Cover of MoneyWeek magazine issue no 484

Here comes the bill

30 April 2010 / Issue 484

What Britain faces after the election ...

PLUS:

  • Profit from the new space race
  • The cheapest way to buy into Japan
  • The next blow-up will be the biggest one yet

Excerpt

The politicians’ slash and burn plans

A marvellous statement of the obvious came from the Institute for Fiscal Studies this week. The think tank says all the main parties are hiding the true extent of the spending cuts and tax rises that will be needed after the election if Britain is to avoid fiscal meltdown.

It is, of course, perfectly true. Nick Clegg was out and about this week talking about how the To-ries and Labour are taking the nation for “fools” by pretending a few “efficiency savings” can fill one “of the biggest black holes in our public finances in generations”.

But even Clegg, having recognised this, hasn’t actually come clean on exactly what is needed to fill the hole: he is promising that he will cut enough from public spending to reduce the deficit by £10bn. But while that may be a slightly bigger drop than those offered by his rivals, it’s still a drop in the ocean in the context of our vast structural budget deficit.

However, I’m not sure what else any of us could possibly expect from politicians. Before they even think about trying to fix anything they have to get elected. And anyone who announces that they’re planning tens of billions worth of cuts isn’t going to be.

But just because our would-be leaders aren’t articulating their slash-and-burn plans, don’t think they haven’t got them…

• Read the full editor’s letter here:
The politicians’ slash and burn plans