The hare has been set running on the above question today not by a Conservative politician, but by a Labour MP who is pressing for such cuts.
In the latest ConservativeHome survey of Tory members, no fewer than 94% took the view that significant cuts in public expenditure would be necessary to restore order to the public finances.
Today that position is eloquently echoed by the man who is most Tories' favourite Labour pin-up, Frank Field - the former welfare reform minister who was told to "think the unthinkable" by Tony Blair and then prevented from doing just that.
In advance of the Budget next Wednesday, he has written in The Spectator a devastating critique of the economic problems stored up by the Labour Government, which is worth quoting extensively here, not least because most Conservatives will find it almost impossible to disagree with him:
Having effectively echoed the Tory charge that the Government "didn't fix the roof while the sun was shining", Mr Field writes that last November's Pre-Budget Report estimation of proposed borrowing of £78 billion is now guesstimated by the Government at somewhere between £180 billion and £190 billion for each of the next two years (today's Times reckons £175 billion):
"The Government appears to hope that it will gain enough cover by repeating ad nauseam that it is Keynesian common sense to borrow during the downturn and pay back when the economy is on a more even keel. Whether it really believes this is anyone’s guess. But its bluff might be called, and here will be a test not only for the current administration, but also for the opposition, whose consistent poll lead suggests it may form the next government."
He cautions "any government" against thinking it can "tax itself out of these debt levels", suggesting that tax rises "can only play a modest role in closing the enormous gap in the national accounts".
So Mr Field asserts that the Government "not only has a moral duty now to cut public expenditure, but may be forced to do so by its inability to borrow on the scale necessary", and he has a variety of suggestions as to how it might go about what he calls the "Herculean task of bringing government spending nearer to what it can raise in taxes".
He stresses that the following proposals do not form a programme in itself, but rather are examples of the kinds of cuts needed to go just some of the way towards balancing the books:
- Scrapping Trident’s replacement to save between £15 billion and £20 billion;
- Scrapping the ID card scheme to save £5 billion;
- Freezing the health budget in cash terms to save an annual £7.5 billion;
- Postponing the increase in the school leaving age; and
- Scrapping the target of sending 50% of school leavers to university.
In a further nod to the expectation of a Conservative government before too long, he concludes by calling on "both opposition and government" to use the Budget to find ways of rebuilding the country's solvency".
Dare I suggest that Mr Field ought to be offered a role in that Conservative Government?
Jonathan Isaby
Yes.
But when the opposition themselves are too frightened to support cuts, why should Brown cut spending?
"Dare I suggest that Mr Field ought to be offered a role in that Conservative Government?"
Why? He seems to be supporting the policies the Roons usually smear as "frothing at the mouth Right Wing"?
Posted by: ToryBlog.com --> Not a roon | April 16, 2009 at 08:03
If this government knew what 'moral' meant then yes, it would have such a duty to cut spending.
However, the son of the manse seems to have misplaced his moral compass and is employing an economic scorched earth policy. Whether Darling will be able to prevent him from destroying a future generation of Britain with massive debt remains to be seen. I'm not holding out much hope.
This budget needs to set out medium/long term aims for spending cuts, along with giving a few cuts to show that they mean it.
The Keynesian argument just doesn't fly. You can't discover the brilliance of Keynes when you have already been borrowing during the good years.
Who remembers the golden rules? Debt lower than 40% GDP? We should be so lucky. Not for another 20 years.
Posted by: Mark M | April 16, 2009 at 08:19
How is he allowed to go so far from the führer's message, and speak sense twice in a week?
He must have a key to brown's skeleton closet.
Not sure about offering him a role as he isn't really conservative, but then again not all the conservatives are, and FF doesn't belong with the shower o' shites that currently lead his party.
Is that a bit presumptuous that Conservatives would be saving him from labour (they're not a real party, after all)
Posted by: Norm Brainer | April 16, 2009 at 08:52
Let's hope the Conservatives can get him to defect.
BROWN is the worst PM this country has ever had.
Posted by: Freddy | April 16, 2009 at 09:05
Short answer Yes.
I have just finished reading Art Laffer's latest tome, it is aimed at the US government but there are some clear lessons to be drawn.
