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Left Foot Forward > Published by Will Straw, August 17th 2010 at 9:30 am

Osborne let off the hook on spending cuts

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George Osborne this morning admitted that his approach to deficit reduction would result in spending cuts that were nearly half as big again as those planned by the previous Labour government. Speaking on the Today programme ahead of a speech to City analysts, he got an easy ride on his use of Budget numbers and on whether the Budget had been “fair”.

George-Osborne-confusedGeorge Osborne told the BBC’s Evan Davies that:

“Of the £61bn spending cuts I have to make, £44bn were planned by Labour.”

The difference – £17 billion – amounts to a 40 per cent increase in the level of cuts. But the figures are different from those presented in either Alistair Darling’s March Budget or Osborne’s own emergency Budget in June. After the interview, Evan Davies told Left Foot Forward that, “I was bemused by that.. but didn’t have the detail to hand.”

Labour’s final Budget in March announced plans to cut public spending by £38 billion by 2013-14. The Coalition’s emergency Budget had slightly different figures. Table 1.1 compared the Coalition’s planned spending cuts of £63 billion by 2013-14 to £39 billion planned by Alistair Darling – an increase of 62 per cent. Although Labour has avoided setting out how it would make these cuts, if the party were in power its plans could have avoided all of George Osborne’s cuts to child benefit, child tax credits, and housing benefit as well as the stealth reductions in the value of public service pensions and benefits with £14 billion to spare.

Mr Osborne went on to claim that his plans were “fundamentally progressive and fair” – a demonstrably false statement. The independent Institute for Fiscal Studies said the, “likely … overall impact of [the emergency Budget] was regressive”. In a briefing paper for the TUC and Unison, Tim Horton and Howard Reed showed that the impact of the Coalition’s spending cuts was “deeply regressive … All households are hit considerably, but the poorest households are hit the hardest.” Analysis by Left Foot Forward showed that deprived inner-City areas will be hit the hardest by cuts to the budgets of local government.

  • http://twitter.com/houseoftwits/status/21387341116 House Of Twits

    RT @leftfootfwd Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://twitter.com/andyprg/status/21387444445 Andrew Griffiths

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://twitter.com/sohopolitico/status/21387452517 Soho Politico

    RT @leftfootfwd Osborne let off the hook on spending cuts http://bit.ly/aXzx9f <With Evan 'Bulldog' Davies asking the questions? Surely not!

  • http://twitter.com/nickbrompton/status/21387497422 Nick Brompton

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://twitter.com/lockpickernet/status/21387607544 LockPickerNet

    Osborne let off the hook on spending cuts http://bit.ly/aXzx9f via @leftfootfwd

  • http://twitter.com/shamikdas/status/21387667813 Shamik Das

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://www.order-order.com Guido Fawkes

    How do you know what they would have avoided cutting? They never told us.

  • http://twitter.com/tamsinchan/status/21387833070 Tam Chandler

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://twitter.com/j_shirtcliffe/status/21388104692 James Shirtcliffe

    http://goo.gl/Dxmt Osbourne looks like a literal puppet in that photo

  • http://twitter.com/garethsiddorn/status/21388489595 Gareth Siddorn

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • John Lees

    Osborne is weak – he should cut more. If we keep on spending more than we earn as a nation some day teh buble will pop and it will be the porest that will suffer. Growth based on deficit finance is the next bubble.

  • http://twitter.com/helenmew/status/21388646774 Helen W

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f « the BBC is so often accused of liberal lefty bias because?

  • Robert

    Labour Tory, Tory labour whats the difference

  • http://twitter.com/georgesandeman/status/21389963828 George Sandeman

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://billyblofeld.wordpress.com Billy Blofeld

    Will,

    The media are soft when it comes to financial detail. Gordon Brown used to get away with blue murder.

    Most journalists aren’t even aware of the difference between “deficit” and “debt”.

  • http://twitter.com/yorkierosie/status/21390108299 yorkierosie

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • Ash

    I still think Labour under a new leader need to have a clear story to tell about what cuts *should* be made; it’s just not a credible medium-term strategy to agree in principle that 65% (ish) of the cuts Osborne makes are necessary but then condemn 100% of those cuts.

  • http://www.leftfootforward.org/ Will Straw

    Guido – Could, not would. I set out only my own priorities. The next leader has, in my view, to set out what they would do to reduce the deficit. Labour lacks credibility without setting out its own priorities but it doesnt diminish the responsibility of groups/blogs like LFF to point out the absurdity of Osborne’s plans.

    John – Utter madness. The Bank of England outlined last week how the Budget was negatively affecting growth. Some City analysts are already predicting that growth will be flat at the end of this year and possibly negative. Any more cutting would almost certainly put Britain into a double dip recession.

    Robert – £24bn in cuts by the Treasury’s own figures. And, hopefully, a very different approach to on whom the axe will fall.

    Ash – as per my reply to Guido, I completely agree. There should have been a comprehensive spending review before the election.

  • http://twitter.com/weetam21/status/21394416371 Thomas Gillespie

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://twitter.com/sarateresaphoto/status/21396893405 Sara (Teresa) Brooks

    RT @leftfootfwd: Osborne let off the hook on spending cuts http://bit.ly/aXzx9f

  • http://bestblogs.labourhome.org/2010/08/17/osborne-let-off-the-hook-on-spending-cuts/ Osborne let off the hook on spending cuts « The best Labour blogs

    [...] More… [...]

  • John Lees

    “The Bank of England outlined last week how the Budget was negatively affecting growth.”

    That is exactly my point – cutting the deficit may cut growth in the short term. But in teh long term we can not afford to have growth based on deficit financing. It is unsupportable and so will come to an end who ever is in power. We may as well start now rather than stoke this bubble.

  • Mike

    Whats this scandal re Eric Pickles new £70,000 car paid for by tax payers
    maybe the audit commission should investigate

    What a disgrace

    cuts for the poor new big cars for the millionaire cabinet ministers

  • John Lees

    Will – can i ask you a question. If you believe that cutting the deficit is bad because growth will suffer – do you believe that Governments should always run deficits? Should they run deficits in good years and bad? If as you may believe they should only run deficits in recessions and for some time after – when should we reduce spending? This year next year the year after never? And if you admit we do at some point have to reduce spending would not those cuts have to be bigger if teh debts have been allowed to grow even bigger?

  • http://www.leftfootforward.org/2010/08/george-osborne-leading-economists-intergenerational-fairness/ Leading economists question Osborne’s definition of “intergenerational fairness” | Left Foot Forward

    [...] criticism about the distributional impact of the June Budget, George Osborne sought last week to include “intergenerational [...]