The “cuts”

Throughout the Thatcher era Labour claimed public spending was being cut. Each year it rose. In 1978-9, the last Labour year, total public spending was £75 billion. By 1989-90, the last Thatcher year, public spending was £200 billion. This was up every year and up after allowing for general inflation.

According to this year’s budget plans, public current spending will rise from £600.6 billion in 2009-10, the last Labour year, to £692.7 billion in 2014-15, the last planned year of the Coalition government in this Parliament. That’s a rise of £92.7 billion, or more than 15%: a rise of £1500 for every man,woman and child in the UK.

Total spending including capital will rise from £669.3 billion in 2009-10 to £737.5 billion, a rise of £68.2 billion. This shows that capital spending will be cut, according to the plans inherited from the last Labour government which the Coalition government has accepted.

So why then do we hear so much about cuts?

There are three main reasons.

1. Some departments and Councils had wildly optimistic plans for increased public spending over the next five years. They are now having to cut the increases in the plans. This is very different from having to cut important things they are already spending on.

2. Many public sector managers believe in the “parade of the bleeding stumps” to try to frighten or shock the Treasury and the Cabinet into making more money available. They deliberately claim they have to cut important things to force the hand of the paymasters. It was always thus. When it comes it to it, if they do not get more money, they often then manage things more sensibly and avoid the bad cut. Sometimes they go ahead regardless, cutting clumsily to make a point.

3. The Treasury has asked to see what larger cuts in spending would look like, as they presumably wish to establish new priorities and need to see what could be achieved by cutting in one place to spend more in another. The Treasury’s requests have given departments more scope to play the “inappropriate cuts” game under item 2.

If a major private sector company needs to cut its costs – or reduce its forecast increases in spending in future years – it usually does so in private, hammering out what is feasible without worrying customers and shareholders. A leading retailer, for example, would not start off by saying in public they would have to open the store for shorter hours, cut out a couple of departments or worsen the quality of the service. They would normally look at how they can they cut stocks without cutting product availability, how they can do all the back office functions with fewer staff, how they can they buy better.

We need a new tone and approach to public sector budgets. It is bizarre to listen to this debate about massive cuts, when we know that overall spending will rise. It will be a sign of very bad public sector management in individual Councils and quangos if we end up with clumsy cuts in services, when the overall spending totals allow us to avoid such an outcome.

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60 Comments

  1. JohnnyNorfolk
    Posted August 12, 2010 at 9:19 am | Permalink

    Thank you John. This is what Newsnight stopped you from saying last night. I remember a time when the BBC has reasoned debate. Now it just ensures that Labour can spout its party line. The BBC does not like the truth only its own beliefs.

    • Mark
      Posted August 12, 2010 at 11:36 am | Permalink

      She Warked into it though, didn't she?

      • Stuart Fairney
        Posted August 12, 2010 at 7:31 pm | Permalink

        So who exactly do those of us who actually want a smalller state vote for? Not you as above, or the Liberals, certainly not the socialists, so who?

        Kinda makes you think the whole thing is a farce eh?

        Did you want to get into politics to increase the state year on year? Do you really believe in this?

        How is the portrait in the attic?

    • Posted August 12, 2010 at 11:39 am | Permalink

      Of course the BBC lies. When there main channel 4 fianancial program money box states the debt is 175 billion, what do you expect?

      However, I'm deeply worried about John saying that spending is going to increase. To balance the books needs cuts of 30%. He's trumpetting the failure to get spending under control

    • THE ESSEX GIRLS
      Posted August 13, 2010 at 11:19 am | Permalink

      However, Johnny, Guido Fawkes blog yesterday made good reading….

      "Last night John Redwood flummoxed Kirsty Walk on Newsnight (here) when he said that the government was not cutting public expenditure. She didn’t really know where to go with her line of questioning since it was so off her script. The BBC weltanschauung is that we will soon be seeing massive and terrible cuts in government spending which will provide endless material of the grinding down the poor and vulnerable kind for them.

