Hat tip Andy for this on Osborne's "austerity budget".
My own feeling is that it is ridiculous to ring-fence NHS spending, giving the huge real increases there have been in that department in the last few years. Why single out one lot of waste for special privileges? This is not to say that an identical across the board departmental % cut is the only way to go, but that's where I would have started.
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IFS reaction to the Budget
BBC Comment
Stephanie Flanders
Wednesday, 23 June 2010
So far the most striking figure from the IFS post-mortem briefing is this: applying the planned squeeze in public spending evenly across departments would require an average cut of 14% in real terms by 2015-16. The only reason we are talking about 25% cuts for most departments is the decision to protect the NHS. ...
According to the IFS, unprotected departments like the Home Office and environment could have their budgets cut by as much as a third, if the NHS and overseas aid budgets are protected from real cuts, and defence and education are cut by less than others, as indicated by the chancellor.
The think tank calculates that this real cut for every other department would fall to 25%, if the spending review could identify another £13bn to cut from the benefit bill. The total benefit bill is £270bn, but that includes the basic state pension and local authority-financed expenditure. There is about £154bn that could plausibly be cut.
4 comments:
Here's Hitchens characteristically pessimistic and contrary view on the budget:
"These cuts are a con – we’ll soon be just like Greece (but without the lovely beaches)
This is Peter Hicthens' Mail on Sunday column
Anyone would think that the late General Pinochet, Chile’s ultra-conservative military dictator, had risen from his grave and was stalking Britain, slashing public spending with an axe and machine-gunning screaming public-service workers in football stadiums.
The exaggerated fuss over George Osborne’s Budget is crude spin.
Unlike proper, old-fashioned Budgets, which could not be leaked on pain of political death, this propaganda document was made ublic almost completely beforehand.
It may convince the gullible sheep-brained people who appear to control the stock markets and bond markets of the world, and who make their livings by dashing hither and thither shoving prices up and down on a whim. But should it convince us?
There’s such a mismatch between the scale of the national profligacy and what the Government can actually do that it’s necessary for the Chancellor to pretend that he is being more brutal than he truly is.
Likewise the Labour Party, which would have done more or less the same had it been in office, has to join in the same pretence.
False declarations of resolve are met with false howls of outrage.
The supposed core of the Osborne effort is a series of 25 per cent cuts in spending in most departments.
These cuts have yet to be specified, and will actually need to be much higher than 25 per cent, probably nearer 33 per cent, because the sacred NHS, the largest employer in Europe and a sink of bureaucracy and inefficiency, is to be spared the slasher’s knife. And so is the equally sacred budget for ‘Foreign Aid’.
Quite why this suspect activity – which so seldom actually reaches the suffering – is so untouchable, I do not know.
Once you realise that a sizeable chunk of it will be spent on aborting Third World babies, you begin to wonder where the rest is going.
The trumpeted cuts are politically impossible.
The screeching lobbies that stand behind the public sector and the welfare state have automatic access to the BBC, where their advocates are treated with reverence.
They have a similar direct line to large chunks of the Liberal Democrat Party, and the cultural elite in general.
Maybe if this were 1920 rather than 2010, Mr Osborne might hope to do as he promises.
But – as Michael Portillo has repeatedly warned, and he was once in charge of controlling spending – real cuts are extremely difficult to achieve.
So what will happen?
My guess is that the country will continue living beyond its means as it has done since Harold Macmillan began debauching the national finances to win popularity 50 years ago.
And we will pay the price in inflation and in a devalued currency, slowly slipping from second to third-class status, so that at the end we really are pretty much like Greece, instead of just pretending to be, hopelessly in debt and nothing working properly.
But without the Acropolis or the nice beaches."
Wonder what ImpDecers make of this Labour attack on the govt's cuts policy?
Countering the cuts myths
Red Pepper
05/08/10
The government and the press say we are in the grip of a debt crisis caused by the ‘bloated’ public sector. Here, Red Pepper debunks the myths used to push cuts to jobs and public services
It can't have been an easy decision to choose the Tornado over the Harrier:
Analysts say that in terms of range, size of payload, speed and its ability to hit moving targets, the Tornado does triumph, as well as in the reconnaissance abilities of its Raptor pod. However, the Harrier's advantage is that it is more reliable, with a 95% technical serviceability rate, higher than the Tornado's 75%, and can operate from carriers, makeshift landing sites, and works better in the heat of a Helmand summer.
But this is undoubtedly true. It doesn't get much tricker than mastering carrier operations, and it takes a long time to grow a tradition:
Struggle at the top over decision to scrap UK Harriers
BBC
15/12/2010
Critics point out that the decision to get rid of the Harriers and the flagship aircraft carrier Ark Royal leaves the Royal Navy without a carrier able to operate strike aircraft until the second of two new carriers enters service in 2020, and warn of the risk of being unable to respond flexibly to unexpected events or threats outside the UK during those 10 years.
Admiral Sir "Sandy" Woodward, who commanded the British Task Force in the Falklands War, has drawn up a petition to the prime minister, calling on him to save the Harrier.
"I thought the decision was totally contrary to common sense, and wondered how on earth they could have come to such a perverse decision, which costs money at a time when we are in severe financial stringency. I have to assume the prime minister was improperly or incorrectly briefed," he said.
His worry is that when the Harriers are taken out of service, the skills needed by the air crew, pilots and deck handlers will be hard to regenerate. "Handling fixed wing aircraft on the deck of an aircraft carrier is as complicated a business as it is to run the Bolshoi ballet, if not more so, and you do it for months on end as opposed to one evening at a time, and to get all that skill back will take you 10 to 15 years," he says.
"That is a major problem, because if you want to do anything in terms of expeditionary force in the world, you must have air cover, and we won't have it. "We will have lost fixed-wing flying for the Navy and that's the ability to provide air cover for the Royal Marines, or the Army, or the Air Force when they need to operate overseas away from home bases. "That means that our defence becomes strictly of an island and not of our interests further afield.
The Times have a lock-down policy, so just quoting a couple of paras. You can still read the whole article for free if you register.
Banks, bills and bail-outs
FT
By Tim Harford
June 10 2011
[H]ow much of the deficit is the result of bailing out the banks[?]. It turns out that the answer is simple: none of it.
Hundreds of billions of pounds were ostensibly on the line, but such figures were always somewhat deceptive: they described the maximum possible losses on the government’s guarantees and capital investments. What were the actual losses?
The final bill is not yet in, and won’t be until the government successfully divests itself of its shares in banks. But ...[n]ow the Office for Budget Responsibility has the job of calculating these figures. Its estimate at the time of the last Budget: a profit of £3.4bn.
...
Are we fussing about nothing, then? Not at all. The “bail-outs” might easily have cost money: just because an insurance policy has no claims on it, does not mean the policy was free to offer. In other circumstances – smaller states, more incompetent banks, cruder interventions – support for the banks has brought governments to their knees. Anyone reading this in Ireland will know exactly what I mean. There is no reason to believe that a future bail-out will not be ruinous.
So why does this discussion matter? It alters the debate about what we want to do to the banks. If you take the perfectly understandable – but wrong – view that the banks have swallowed a huge public subsidy and have delivered little in return, you should be delighted at their threats to move to Switzerland or Singapore. If you recognise that well-functioning banks are vital to the economy, the policy problem becomes far harder: keep them, discipline them, make them more robust and far less likely to risk public money next time. All of which is a far harder problem than cheerily waving them goodbye.
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