How big are the Conservatives' planned cuts?
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What is the main topic discussed in this episode?
Thank you for downloading the More or Less podcast from the BBC, statistically proven to be the very best numbers programme around. Hello and welcome to More or Less, the programme which uses numbers the way your gin and tonic uses a slice of lime. In today's programme, spending cuts, victims of terrorism and this.
Do you concede Tokyo?
No! The best and worst board games in the world. The statistics decide, although my children have their own ideas too. But first, in the Chancellor's autumn statement, which for some reason happened in December, Mr Osborne announced that... By 2019-20, Britain is now predicted to have a surplus of £23 billion. There seemed to be near universal acknowledgement... Could we stop the Christmas music, please? Thank you. There seemed to be near universal acknowledgement that this plan to achieve a surplus and to do so without raising taxes would involve big reductions in government spending. Really big ones. Massive, dramatic, devastating. But then this week, David Cameron said something that made those warnings seem completely misplaced.
It means reducing overall government spending.
by just 1% each year. Put another way, we have to spend £1 a year in every £100 that government spends. I don't think there is a family or a business that couldn't do that. And I don't think that government, seeing as it is your money, should be any different.
Just what's going on here? Would the proposed cuts to government spending be huge or just 1%, as the Prime Minister said there? I asked Gemma Tetlow from the Institute for Fiscal Studies and Independent Economic Research Institute to explain.
David Cameron is right to say that over the next parliament, the coalition's plans imply that total spending will be cut by about 1% a year over the four years from 2015 to 2019.
OK, so it's true. But then how does that square with what we hear about enormous cuts that are planned?
Even though total spending is only being cut by 1% a year, within that there are parts of spending that are actually growing much more quickly over the next Parliament, which means that there are some other areas that are going to have to be cut by much more in order to reach that total of only a 1% cut.
So we've got a cut of 1% a year, but that's the overall spending. So when you just look at the areas that are not protected, what do the planned cuts look like each year?
Total spending is going to be cut by 1% a year, but once you take account of the fact that debt interest will be growing, spending on the NHS isn't going to be cut, spending on schools and overseas aid may well not be cut either. Pension spending is going up, as are other areas of social security spending. That means that the unprotected areas of public service spending, that includes things like policing, the Home Office, courts, areas of local government spending, such as social care, would need to be cut by about 6% a year over the next Parliament.
And then when you add it up over the entire Parliament, what are the cuts by the end of that Parliament?
So 6% a year for four years means that by the end of the Parliament, those areas will be cut by 26% compared to their 2015 level.
How big are the Conservatives' planned government spending cuts and what did Cameron mean by '1% a year'?
OK, so I think it's fair to say that's not a small cut.
That is not a small cut to spending, and it comes on top of significant cuts to those same areas of spending over this Parliament. So it will not be easy to deliver.
So taking into account cuts since 2010 then, when David Cameron became Prime Minister, what are the total cuts scheduled over the life of both parliaments?
So comparing what these budgets would be in 2019 with where they were in 2010, they'd be about 41% lower than they were.
OK, so that's not 41% on all government spending, that's 41% of the departments that are unprotected.
So comparing these unprotected departments, if the next government were to continue the sorts of protection that we've seen in this Parliament, that would mean those unprotected departments' budgets being 41% lower by 2019 than they were in 2010.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–3:20
2
How big are the Conservatives' planned government spending cuts and what did Cameron mean by '1% a year'?
3:20–10:27
3
Why can an overall 1% cut mask much larger reductions in unprotected departments?
10:27–12:59
4
How large would cuts to unprotected public services be each year and over the Parliament?
12:59–17:53
5
How do the cumulative cuts since 2010 translate into a 41% reduction for unprotected departments?
17:53–20:16
6
What fiscal alternatives exist — could Labour or others borrow instead of cutting, and by how much?
20:16–28:01