Andy Silvester: Earnest on deficit cuts, light on detail

Have your say

NOW the phoney war of the last 18 months has given way to the hot war of the election campaign, voters would be forgiven for expecting a little bit more from politicians. This saw the publication of the manifestos from the major parties, with Labour releasing their document on the set of Coronation Street and the Tories at a spanking new college in Wiltshire. The political reasons were more obvious in the latter case than the former, but I digress.

Both manifestos contained earnest pledges, as we have become used to. Labour promise to bring the deficit down every year – admittedly, they weren’t particularly clear on the detail or scale of what that reduction might look like. The Conservatives have pledged to eliminate the deficit by 2018, through a combination of savings and an increase in tax revenues as a result of economic growth.

All, as stated, earnest. However both documents remain implausibly light on detail about what the spending cuts they might make actually entail. Politicians are ever so keen to tout how willing they are to make the tough choices, the difficult decisions, to get Britain back in the black. But they are less willing to tell us what those tough choices actually are.

Will they scrap free TV licences for pensioners, saving £919m? Would they scrap the childcare subsidy programme, saving another £900m? Or would they raise the state pension age to 67 by 2021, saving £2.3bn? We remain in the dark. They simply aren’t coming clean about the necessary savings. The Conservatives have been criticised for not saying how they would achieve the £12bn of welfare savings, beyond £2bn from a two-year benefit freeze. The criticism is justified, but not from the Labour Party, who have made brick walls look transparent when it comes to their spending plans.

Yet, with every day to go until the election, we remain far more clued up on what the parties would spend money on. Rather like the uncle who buys his nephew a drum kit, politicians are very keen on being popular without having to deal with the consequences. The Conservatives, fresh from saying unfunded spending on the NHS was a sure way to destroy it, found £8bn a year down the back of the Treasury sofa to pump into the Health Service.

It was a clear, and expensive, way to shoot Labour’s most energetic electoral fox. Labour promised to spend £2.5bn more than the Tories on the NHS – appar-ently regardless of what that figure is. One is forgiven for thinking our spending on the NHS is destined to remain in some sort of perpetual Penrose Stairs until the economy collapses in on itself. Similarly, all parties that have found more money for childcare, have pledged to protect our Armed Forces, and committed to spend 0.7 per cent of GDP on foreign aid.

These are all well and good, and no doubt will play will on the doorstep. But it is increasingly hard to square a circle in which these pledges are delivered and the deficit reduced. In short, politicians are seeking to have their deficit reduction cake and eat it, too. Sensible finances appear to now be playing second fiddle to higher spending and more borrowing.

The sheer numbers that we’re dealing with are worth repeating. The deficit sits at around £90bn a year – which means we’re spending about £240m a day more than we bring in. Decades of borrowing have left us with a national debt of some £1.4 trillion. Just to service that debt – the overdraft payments, essentially – we’re spending £40bn a year, more than we spend on the Ministry of Defence and near on a third of what we spend on the Health Service. Don’t let anybody tell you that the deficit and the debt don’t matter.

Getting Britain living within its means isn’t some ideologically-driven crusade. Bringing spending under control is about more than dealing with a tough fiscal climate. Reducing public spending should be part of a big picture strategy: it would mean lower taxes for families, less debt for future generations, and faster economic growth generating prosperity for all. That is the pitch politicians should make.

It is important to remember that the spending levels required for real deficit reduction – that of around 35 to 36 per cent – are not the path to Victorian Britain. It would rank us alongside Switzerland, Australia and New Zealand – advanced, civilised economies all. Such a vision still involves taxpayer-funded education and healthcare for all, robust defence and justice systems and massive welfare transfers to those in most need. But it will leave far more of people’s earnings in their own hands to spend, save or invest.

Taxpayers deserve more from those who want the keys to No 10 Downing Street on the morning of May 8.

Andy Silvester is campaign manager of The TaxPayers’ Alliance.