Tory cuts to start immediately after election

[Hopeless Romantic]

The Conservatives would start to cut public spending straight away if they won the General Election, shadow chancellor George Osborne has said.

Speaking at the London School of Economics, he said spending on advertising and tax credits for people earning more than £50,000 would be cut.

He also identified child trust funds for better-off families as an area where savings could be made.
Labour and the Lib Dems said Tory plans would put economic recovery at risk.

Mr Osborne's speech signalled the first time the Conservatives have said cuts would be made in the new financial year, which starts in April, if they come into power.

He told the audience: "Everyone knows the government's spending plans for next year are driven by a looming General Election and not economic reality.

"So, with the date of the general election increasingly likely to be after the beginning of the next financial year, that means we will need to make early in-year reductions in existing plans.

"Programmes that represent poor value for money, excessive spending on things like advertising and consultants, spending on tax credits for people earning over £50,000, and spending on child trust funds for better off families will all have to be cut during the financial year."

The shadow chancellor also warned there was a "clear and present danger" the government's failure to signal early measures to shore up the public finances would dent confidence in British economic policy.

He said delaying cuts could damage the UK's credibility on the international markets, pushing up interest rates and making mortgages more expensive.

Responding to the speech, Chief Secretary to the Treasury Liam Byrne said in his "rush to cut spending, George Osborne would put the recovery in grave danger".

"But until he says how he'll do it and whether he'll match Labour's pledge to halve the deficit in four years, his speeches must be taken with a huge pinch of salt.

"This is yet another Tory speech which raises more questions than it answered," said Mr Byrne.
Liberal Democrat Treasury spokesman Vince Cable said it was "foolish to set a political timetable with no regard for the state of the economy".

"There's a big risk that if cuts begin suddenly and on a purely political basis that the economy will be plunged back into prolonged recession."

He said a set of clear economic tests, including economic and employment growth, was needed to judge when contraction or acceleration of spending should begin.

http://news.bbc.co.uk/1/hi/uk_politics/8460548.stm

[LeftishBrit]

1. Maggie Thatcher here we come again!

Let's hope that the voters have the sense to oppose this. Unfortunately, many current voters are too young to remember Thatcher, and there is a media spin which portrays her as a great and decisive leader.

[Rosa Luxemburg]

2. privatise everything!

[Nihil]

3. Sorry not to knee-jerk on this ...

... but the points quoted were good:

> "Programmes that represent poor value for money,
> excessive spending on things like advertising and consultants,
> spending on tax credits for people earning over £50,000 would be cut.
> child trust funds for better-off families

The only reason that the above are in place now is that "Labour" is
every bit as corrupt & self-serving as the "Conservatives" and have
blatantly wanted to have their cake & eat it.

I have no doubt that they will not stop there (they never have) but I
can see nothing wrong with the above points. (Mind you, I'm not in
advertising, not a consultant, haven't got any trust funds and don't
get any tax credits so, to me, the above *are* all wastes of public
money.)

:shrug:

[fedsron2us]

4. And how much of the PSBR is taken up by the bank bailouts ?

Darling has rather conveniently reduced his estimate of potential losses from the guarantees provided to the banksdown to £10 billion pounds.

http://www.bloomberg.com/apps/news?pid=20601085&sid=aQe4Yy1fQsd0

But this maths is largely down to the propping up of UK asset prices (particularly house prices) by the magic of QE whereby the government monetises debt by buying gilts under QE thereby essentially becoming the holder of its own debt. How long the government can play that game remains to be seen but when it unravels then asset prices are likely to head south very quickly ( you need only look at Ireland to see how far prices can drop) and all those bank debts will suddenly become toxic again.

http://www.marketoracle.co.uk/Article15696.html

The harsh truth is that it is the rescue of the financial system not tax credits, government advertising or any other of the novelties being touted by Osborne that is bankrupting Britain. The fact that he does not have the courage to address that fact shows what a losuy Chancellor he is likely to be.