Today the government is announcing one of its spending increases – £7 billion extra over four years for education. I expect when we see the total schools’ budgets we will see they will avoid cuts this Parliament.
We should also expect to see increases in the Health budget, as promised. The pensions budget will rise more quickly than before, now pensions are linked to wages not just prices. Maybe overall the whole welfare budget will rise as benefits go up with prices. The debt interest budget will of course rise as the country carries on borrowing more and more. This week we learnt that the EU budget is planned to rise by 5.5% unless the UK government can get that changed. The Overseas aid budget will increase.
Other commentators are coming round to my view that total current spending will rise every year this Parliament in cash terms, and may rise in real terms if the Bank gets inflation under control as it is obliged to do. As the largest programmes of Welfare, Health and Education are seeing increases it is not surprising that overall there will be an increase.
The latest work by the CPS pursues this theme. They add capital spending in to the totals, which does reduce the growth rate as capital spending is being cut quite heavily.
Today I read that the Adam Smith Institute has come up with £90 billion of possible asset sales for the government. A bigger asset sales programme would be a good idea. The receipts would reduce the amount the government had to borrow, and therefore reduce the rate of increase in the amount spent on debt interest. It would also be a good idea to get the taxpayer out of the risky business of banking, and get our money back from past taxpayer support operations.