Tory Cuts?

David Davis has an interesting opinion piece in the FT today. He is writing with his ‘former Chair of the Public Accounts Committee’ hat on rather than in his role as ‘Captain Liberty’ and makes an argument as to what could be cut from public spending.

There are some rather silly attacks on the government and some fairly ‘gimmicky’ suggested cuts, but nonetheless I welcome the article and would recommend reading it.

Here, at least, is a senior Tory prepared to be straightforward about proposed cuts. Some of his suggestions are even sensible. Many are not. But this is the debate we need to have. I do though think he is overstating exactly how much these proposed cuts would save. I’ll try and tot up the figures myself when I get a chance.

To summarise:

(i) ‘Pay and recruit freeze’ on ‘the entire public sector’. I am unclear if he means an actual recruitment freeze (i.e. not replacing people as they retire), which would surely be a disaster as the numbers of doctors, nurses, police constables, soldiers, teachers, etc fell. He admits this will be ‘controversial and uncomfortable’.

(ii) Public pension schemes should be closed to new entrants.

(iii) ‘Where salaries have really got out of line, as with doctors’ pay, lower starting rates should be introduced’. Cutting junior doctors pay? Really? Junior doctors are the ‘public sector fat cats’ David Davies has chosen to target?

(iv) Cancel Senior Civil Service bonus payments. As he says it would only save £25mn but the ‘symbolism’ is important. So he advocates cutting bonus payments as symbolism? From a party which attacked the 50% rate as ‘political’?

(v) Cut back in MPs’ expenses and Cabinet ministers’ pay.

(vi) Cancel ID cards and ‘government databases’. That’s be Captain Liberty speaking. In particular Contact Point and ‘internet scrutiny schemes’.

(vii) Renegotiate ever PFI contract now. This probably makes sense.

(viii) Big savers from the departments, ‘particularly the burgeoning welfare budget’. He notes this is heading towards £180bn within two years much of this because ‘ of Gordon Brown’s badly designed, fraud – and error-prone tax credit system’. Really? I assumed most the increased welfare spending was due to rising unemployment and that while recession thing.

(ix) He moves onto the issue of ‘welfare for the well off’. Noting ‘gimmicks’ such as ‘winter fuel payment and free tv licenses for the over-75s’. He wants these measures (and child benefit) targeted towards an ill defined ‘worst off’. He reckons this saves £8-10bn.

(x) Abolish regional government and devolve remaining functions ‘back to the counties’ or back to the centre. I’d be interested to hear what the Local Government Officer thinks about this, both in terms of effectiveness and cost saving.

(xi) Finally, he finishes off by questioning the need for ‘a wholesale upgrade of Trident’. Which did surprise me.

I’m not actually sure how much the above saves. I wouldn’t (at a first estimate) have thought much more than about £30bn of one off spending and about £20bn of annual spending. Not a huge amount againsta prjected deficit of £175bn this year. But if the Tories are intent to rebuild the public finances through spending cuts rather than tax rises then it will only be the start.