By Joe Randall of Community Links

Nearly all charities seem make a case for savings from preventative action these days. The argument tends to go something like ’invest early in my youth scheme now, and save much more later on from your criminal justice and welfare budgets’.

This would seem to be a common sense principle for policy making, but David Cameron appeared to pour cold water on it in front of the liaison committee last week:

“Generally speaking, if you go to the Treasury and say it is a spend-to-save scheme, they will say ‘thank you very much, but we have got a budget deficit’.“

Whilst the individual business case for a scheme which acts early is often questioned like this, the wider economic case is more widely accepted.

For example, the Department for Education’s introduction to its early intervention grant states:

It is common sense that intervening early to stop problems developing has to be the best way of preventing bigger and more expensive problems.

It is not only the coalition that has recognised the sense in early action. Tony Blair deemed the subject so important he dedicated a section of his first ever speech as prime minister to it.

He warned:

“Government must not fall into the trap of short-termism. Huge sums are spent dealing with this year’s problems, but very little on preventing the problems that will arise in five years time…

“We need to go further if we are to avoid the double jeopardy of worsening social problems and escalating tax bills.

“We will be calling on departments to draw up plans for shifting energy and resources from cure to prevention, from clearing problems up to anticipating them, and I will judge their success by how far this is done.”

The strong rhetoric of the power of prevention is not based on conjecture. While the prime minister may question the business case evidence for specific interventions, the findings of numerous reports and reviews echo the broader message articulated by politicians, that earlier investment and intervention can result better long term outcomes, and considerable savings.

Take a glance, for instance, at the Stern review into the economics of climate change, Derek Wanless’s 2002 and 2004 studies of public health policy, or more recently Graham Allen’s reports on early intervention (pdf).

Alternatively, this, from a 2009 Audit Commission report:

A young person who starts showing behavioural problems at age five, and is dealt with through the criminal justice system will cost the taxpayer around £207,000 by the age of 16. Alternative interventions to support changes in behaviour would cost about £47,000.

Over £113 million a year would be saved if just one in ten young offenders was diverted towards effective support.

Most can agree that the powerful language of Tony Blair in 1997 was not backed up by sufficient action in the subsequent thirteen years of New Labour government.

It seems too that the current government is hardly prioritising early action. An IFS study estimates that the early intervention grant, which has been cut by 10.5 per cent from its preceding funding streams, will be worth 21.7 per cent less in real terms by 2014-5.

The removal of ring-fences from these early action funds, and significant cuts to local authority budgets seem to have made for a worrying trend towards disinvestment in early action.

Haringey Council for example has felt it necessary to cut 40 per cent from its early years budget, 75 per cent from youth services, and 23 per cent from youth offending services. The temptation to cut back on those vital, prompt interventions which pick up and respond to the first signs of difficulty, is one which is only increased in a time of austerity, where budget silos become hardened and long-term investment appears a luxury.

The first report of the Early Action Task Force, launched this week, attempts to counter this temptation. Our case is simple – earlier action isn’t only cheaper than later action and important for social well being; it helps to reduce the deficit and to increase growth.

A population that is well supported and “ready for everything” contributes more, public spending goes down and growth goes up. If we look North, across the border to Scotland, a situation is developing in which politicians’ rhetoric is beginning to more closely resemble actual policy making.

The finance committee of the Scottish parliament concluded a report earlier this year, which argued that:

The current reactive approach to public spending is unsustainable. There must be a shift away from reacting to crises to a greater focus on prevention and early intervention.

The political interest this has engendered for early action in Scotland has culminated in a draft budget proposed this September containing a £500m increase in preventative spending, despite a 9.2 per cent reduction in funding from Westminster.

The SNP minister Angela Constance has recently remarked:

“Apart from independence, preventative spend is the most radical and exciting agenda that this government is pursuing.”

Westminster must follow the Scottish government’s lead. The case has been made and won for too long, now we need real action to match the rhetoric.

See also:

• Forget “child poverty”; just fight for a decent childhood for all – Kate Bell and Jason Strelitz, November 15th 2011

• Teflon Teather dodges the key question about Sure Start – Alex Hern, October 17th 2011

• The coalition is actively increasing child poverty – Felicity Dennistoun, October 11th 2011

• Toby Young is wrong about the cuts and wrong about the march – Nicola Smith, March 29th 2011

• On legal aid, the government has chosen the wrong path – Lord Willy Bach, February 3rd 2011

Obviously much of the focus today is rightly on the government’s efforts to fulfil one of its key obligations: the maintenance of law and order. However, it is worth noting the IFS report on the shape of future state spending and its implications for our society.