-Complex tax systems favour the most wealthy who can afford to avoid them
-Mugging the wealthy reduces tax income
-Complex tax systems are very expensive and burdonsome to administer
-"Class War" taxes such as inheritance tax and stamp duty in reality raise as good as no income
-A reduced tax burden and regulatory burden increases revenue, counter to leftist instinct.
All this points to the fairest scheme being a simple flat tax on income above a minimum level, no exceptions, no deductions, no escape. When Russia adopted this (at 13%) they tripled revenue.
If Tim/ Jonathan are interested I might work up a budget based on this for ConHome
Posted by: Bexie | April 16, 2009 at 09:14
It's nothing to do with "moral duty". When an economy becomes dominated by the overbearing burden of the state it collapses.
The Berlin Wall did not come down due to the rush of West Germans into the welcoming embrace of the Stasi.
Frank Field should replace that idiot Letwin as the intellectual kernal of Conservative thinking.
Posted by: gareth d | April 16, 2009 at 09:20
People's belief in flat taxes can be easily tested by asking what rate it should be set at. Anything under 30% for the UK indicates that flat taxes aren't what they are after, just an excuse for ridiculously low ones.
Posted by: David | April 16, 2009 at 09:20
'Moral duty' what on earth does that mean?
Has nobody accepted and fully grasped that it's absolutely vital and urgent - now, before the IMF get here. I can hear the accountants with their lap tops and calculators at the door.....
Posted by: Victor M | April 16, 2009 at 09:26
The proposal to scrap Trident is worrying. Its a dangerous world out there, who knows what threats could occur in 20 - 30 years time - which is when the next generation of Trident will be active. By all means look at how the life of the present system can be extended and keep costs as low as possible but we don't know who our friends and enemies will be in the medium-term future
Posted by: m wood | April 16, 2009 at 09:32
Proposing an effective cut of £7.5 billion in the health budget would not just mean frontline staff being sacked it would also mean if proposed by the conservative leaderhip at the election the return of a Lasbour government. Think people will support that and you are living on another planet.
Posted by: Jack Stone | April 16, 2009 at 09:32
Yes, yes, yes!
If only we could be given the opportunity of electing Frank Field as our next PM rather than the vacuous Mr Cameron.
Posted by: David_at_Home | April 16, 2009 at 09:36
There would seem to be an opportunity with one or two Labour MPs who seem much closer to our side than to their own. Frank Field, clearly one. Perhaps Austin Mitchell, certainly as far as his EU views are concerned, though he's quite old and may not stand again. The redoubtable Kate Hoey.
Do we have a plan to bring these kind of people over ?
Posted by: clive elliot | April 16, 2009 at 09:57
Why is Frank Field still in the Labour party?He really doesn't seem to have anything in common with them does he?
I'm not sure about whether the government has a 'moral duty' to do anything. But not to massively reduce our levels of borrowing would be the height of irresponsibility.
Posted by: Malcolm Dunn | April 16, 2009 at 10:01
Frank Field is a wise and honourable MP and I hope that David Cameron might call upon his wise counsels in some form but it is very unlikely that he himself would want to be part of a conservative government.
Any government surely has a 'moral duty', which is to act in the best interests of the nation at all times.
In our case that will inevitably mean cutting back the blubber that Brown has built up over the years (Cleethorpes Rock made some very good suggestions yesterday).
It will also mean scrapping one or two hugely expensive projects such as the ones suggested by Frank Field - or perhaps withdrawing from the EU - in order to make a big immediate difference.
Unlike Blair and Brown, we should hold this once great nation in trust for our children, not mortgage them up to the hilt.
Posted by: David Belchamber | April 16, 2009 at 10:01
@clive elliot
Now that would be something - 3 defections from Labour to our party.
Even the BBC couldn't play that one down!
Posted by: Freddy | April 16, 2009 at 10:03
At least Frank Field's thinking is going in the right direction in suggesting some modest expenditure cuts. But modest is the word - a mere £5 billion here, £10 billion for ID cards, universities & etc.
But yet again, the elephant in the room is STILL invisible, even to Mr.Field, much of the MSM, and all Front bench spokesmen and their Shadows.
How can they STILL miss the astonishing and unacceptable costs of EU membership as potentially the most effective cut of all? But they do!