      The truth, as Redwood points out, is that the government is still planning on spending rising every year, government debt will continue to rise year-on-year and the deficit will not be closed even in 2015. The unfunded overspending will be restrained in comparison to Gordon Brown, but will continue regardless. This government will continue to spend more than it receives and the budget will not be balanced. There will be no overall cut in spending…"

  2. Adrian
    Posted August 12, 2010 at 9:33 am | Permalink

    "According to this year’s budget plans, public current spending will rise from £600.6 billion in 2009-10, the last Labour year, to £692.7 billion in 2014-15, the last planned year of the Coalition government in this Parliament. That’s a rise of £92.7 billion, or more than 15%: a rise of £1500 for every man,woman and child in the UK."

    And according to the Office of Budget Responsibility, public current spending on membership of the European Empire has been revised upwards for 2009/10 to £8.3bn, from the previously estimated £7.6bn. It is due to rise to £10.3bn a year by 2014, again according to a revised estimate from the Office of Budget Responsibility (OBR). That's a rise of £2.7 billion, or more than 35%.

    These figures do not take into account the cost of regulations, and therefore mask the true cost of membership by a great deal.

    UKIP Leader Lord Pearson has introduced a Private Member's Bill calling for a public inquiry into the cost to the UK of its EU membership. First reading took place on 19 July.

  3. stevec
    Posted August 12, 2010 at 9:44 am | Permalink

    Fully agree John. But why then aren't the Government and their advisers making this point at every interview, every day? Why do they themselves talk of 'pain' & 'cuts'?
    it's bordering on incompetence to allow the agenda to be about negativity all the time.

  4. EJT
    Posted August 12, 2010 at 9:45 am | Permalink

    So, do you bypass the "bleeding stump merchants", or leave them in the loop and hope that they see the light when cuts are forced on them ?

    Whatever the politics of the milk saga, it was desperately bad management. The minister is shown not to be empowered to make a £50M decision.

    • Mark
      Posted August 12, 2010 at 11:41 am | Permalink

      I'd set a John Harvey Jones style televised expose on them. Meeting the real workers in the canteen, and listening to them talk of incompetent management, talking to the middle manager whose ideas have been blocked, etc. Now that would be real public service television.

      • Posted August 12, 2010 at 11:06 pm | Permalink

        There was such a programme, in which Gerry Robinson went into a hospital and left exasperated by the bad management, waste and inability to make changes to improve things without going through a massive bureaucratic maze. We have also had Digby Jones talk of the overmanning in his department when he was in government. So far the message has not got through, we need much more of it.

  5. Posted August 12, 2010 at 9:51 am | Permalink

    No mention of inflation? What will £669.3 billion be after five years of inflation?

    Politically, at least to Labour, a cut is a reduction in service. It doesn't matter what the numbers are. While this argument might be technically correct I don't think the public would buy it and I doubt if Labour would let it go by without throwing political mud around.

    There will be reductions in service and the public are currently supportive of this. I think that for Osborne to use this argument would make him look foolish at this point.

    • John Bracewell
      Posted August 12, 2010 at 11:44 am | Permalink

      Depends of course on whether the 2015 planned spending figure (£737.5bn) has been adjusted to take account of inflation but if not then…..
      Assuming 4%,3%,2%,2% in years 2010,11,12,13 respectively £669.3bn is £745bn of spending in 2013 which is £8bn more than is planned to be spent in 2015, so it is realistic to say that there are cuts on the way, but not as severe as the government is making out. It looks like by their argument of austerity, they hope not only to reduce the deficit but to start to make some small impression on the debt, for political benefit at the next GE.

      • Posted August 12, 2010 at 1:03 pm | Permalink

        Thanks for doing the maths for me 8)

        The plan is to cut the structural deficit, but that does not mean the whole deficit. That still potentially allows deficit spending for investment and for deficit spending during a downturn that is repaid during the boom years.

        If there is any money left over after the cuts expect most of it to go to tax cuts. Labour are already predicting them as a justification for cutting slower.

        My prediction is that Osborne will finish raising the tax allowances to 10K and remove the 50p tax rate in the 2014 or 2015 budget. That should give both the Conservatives and LibDems something to campaign with. Labour won't be able to fight the first but will fight the second.

  6. Posted August 12, 2010 at 9:59 am | Permalink

    Off topic:

    What is the point of having a target framework for the BOE if they consistently miss it? It just makes the BOE look ineffective which damages it's reputation and reduces confidence in the system.

    Is it not time to re-write the BOE goals? If so, what should they be replaced with? Maybe we could just increase the inflation target because of 'special circumstances' but time limit it?

