Ending Britain's false economy

It is simply unfeasible, with the money markets in turmoil, for the Government to delay the tough decisions. If it doesn't, the annual interest charge could be 70bn – outstripping the country's education, transport and climate change budgets.

This is money which is having to pay for Labour's largesse rather than cut the national debt – or improve the country's overstretched

transport infrastructure and outdated energy plants, for example.

It is a complete false economy.

There will, of course, be concern that the savings required will be greater than the levels anticipated before the election – but the fact is Labour were not honest about the public finances and the global economy is in flux because of the Eurozone crisis.

What is reassuring, however, is the manner that Mr Cameron is approaching the spending review, and how his Liberal Democrat coalition colleagues are acting as a counter-balance to ensuring that this process is undertaken responsibly, and with sufficient compassion shown towards the most vulnerable members of society.

Yet, by learning lessons from the highly effective deficit reduction plan in Canada, Mr Cameron has – to his credit – recognised that this spending crisis is actually an opportunity to reappraise the role of government.

He is right to do so. Under Labour, the Government has been allowed to become too big – and too inefficient. Its ministers believed that the State was the answer to every policy challenge.

Yet the consequence is an over-bloated public sector that can only be paid for by a thriving private sector – and private enterprise being stifled by excessive regulation and higher taxes.

In short, the status quo – the default position of ex-Labour ministers who still appear in denial about the seriousness of the financial crisis they bequeathed the nation – is no longer viable.

This is why the new Government is right to consult broadly. In many cases, frontline staff are better qualified than Ministers to identify efficiency savings and how services can be improved.

The challenge for Mr Cameron is do so in a way that means the country's debt interest charges can be eradicated as swiftly as possible – it is money that the country can ill afford to throw away.