They say charity starts at home. In that case public spending cuts should start abroad.
The Uk does not just have a problem of overspending in the public sector. It also has a big balance of payments problem. The UK needs to buy too much expensive overseas currency to pay its bills abroad. This is helping drive the pound down, making us even worse off.
So if the public sector can cut its spending in foreign currencies, that provides a double help to the struggling economy. Fortunately, it should not be that difficult to do so, as some of the more wasteful or less desirable spending is the spending the government does abroad.
Here are some examples:
1. Withdraw the army from Germany, and house them in UK barrracks. Follow the suggestions on this site to allow soldiers to own their own married quarters whilst in barracks, and to sell them back at market values on leaving, using private finance. This will save large Euro based spending, allow disposal receipts of assets in Germany and provide extra private capital for much needed improved housing.
2.Cut the wasteful and often undesirable expenditure incurred by the EU. Much of the non agricultural spending is at best marginal and at worst undesirable. All EU states are wrestling with budget problems, and the EU itself says they should all cut their budget deficits to 3% of National Income. Shouldn’t the EU lead by example and slash its own spending to make that easier? That’s more hard currency cost for the UK. The government says it has influence in the EU – now’s the time to use it. Would Labour rather cut the NHS than the EU budget? If so, why?
3. Transfer spending on reconstruction and development in Afghanistan and Iraq to the Overseas Aid budget where it belongs, removing aid to richer countries from that budget whilst continuing to meet the international targets that both main parties have agreed. Overall betweent he Defence and Overseas Aid budgets there would be a cut, but the overseas aid budget would go up and be better targetted on need.
4. Pull the army out of Afghanistan as soon as possible. We should not commit ourselves to an intensification or prolongation of the war in a situation where the effort needs to be put into the politics rather than the fighting.
5. Review all the imports of goods and services within the public sector and hold competitions to see if domestic suppliers can provide a good alternative as contracts come up for renewal. Every transfer of a service or good from overseas to UK will help relieve pressure on the currency, and will help cut the benefits bill as more UK people go to work to service the state.
The UK has to earn its way out of this mess. It is importing too much, and that includes the public sector.