Public spending: where will the axe fall?

This week Gordon Brown finally admitted that cuts in public spending will, after all, be needed to tackle the budget deficit.

This week Gordon Brown finally admitted the "blindingly obvious", says The Daily Telegraph: that cuts in public spending will, after all, be needed to tackle the budget deficit. The prime minister told the TUC conference that the government would "cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets", but would not support cuts in "vital frontline services".

Yet in spite of the consensus that cuts are needed and the fact that most of the public accept them as inevitable both parties are reticent on the detail, says Rachel Sylvester in The Times. This isn't surprising. After all, will people really vote for a party that proposes cuts to the benefits and services they use? As Helmut Kohl, the former German chancellor, once said: "You don't win elections by putting the instruments of torture on display."

You don't, but "vague promises to delay the evil day" won't encourage voters to stick with Labour, says Jackie Ashley in The Guardian. Ministers should make pre-emptive cuts on public sector frills, such as consultancy bills. The withdrawal of universal benefits such as child benefit and the winter fuel allowance from the better off should also be on the agenda.

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The Tories have been no more specific than Labour about their plans (aside from to cut ministerial pay and subsidies on meals in parliament), but proposals from the Institute of Directors and the Taxpayers' Alliance give us a "reasonable crystal ball to read". Ideas include a 10% cut to our 520,000-strong army of civil servants; 'non-frontline' cuts in health, education and local authorities; a one-year public-sector pay freeze; big rises in pension contributions for public sector staff in unfunded schemes; and the axing of big capital spending projects.

There are many potential 'big beast' cuts for either party, including expensive computer programmes for the NHS and ID cards and military projects such as Trident, says Simon Jenkins in The Guardian. But with 25% of workers on the government payroll and half of public spending going on wages, it's obvious what the main target should be. "The coming year will have to produce something swift, clinical and big." The government should follow the Swedish example and "lop 5% off every budget and every public salary for a year, no exceptions and no argument".Few people would rather lose their job than suffer a small pay cut.

Enough talk of cuts, says Steve Richards in The Independent. It is only the Tories' reaction to the economic crisis that has turned debt into such an "explosive topic". David Cameron and George Osborne's opposition to the fiscal stimulus was economically illiterate, as is their revival of Thatcher's metaphors about this country being the same as a household that must repay its debt.

As Peter Mandelson argued this week, the government had to invest to revive our "derelict public services". It has to do so now to "stimulate economic recovery"; savings must be made, but only when the economy is growing again. He's right, says Polly Toynbee in The Guardian. Cameron and Osborne have persuaded the public debt is all that matters, and the danger is that Brown won't be able to shift the terms of the argument. But unless he does, the Tories will continue to promote drastic cuts, which are a "recipe for economic and social misery".

Emily Hohler

Emily has extensive experience in the world of journalism. She has worked on MoneyWeek for more than 20 years as a former assistant editor and writer. Emily has previously worked on titles including The Times as a Deputy Features Editor, Commissioning Editor at The Independent Sunday Review, The Daily Telegraph, and she spent three years at women's lifestyle magazine Marie Claire as a features writer for three years, early on in her career. 


On MoneyWeek, Emily’s coverage includes Brexit and global markets such as Russia and China. Aside from her writing, Emily is a Nutritional Therapist and she runs her own business called Root Branch Nutrition in Oxfordshire, where she offers consultations and workshops on nutrition and health.