    Also, why does the BOE have different growth projections to the OBR? The media (mainly BBC) used a downgrade in the BOE growth projections to predict doom and gloom. This whole double dip issue is scare story from the left to organise resistance to the 'cuts'. Letting the BOE have it's own growth projections, especially ones that are too high, is just handing ammunition to our opponents.

    I know that George Osborne is busy, but hopefully after the spending review he can spare some time to sort out the monetary framework for this country because quite frankly it is a mess.

    A subject for a future blog post, perhaps?

  7. A David H
    Posted August 12, 2010 at 10:10 am | Permalink

    If the government is incapable of controlling the story about whether its budget represents a cut or an increase in public spending, what prospect is there that it will be able to govern the country? About as much as it will be able to recover powers from the EU or prevent new powers going to the EU without a referendum?

    If, as we are told, the country is heavily overspent, why are we getting pretendy cuts instead of real cuts? Too much flimflam, how are we to believe anything we are told?

  8. Brian Tomkinson
    Posted August 12, 2010 at 10:11 am | Permalink

    Im glad you have returned to expose this sham argument. We are given a daily diet of media stories about the severity of cuts how bad things are going to be and then the same people express surprise and more gloom when they report that public confidence in the future of the economy is dwindling. Yesterday was a prime example – the BoE announced that they were reducing their forecast growth figures which had been something like 50% higher than the average of other economists including the new OBR and bringing them closer to that consensus – the media seized on this as evidence that the economy was heading for the rocks and this was a result of the "cuts". The government must accept some responsibility for this as they have been pleased to hear how tough they were going to be when in fact, as you point out, they are planning to spend even more money year on year than their profligate Labour predecessors. The danger they run is that the myth will take permanent root and that any changes they do wish to make will be opposed vehemently. We have seen an example of this already with last week's U-turn on the provision of free milk for children under 5. Are we really to be denied the opportunity to bring government expenditure under proper control, stop the massive waste and poor efficiency in public funded departments? It is rather looking that way.

  9. Andy
    Posted August 12, 2010 at 10:20 am | Permalink

    The State is hopeless at managing anything. The only way to control these things is to hand as many functions as we can back to the people, allowing them freedom to chose how and where to spend their own money.

    The BBC is running the 'how terrible the cuts are' line at every verse end. Fed up of listening to it.

    • Peter Grimes
      Posted August 12, 2010 at 10:41 am | Permalink

      Well the BBC would hardly be expected to parrot any other line given its partiality, Andy, would it?

    • Lola
      Posted August 12, 2010 at 12:19 pm | Permalink

      Seconded. Saved me fom posting something similar

    • Posted August 12, 2010 at 1:05 pm | Permalink

      If you listen carefully there is a new verse that they are sneaking in. That is the famous 'double dip' that no economic forcaster is actually predicting. It is all part of the fight against the cuts though.

  10. Posted August 12, 2010 at 10:33 am | Permalink

    It should be made clear that any Civil Servant or State employee who releases details of how any cuts might affect his area of work will be fired. This is confidential information, and until a formal announcement is made, they should keep their mouths shut.
    When a public company has to make cuts, departmental managers don't go around shouting in public how these will effect people, they just get on with the job and make them work, because they know if they don't they will be out of a job as someone else will take over.
    Strange, I have never heard someone from the public sector saying "Yes, these budget cuts are severe, but I'm determined to make them work without any loss of service"!

    • evie
      Posted August 12, 2010 at 6:08 pm | Permalink

      They aren't saying that because it will be impossible to deliver the same service on such a vast reduction.

  11. Bill
    Posted August 12, 2010 at 10:45 am | Permalink

    Agree with all of the above. My view is that there has been an enormous increase in the regulatory sector over and above any management costs. My eyes were opened when I met someone who told me her daughter was doing a BA in Health and Safety. I work in the public sector (education) and this is what we see. A report on the University of Wales some while ago found that only about 38% was spent on teaching students and the rest is management which, in effect, is a number of bureaucratic control systems staffed by poorly paid (and therefore inefficient) staff. Ten years ago you could put on a new degree course with a peer group decision and a few pages of description. Not now.

  12. Posted August 12, 2010 at 10:51 am | Permalink

    Since we are only seeing cuts in "real" terms (due to projected inflation) and not in cash terms. Is it not true that the best way to keep the cuts down over the next 5 years is to keep inflation down?

