The battleground for the general election is now clear, says Rachel Sylvester in The Times. It will be cuts versus cuts, or, as one minister put it, “nice Labour cuts versus nasty Tory cuts”. Even Gordon Brown has admitted the need for spending constraints.
Meanwhile, David Cameron has promised a “bonfire of the quangos” (although he was “pipped to the post” by Labour’s Liam Byrne who will presumably deliver a ‘nice’ bonfire). The Tories are trying to come up with a handful of “progressive” spending cuts to prove they mean business, but are “not about to fire all the nurses”.
It’s high time quangos were pulled out of their “twilight zone”, says Andrew Haldenby, director of think tank Reform, in The Times. Their supposed advantage is that they are completely independent organisations, but “in practice they are a law unto themselves”.
They cost taxpayers £35bn last year (£1,400 for every family in the country) – “far too much to be taken on trust”. Worse, they have been “responsible for some of the biggest failures in our politics”, including the NHS, which is caught in a “cat’s cradle” of no fewer than four.
Sure, but it’s the whole culture of state spending, not just quangos, that needs examining, says The Sunday Times.
And that, to their credit, is what the Tories are doing. Hence their interest in what the architects of Canada’s spending surgery had to say when they visited London recently, says Sylvester. In the early 1990s, Canada was running a deficit of nearly 9.2% of GDP, about the same as Britain’s today.
The Liberal government launched a fundamental review of the role of the state, cut public expenditure by a fifth and reduced the state payroll by 23% without significantly damaging public services or inhibiting economic growth. “Within three years the deficit had been reduced to zero and the government re-elected.”
Indeed, the Tories should take heart from the Canadians, says Emma Duncan in the Evening Standard, and stop worrying that talk of cuts will bring back “the aura of nastiness they have spent so long shaking off”. Even if Cameron is coy about cuts until he is elected, notes Simon Heffer in The Daily Telegraph, with any luck Treasury officials won’t allow him to hesitate once he’s prime minister.
“Aghast at the catastrophic state of our economy and the refusal of politicians to be realistic about it”, a cadre of civil servants have reportedly devised their own plan for implementation immediately after a general election. We can only hope they succeed. This is a “golden opportunity” to de-bureaucratise Britain.
This whole debate is “out to lunch”, says Will Hutton in The Observer. “Obviously Britain cannot run deficits of 12% of GDP indefinitely”, but swift and drastic cuts are not the answer.
The problem is that, as with Japan in the 1990s, a large number of traumatised companies are moving from being “profit maximisers” to “debt minimisers”. They are paying off debts, not investing, and are not in the mood to borrow even if loans weren’t as “astonishingly expensive” as they are.
The correct policy is to “spend and borrow radically until the downward phase stabilises”, but in such a way that spending commitments can then be radically reduced in more stable times. Unless we want to topple into a 1930s-style Depression, “tough talk about deficit reduction must wait”.