Forget Trident – here’s where we really need to slash spending

Labour politicians have tried to avoid using the word ‘cut’. But even they now seem to accept the idea that something needs to be done about public sector spending. The trouble is, our leaders have been rather reluctant to say exactly where the axe should fall.

So it’s good to see that Vince Cable, the Liberal Democrat Treasury spokesman, has now identified some specific targets. Some are even new. Cable suggests a freeze on public sector pay overall (saving £2.4bn a year); a 25% cut in the total pay bill of staff earning over £100,000; and an end to bonuses for the civil service (saving £200m a year).

Others are just the usual “painless” cuts that have already been suggested. These include scrapping several major IT systems including the ID card scheme (£5bn over 10 years), the child database Contactpoint (£200m over five years), the NHS IT scheme (£250m over five years) and the proposed “super database” (£6bn). He suggests that big military projects such as Trident and the Eurofighter are also open to debate.

Unfortunately, Cable is much more cagey about the one area that could really make a difference to the UK’s massive deficit – public sector pensions. With several million public sector workers looking forward to early retirement on guaranteed pensions, it’s no surprise that politicians are reluctant to tackle this one.

But they have to. The UK government already faces a whopping £1 trillion retirement bill, said the Organisation of Economic Co-operation and Development in June. That’s costing taxpayers £3.8bn a year, according to the latest statistics, almost £1bn more than a year earlier.

Cable fudges the issue by calling for a “radical review”, with the view to employees making higher contributions and working for longer. But if Britain is ever going to make a significant dent in its growing public debt pile, it’s not yet more radical reviews we need – it’s radical action. If our politicians can’t find a way to confront this at a time when the country’s back is against the wall and most people agree with the idea of cuts, we may find ourselves forced into it at a later date – perhaps by the International Monetary Fund.