Public spending: does it matter what politicians say?
16 September 2009
SUGGESTED
Economic Theory
15 September 2009
Monetary Policy
Trade, Development, and Immigration
4 November 2024
The debate on the future of public spending is a developing one, with Gordon Brown finally being forced to use the “c” word. However, there is still no real attempt to state what and how much will be cut in order to restore the public finances to health. In particular, the vagueness of the Conservative position is worrying, especially as they are favourites to form the next government.
But should we really be worried about this? Should we not rather accept that winning the election is their most pressing issue and if this means not frightening too many then all well and good? Of course, there is the danger that some people might cry foul when the cuts actually start, but surely there is some merit in the so called “doctor’s mandate”, where a new government is given the liberty to do whatever is necessary to cure the patient.
However, another reason that we should offer some slack to the Conservatives is precisely because they will have no alternative but to cut and cut deep: the markets will not allow them any other option. The only difference would be that the Conservatives might be given a reasonable length of time (perhaps as long as a year) to put their plans into operation, whereas were Brown to win the crisis could start the following day.
But should we really be worried about this? Should we not rather accept that winning the election is their most pressing issue and if this means not frightening too many then all well and good? Of course, there is the danger that some people might cry foul when the cuts actually start, but surely there is some merit in the so called “doctor’s mandate”, where a new government is given the liberty to do whatever is necessary to cure the patient.
However, another reason that we should offer some slack to the Conservatives is precisely because they will have no alternative but to cut and cut deep: the markets will not allow them any other option. The only difference would be that the Conservatives might be given a reasonable length of time (perhaps as long as a year) to put their plans into operation, whereas were Brown to win the crisis could start the following day.
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It’s disappointing that the Conservatives have promised to ring fence spending on the NHS and foreign aid (a rare exception to their overall vagueness). The debt situation is so severe that they surely cannot afford to have any sacred cows.
It’s disappointing that the Conservatives have promised to ring fence spending on the NHS and foreign aid (a rare exception to their overall vagueness). The debt situation is so severe that they surely cannot afford to have any sacred cows.
One concern raised by Simon Heffer and Irwin Stelzer (no doubt among others) is that without conveying a measure of the level of cuts necessary to restore the public finances to a semblance of recovery — as opposed to the slight ‘surface’ savings available from efficiency reductions or parliamentary rationalisations — the public may entertain false expectations of minimum hardships post-election (especially by a most aggrieved and vocal public sector). Any efforts by a Conservative ministry to ‘rethink’ the parameters of State action are thus frustrated from the beginning.
One concern raised by Simon Heffer and Irwin Stelzer (no doubt among others) is that without conveying a measure of the level of cuts necessary to restore the public finances to a semblance of recovery — as opposed to the slight ‘surface’ savings available from efficiency reductions or parliamentary rationalisations — the public may entertain false expectations of minimum hardships post-election (especially by a most aggrieved and vocal public sector). Any efforts by a Conservative ministry to ‘rethink’ the parameters of State action are thus frustrated from the beginning.