It seems that one of the main results of this week’s failed coup against Gordon Brown is that Alistair Darling has plucked up the courage to make a partial admission of the extent of the disaster that the Labour government has visited on our country. In an interview in the Times today he says:
Many departments will have less money in the next few years,â€ he said. â€œ[The cuts] are utterly totally non-negotiable … We had a very constructive meeting on Wednesday about what we needed to do and wanted to do in the Budget. I have always been clear you have to level with people. We are talking about something like a Â£57 billion reduction in the deficit through tax increases and spending cuts. It is a change of direction.â€
It is good to see a number from Darling but it is less than half of the amount required. On Thursday Philip Hammond, Shadow Chief Secretary to the Treasury, roasted the Government in the debate of the Pre-Budget Report. The key section of his speech was:
Listening to the Chancellor and the Prime Minister yesterday, and to the Chief Secretary, one would think that the global financial crisis had caused the meltdown in Britainâ€™s public finances, but that is not what has happened. According to the Treasuryâ€™s figures, the economic recession accounts for about a quarter of Britainâ€™s deficitâ€”that is the cyclical part of the deficit, which economic recovery will eventually eliminateâ€”but three quarters of it is structural, and requires a structural response.
The deficit is Â£178 billion right now. So three quarters of that is Â£133.5 billion not the Â£57 billion figure mentioned by Darling.