Amidst all the over hyped media talk of cuts to come and massive public sector pain ahead, let’s spare a thought today for all those who have been living with cuts for many months. People in industry lost their jobs or suffered pay cuts in the deep 2008-9 recession. Savers have seen their income from deposits slashed by the low interest rate regime. Most people today in the private sector are accepting little or no pay increase at a time when prices are rising by 5.3%.
So far the spending cuts have been modest. We have not yet cut anything like as much as Ireland. Portugal and Spain, which now have lower deficits in relation to their economies. This autumn’s public spending review is going to have to identify less desirable spending as well as waste, to get on top of the problem.
It is always a good test for an MP saying such things to ask what he is prepared to see cut from his own area. Let me make two suggestions.
The first is I want to see the South East England Regional development Agency abolished. There have been words in some papers saying that maybe we will get a cut budget for this body rather than its removal. I have even had lobbying from another quango asking me to support SEEDA. Any quango which has the time and money to write to me in support of SEEDA should have its own budget and rationale examined. Getting rid of bodies like SEEDA should be easy in this climate.
The second is the case of a new secondary school for Wokingham Borough. This was placed in the Borough’s budget with an £80 m price tag owing to the large increase in homes required by the last government’s regional planners. The last government of course did not include any money to build the school, and I warned that I did not think if they stayed in office they would come up with any. I also warned during the election that I did not expect a new giovernment to be able to afford a new school in the next three years either. The Council now has the option instead of lowering the housing targets and getting by for longer without a new school.
The UK is battling to avoid the collapse in economies we are seeing in peripheral Euroland. Last night an Irish entrepreneur was telling me that many companies are going bust in Ireland. The phoenix companeis that arise in their place may cut wages and salaries by a third, and end up paying rent at half the previous level. That is savage.
We can avoid such a path. To do so we need to stay ahead of the markets in reducing the deficit. Reducing the deficit requires us all to be realistic about public spending. It also requires vigorous and sprightly private sector led revival, which in turn requires pro enterprise policies.