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.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

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 worked as a journalist for more than thirty years and was formerly Assistant Editor of MoneyWeek, which she helped launch in 2000. Prior to this, she was Deputy Features Editor of The Times and a Commissioning Editor for The Independent on Sunday and The Daily Telegraph. She has written for most of the national newspapers including The Times, the Daily and Sunday Telegraph, The Evening Standard and The Daily Mail, She interviewed celebrities weekly for The Sunday Telegraph and wrote a regular column for The Evening Standard. As Political Editor of MoneyWeek, Emily has covered subjects from Brexit to the Gaza war.

Aside from her writing, Emily trained as Nutritional Therapist following her son's diagnosis with Type 1 diabetes in 2011 and now works as a practitioner for Nature Doc, offering one-to-one consultations and running workshops in Oxfordshire.