This is solid reasoning from Osborne and I applaud most of it. But in something so fundamental everyone will find detail of things they want to be emphasised more and omissions too. The pressure to spell everything out in detail now has to be resisted. At the rate our finances are deteriorating now, any such proto-budget promises (or threats !) might look very silly when the emergency budget has to be presented.
Osborne must be doing something right - he’s got right up Mandelson’s nose! The NewLabour house-paper - The Guardian - has “Mandelson launches withering putdown of George Osborne” . Writing in today's The Guardian, Mandelson describes Osborne's claim in a recent speech that the "torch of progressive politics" has passed to the Tories as "audacious" and "political cross-dressing" that will not convince voters. He had another go on the “Today” programme this morning - - - “Lord Mandelson dismissed George Osborne's claim that the Conservatives were the progressive party as "rank hypocrisy", arguing that the Tories policies would leave poorer services for those unable to go private.
"The swingeing cuts that the Tories envisage will not produce a better service, they will produce a poorer service, driving those who can afford it to private education and private healthcare with no safety net for those who cannot afford to got private," he said.
"When the Tories talk euphemistically about independent provision they are talking about private provison for those who can afford it,"
He rejected the Conservatives claims that they would not be the progressive party: "I have never heard anythign so laughable in my life".
He also sought to dismiss claims that the Conservatives were being more candid than Labour about the need for reductions in public spending to tackle the budget deficit.
"There is no question we are being fiscally irresponsible or in denial about this. We are the first to acknowledge that in the medium term these adjstments will have to take place," he said”
He’s getting rattled.
Christina
THE TIMES 12.8.09
The new dividing line: radical reform or cuts
Sceptics argue that reform is a luxury we cannot afford. Without it, money for schools and health will inevitably be slashed
George Osborne
Even in the depths of August the thoughts of politicians occasionally drift to the conference speech they will have to deliver in a few weeks’ time. Looking for inspiration this year, I was inevitably drawn to words spoken by the last Shadow Chancellor in his address to his party’s conference on the eve of an election many people expected they would win. “I tell you we have learnt from past mistakes,” he told his party faithful. “Just as you cannot spend your way out of recession, you cannot, in a global economy, simply spend your way through a recovery either.” Facing down his critics on the Left, he then warned “losing control of public spending doesn’t help the poor”.
The year was 1996 and the Shadow Chancellor, of course, was Gordon Brown. He appeared to understand what other centre-left politicians at the time, from President Clinton to Jean Chrétien in Canada and Göran Persson in Sweden, clearly understood: fiscal responsibility is deeply progressive. For where is the fairness in building up unsustainable debts for future generations? How can you build a more inclusive society when your government spends more on servicing its debts than in educating your children?
But it turns out that Mr Brown has failed to heed his own warning.. On the pages of this newspaper two months ago, I wrote that the time had come to tell the public the truth: that Britain faced a debt crisis, that our international credit rating risked a disastrous downgrading and that, as a result, real government spending would have to be cut, whoever wins the next election. I said to deny this statement of fact was to invite ridicule. Since then the Prime Minister has neatly proved my point, inviting ridicule even from members of his own Cabinet.
So yesterday in my speech at the think-tank Demos I ventured a political prediction. Sometime soon Mr Brown will make a humiliating climbdown. He will have to use the “cuts” word. But he will then adopt a new and equally dishonest argument that all the cuts will come from “Whitehall cost savings”.
Now of course it is the case that there are billions of pounds of savings to be had from a bureaucracy that has become far too bloated, though the government that let it happen are the last people you would want to tackle it. We Conservatives are undertaking detailed work to transform how Whitehall operates, bring financial discipline to departments and entrench incentives to cost-cutting in the pay and career paths of civil servants. But to pretend that Whitehall cost savings alone will be enough, when the Government is borrowing £1 in every £4 that it spends, is to take the public for fools.
Look at the spending challenge facing our unreformed health and education systems. The King’s Fund warned last month that “even under the most optimistic funding scenario, the NHS will struggle to meet people’s healthcare needs without significant increases in productivity”. In education the pressure is just as severe. A 14 per cent increase in births since 2003 means that even if real overall spending on schools is maintained, spending per pupil could fall by £800 a year under Labour’s present arrangements.
So we have to get more of the money in the education and health budgets to the front line, and we have to make sure the money that gets there is spent better. That means improving the productivity of our public services. Yet under Labour that productivity has fallen by 3.2 per cent over the past ten years. The reason is the failure by this Government to improve those public services, aided and abetted at every stage by the Chancellor of the Exchequer then, Gordon Brown, who acted as a roadblock to reform. Even today, his acolyte Ed Balls is busy undoing what little reform has taken place by, for example, removing freedom over the curriculum from new academies.
The result of blocking reform at a time when budgets are tight is inevitable: there will be frontline service cuts under Labour. The Conservative alternative is to embrace reform and make the money work harder. Our ambition is not just to protect frontline health and education services, but to improve them. My Shadow Cabinet colleagues Andrew Lansley and Michael Gove have set out in increasing detail how we will move quickly as a new government to let new providers offer taxpayer-funded choice to parents and patients, and how the corollary of this choice will be new professional freedoms for the dedicated people who work in these services. We will sweep away the target culture and the stultifying Whitehall-knows-best centralisation.
Some argue that reform is a luxury that cannot be afforded given the short-term pressures of the fiscal crisis we face. But that is too pessimistic. Yes, the full benefits of structural change take time to come through, but from Day 1 it is possible to start getting more of the budget to the front line. As Sweden showed when it reformed education in the 1990s at a time when it too had a huge budget deficit, the savings follow quickly. As well as driving up standards, new providers soon found innovative ways of making money go further. They negotiated contracts on premises, IT and textbooks that reduced costs, liberating more money to spend on teaching. And the mere presence of new providers forced bureaucracies to find savings. So reform is vital if we are to avoid Labour’s frontline cuts.