Cut out this monstrous haemorrhage of £56 Billion net p.a. from the British taxpayer to the EU coffers (inclusive of the CAP, CFP, and imposts on British business by regulation), then in three years we could begin to redress much of the present budget deficit - something like £168 Billion in that period.
Come on Tories, wake up - start THINKING for a change!
Posted by: graham wood | April 16, 2009 at 10:06
Come on Frank see sense and join Conservatives.
Posted by: Gary | April 16, 2009 at 10:07
I have great respect for Frank Field as a person and a politician who has a real care for the country.
I wouldn't bring him into the conservative party though, as while his diagnosis of the problems is spot on I would be unsure whether his solutions aren't on the left.
Second, we need a competition of ideas in parliament and a good opposition to the conservatives to ensure they are kept on their toes. Ideally - while there may be some room for cooperation - I would hope that the opposition to the (hopefully) next conservative goverment would be led by honourable men and women like Field rather than the current scum at the top of Labour.
Posted by: Jonathan | April 16, 2009 at 10:28
I don't think he will be happy in the Cameron Conservatives. I know I wouldn't be and their plans will be short-lived in any event because if the IMF come in they will impose swingeing cuts across the board even in Mr Cameron's pet areas such as the NHS. If Mr Cameron is prepared to make cuts, shouldn't he level with the public now?
Mr Field may as well stay as an independent commentator where he is.
Posted by: Henry Mayhew - ukipper | April 16, 2009 at 10:30
cutting spending is not a magic bullet. I work in the private sector and do plenty of work in how companies need to invest at the moment, and i believe the Government has to do the same. If they don't, we'll be worse off. The money has to come, and it has to come from somewhere, and that somewhere is the government otherwise the market will over-correct
Posted by: Bearded Socialist | April 16, 2009 at 10:44
Public spending cuts are nearly ALWAYS a good thing.
Only the defence budget should be retained/increased.
Posted by: Robert Eve | April 16, 2009 at 10:47
YES. Make a note Mr Osbourne.
Posted by: Jack Iddon | April 16, 2009 at 10:53
"If Mr Cameron is prepared to make cuts, shouldn't he level with the public now?"
Mr Cameron seems to me to be completely out of his depth. I hope I'm wrong; maybe it will be a case of “come the hour, come the man” but, thus far, there seems little evidence of this.
Might I suggest to my Tory friends that, since Gordon has completely blasted both his feet off so you will not now require Mr Cameron’s supposed PR skills to win the next GE, you should think about sending the boys back to the school room and find some men to lead our country throughout what, as Frank Field rightly sates, may be our darkest hour since 1940?
Posted by: David_at_Home | April 16, 2009 at 10:54
There is not only a moral duty to drastically cut public spending but a vital economic one too. Any future Conservative Government has to bring back the concept of personal responsibility and not to further encourage vast bulks of the population to rely on State handouts
instead of actually working to better their standard of life.
Posted by: JS | April 16, 2009 at 10:55
I agree with Graham Wood. The EU is a huge net loss to our economy in which we subsidise our economic rivals.
Will anyone do anything about this? I doubt it
Posted by: rcs | April 16, 2009 at 10:58
"At some stage the Government will wake up to the awful realisation that borrowing on its projected scale might just be a rather difficult operation."
It already has; and at some stage the Tories may wake up to the awful realisation that the Labour party has solved that problem, or at least put off the crunch point for long enough to borrow its way to a possible general election victory next spring.
If anybody in the Tory party is interested, the Bank of England reports its purchases of gilts here:
http://www.bankofengland.co.uk/markets/apf/index.htm#giltresults
This Tuesday, another £3.0 billion of new money created by Bank and used to buy back previously issued gilts.
Plus yesterday, another £3.5 billion of new money created by the Bank and used to buy back previously issued gilts.
Total this week, £6.5 billion, to be added to the previous running total of £25.0 billion, = £31.5 billion of new money created and passed to gilts investors by buying back existing gilts, making it easier for said investors to buy new gilts issued by the Treasury's Debt Management Office:
http://www.dmo.gov.uk/index.aspx?page=About
Yesterday, £0.5 billion of new gilts sold; today, £4.0 billion of new gilts to be offered for sale; so total this week will be £4.5 billion borrowed.
So like last week, the Bank is buying back previously issued gilts faster than the Treasury is issuing new gilts to fund the budget deficit.
