, in this case, halting mini-speeches which have barely inquisitive constructions stuck on the end of them.

Ed Miliband started on Europe as well, asking if Cameron would fulfil his promise that treaty change might give the opportunity to “repatriate powers”. The Prime …

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Opinion: cuts in welfare are the hallmark of a selfish society

During the Conservative Party Conference, George Osborne announced a simple change to child benefit. He took a difficult and historic decision to remove payments to households with at least one higher rate taxpayer, saving an estimated £1 billion of public money from going directly to the highest paid 12% in our society.

In what turned out to be my last blog post, I railed – somewhat hysterically – against the reaction to this modest cut. It was clear that the right wing press would oppose such a move. But what was less clear, and more galling, was the way the …

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Cutting spending back to 2006 levels will be tough, but it has to be done

The cuts that will be proposed today by the Coalition Government will not reduce the national debt.  Over the next four years, the debt will continue to grow.  After four years, if all goes according to plan, it will stop growing.  By that time it will already be a lot higher than it is today.

We, as a country, are currently adding £400 million a day to that national debt.  That’s £400 million that we, and our children, will need to cover the interest payments on until  it’s paid off.  For every three pounds the Government raises in tax, it currently …

Posted in Op-eds | 38 Comments

Opinion: an alternative to cuts? Be careful what you wish for

While canvassing in South Manchester I have met a number of people who do not accept that cuts are necessary on the scale suggested by the government. The common mantra is that the banks who caused the collapse should be made to pay, not the taxpayer, or, by implication, the poor who rely on the taxpayer.

Telling people on the doorstep about the Banking Levy meets with the response that this has not stopped bankers receiving enormous bonuses. Reminding them that 50% of these bonuses end up in the treasury is just as ineffective. The public seem to want more. They …

Posted in Op-eds | 32 Comments

Opinion: the Coalition’s £7 billion hit on families

The Government believes that strong and stable families of all kinds are the bedrock of a strong and stable society.

So says the Coalition Agreement, but has the Government’s approach to reducing the deficit actually demonstrated the opposite?

The furore over the proposed removal of Child Benefit from higher rate tax payers has raised hackles in the middle classes – and aspiring middle classes. But the cuts to Child Benefit are further evidence of a worrying trend since the election.

Whether there are arguments for the cuts or not, the list since May does not smack of a Government committed to “strong and …

Posted in Op-eds | Also tagged | 36 Comments

Nick Clegg on winning people over for deficit reduction

Nick Clegg addressed the ippr this morning to set out his approach to the single biggest problem facing all three major political parties in the coming weeks and months: how to keep the support of the British people given the need for huge public spending cuts to tackle the deficit.

We’re re-printing Nick’s speech in full, below, but here are the key points which struck me:

  • Re-iterating Vince Cable’s five conditions to take account of before cutting public spending: the rate of growth; the level of unemployment; credit conditions; the extent of spare capacity in the economy and the cost of Government borrowing.
  • A clear statement “that the conditions will be right for cuts from 2011-12, but not before.”
  • A clear statement of the level of cuts needed: “at some point in the next eight years the government is going to have to stop spending as much as 10% of what it spends today.”
  • A promise that the Lib Dems will follow the example of Canada’s Liberal Government in the 1990s and undertake “a massive consultation about every last line of public spending”.
  • A cash limit on public sector pay rises of £400, ensuring that the lower your salary, the higher percentage pay rise you are eligible for.
  • In addition, Nick sets out once again the party’s four key election campaign pledges: fair taxes, the £2.5bn ‘pupil premium’, a sustainable economy, and a fair political system.

The sharp eyed will notice no mention of “progressive austerity“. Nor indeed does Nick use the term “savage cuts” – though for all the embarrassment and mockery with which that phrase is identified, it’s the reality of what all the parties would have to implement in their own ways if elected to government.

Here’s what Nick said:

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Vince’s 5-point spending cuts plan

In today’s Guardian, Lib Dem shadow chancellor Vince Cable asnwers five questions that outline the party’s approach to implementing the spending cuts which will be necessary in the next few years while protecting frontline public services. Here are the filletted highlights:

On restoring professional autonomy …

One key step to getting the NHS and education working better is to motivate those who work there. Top-down, command-and-control management has done great damage. Staff have much to contribute but are currently treated as a cost rather than as a resource.

On cutting bureaucracy …

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LDV post-conference members’ survey (2): ‘savage’ cuts, tuition fees, ‘mansion tax’ and the leadership

Over the weekend, Lib Dem Voice invited the members of our private forum (open to all Lib Dem members) inviting them to take part in a survey, conducted via Liberty Research, asking a number of questions about the party and the current state of British politics. Many thanks to the 200+ of you who completed it; we’re publishing the results on LDV over the next few days. You can catch up on the results of all our exclusive LDV members’ surveys by clicking here.

First up, LDV asked: In a media interview before the party conference, Nick Clegg spoke of the need for the Lib Dems to be “quite bold, or even savage, on current spending”. Do you agree with Nick’s assessment?

Here’s what you told us:

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David’s paucity of ambition

David Cameron is talking this lunchtime, the news tells us, of his plans to reform Parliament by removing subsidised meals and shaving 5% off the pay of ministers.

Danny Alexander MP, Chief of Staff to the Leader of the Liberal Democrats is a) unimpressed and b) unfamiliar with the concept of run-on sentences:

There is a good argument to be made for cutting the cost of politics, the Liberal Democrats have proposed reducing the number of MPs by 150, but if the Conservatives seriously hope to convince people they are fit to govern it is time they stopped dodging

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