This is the choice we now face as a country in this age of austerity: far-reaching reforms to improve the productivity of public services under the Conservatives, or frontline cuts under a Labour leadership that has run away from reform. It is a choice that shows that a fundamental shift has taken place in British politics.
The torch of progressive politics has passed to a new generation of Conservative politicians. We are following a Conservative tradition that goes back as far as Disraeli. As he said in 1867, “in a progressive country change is constant”, but the challenge is to carry it out “in deference to the manners, the customs, the laws and the traditions of a people”. Whether it is pioneering the use of open primaries to select our parliamentary candidates, or harnessing new technology to give citizens transparent access to government information, or our unshakeable belief in the fairness of fiscal responsibility, the conclusion is simple: we are the progressives now.
George Osborne is Shadow Chancellor
TELEGRAPH
12.8.09
1. George Osborne paves way for Tory tax rises [This headline is misleading - the article does not say that at all. There may be - almost certainly will be - tax rises but Osborne was very careful NOT to start detailing them maybe 9 months before he has to! -cs]
Spending cuts alone will not be enough to rebalance the public finances, George Osborne said yesterday, paving the way for a Tory government to raise taxes.
By James Kirkup, Political Correspondent
The Shadow Chancellor declined to rule out increasing VAT and said he will go into the next general election without offering voters "cast iron" promises on individual taxes.
The Treasury is borrowing an additional £700 billion over five years, taking the national debt to £1.4 trillion.
Mr Osborne said that Labour has left Britain facing a "debt crisis" that will require painful readjustments. Some - but not all - of the rebalancing can be achieved by cutting Government spending, he said.
"The bulk of dealing with this budget deficit has to be dealt with by spending restraint," Mr Osborne said.
The Sunday Telegraph reported this week that senior Conservatives are looking at the possibility of increasing VAT to 20 per cent. Sir John Major, the former prime minister, earlier this years said the move may be necessary. [This is pure newspaper kite-flying to wring an admission out of Osborne. It might happen or he might choose something else! Don’t fall for this newspaper trap - Osborne didn’t! cs]
Mr Osborne said that he had "no specific plan" for VAT rates, but said he could make no firm promises.
He said: "I am not going to go through every single tax from now until the election giving cast iron commitments to do something to it. I don't think that would be sensible."
Mr Osborne was speaking at Demos, a traditional New Labour think-tank, where he argued that the Conservatives are now the "progressive" party and will continue Tony Blair's programme of public service reform.
That reform is all the more necessary because of the coming squeeze on public spending, he said. Without fundamental reform of services, deep cuts will be unavoidable, he said.
For example, he said that schools face a "mini baby boom" which has seen a 14 per cent increase in the number of births between 2003 and 2008.
Without increased productivity in education, accommodating all those children will cuts of up to £800 in spending per pupil, Mr Osborne said.
"We have to face up to the consequences of what happens when a mini baby boom hits an unreformed education system at a time when money is tight," he said.
"Without reforms to get more of the education budget to the front line and reforms to make that money go further once it gets there, there will be cuts in the classroom," he warned.
2. The Tories are right to want to cut spending
Telegraph View: Tories should make the case for more private-sector revenue streams for the NHS.
By Telegraph View
In an important speech on the public services yesterday, George Osborne, the shadow chancellor, produced one of those statistical jaw-droppers that perfectly sums up the nature of the problem. According to the World Economic Forum, the United Kingdom ranks 76th out of 134 countries in terms of efficiency in public spending. It is not just the usual suspects – Singapore, Finland, Sweden – that are showing how it should be done. Greece, Mozambique, Ethiopia and Tajikistan all spend taxpayers’ money more efficiently than the British state. Such is the legacy of Gordon Brown’s decade-long spending spree with our money. This is the battleground on which the next general election is going to be won and lost.
Mr Osborne argued that the economic meltdown and the ballooning budget deficit it has spawned require radical measures. That is a view shared by an electorate that has watched as Labour’s tax-and-spend experiment has been tested to destruction. Opinion polls show voters have had enough of ever-expanding state spending – yet the penny has yet to drop with the Government. Even that arch-moderniser Lord Mandelson argued yesterday that the notion that public spending could be reduced was “laughable”.
Central to Mr Osborne’s approach is a transformation in the productivity of the public sector, which he says is the only way to protect frontline services. This must mean cutting spending and personnel, though Mr Osborne remains reluctant to say so. While his argument yesterday was wide-ranging and convincing, he cannot avoid spelling out the hard detail of these reforms indefinitely. The Tories have already pledged to cut the number of ministers and MPs and to publish online every item of public spending in excess of £25,000. Both ideas are welcome – but why wait until they are in power? The Conservatives now control most local councils in England. Yet with a handful of notable exceptions, such as Wandsworth [AND Hammersmith & Fulham, and Ealing and Hounslow! -cs] in London, the spending party still seems to be in full swing. Mr Osborne’s vision of a smaller, more efficient state sector would be even more persuasive if Conservative-controlled councils started to live by those lights.
The Tories’ obsession with preserving the sacred-cow status of the NHS should also be revisited. Mr Osborne promises a “real terms increase” in spending, leading to “even bigger real improvements” because of greater productivity. Doubtless Labour will trumpet something very similar. This is a non-debate. If health spending is to rise – as an ageing population and scientific advance demand – then there have to be new, private-sector revenue streams. It is up to the Conservatives to make that case.
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