Eventually this silly game must come to an end, but basically the Government has a novel funding mechanism which should see it through this year at least.
George Osborne has nothing to say about this "money-go-round", even though it could just prevent him from becoming Chancellor ...
Posted by: Denis Cooper | April 16, 2009 at 11:11
It is not only a "moral duty". As in 1940, it is a question of survival.
Posted by: Dorothy Wilson | April 16, 2009 at 11:13
Denis Cooper, I wonder if any of this actually gets through to our seemingly somnambulent leadership? Cameron and Osbourne are without doubt Brown's best hope of re election.
For heavens sake can we not do something about these useless people elected to leadership, but clearly incapable?
Posted by: Jack Iddon | April 16, 2009 at 11:24
There is a certainly a moral imperative that each generation should leave the world and the economy in as least as good a state as they would have hoped to find it for the benefit of succeeding generations.
There is a more pressing economic imperative that says this level of spending and borrowing is unsustainable. Government spending is now 48% of GDP, but the government only raises 75% of that figure through taxation. The balance will be paid for currently by borrowing and repaid by future generations.
The implications for Britain are disastrous in aglobal economy. Any inbound investor knows that any enterprise here will either be burdened by those debts or will employ staff who will need higher wages to pay for the debts incurred by this generation. Current government largesse has ruined our future prosperity.
Posted by: Mark Williams | April 16, 2009 at 11:49
We get a lot of good out of the EU. I'm all in favour of reforming it, cutting out a lot of the bureaucracy and focusing on proper things rather than the straightness of bananas, but I will stand up and defend the EU. Remember how much more business we do with Europe (both ways)
Posted by: Bearded Socialist | April 16, 2009 at 11:51
I actually think that investment now is the best path to lower debt in the future. I'm in my early twenties, so i'll be working to pay off this debt through my taxes etc etc.
I don't mind the government running up this debt as investing now is our best chance for future prosperity. It's true in the private sector and its true in the public finances too
Posted by: Bearded Socialist | April 16, 2009 at 12:18
Don't worry too much - a lot of the debt will be owed by one branch of government - the Treasury - to another branch of government - the Bank of England - so in the end that may just be cancelled. The price of doing that will be increased inflation.
Posted by: Denis Cooper | April 16, 2009 at 13:05
Inflation in the classical sense is the increase in the money supply, precisely what HMG is doing now.
It penalises the prudent and rewards the profligate. Never sensible policy, but then democracy does suffer from its bread and circuses moments...
Posted by: Bexie | April 16, 2009 at 13:30
Having worked in the public sector for the last seven years I have seen first hand the huge amount of money that is wasted.
It's really depressing, makes me very angry.
Posted by: Catriona Mackenzie | April 16, 2009 at 13:57
"Remember how much more business we do with Europe (both ways)."
Yes, but trade goes round the world without the need for cumbersome political arrangements like the EU. They need our trade & we need theirs, so a trading relationship can be arranged. I take the point that there might be some disjointing, but we'll benefit so much from the end of onerous regulation that we'll get a net gain.
I do not yet commit to withdrawal but it must be an option if we cannot achieve reform from within. I doubt whether we can persuade them to just drop the protectionism & other restrictions they love to impose.
I generally support the entry of hard-working Poles, Slovaks etc. into this country. I would like relatively easy access for people from European countries who wish to enter. But again, it's all about bilateralism rather than being beholden to follow what the EU deems we should do.
Posted by: asquith | April 16, 2009 at 14:07
The problem we have is that Politicians say one thing and the faceless bureaucrats in the civil service do the exact opposite.
When economies are required, those bureaucrats will do anything to protect their own positions while maximising the embarrasment for their political masters of whatever party. When did you last see a council or civil service department reducing the numbers of middle management and administrators (no I thought not)
So long as we remain in the mindset that Government must provide etc we will never rebalance the situation.
We now need to have the debate as to what is the role of government and who is best placed to provide those essential services we all want and how should they be paid for.
Posted by: Stewart Geddes | April 16, 2009 at 14:14
Asquith...
We do not need to be in the EU to be part of the EU trade area. Reagan dreamed of a Pan Atlantic free trade area, that would be most preferable
Stewart...
