Treasury cuts begin to bite

Mr Byrne's final act in the Treasury was to advise his successor: "I'm afraid to tell you there's no money left." He says it was indicative of his sense of humour – but it is, in fact, an inevitable consequence of Labour's pre-election spending spree.

However, it has become abundantly clear that Gordon Brown's government paid little heed to the notion of public responsibility during its final months, even though Alistair Darling, the Chancellor, had issued

dire warnings about the growing size of the deficit.

Nevertheless, this should not be a major surprise to the new Government – all administrations, Conservative and Labour, have traditionally masked any economic weaknesses prior to past elections.

What is surprising, however, is that the Civil Service does not insist – as a matter of course – that all expenditure signed off in the six months preceding an election is subject to review, and the necessary "get out" clauses inserted. It would, at least, prompt Ministers to think twice about their decisions.

This temptation will certainly be checked by George Osborne's proposed Office for Budget Responsibility – another example of the coalition being prepared to accede power in order to gain the public's trust. The test, however, will come if the Chancellor disagrees with the independent analysis. Which viewpoint then takes precedence?

That is for the future. The primary challenge for Mr Osborne's team in the interim is to identify 6bn of savings ahead of next month's emergency Budget. And, of course, he is going to focus on Labour's most recent spending decisions.

However, a word of warning is required. This course of action brings into play, for example, funding for a series of long-awaited transport projects across Yorkshire, including the Leeds Trolleybus scheme. Also included is the nuclear power research now being undertaken by Sheffield Forgemasters.

Given the deficiencies in the transport and energy programmes, it would be unwise for Mr Osborne to cut such projects out of political spite when they are clearly in this region's best interests.

His first priority must be scaling back the vast, and unnecessary, bureaucratic empire that Labour created.