Here Is The News

TUESDAY, JULY 06, 2010

Here Is The News

"Here is the news. The Tories are to press ahead with their savage spending cuts, despite being warned by experts that it will result in millions of children being eaten by wolves. Vulnerable old people are expected to be starving in gutters by Christmas, and we are certain to see many more innocent babies impaled on Thatcherite Pickelhauben."

Thus our "public service" broadcaster reports George's prudent and necessary programme of fiscal retrenchment. The programme that is essential if we are to rebuild a sustainable and prosperous economic future.

Last night's Newsnight was a classic, opening with footage of a huge axe poised over a school playground, and a smug looking Emily telling us that the abandonment of Labour's multi-billion Building Schools for the Future (BSF) programme shows that Tory promises to safeguard frontline services are all lies.

No matter that the £50bn BSF had already turned into a vastly expensive disaster (see this blog), or that it threatened to leave us with yet another socialist legacy of poorly built, difficult to maintain, education factories (see this blog). No, the message was that millions of children are now being consigned to freezing leaking Nissen huts* with their educational prospects wrecked.

Look, we all understand that the tax-funded BBC is never going to support public spending restraint, but we should surely expect the occasional brief nod in the direction of the facts. 

And the fact here is that these so-called savage spending cuts make barely a dent in the massive upward trend of public spending. 

As we've blogged before, far from cutting spending, George's budget actually projects a 9% increase by 2015-16 (Total Managed Expenditure increases from £696.8bn this year to £757.7bn in 2015-15). 

Of course, if you assume the Simple Shopper is unable to restrain the price it pays for goods and services, then that 9% cash increase may translate into a squeeze on the volume of stuff it's able to buy. But even then, the reduction looks pretty small in relation to the reckless rise under Labour. 

The following chart shows public spending in real terms (ie 2010-11 prices adjusted using the GDP deflator) all the way back to 1964-65. We have spliced on George's budget projections out to 2015-16.

As we can see, over the next 5 years George intends to squeeze total public spending by 4%, or about £25bn pa. 

Hardly a disaster, and to put it another way, that will take spending all the way back to the level last seen in... wow... 2008-09. 

And compared to when Labour came to power in 1997, real spending will still be over 50% higher. Most of Labour's insane spending splurge will remain in place.

Yes, OK, we know that some departments will be squeezed more than others. But without working through all the numbers in detail, I'd be amazed if anydepartment was going to end up with less in real terms than they had when Labour came to power. And as has been pointed out, the world seemed to be working perfectly fine in 1997.

You might want to keep these figures handy for the next BBC axe horror story. 

*Footnote Back in the 60s, Tyler's first two years at his most excellent state grammar school were spent being taught in wartime asbestos huts. They weren't quite the classic Nissen hut, but close enough. They were draughty, hot in summer, f-f-freezing in winter, and the bogs were outside. None of which made any difference whatsoever to the quality of the education. As ex-teacher Mrs T is forever saying, it's not the buildings that matter, but what goes on inside them.

PS Talking of Mrs T, she's got it into her head that the BBC has been systematically referring to Cam as David Cameron, rather than the Prime Minister. She reckons they never did that with Bliar or Brown. Can that be right? Having now listened more closely, she certainly seems to be right about Cam's treatment, but the Tyler memory banks have blotted out 1997.

PPS The WW1 propanda posters are lifted from weburbanist - well worth a look.