Lib Dem’s will preside over £47bn extra cuts

Green Politics

During the election, the Liberal Democrats supported Labour's fiscal consolidation plan. They now support £47 billion of additional spending cuts by 2015-16.

During the election, the Liberal Democrats supported Labour’s fiscal consolidation plan. In the Coalition Programme they changed tack and announced a desire instead to “significantly accelerate the reduction of the structural deficit”. Today we learned that this means an additional £47 billion in spending cuts by 2015-16.

In April, the Institute for Fiscal Studies produced a report on the plans of each of the three parties’ plans to repair the public finances. It said:

“The Liberal Democrat manifesto says that, in addition to delivering its tax plans, the party would set out spending plans this autumn to ‘at a minimum, halve the deficit by 2013–14’. On the face of it, this looks like adopting the less stringent of Labour’s two legislative targets and therefore seeking a less ambitious fiscal consolidation than that set out in Budget 2010. But the party has told us that this pledge should be seen as ‘shorthand’ for pursuing the same consolidation path as Labour.”

Table 1.1 of the Budget compares the policy inherited by the Government with the total discretionary consolidation. To criticism from some Keynesian economists for going too far, Labour had proposed “to more than halve the deficit over four years”. This mean £52 billion of spending cuts and £21 billion in tax increases by 2014-15. By 2015-16, the Coalition Government will have presided over an additional £47 billion in spending cuts and £8 billion in tax rises.


The graph above shows what this means in terms of tax (current receipts) and spend (total managed expenditure). The Coalition are clear that public spending should fall below 40 per cent for the first time since 2004. At least with the minor matter of an election out the way, we now know what the Lib Dems really think.

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9 Responses to “Lib Dem’s will preside over £47bn extra cuts”

  1. House Of Twits

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  2. Andy Sutherland

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  3. Malcolm Evison

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  4. Owain Gardner

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  5. B Latif

    Hi Simon #Hughes, Are you proud of #Tory #coalition govt?
    RT @leftfootfwd: #LibDem's will preside over £47bn extra cuts http://bit.ly/cEhd91

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