    Should that not be a priority for economic management, for the good of us all? And should the bank of England therefore not get off its backside and do something about this?

  13. Avikal
    Posted August 12, 2010 at 11:18 am | Permalink

    The BBC has a vested interest in their Left Wing propaganda being spewed out that "Big Cuts are Hurting us" because they know that the Government would like to drop our annual licence fee to under £100 pounds per house hold. This would force the BBC to have just ONE Commentator on Overseas Events and NOT three as they do so frequently, particularly for sporting events

    • grahams
      Posted August 12, 2010 at 4:20 pm | Permalink

      The BBC licence fee has nothing to do with deficit reduction. I agree that the feud between BBC News and Current Affairs and the Conservative Party is disgraceful but it goes back nearly 30 years and needs a high-level peace mission to sort it out, not a revenge attack under cover of fiscal responsibility.

      • Andy
        Posted August 12, 2010 at 11:45 pm | Permalink

        Oh it is more than that. The BBC is 'institutionally leftist'. It hates conservative ideas in any and every shape and form, not just in News and Current Affairs reporting and comment, but also drama. It is almost impossible to get a play or whatever made which has what might be termed a 'right of centre' message. The BBC is so bias it really cannot see it, as was illustrated last night on Newsnight. A simple solution is to make the BBC live in the real world rather than in subsidised lefty heaven.

  14. Chris W
    Posted August 12, 2010 at 11:28 am | Permalink

    "A leading retailer, for example, would not start off by saying in public they would have to open the store for shorter hours, cut out a couple of departments or worsen the quality of the service."

    Of course they wouldn't, because poorer service would lose trade. But government departments can't lose trade, they have a monopoly, so inevitably their bosses will protect themselves and cut the front line staff.

  15. Posted August 12, 2010 at 11:46 am | Permalink

    4. Government departments (and local authorities) have a lot of inbuilt inflation due to people moving up bands of NJC pay scales. Often the 'career graded' posts guarantee a 2.5% – 3.5% pay rise year on year for 8 years.

    5. Government departments (and local authorities) allow employees to go on 'flexible retirement' meaning that they roll over their 40 years redundancy rights after they claim their pension and come back on a 2 day week. They all know they are in line for a £10k payout of they hang on a few more months.

  16. Richard1
    Posted August 12, 2010 at 11:55 am | Permalink

    Excellent summary – I wonder why Coalition ministers arn't so clear? An excellent letter from Eric Pickles in yesterday's FT saying lobbying of government for funds by publicly-funded bodies should be outlawed, as in the US. Lets hope they do that.

    • EJT
      Posted August 12, 2010 at 1:35 pm | Permalink

      "should be outlawed, as in the US"

      Very interesting – didn't know that. Is it administratively forbidden, or a criminal offense ?

      • Richard1
        Posted August 12, 2010 at 8:30 pm | Permalink

        Dont know. See Eric Pickles's letter in the Financial Times yesterday in reply to a lobbying letter on 9/8 (I think)

  17. Mick Anderson
    Posted August 12, 2010 at 11:59 am | Permalink

    As a Nation we are over-taxed, and the Coalition intends to increase spending (and thus taxation). There is still a massive deficit, which is increasing the amount of debt and interest that we are going to have to pay. This deficit is unlikely to be at zero even at the next General Election.

    Inflation is comfortably outstripping either wage increases or the meagre return on our savings. So, as a proportion of my income, it is most likely that taxation is going to rise.

    Who can I vote for if I want real cuts and lower taxes?

    • Posted August 12, 2010 at 1:10 pm | Permalink

      >>Who can I vote for if I want real cuts and lower taxes?

      Who ever you like, they won't get elected.

      Lower taxes will come from the Conservative party when the growth in the economy generates extra tax income but only after the structural deficit is cut. IE. 2014 onwards.

      • Norman
        Posted August 12, 2010 at 10:46 pm | Permalink

        It's a pity we've completely abandoned conservative thinking. Once upon a time it was believed that lower taxes was a driver of economic growth, not the other way round.

    • Electro-Kevin
      Posted August 12, 2010 at 6:47 pm | Permalink

      Mick Anderson – I agree. Over-taxation exists and it is meekly accepted because of the modified definition of 'middle class'. To be called middle class is flattering and appeals to vanity – useful when your people are getting poorer in real terms.