We should be asking what business government should be involved in. As some sage said Government Governs, Business does Business, in otherwords Government is there to provide a collective big stick to apply to businesses that fail to deliver what they say, or rip us off.
Posted by: Bexie | April 16, 2009 at 14:20
"Remember how much more business we do with Europe (both ways)"
We actually have quite a large trade deficit with the EU.
Posted by: Dorothy Wilson | April 16, 2009 at 16:22
Frank Field is one of those Labour MPs who is a credit to that strand of British political thought and I hope that after the inevitable implosion of the current Labour party he and his ilk are able to rebuild it free from Fabian class war and the politics of greed and state dependency.
Posted by: Eleanor McHugh | April 16, 2009 at 16:36
Of course there is a moral duty to cut public expenditure: when it has become such a bloated behemoth, seemingly out of control, the duty is clear. Today's FT lead story reports the imminence of public expenditure at the rate of 48% of GDP, not seen since the early '80s when it took several years for the Thatcher government to bring it down to 41% - a level still exorbitant, a gross imposition on the people. Taxation and State expenditure beyond the minima necessary to pay for defence of the realm, internal order, and security of the currency, is theft. Theft is immoral.
Posted by: Malcolm Stevas | April 16, 2009 at 17:17
Of course Government has a duty to cut public expenditure. Just a small word of caution though, whilst it is perfectly true that pruning is a good thing, over doing the pruning could be fatal. We need an ordered retreat to sound fundamentals, not a forced rout. Yes expenditure will be cut, and there will no end of bellyaching. If we are wise and cut hard there will be season of angry people. So these cuts will have to be seen as fair and not simply cost cutting. Loads of jobs are going to be axed from Labours much expanded bureaucratic machine. The trouble is a lot of the softer Jobs are in the hands the new generation of Graduates and they are unlikely to go quietly. Much of the fat can be trimmed with little disruption to the running of the economy.So this is going to produce a wave of unemployed people. We are going to reform Welfare ? I can assure you nobody is willingly going to subsist on less than £70 a week. Worse a lot of these people will have homes and families, this cost cannot be over looked when we make plans that will certainly add to the problem. We need to quickly inject a note of hope and make some significant reforms that increase freedom. This way we can carry the people with the tsunami which we know is expected to follow the false recovery. We are still dependant on oil, this is a very unwise position to remain in. China is in recession and still expanding but will come to the same cropper.
Pulling back from the brink will be a generations work at least.
Posted by: Ross Warren | April 16, 2009 at 17:37
Absolutely!
We have been living beyond our means for years. We have encouraged a reliance upon the state and we are still doing it.....but worse.
People in this country need to get a grip on reality. Unfortunately it will be the Conservative party who will have to do it, leaving us open to attack from the lefties.....again.
Posted by: Tony | April 16, 2009 at 20:52
The qualifcation I would add is that defence spending is one area of spending that needs to be increased (given immediacy of front-line commitments). And a lot of very good jobs are reliant upon very necessary defence projects.
However scapping the ID card scheme is an excellent idea.
Also scapping the increasing regime of redtape/bureacracy (since 1997) upon the business sector should bring in more revenue through lowering the burden upon wealth creation. Any thoughts?
Posted by: John Barstow | April 16, 2009 at 21:28
What about scrapping the new supreme court? If we kept the Law Lords where they are it would save quite a bit of money, and they do a perfectly fine job in committe room 1 at a fraction of the cost it will be come September.
Posted by: James | April 16, 2009 at 23:43
Don't offer Frank Field a job.
After six months, he will have fallen down the stairs and smashed all the furniture.
Posted by: Joe James B | April 17, 2009 at 00:51
I absolutely support James in scapping the new supreme court.
New Labour's doing away with the perfectly workable Law Lords is an ultimate in examples of 'change for changes sake and with next to no thought of practicalities.
Those middle class 'Islington intellectuals' who drive these changes are a particular bete noire of good Conservatives.
Posted by: John Barstow | April 17, 2009 at 07:47
The words "moral" and "duty" are not in the government's dictionary. Others deleted by "new" labour include "truth", "honesty", and "decency". I won't go on or we'll be here until the General Election, assuming Brown doesn't declare a state of emergency for himself, and cancel it.
Posted by: John Lee | April 20, 2009 at 01:40