Sunday, June 28, 2009

Packaging Cuts?

No I'm not talking about the stuff that our beg comes in, but how politicians talk of a cut in spending when they are unable to say they are cutting spending. Labour have put themselves into a rather difficult position it seems: they have to reduce the amount the government spends but cannot announce public spending reductions. So there is a lot of talk about 'cuts' from the Conservatives and various journalists, while Labour politicians talk of maximising finite resources. I actually thought Ed Balls did rather well, though Andrew Marr did not exactly savage him, but he used language very carefully. He talked of demanding savings and 'smarter' and 'defter' spending, so targeted where need is most, though of course if previously spending has not been smart and targeted it does beg a few questions. This of course will be the key wedge issue between the parties, Conservatives accusing Labour of over-spending and reckless economics, while also obfuscating and concealing the true extent of the problems and their cuts. Meanwhile, as Balls frequently stated, Labour's position is the Conservatives will reduce public spending in favour of 'the rich' so appealing to those reliant on public services and fearing a heavy tax burden. If this remains the key issue through to May next year who the public trust most could determine the outcome of the election and there may be many hovering pencils when voters try to work out who is the most believable or least untrustworthy.


Ewan Vellacott said...

This is New Labour using Old Labour slogans; "The Conservative Party will make the rich richer"! How delightful that no matter how it tries to re-package itself, a political party will eventually revert to their most basic stance and fire tired, old, slogans at the opposition.

Labour are not going to commit political suicide, so the next general election will be on the last possible date that Gordon Brown can call it. This means that there will be another budget for him to oversee. My view is that the budget will be a non-event resulting in little or no change to either taxation or public spending; leaving the real work until the November budget statement following the election.

We also have the November budget statement to come this year and it will be interesting to see what happens about VAT. When VAT was cut, duty on petrol and diesel was increased to keep prices static. Does anyone actually think the duty will reduce again when VAT is brought back to 17.5% in December? Of course not! We are far more likely to see an increase in VAT to 20% than a reduction. Should Labour decide that VAT should be increased, it will be particularly amusing; during the Thatcher years, Labour touted that Mrs T wanted VAT at 20% and that this was something Labour would never do.

Matt Hurst said...

Wasn't duty on petrol frozen at the time of the last pre budget report, only being increased in May, The decrease of vat was announced in the pre budget. (Do correct me if I'm wrong)

Labour said alot in pre New Labour days, a party that still fundamentally believes in privatisation is a long decade or two ago from a party that now believes in nationalisation.

The problem with a budget prediction now is the economy, even though jobless figures have stablised in the southwest region.

I think cuts in the dwp were at 5% before the economy collasped now they are recruiting at a higher rate, the first thing will be job losses, Tories and indeed Labour have never been shy to do this, they usually are more coy when it comes to cutting services.

Alex Robinson said...

I wouldn't trust this shower to run a bath.