      Mr Cameron alludes to the 'sharp elbowed' middle class when they are nothing of the sort. £42k pa is quite achievable on benefits and yet the point at which someone becomes middle class is much lower than that. It is then that they become the target of a range of imaginative taxes and disadvantages.

      Mr Cameron is about as middle class as a bottle of Petrus. His smeer of the middle class as 'sharp elbowed' (albeit self-deprecatingly) is insulting and wholly inaccurate. It shows lack of understanding. He's never known what it's like to worry about a gas bill or petrol costs, let alone that his kid might end up in a classroom full of hoodies.

  18. Posted August 12, 2010 at 12:00 pm | Permalink

    Mr Redwood. Are government sources talking up cuts to "look good" later?

    Decisions to revise and re-prioritise public spending to focus on Coalition goals, reduce waste, encourage thrift are eminently sensible. It would be possible to argue this cogently without worrying the public and business.

    It is the government itself that is consistently talking about sustained cuts in public services. It should be no surprise the news media are reporting this with startling headlines … "news reporting" is now about debate stimulation, not repeating press releases. I'm not sure this provides any evidence of bias …. remember the last government was livid about bias too!

    Is the plan to talk tough to impress the markets ….. then deliver modest change and claim successful protection of vital public services?

  19. Emmanuel Efunbote
    Posted August 12, 2010 at 12:28 pm | Permalink

    Thank you John for this incisive analysis, I believe the point is not made enough about what is feasible when the stragulation of the nanny state is lessened. The quest for viable alternaives in itself is a good dynamism for the economy and the people, such alternatives might involve some element of risk but with this comes the reward of personal achievement, satisfaction and self-worth, all beneficial to the individual and the Nation. Would it therefore be wrong to say that the talk of the age of austerity is begining to expand peoples' options? Especially in the area of part-time employment. The Office for National Statistics states that employment is up 104,000, and that the quarterly increase in total employment was mainly driven by part-time workers, which increased by 115,000 on the quarter to reach 7.84 million, the highest figure since comparable records began in 1992. The number of full-time workers increased by 68,000 on the quarter to reach 21.18 million. A mere coincidence or the reality of a Conservative (Coalision) government that encourages individual choice?

  20. Henry Male
    Posted August 12, 2010 at 12:43 pm | Permalink

    Does the current spending total include the cost of servicing the debt? Given how fast this is rising (still, unfortunately), it is surely perfectly possible to combine rising public spending with falling expenditure on services. If this is right, it perfectly illustrates the cost of Labour's failure and the need for spending restraint.

    reply: If policy encourages confidence and keeps interest rates down, the pressure on debt service is reduced. Asset sales could also be used instead of some debt to cut the rising interest bill

    • Mark
      Posted August 14, 2010 at 2:55 am | Permalink

      The interest bill on the £720bn or so of conventional gilts in issue is fixed. The interest bill on the £200bn of indexed linked gilts rises with RPI inflation. QE is masking some of the real interest bill, because there are £200bn of gilts held by the BoE. If we get high inflation, nominal interest rates will be forced sharply upwards on newly issued gilts – but the real burden of debt will on average reduce. In a high inflation environment with artificially low interest rates , there is a danger of hyperinflation and currency collapse, because the currency is seen to be "dishonest".

  21. A G
    Posted August 12, 2010 at 1:04 pm | Permalink

    When is a cut not a cut? Answer, when it's a reduction in the expectation of a future rise in expenditure or payment. It's all weasel wording. Try telling the people who have lost part of their future expectation of a pension indexed to RPI that there is no cut. Try telling savers who are experiencing negative rates of interest in real terms after allowing for inflation because of BOE policy, that there is no 'cut'.
    You are absolutely right to point out that overall public expenditure will rise but the government seems happy to coast along with the narrative of hard times presumably to stop rebellion in the above groups. It can't then turn around to public sector managers and tell them everything's rosy so stop whingeing.
    I think that the muddle and confusion in presentation and management are a direct result of political cowardice and dishonesty. This isn't a cutting government it's a robbing government .
    The conclusion to your post is that state spending will increase under Conservative governments. I wonder how many Conservatives voted for this in the last general election?

