Not so fast

Speculation is growing that the Coalition will slow the timetable for deficit reduction. The slow down would bring the Government more into line with Labour's planned approach.

Speculation is growing that the Coalition government is about to slow the timetable for deficit reduction. Whitehall sources have briefed the Financial Times amid warnings from the World Bank and concerns from Cameron and Osborne’s Cabinet colleagues.

The Financial Times reports today:

“The Treasury is working on plans to “reprofile” spending cuts next April, spreading the pain of deficit reduction more evenly over the next few years, senior Whitehall officials have told the Financial Times.

“Confronted with the difficulties of quickly cutting spending – including financial penalties for breaking contracts and redundancy costs – ministers have been forced to consider delaying some of the big savings until later in this parliament.”

Although reprofiling would not presumably alter the Government’s determination to eliminate the “structural current deficit” by 2014-15, it would bring the speed closer to the deficit consolidation planned by Alistair Darling in the early years of the current Parliament.

On Sky News last night, World Bank president, Robert Zoellick warned fiscal stimulus should not be withdrawn too rapidly. In addition to praising the “wise” plan to reduce the deficit, Mr Zoellick said:

“What you have to see is that if it happened overnight – and all of this were pulled back overnight – that could create a problem.”

In an expertly written piece in the Independent on David Cameron’s conference speech, Steve Richards observes:

“As the spending review hovers, the Tories have become sudden converts to the importance of public spending, the illuminating revelation of the conference. Faced with the reality of precise cuts, they do not like them. Boris Johnson, Iain Duncan Smith, Liam Fox and an array of other prominent figures put the case for the virtues of public investment as the axe looms.”

A further example of trouble ahead is provided today as the head of the prison officers’ union, Harry Fletcher, has warned that 25 per cent cuts to the probation service budget will lead to a lack of resources and courts being forced to hand down short prison sentences despite the Government’s plans for a rehabilitation revolution.

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today. 

24 Responses to “Not so fast”

  1. Daniel Simms

    RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  2. Natasha Cox

    RT @leftfootfwd: Not so fast http://bit.ly/9lhhHG Gobsmacked – are they actually starting to think about things a little more?

  3. Claire Spencer

    #fingerscrossed that the coalition do choose to cut at a slower pace, as this @leftfootfwd piece suggests: http://s.coop/412

  4. Tony Gee

    So Thunderbird 1 was right? RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  5. paulstpancras

    RT @leftfootfwd: Not so fast http://bit.ly/9lhhHG

  6. LadyRoisin

    leftfootfwd Osborne considers slower deficit reduction World bank not happy with ConDem plans http://bit.ly/9lhhHG

  7. Melissa Nicole Harry

    RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  8. yorkierosie

    RT @paulstpancras: RT @leftfootfwd: Not so fast http://bit.ly/9lhhHG

  9. Kieron Merrett

    RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  10. Steve Rooney

    RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  11. Richard Moorhead

    RT @leftfootfwd: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG

  12. Shamik Das

    Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG by @wdjstraw on @leftfootfwd

  13. shamikdas

    Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG by @wdjstraw on @leftfootfwd

  14. Duncan Weldon

    RT @shamikdas: Not so fast – Osborne considers slower deficit reduction plan http://bit.ly/9lhhHG by @wdjstraw on @leftfootfwd

  15. M Davies

    RT @ladyroisin: leftfootfwd Osborne considers slower deficit reduction World bank not happy with ConDem plans http://bit.ly/9lhhHG

  16. kevin doran

    RT @leftfootfwd: Not so fast http://bit.ly/9lhhHG

  17. Richard Blogger

    The big problem with this “reprofiling” is indicated by the gradient of the last year of the graph. This means that the austerity measures will be far harder in the last year before the (planned) election than at any other time. No politician will want to go into an election under the climate of hard cuts. They would prefer to go into the election in a climate of rising public spending with the comfort that buys in the electorate.

    I think that the political penalty of not achieving the target of removing the “structural deficit” by the next election will be seen by the Tories as a price worth paying for the feeling that “austerity wasn’t really that bad” that an easing off of austerity measures will create. I wouldn’t be surprised if for the last year the dotted line rather than increasing gradient actually *decreases* and meets Darling’s red line at the election.

    Or perhaps Gideon is hoping that the sell off of the nationalised banks in 2014 will give him his election bribe?

  18. Christian Wilcox ( ctg )

    This is good news. Time for recovery, and time for tax rises 🙂

  19. James Cowley

    RT @leftfootfwd: Not so fast http://bit.ly/9lhhHG

  20. Mark Stevo

    Odd that you didn’t mention Zoellick’s subsequent sentence that “The way most government policies work, I don’t think it will do that.”

  21. Neil80

    The Tories are also probably just starting to realise how hard politically it is to take an axe to essential services.

  22. Mr. Sensible

    This morning the Guardian suggested that the ‘Bonfire of the Quangos’ might not actually acheaves avings for 10 years:
    http://www.guardian.co.uk/politics/2010/oct/07/quangos-government-multibillion-pound-bill

    Might economic reality be catching up with this government?

  23. Mr. Sensible

    Will, can you find this story on another website?

    The FT’s hiden by a subscription wall.

  24. Will Straw

    Mr Sensible – ‘fraid not.

Leave a Reply