Public spending

There’s not a lot to add from the Statement today. As expected, total cash public spending rises every year for five years. Departmental  Expenditure Limits are flat, rising from £326.6 bn to £328.9 billion from this year to 2014-15.

There are big cuts in CLG  Communities , down from £2.2 bn to £1.2bn, and cuts at Transport, down from £5.1 billion to £4.4 billion.

Education, Health, Defence, International development, Work and Pensions, Scotland, Wales and Northern Ireland , Cabinet Office and Intelligence all have cash increases.  Home Office, Local Government, BIS, Justice, Environment and some smaller departments have cash cuts.

Capital did not suffer as large a cut in some cases as expected. Transport capital, for example, will average around the £7.7bn level of this year for each of the four years.  CLG Communitiies capital is hit hard, falling from £6.8 billion to £2 billion.

The oddest line in the printed document is CLG Local Government capital. It reads zero for every year including the first year, yet is given a 100% cut figure  in the final column.

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17 Comments

  1. JimF
    Posted October 20, 2010 at 3:19 pm | Permalink

    So devaluation and inflation have the broadest shoulders!?

    • Robert K
      Posted October 21, 2010 at 7:55 am | Permalink

      Right. A perfect example of why inflation is taxation in a different guise.

  2. P H
    Posted October 20, 2010 at 3:33 pm | Permalink

    Simply not enough state sector cuts to render private industry competitive, quickly enough, for the next election. They will regret the lost opportunity. Perhaps they can at least now do something real on regulations and bank lending and finance for smaller businesses.

  3. nick
    Posted October 20, 2010 at 3:58 pm | Permalink

    More debt…

    More spending…

    More tax …

    What do you expect from government?

    When are you going to tax the guilty? For example, politicians.

    When are you giving up your pension to pay for the mess?

    No doubt you will blame other politicians, but that hasn't stopped you taxing the middle class or all bankers.

    ie. Give us the money to keep us in the style to which we are accustomed. Let the peasants eat cake, we've got our subsidise canteen in the commons.

  4. Johnny
    Posted October 20, 2010 at 4:09 pm | Permalink

    What happens if we do not get any Private Sector Growth or Export led Growth over the next five years?

    That would mean the State spending even more of our earnings than ever before and sterling continuing to fall. Inflation is then bound to return to us.

    The Private Sector is simply in no shape to grow in order to balance out a loss of 500,000 Public Sector jobs. The Government is in Cloud Cuckoo Land.

  5. Acorn
    Posted October 20, 2010 at 4:51 pm | Permalink

    The new Board of Directors of UK PLC appear to be getting a grip of the company finances, not bad for five months at the helm. I may even buy a "call" option on the shares!
    Question JR. What does the phrase "stand part debate" mean. Chris Bryant said he wanted one Tuesday in Parliament?

  6. Brian Tomkinson
    Posted October 20, 2010 at 5:36 pm | Permalink

    Are we all supposed to be pleased that the government has flunked its opportunity to really get a grip of public spending? I suppose it’s all a game that you politicians enjoy playing – pretending to cut whilst increasing spending other people‘s money. One thing we do know is that we taxpayers will all be increasingly worse off as our taxes go up. I don't suppose I should be so surprised as I am sick of hearing your colleagues saying "I didn't enter politics to make cuts in public spending."

  7. A.Sedgwick
    Posted October 20, 2010 at 6:10 pm | Permalink

    There’s not a lot to add from the Statement today – you have got to be kidding.
    Foreign aid up 37% by 2015 – ring fencing the amount is highly questionable never mind a whopping great increase. This with defence cuts I am beginning to wonder which side Cameron and Osborne are on.

  8. MarkJ
    Posted October 20, 2010 at 6:26 pm | Permalink

    It is an utter disgrace that Britons are being forced to feel the pinch from cutbacks and made to work even longer (to 66 in 2020 and 68 by 2038) when the Foreign Aid bidget has been increased quite dramatically. It has been proven time and time again that funds sent abroad lands up in the hands of terrorist organisations, or corrupt dicatators who spend the money on things that benefit them. Also for economies that are langer than our own, so why on earth has this area received a substancial increase? A comment on the Daily Mail website quite rightly states charity begins at home. This comment has received overwhelming support from Daily Mail readers – your core vote. This is yet another slap in the face to Britons, along with yet more of their tax money being used to fund a bloated and corrupt EU Parliament.

