Frank Field wants public spending cut now and suggests Conservatives will win next election
It's worth taking a couple minutes to read this article which Birkenhead MP Frank Field has written for the Spectator.
Two most interesting points in a detailed piece of economic analysis are his assertion that public spending must be cut and his suggestion that the Conservatives now seem likely to be the next government.
It never ceases to amaze me that Mr Field gets away with saying these things, when other parliamentary colleagues would not have the nerve or would find pressure brought to bear on them for veering from the party line.
That the second point has almost become accepted wisdom by many is besides the point, you will get many Labour politicians openly admitting they are about to lose the next general election.
Here's an extract from the article:
The government appears to hope that it will gain enough cover by repeating ad nauseam that it is Keynesian common sense to borrow during the downturn and pay back when the economy is on a more even keel. Whether it really believes this is anyone's guess. But its bluff might be called, and here will be a test not only for the current administration, but also for the opposition, whose consistent poll lead suggests it may form the next government.
...The government not only has a moral duty now to cut public expenditure, but may be forced to do so by its inability to borrow on the scale necessary.
...Again, it's worth going for a cash ceiling on all public expenditure programmes. The drive must then be to ensure that falling real budgets result in increased output. This goal will not be easy to achieve and it will require a serious budget devolution so that entrepreneurial skills that are within the public system operate to full effect. But there will be no escaping the need to take out whole programmes if there is any prospect of bringing expenditure down merely towards tax revenue levels in a time-span necessary to continue attracting scarce credit.
The annual ÃÂ£180-190 billion gap will take some filling. Trident's replacement comes in at between ÃÂ£15-ÃÂ£20 million. ID cards still have a ÃÂ£5 billion price tag. Freezing the health budget in cash terms could save something like ÃÂ£7.5 billion a year. Postponing the school leaving age and ceasing to overreach ourselves in sending 50 per cent of pupils to university, many of whom never complete their first year, would only bring in modest sums.
I raise these programmes as examples of the kinds of cuts that will be required to bring the national accounts towards balance. I am not suggesting that this is the programme, or that this list is adequate. But the threat to the country's solvency is now so serious that both opposition and government need to use next week's Budget on what needs to be done this year to begin rebuilding the country's solvency.