Tax and spend is going to be the biggest issue in our politics between now and the next election which will happen at the latest possible time in May 2010. The BBC is reporting today that even Darling/Brown know that they have to cut public spending.
Darling is a joke. In November’s Pre-Budget Report he sneaked in without fanfare “inclusion of a £5.0 billion allowance for Additional Value for Money Savings in 2010-11”. Even with this total finger in the air never, never saving that does not kick in until next financial year, effectively safely after the next election, public debt as measured by the Maastricht Treaty definition will hit £1 trillion by March 2011 – only two years away, see previous posting. And these figures will be revised downwards on Wednesday as they are wildly optimistic.
Apparently Darling is going to square the circle by adding another £10 billion of savings that kick in the year after that in 2011/12. No doubt there will be little detail of how these savings will be achieved. Darling’s £15 billion savings are grossly inadequate. According to the BBC “He will say the money can be found by making Whitehall more efficient”. This is just a fantasy.
More realistic estimates of the gap to be filled range from £40 billion, according to the IFS, to £100 billion, according to Malcolm Offord’s Bankrupt Britain report.
Today the Reform think tank is launching its report “Back to black” which spells out how to save £30 billion. None of their suggestions are easy. But, they are serious.
Meanwhile the erstwhile favourite think tank of New Labour, IPPR, has lost its mind in proposing a totally irresponsible wish list all funded by higher taxes in their new paper published today “Time for Another People’s Budget:
- A substantial increase in personal tax allowances
- Extra spending to achieve the Government’s child poverty reduction target
- Extra spending on low-carbon technology
- An immediate restoration of the link between pensions and earnings.
As my contribution to the debate I have been working with the ConservativeHome blog on a project called the Star Chamber which we launched yesterday. The idea is to look in detail at various savings proposals in order to gauge their public acceptability. Many of the proposals will be controversial. Some will be easy and popular. Some will be unacceptable but we won’t find out which are which without the debate.