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Cuts, what cuts?

October 20th, 2010 Posted in Economics by

There will be much analysis of the Comprehensive Spending Review over the coming weeks. What is important economically is that the Coalition Government has begun the process of tackling the deficit bequeathed by Labour, and politically has done so in a way that is broadly pragmatic and fair. What this is not though is a mammoth cut in the size of the state.

As the table below shows, public spending in 2015 will be higher than today.


‘Cuts’ in some departments expenditure and capital are in no small part due to the rise in debt interest repayments from £43bn to £63bn per year. This as a result of this:

spending-review-figuresand this:

the-debt-challengeLabour’s economic legacy then, by 2015, is to have made debt repayment the third largest item of government expenditure. Larger than education at £58bn, and exceeded only by health £111bn and welfare £171bn.

Whatever concerns individual pressure groups and departments have about specific reductions. That is the context. “I’m afraid there is no money“.

2 Responses to “Cuts, what cuts?”

  1. AndrewM Says:

    Mr Mayer, you are either economically illiterate or you are being thoroughly disingenuous. Have you not heard of a little thing called inflation? In cash terms public spending in 2015 will of course be higher than now, but not in real terms.

    In case you are in any doubt about the reality of the cuts, the Spending Review helpfully tells us that “departmental budgets other than health and overseas aid will be cut by an average of 19 per cent over four years”. Table A.5 shows you how much each departmental budget is being cut by.

  2. Jack Hughes Says:

    Why not cut down foreign aid – cut it to zero?

    People who want to send their own cash abroad can do it themselves – but leave me out.