  22. F0ul
    Posted August 12, 2010 at 1:05 pm | Permalink

    I really am surprised that this is not known by more of the general public.

    However, while we are currently seeing the socialists all at it, we have to remember that the Tories are just as good at squealing like pigs when it comes to manipulating the story!
    Remember when it was decided that it was time to stick VAT on fuel? Fuel is a luxury after all! Remember how the story was manipulated to declare a victory as the rate was only half the normal rate?
    Everyone was careful to forget to mention that a real victory would have been to not stick VAT on fuel – but that's politics for you!

    I am coming to the conclusion that politics is totally broken and will never be fixed – so why should I waste whatever time I have left on the planet watching them all hamming it up for the cameras and their meaty pensions?

  23. Posted August 12, 2010 at 1:05 pm | Permalink

    It's unusual for me to disagree with you, John. But I can assure you local councils are facing the threat of real cuts. I'm not saying there isn't room to make savings (Im sure there is) or that we should expect endless rises in available budgets. But the idea that the cuts aren't "real" and aren't forcing councils to make hard choices is not correct.

    And its a damaging thing to say too, because those of us struggling with lower budgets have been saying to residents: "This is what Labour has left us with" and on the other hand you are saying: "that's rubbish – there's just as much money." Unhelpful and, I believe, wrong.

    reply: This year Councils will spend more than last. We have not yet seen the proposed spending level for next year.

    • Posted August 12, 2010 at 7:33 pm | Permalink

      It suits people like Mr Tierney to blame people like you for the 'cuts' John. The last thing they want is for their residents and officers to ead their accounts and see how much in the way of PFI and pension's liabilibilites are about to explode in their faces.

  24. Posted August 12, 2010 at 1:45 pm | Permalink

    That article would have been even if it included the phrase "shroud waving".

  25. Steve S
    Posted August 12, 2010 at 1:51 pm | Permalink

    I would like to see a fundamental re-negotiation of our EU contribution. We should withhold at least 20% of the contribution and then argue it out later. There can be no justification for this grossly indecent level of funding for the EU from Britain.

    On another note, Wark was completely caught in the Redwood headlights last night and it was a joy to watch her face drop as the Labour spin was revealed to all as clear as day.

  26. sm1
    Posted August 12, 2010 at 1:59 pm | Permalink

    How much of the 'increase' will be spent on the bureaucracy rather than the frontline service?

    Could we not establish bounties for 'independant consultants' to find savings in some of the departments?

    Could we not establish bounties for 'independent consultants' to monitor pursue potential overclaiming of expenses,by MP's, Senior quangocrats etc?

    Could we not do the same for potential tax evasion?

    When is the headcount cut's of MP's and House of Lords to come etc.

    Meanwhile i read more about special BBC pension pots- funded again by those who probably have no pension provision?

    • evie
      Posted August 12, 2010 at 5:59 pm | Permalink

      Why aren't you angry and asking questions of the private companies who fail to provide their employees access to decent affordable occupational pensions?
      Why do you appear to want to level people down to the deplorable standards which are set by those private companies – who are content only when making massive profit – profit that is possible only by paying minimum wages and reducing terms and conditions?
      And why do you seem content to accept that all public sector pensions provide a bonanza to their pensioners – when the truth is that a large percentage of such pensioners qualify as 'poor' under any calculation.
      Private companies in the Nordic countries manage to provide affordable and high-performing pensions. Private pensions there have significantly lower 'charges' than the rates charged in the UK. Why aren't you lobbying to ensure that employees of private companies are given the best pension deals – instead of trying to reduce all employees in the UK to the poor levels set in the private sector.
      How much money should we put into the pockets of 'independant consultants' – only for them to come up with 'cuts' that the ordinary front-line worker could identify?

  27. Duyfken
    Posted August 12, 2010 at 2:01 pm | Permalink

    I had the impression of the Newsnight discussion that it was wrapped up by the BBC more quickly than originally intended, probably because you were getting the much better of the argument.

  28. evie
    Posted August 12, 2010 at 2:43 pm | Permalink

    Mmmmm…. why then have I been advised that the budget for my organisation is likely to be 21 million next year, as opposed to the 23.5 million it was for this financial year (and for the preceding 3 financial years incidentally – a static financial position which was a cut in real terms)?
    Have I to call this reduction (of 2.5 million) a rise in real terms?
    Or can I just assume that the Condems have subverted the ordinary and accepted meaning of the words 'reduction' and 'rise'?

