Public spending: The Tories are being dishonest too

For a moment last week it looked as though Andrew Lansley was in deep trouble. He did something that, in David Cameron’s Tory party, counts as a cardinal sin. He came dangerously close to making a policy announcement.

However, the Tory spin machine, which is now even more effective than Labour’s in the early Blair years, swung into action and recast the whole incident as a carefully laid trap in which the government would hang itself with its own public spending figures. This argument seems, by and large, to have been accepted and it is the government that is once again on the defensive over its spending plans.

This is hardly surprising . Anyone who looked at Alistair Darling’s budget statement could see that, however you dress it up, in real terms public spending would be cut from 2011. The only question is by how much and whether it will be enough.

The Tories’ policy, or at least what seems to be emerging as their line, is that the NHS and education will be ring-fenced from any spending cuts. Is this wise or, for that matter, honest?

A recent study by PricewaterhouseCoopers calculated that, to get public debt back to somewhere between 40-50% of GDP within the next 20 years, would require spending cuts of 9.3% between now and 2018. Together, education and the NHS account for around 30% of government spending. Cutting everything else by 10% but leaving health and education alone isn’t going to do it.

But, regardless of the maths, if politicians of whatever colour are really serious about regaining control of the public finances it doesn’t make sense to ring-fence anything. When the suggestion was made that health and education would be protected you could almost hear the sighs of relief in the NHS and in the now quasi-autonomous town hall education departments.

While it is true that, as a general rule, local authorities and NHS trusts look lean and mean when compared to central government departments, that doesn’t mean that there is no fat to cut. As I’ve said before, ad nauseam, there is plenty to be saved on support functions in local government and NHS trusts. Even more could be cut if a long, hard look were taken at what Strategic Health Authorities do.

Whoever wins the next election will not be able to rule out spending cuts in any part of government. To do the job properly everything will have to be up for grabs. The Tories’ suggestion that they would protect health and education is both cowardly and downright dishonest. Even as they say it they know that they won’t be able to do it.

Of course, the reason the Tories are pretending that they can save health and education from cuts is because they are scared that the public will take fright and, at the eleventh hour, vote Labour back into power next year. This assumption is insulting to the voters. In pubs, around dinner tables, in shops, offices and factories across Britain, people are discussing the huge levels of public debt. Most people grudgingly accept that, five years from now, there are some things that the state does now which it won’t be doing then. They know that some things that are free now will soon have to be paid for. Sure, no-one is clear specifically what will be cut but that is because politicians have been so reluctant to open up the discussion.

This lack of candour helps no-one. Politicians prepared to tell the truth might find that, far from running away, the public loves them for it. The Independent’s editorial hinted yesterday that this might be an opportunity for the Liberal Democrats to steal a march on the other two parties. 

Of course, it is not hard to see why both the Government and the Conservatives have chosen obfuscation over openness. The Tories fear that the public still associates them with painful cuts of the past and could punish them again at the ballot box if this debate moves up the political agenda. Meanwhile, ministers are loath to admit that their historic investments in the public sector since 2000 now need to be thrown into reverse. The Liberal Democrats have been admirably open about their belief that the role of the state needs to be reconsidered, but there is only so much the third party can accomplish on its own.

Yet this debate cannot be evaded forever; these questions are simply too important to all our futures to remain unanswered.

True enough. Not only can this debate not be evaded for ever, it cannot even be evaded for much more than three years. By June 2012, thanks to what in real terms will be a gradual erosion of public spending, the unreformed and, by then, under-funded public services will start to collapse of their own accord.

Those of us who know from experience how hard it is to make efficiency savings in organisations can see that, if intelligent cuts are to be made in time, the planning needs to start now. By the next election each party needs to have a clear view on how it will reduce the cost of public services. If it hasn’t got one it should not be voted into power.

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4 Responses to Public spending: The Tories are being dishonest too

  1. Matlock says:

    Being a New Zealander having just returned home from Living in London for 3 years I think that an important political difference between the UK and other “similar” nations (e.g. Aust., NZ, US) is the role of the BBC. The BBC dominates news on the radio, TV and the internet to an extent that simply does not exist in other similar countries.

    If the Tories were honest and stated that health and education services are going to have to be cut and that taxes are going to have to rise it is a near certainty that this would be the meme broadcast 24/7 from the BBC from now until the election backed up by the Guardian and Independent.

    Unfortunately I think the “tax the rich a little more to invest in education and health and no return to Thatcher” message still has legs and would impact the Tories election prospects and potentially lead to a hung parliament. As much as the hatred of Labour is strong most people are still in denial about the economy and wish to believe that improvement and a return to normal is just around the corner.

    I see precious little evidence in the UK or US or any desire to confront reality and live within means. The only plan is for Govt.s to borrow, borrow, borrow, spend, spend, spend and print, print, print. Until such time as the can can be kicked down the road no longer, and interest rates, and inflation go through the roof and unemployment reaches depression levels lying is the best policy for a politician.

  2. “By the next election each party needs to have a clear view on how it will reduce the cost of public services. If it hasn’t got one it should not be voted into power.”

    How about rephrasing that as each party will need a clear view of how it, over the cycle, brings public sector expenditure and tax take back into rough equilibrium?

  3. Rick says:

    Fair point Charlie.

    Perhaps what I should have said was:

    “Cutting everything else by 10% but leaving health and education alone isn’t going to do it, unless they whack taxes up too.”

  4. jameshigham says:

    Of course, the reason the Tories are pretending that they can save health and education from cuts is because they are scared that the public will take fright and, at the eleventh hour, vote Labour back into power next year.

    Ain’t that the truth?

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