John Redwood, the unreconstructed Thatcherite and leading Conservative, thinks we should be cutting about 20% off total public spending. Redwood is not in the current Shadow Cabinet, but is Chairman of their Economic Competitiveness Policy Group, and clearly still influential.
And his logic is impeccable – not surprising for someone often mockingly described as a Vulcan.
If the Tories are to implement their new-found fiscal conservatism and ‘balance the books’ then this is the order of magnitude of cuts that would have to be made. Redwood even asserts that the first 10% could be made relatively painlessly – which just goes to prove he really is from another planet.
What would 10% – never mind 20% – real-terms cuts to public spending look like? It is roughly the equivalent of 500,000 public sector jobs if evenly spread across all spending. Or you could be more selective and close down half the health service – but that would entail about 600,000 or more jobs. Or maybe you could just cut the whole social security budget – but that would only get you about 5% -halfway to Mr Redwood’s ‘painless’ target of 10%.
Just double all of those numbers to get some idea of what 20% cuts would look like. Redwood claims the public would support such cuts – they probably do when asked in the abstract by pollsters. But as soon as the cuts were translated into the inevitable school and hospital closures, a return to long health waiting lists and massive job losses, Mr Redwood would find that fiscal conservatism wouldn’t be quite as popular as he seems to think it will be.
So far the Tories have talked about puny areas of savings like quango-chiefs pay, MPs expenses and public sector pay and pensions generally. But none of this would put much of a dent in the public deficit. When are the Press going to get around to demanding of Messrs Cameron and Osborne – how much will you cut and where? Is John Redwood reflecting the real thinking going on behind closed doors, or is he just getting in an early audition for a part in Star Trek 12? We should be told.
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Colin Talbot: “Or maybe you could just cut the whole social security budget – but that would only get you about 5% -halfway to Mr Redwood’s ‘painless’ target of 10%.”
How do you arrive at 5%? I kept The Budget supplement from The Guardian, dated 23 April 2009. The graphic has “social protection” expenditure at £189 billion out of total expenditure of £671 billion.
Colin Talbot: “So far the Tories have talked about puny areas of savings like quango-chiefs pay, MPs expenses and public sector pay and pensions generally.”
Public sector pay and pensions account for significant expenditure. Hasn’t Labour added six (or is it seven?) hundred thousand more public employees since 1997?
Labour has doubled (or possibly tripled) expenditure on the NHS since taking office. The Guardian Budget supplement has the NHS budget listed at £119 billion. Whether outcomes have really improved threefold is arguable. For example: many people still unable to register with a NHS dentist; Royal Sussex Hospital scandal (whistleblower nurse recently struck off); Stafford Hospital deaths … and then when it emerged another 4/5 other trusts had even worse figures the quango responsible for care announced it would not investigate!
Thanks for the comment – my fault for using sloppy language. I was referring to a narrow definition of social security as unemployment benefits and tax credits, which is only £25.5bn – you are quite right total social protection is around £186.6bn. Of that personal social services accounts for £27.4bn; pensions and personal social services for the elderly is £79.2bn; housing support is £18bn; etc.
Colin
on your 2nd comment: please read the Public Expenditure Statistical Analyses 2008 (HC489).
Public sector pay (Table 2.1) is about £86bn – so even a 10% cut in pay would only net £8.6bn and the best that could realistically be expected is a pay freeze not a cut like that.
Since Labour started expanding the public sector employment has risen from 5.1m in 1999 to 5.8m at the end of 2008 (ONS). But please remember what really counts is not absolute numbers but relative numbers – i.e. in this case proportion of the workforce and/or employment, which has risen slightly less than the absolute numbers suggest. Ditto re public spending – until the current crisis the average Labour spending as a proportion of GDP – the really important measure – has been several percentage points lower than the previous Tory governments (see my evidence to the Treasury Select Committee). Relative spending on the NHS has increased dramatically, but partly by lowering relative spending in other areas.
Agree reducing jobs in the public sector may not be popular but surely something on this scale needs to be done to tackle the UK’s debt problem. Alternatives such as raising taxes also likley to be politically difficult. I do not believe that the public sector is so efficient that savings cannot be madew without affecting front line services.