    It is about time the Government (this and subsequent ones) got its priorities right for once – look after your own before embarking on "saving the world".

    One last thing – Train fares – at this rate no one will be able to afford to get to work, or make it unviable to travel to work. Pricing people off of the Railways is a joke! After all we are told to use public transport to save on co2 yet the cost makes it unworthwhile. The "green" agenda has been thrown out of the window in order to save a few pounds. The UK has the most expensive rail travel in the EU, yet it is about to become even more expensive!

    • Mark
      Posted October 21, 2010 at 10:08 am | Permalink

      I think that commuter fares above cheap day return prices ought to be paid by employers. They would then have to consider whether they might be better to locate elsewhere (including tele-commuting), and whether to change working hours so as to spread the load away from rush hour peaks and improve the economics of rail travel, and reduce congestion generally.

  9. The engineer
    Posted October 20, 2010 at 6:30 pm | Permalink

    Since we are clearly not going to get proper cuts in government tax and waste could we please have real cuts in pointless regulations (most), get out of the EU and CAP, a sensible energy policy, (gas, coal and nuclear which, unlike wind farms etc will actually work and be "sustainable". Also lower tax rates, that maximise actual tax revenues rather than driving them abroad.

    If we get those industry might still be able to carry the baggage.

    I guess not.

  10. Jenn
    Posted October 20, 2010 at 10:09 pm | Permalink

    How can it be right that, having already been robbed of 4 years 10 months of pension (£24,542.7) I am now having another year (£5077.80 ) taken from me. Whilst those just 5 years younger than me who retired this year, get a 4.6% rise in their pension? Higher than my wage rise (2.2%).

    At the same time the number of years needed to qualify for a full OAP, has been reduced by 10 years! to 30 years. Thus those who benefit most are those who have paid the least!!!.

    Having begun work at 16 years old, funded my own degree to better myself and worked now for 40 years paying NI contributions continually, I must now work for another 11 years before I can retire.

    Fairness from politicians? Bah, we’ll see those pink curly tailed things flying through the air before that happens.

    • Robert K
      Posted October 21, 2010 at 8:04 am | Permalink

      Unfortunately you NI contributions are not pension contributions, they are simply tax in a different form. Thus, because state pensions are not funded, you are not being robbed of your pension. It is essential to raise the age limit of the state pension. It is fair enough to pay a pension to the frail and elderly – these days, those in their seventies and above – but to encourage people in robust middle age to retire at 60 is ludicrous.

  11. Iain Gill
    Posted October 20, 2010 at 10:14 pm | Permalink

    I would have cut spending a whole lot more

    But I wouldnt have cut the harriers, crazy crazy decision

  12. Robert K
    Posted October 21, 2010 at 8:23 am | Permalink

    Thank goodness for this site. The Guardian talks of Osborne having "bloodied hands" and of "carnage". The Mirror describes "the deepest spending cuts in living memory". And so on. Yet the simple fact that JR has been pointing out consistently is that state spending is still set to increase in cash terms over the next four years. What's depressing is that all those with a vested interest in a big state are blotting out the big question: how can the state get out of the way of the private sector and thus encourage an enterprise economy?

  13. Andrew Duffin
    Posted October 21, 2010 at 9:01 am | Permalink

    What kind of government is it that funds the Indian space programme by cutting our Defence budget?

    What kind of government is it that enforces cuts in our essential programmes while saying and doing nothing about our increased contributions to the EU one?

    It's time we looked after ourselves.

  14. Mrs T
    Posted October 21, 2010 at 7:48 pm | Permalink

    I agree that cuts are needed but some of them are just totally unfair and wrong. Why can't they admit that the child benefit issue of two people earning 40K will get it and one person earning 44K won't…..it's so arrogant of them not to re-think this.
    Why cut child benefit to British people when Eastern Europeans working here can claim it to send back to their children in their own countries.
    Why increase the amount of foreign aid, it's not like we're a rich country anymore; surely you put your own house in order first?
    Why get rid of Harrier Jets and have aircraft carriers without aircraft for ten years or more, can't they keep these impressive planes until the new replacement's are available.
    I and many others are getting angry because they are not being fair!!!

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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