    Incidentally, I do hope that you 'left-wing' conspiracy theorists are seeking some help for the nasty case of paranoia you are suffering from…

  29. Charles
    Posted August 12, 2010 at 4:04 pm | Permalink

    A caveat:

    Some of the spending "increase" is an increase in debt interest payments. They will rise from £35bn a year to £75bn in 2015, then onward to £100bn as bond yields soar due to demographic changes (Barclays Wealth forecast 10-year gilt yields to hit 10 per cent within a decade because of this.

    Increased debt payments aren't really proper spending. I reckon you've got to subtract the debt payment from overall spending to arrive at a useful figure.

    • Brian Tomkinson
      Posted August 12, 2010 at 6:05 pm | Permalink

      Charles,
      I suppose you don't think paying your mortgage interest is proper spending either?!

    • Posted August 13, 2010 at 9:25 pm | Permalink

      Current spending minus debt interest is forecast to rise in cash terms, it's capital spending that gives way a bit.

  30. notme
    Posted August 12, 2010 at 8:37 pm | Permalink

    Us Councillors are awaiting an anticipated budget cut of 20% to 25% in our revenue support grant. This isnt a reduction in increases, but a hard core cut. If today we receive a £10 million a year RSG we have been told to expect that to go down to £7.5 million.

    These are real. I am not saying change doesnt have to come, it obviously does, but we are talking about genuine reductions in funding here.

  31. Alan Jutson
    Posted August 12, 2010 at 9:02 pm | Permalink

    Good try in trying to get your point across last night in Newsnight, shame the interviewer did not want to listen, but then what do we expect from the BBC and the Media in general.

    They all want bad news, and if it is not bad, they are not interested. Just ask yourself how often we get a good story from the media. Virtually never.

    The argument over cuts and increased Government spending should be made clear by the Government time and time again. Whilst I appreciate you are trying to do your best John, this one should be the job of David C, George O and Nick C, with Sir Vince also in the frame.

    How much more simple can it be, but to use annual expenditure figures,

    Once again you outline very simple facts and mathematics, in a clear and concise manner.

  32. Javelin
    Posted August 16, 2010 at 4:46 pm | Permalink

    I've argued before the term "cut" shows political bias, as does the word "improvement".

    The Conservatives need to insist these terms are replaced by the neutral terms "budget reductions and increases".

    Tax and spend is a two sided sword. Your budget cuts are my improvement in disposable income. Your public service improvements are my income cuts.

    The term "cut" is blatantly political. Trying to avoid it in this way John is like trying to avoid a punch. The punch shouldn't be thrown in the first place.

  33. Gordon Sloan
    Posted August 18, 2010 at 6:42 pm | Permalink

    If the Government was really interested in economies they have a ready example to kick off with. Cancel the pope's visit next month and save over £20,000,000. If they are determined to spend this sum, let it be on our community needs – or on further disaster relief in Pakistan. As he sits on top of perhaps the world's greatest treasury, he could well fund his visit himself.

  34. Peter Rawstron
    Posted August 19, 2010 at 6:50 am | Permalink

    So how do you stop the public sector, and the media, from using extreme examples of the effects of cuts on pensioners,children and the disabled?

  35. D. Ellis
    Posted August 19, 2010 at 9:46 am | Permalink

    Re; Equitable Life and death
    So, the treasury is treating all you MPs and the PO like monkeys. Again
    Hoping for better

    • magqueen
      Posted August 23, 2010 at 5:08 pm | Permalink

      If a monkey knocked on my door right now and asked for my vote I would gladly give it. What a bunch of phoneys.

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  1. By Where’s the Cut? - Guy Fawkes' blog on August 12, 2010 at 9:03 am

    [...] me of site updates Older Post Home What Cuts? Spending is Going Up – John Redwood Gordon Goes Global – Iain Dale Advice for Dealing with Olympic Vistors [...]

  2. By Cuts? What Cuts? » Spectator Blogs on August 6, 2012 at 12:32 pm

    [...] this a good thing is, for now, a dfferent matter.) As Guido says, Kirsty Wark seemed surprised when John Redwood pointed this out last night.Nevertheless it is true. Public spending will increase from [...]

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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