From the TUC

Public spending cuts: will anyone ask the big question?

10 Jun 2009, by Guest in Economics, Politics, Public services

The debate on public spending cuts heated up again today.  The Tory Health Spokesperson, Andrew Lansley, apparently gaffed by admitting that a Conservative Government would seek 10% cuts in spending. The NHS Confederation predicted massive cuts for the health service after 2011. And Cameron and Brown had the usual unenlightening barney about it all at PMQs.

There is a very widely held assumption in policy and media circles now that cuts are necessary and inevitable.  The only disagreement is over how much and when.  Apparently, those hard-headed bond traders and credit raters will only be satisfied when they see unemployed nurses weeping outside Jobcentres.  It seems to me though, there is one question no-one wants to ask: will cutting spending actually reduce public debt?

I only ask this because the government deficit went sky high in the early 1980s and early 1990s during recessions and only started reducing some time after the recessions had ended.  Even Mrs. Thatcher’s eye-watering cuts had no effect: the deficit was dropping rather well until the Iron Lady became PM, it then stalled, then rose rapidly and didn’t actually start falling again until a full six years after she came to power.

Maybe the truth is that recessions raise public debt and booms reduce it and there isn’t much governments can do to alter that rule.  But no-one won any votes of confidence from the markets or The Mail saying that.

3 Responses to Public spending cuts: will anyone ask the big question?

  1. Tax Research UK » Public spending cuts: will anyone ask the big question? | ToUChstone blog: A public policy blog from the TUC
    Jun 11th 2009, 9:38 pm

    [...] Public spending cuts: will anyone ask the big question? | ToUChstone blog: A public policy blog from…. [...]

  2. Public spending cuts: will anyone ask the big question? | ToUChstone blog: A public policy blog from the TUC | called2account
    Jun 12th 2009, 11:20 am

    [...] Public spending cuts: will anyone ask the big question? | ToUChstone blog: A public policy blog from…. [...]

  3. Public spending: can this debate get any shallower? | ToUChstone blog: A public policy blog from the TUC
    Jul 5th 2009, 10:25 pm

    [...] could, in turn, make the state of the public finances even worse.  (An issue I have dealt with elsewhere.)  This oversight means Bundred, and nearly every other commentator currently calling for cuts, [...]

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