Daily View: Gearing up for the Spending Review
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Commentators gear up for the Spending Review with their takes on who's to blame for the country's debt, the motivations behind cuts and how to get more from less.
[subscription required] why he thinks the need for cuts later today are the previous Labour government's fault:
"The deficit was the result of economic miscalculation (that we could go on spending because the boom would never end in a bust) and of political calculation. And the political calculation is that we - you and me - wouldn't stand for tax rises (Tony Blair) and wanted public spending rises (Gordon Brown). So we'd just have to borrow. And who can say, reviewing the politics of the past 15 years, that this calculation was wrong?
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"The deficit isn't the fault of the banks. The deficit is the amount we borrow each year because we are spending more than the amount of tax that is coming in. We are not doing that to prop up the banks. We paid out to support the banks and that has left us with historical debt, but that is not the same thing as the deficit that we are incurring each year."
In contrast to Daniel Finkelstein, that the idea that the cuts are the previous Labour government's fault is nothing more than proof that the coalition government has won the blame game:
"If Labour's spending was so wildly out of control, why did the Tories promise to match their plans, pound for pound, all the way until November 2008? Why didn't Osborne and Cameron howl in protest at the time?
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"Could it be because things were not actually that bad? A quick look at the figures confirms that, until the crash hit in September 2008, the levels of red ink were manageably low. The budget of 2007 estimated Britain's structural deficit - that chunk of the debt that won't be mopped up by growth - at 3% of gross domestic product. At the time, the revered Institute for Fiscal Studies accepted that two-thirds of that sum comprised borrowing for investment, leaving a black hole of just 1% of GDP. If the structural deficit today has rocketed close to 8%, all that proves is that most of it was racked up dealing with the banking crisis and subsequent slump - with only a fraction the result of supposed Labour profligacy. After all, even the Tories would have had to pay out unemployment benefit."
that the cuts won't be enough:
"The reduction of £83 billion sounds like a lot of money, but it still represents a £92 billion increase in public spending by 2014-15. It will leave a state that is still too large, that is too much of a drain on the productive areas of the economy, and that is undertaking functions that could be done more efficiently and cheaply if transferred to the private sector. It will also leave a level of debt that will impoverish us steadily as interest rates rise, as one day they must. More should have been cut, and there should have been no shame in having an ideological ambition to take the state out of people's lives as far as possible. After all, it is part of the Liberal Democrat intellectual heritage to do that, isn't it?"
that the government will have to be less ambitious:
"So government, here in the UK but actually everywhere in the developed world, will have to try to do more, but do it with less. But it can't. That is why these spending cuts will, I think, come to be seen as a first stage of a wider retreat. It will start to shed some responsibilities: indeed it is already starting to do so. Welfare and social housing are two clear areas where the Coalition will step back, and we will learn much, much more today.
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"Look forward 10 years and the pressures will be greater still: our workforce will probably be falling in size; the retired baby boomers will need more care; we will all have to save more for ourselves and rely less on the state; and I am afraid those debts will still be there. This is not a terrible prospect, for we will still be lucky to live in a decent democracy. But it will be a world of diminished ambitions, for politicians as for the rest of us. And it starts today."
The director of the Institute for Government [registration required] his tip for doing more with less:
"First, the civil service and ministerial merry-go-round needs to be ended, with project management skills improved. In 2009, I became the fifth transport secretary in barely three years. In my previous three-and-a-half years as schools minister, I served under three secretaries of state in a department renamed and reorganised twice. This is no way to run the country."
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