The short version is that we will be spending far more on services for old people. As the IFS says:

 ”[ Health, long term care and social security]  accounted for a third of all spending in 1978–79. They now account for half of spending… This dramatic increase in the share of health and social welfare  spending has been made possible by substantial reductions in the proportion of spending going to defence, housing, and support for business and industry…”

“Going forward, spending on health, pensions and long term care is set to rise fast. Just these elements of spending, excluding all the welfare benefits paid to non-pensioners, will reach half of all public spending over the next 50 years unless there is significant reform or unless total spending is significantly increased.”

They add:

“One consequence is that by 2014–15 spending on the NHS alone will account for nearly 30% of all public service spending.”

This is particularly pertinent for the Conservatives, due to their dependence on the ‘grey vote’:

Thus it should come as no surprise that, for example, spending in the NHS – mainly used by the old - is ringfenced by the coalition, but education is not, or that pensioners’ free bus passes are protected but Education Maintenance Allowances are not.

Not only are the Conservatives tied in electorally to big-spending departments whose budgets are only set to grow, but their policy-apparatus is as well.

Right-leaning think tanks such as Policy Exchange and Reform are often funded by those organisations that tender for public sector contracts.

Reform – where  David Cameron launched the open public services white paper – for example, has received sponsorship from General Healthcare Group, GE and KPMG, who all have an interest in public sector healthcare contracts, and other public sector tenderers such as G4S.

That may explain why Reform have a track record if backing co-payment – where services are paid for by users and subsidised by the taxpayer.

Unless the Conservatives can ‘rebalance’ their electoral appeal, or garner their policies from elsewhere, it is hard to see how they are not committed to ever increasing expenditures on services and payments aimed at older people in future.

New poll data from http://www.yougov.polis.cam.ac.uk/ show that two-thirds of the public believe that the Coalition’s spending cuts should only be temporary, with just a fifth thinking they should be permanent.

Over the last year, polls have sought to gauge public opinion by asking people about ‘the cuts’ – are they fair or unfair, necessary or unnecessary? But, of course, ‘the cuts’ mean different things depending on whether you think they are temporary belt-tightening to reduce the deficit or  an ideological attempt to roll back the state for good.

Last summer David Cameron came clean that – for the Tories – these cuts are permanent:

“Should we cut things now and go back later and try and restore them? I think we should be trying to avoid that approach.”

This should come as no surprise, given the ideological ambitions he expressed as opposition leader: as he told the CBI, long before the financial crisis hit:

 “what really matters is reducing the share of the national income taken by the state”.

So we thought it was time to ask the public about it. And the results are not good for Cameron. Of all those expressing an opinion, 69% want the cuts to be temporary and think that “the Government should increase spending on public services again when the public finances are in better shape”, while just 22% want the cuts to be permanent and think that “the Government should look to reduce its role for the long term” (a further 9% opt for neither). (Including ‘don’t knows’, the figures are: 64% temporary, 20% permanent, 8% neither, 8% don’t know.) This is a huge rejection of the Tories’ Thatcherite, state-shrinking ideology.

Even more interesting is the fact that a clear majority of Tory voters want the cuts to be only temporary. Of those Tories expressing an opinion, 56% want the cuts to be temporary, while just 39% want the cuts to be permanent (a further 5% opt for neither). (Including ‘don’t knows’, the figures are: 52% temporary, 36% permanent, 5% neither, 7% don’t know.) This is a huge rejection of the Tories’ Thatcherite, state-shrinking ideology from Conservative voters.

As I comment in today’s Independent, it’s been perhaps the best-kept secret of the last 30 years that that around half of Tory voters are fundamentally un-Thatcherite about the state – deeply attached to public services and fiercely protective of their social entitlements.

 These voters – who I like to call Daily Mail Collectivists – offer Ed Miliband a real chance to win the next election if Labour can make them a convincing offer on public services and social security, since a Conservative government focused on shrinking the state will always struggle here. Over the next few months, the Fabian Society will be looking in more detail at this interesting group of voters and the electoral vulnerability they create for the Conservatives.

 The polling, analysed in detail in the latest issue of the Fabian Review, was part of a huge survey of the UK conducted by YouGov in May 2011, which included some key questions to explore attitudes to the state, tax and spending. For more details, visit the Fabian Society website and YouGov@Cambridge

Opinion poll evidence is increasingly used by politicians and interest groups to argue their favoured policies are in line with public opinion – that they ‘get it’ and their opponents don’t. But what do opinion polls really tell us about public attitudes and beliefs? Polling evidence from earlier this week raises some interesting questions.

Pollsters ComRes were commissioned by zombie right wing think-tank the Institute of Economic Affairs (IEA) to get views on their latest proposals to ‘cut public expenditure and slash taxes’.

