George Osborne claims there's a "trade-off" between cutting welfare spending and departmental budgets. It's a false choice and reflects only his ideological masochism.
Today’s papers cover the backlash to George Osborne’s supposed “trade-off” between cuts to welfare spending and cuts to departmental budgets.
A number of papers report the warning from the Association of Chief Police Officer over cuts to police numbers. The Scottish Daily Record says, “Tory chancellor George Osborne plans to axe benefits for 60,000 disabled Scots”. Wales Online reports, “Osborne under fire as he targets long-term sick”. Finally, a Telegraph headline outlines that, “Accept cuts or we’ll target pensions, David Cameron warns unions”. But these headlines are not inevitable or, in the words of George Osborne, “unavoidable“.
As the Table below from last week’s Budget shows, the Coalition announced plans to rapidly increase Labour’s plans to “halve the deficit over four years” by cutting an additional £24 billion from public spending by 2013-14 rising to £32 billion by 2014-15. This will see public spending cut by a total of £99 billion by 2015-16.
The alternatives open to George Osborne are two-fold. First, he could revert to Labour’s already eye-watering plans – favoured by the Liberal Democrats before the election – to cut a significant but smaller chunk of public spending. Although details of what would constitute these cuts have yet to be given by the Labour party, the overall reduction levels – which first appeared in the March Budget – had the support of the money markets. Indeed, if the coalition cuts cause the rises in unemployment and cuts to growth predicted by many, they may end up raising rather than reducing the deficit.
Second, he could change the ratio of tax rises to spending cuts so that they reflect the 2:1 ratio favoured by Labour or the 1:1 ratio favoured by Norman Lamont and Ken Clarke in the 1990s and by a number of countries embarking on similar deficit reductions. The Chancellor opted against this route in order to announce tax cuts for big businesses including the banks; cuts to employers’ national insurance; and for the Lib Dems’ regressive tax threshold rise.
The choice facing Osborne is not a trade-off between welfare spending and departmental budgets, it is whether to pursue a responsible deficit reduction programme or a form of ideological masochism.
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.
14 Responses to “Osborne’s false “trade-off””
Guido Fawkes
Passing by the dishonesty pointed out by Mr Sinclair, my comments are;
According to the dynamic modelling from the Treasury a rise above 28% would result in less, not more, CGT revenue.
Perhaps you misunderstood my question – would you cut kidney transplants or after school activities?
My question was, the 10% across the board cuts you specify, what would you cut? Long-term sick or children? You can’t credibly play this trade-off game without naming your trades, can you?
Name the programmes, stop being airy fairy. It is dishonest otherwise.
WHAT WOULD YOU CUT?
Michael Burke
Guido,
demanding of Will whether he wants to cut kidney transplants or after-school activities is, to paraphrase, a bit like asking him who he beats most, his wife or his kids.
George Osborne has been planning these cuts since at least the Tory Party conference. He has had innumerable advisers, including Alan Budd around him all the while and now has an army of Treasury officials. And he has announced a mini-spending round and a Budget.
But still no indication who’s for the chop, kidney patients or needy kids. Somewhat dishonest, don’t you agree?
Politics Summary: Wednesday, June 30th | Left Foot Forward
[…] by the Liberal Democrats.” Yesterday Left Foot Forward reported on the Chancellor’s false “trade-off” between cuts to welfare spending and cuts to departmental budgets and explained how investment […]
Coalition cuts lead to slower growth | Left Foot Forward
[…] growth has been downgraded by the Bank of England – in part due to the Coalition’s largely avoidable cuts programme. By contrast, growth over the final year of Labour’s term in office grew at the top range of […]