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  1. Wealth
February 8, 2010

The right cuts

By Spear's

The Shadow Chief Secretary of the Treasury was raising hopes the Tories had found someone financially literate, until he opened his mouth.

The Shadow Chief Secretary of the Treasury, Mr. Philip Hammond, was enjoying an early and favourable reputation and was even raising hopes that the Tories had at last found someone who was financially literate, until he opened his mouth, that is, and proclaimed that he would make £1.0 billion savings in his first year in office. This inept proclamation caused a large groan among the people, especially the Tories.

The numbers go like this: our dear Darling Chancellor’s latest attempt at guessing the deficit for the year which ends in just two months’ time is £172.50 billion, but like a monetarily-incontinent lady who keeps incurring bills for dress-up and make-up so as to look a lot better than she actually is, it’s more likely to be £175.0 billion if we’re lucky, and a figure nearer £180.0 billion is more than likely.

Just one component of this ballooning deficit stands out for the guillotine of immediate chop: the cost of quangos in the last three years has risen from £37.0 billion to £46.5 billion, with headcount rising from 92,500 to 110,000, which is 3,000 more than the UK’s largest private sector employer, BAE Systems with 107,000 employees, but across nineteen countries. That makes talk of £1.0 billion savings look like a timorous ecologist wondering whether his conscience can afford him to take a piss into an ocean.

What’s wrong with the Tories on the economy? It’s a timely question, given their slip in the polls to just 7% ahead. The Government have set their stall out: they will continue throwing money around like confetti until the recovery is established.

This, the Tories believe, makes it an electoral albatross to talk about cuts, let alone savage cuts that might come and bite them in the Polling Stations. So they announce that the NHS spending is sacrosanct and make innocuous proclamations about miniscule cuts, and find that they are painting themselves into a corner marked “Not-Up-To-The-Job”, and so the Polls go against them even though Q4 2009 GDP growth was just a miserly 0.1%.

The first thing the Tories have to do is undermine Brown’s argument with the facts: the UK economy can only recover on the back of a strong private sector, but the unproductive public sector is now over 50% of the economy, the Quango versus BAE syndrome. That’s why Brown is just plain wrong: it is his policies that are holding the recovery back!

And then the Tories need to spell out their recovery strategy: by universal consent, it begins with £50.0 billion cuts p.a. achieved over three years at most. Instead of singling out the NHS as beyond the guillotine, the Tories should act to cut out inefficiency in this employer of 900,000 and reinvest the savings back into the NHS and not the Treasury, which smacks of efficiency and sound management.

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The simple fact is the Social Security budget is completely bust and has to be reigned in, and quickly too. There is no such thing as a pain-free way of clearing up the Brown mess disfiguring the front door of No. 10, and the electorate know this. Cameron should take care not to step in it.

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