ComRes press released the findings thus:

“Opinion poll shows overwhelming support for new IEA plan to cut public spending and slash taxes…

“Given a straight choice between the coalition’s plans of government spending of 40% of national income and the IEA’s more radical plan of reducing spending to about 30% of GDP and implementing average tax cuts of £7,500 per household, the overwhelming majority (70%) favour the IEA’s proposal and only 30% favour the coalition plan.”

This would have suited the client fine had ComRes not also released the full polling data. The findings are truly amazing, but you’d want to be pretty desperate to lean on them as evidence to support any policy platform.

Here’s the most striking finding (hat-tip to Mark Gettleson at PoliticsHome) – public expenditure for 2010-11 is projected to be 47% of GDP. When asked to estimate what proportion of national income the government currently spends, only 11% of respondents landed in the right range (41% to 50%). See Graph 1 below.

This percentage varies a little by age, social class, region and voting intention but never gets above 16% for any group.

Averaging all the responses gives a figure of 61%, which overestimates government spending by some 14 percentage points. But it gets worse – much worse – because most respondents were nowhere near the average. Some 12% gave answers in the range 91%-100% (this rises to 28% for UKIP voters, by the way, but no party’s voters come out of this exercise looking good).

Graph 1:

Pushing interpretative charity to the limit, we might say that those who estimated public expenditure as between 30% and 60% of GDP gave answers with some relation to reality (on the basis that the figure has in fact ranged between 36% and 50% over the last forty years – see Graph 2 below).

But even this represents only a third of all respondents; the remaining two thirds appear to be living on a different fiscal planet altogether. And the errors are not random. Responses are massively biased towards high estimates, with more than half of respondents appearing to believe that public expenditure is more than 60% of GDP and nearly two fifths believing it is more than 70%.

Graph 2:

In the context of these findings, which are not mentioned in the press release, what can we make of the claim there is overwhelming public support for the IEA’s proposals? The third (of four) questions put to respondents was:

“By the time of the next election, the current government’s plan is to spend about 40% of the UK’s national income each year. What proportion of the nation’s income do you think the government should be aiming to spend?”

The average response was 33%, in line with the IEA’s proposals.

But this result is vitiated by the fact that in asking the question, ComRes made it plain to respondents just how far out their previous answers had been by giving them new information (‘government is planning to spend 40% of GDP’).

Rather than expressing their attitude to public spending, we would suggest that having had the scale of error in their previous estimates demonstrated to them, respondents were looking to give the ‘right’ answer this time around and over-corrected for their previous bias.

In other words, there is reason to believe that that the sequence of questions itself generated the results, which happened to correspond to what the client was looking for.

The ComRes poll can probably be discounted as evidence of support for the IEA’s proposals, but the startling overestimation of current public expenditure is an important finding which raises questions about public beliefs as opposed to public attitudes. Is this evidence that the public is just irrational on the subject of public expenditure?

The idea that voters are basically irrational has recently been in vogue on both left and right. But common sense suggests we should exhaust rational explanations for false beliefs before appealing to irrationality.

Take the finding that 12% of respondents thought that government was spending more than 90% of GDP. That sounds crazy, but a plausible interpretation is that some people thought ‘national income’ meant tax revenue. So even this apparently bizarre response can be interpreted in terms of explicable error rather than irrationality.

More generally, the pattern of overestimation of spending might mean that respondents were not generally answering the same question the pollsters were asking.

The real lesson may just be that it’s very easy to generate gross errors when people are being asked to quantify things which they have no reason to put figures on in their daily lives. The public may just not have any view on the ratio between Total Managed Expenditure and Gross Domestic Product, because most people neither know nor care how these abstract economic and fiscal aggregates are related.

If you ask the wrong question, the answer won’t tell you much. You may get results that appear to support cutting expenditure to 30% of GDP – but if people cared enough about the public spending share of GDP to make that result politically significant, we would expect them to have a better idea of how much the government spends than they apparently do.

Tim Horton is the research director of the Fabian Society

After yesterday’s failed Rally Against Debt – attracting around 500 attendees, despite the benefit of a Times opinion column and coverage across the newspapers – we thought it was time to turn the tables on the Tories by using the No2AV posters they funded to campaign against the Coalition’s cuts.

These posters, you may recall, courted controversy during the referendum campaign with a claim that the Alternative Vote system would cost £250 million alongside a picture of a baby, arguing the money would be better spent on maternity units. Another poster carried the picture of a soldier, arguing for more spending on bulletproof vests.

It was ironic to see a campaign funded by Conservative backers and run by the chief executive of the right-wing TaxPayers’ Alliance – who organised yesterday’s rally – championing public spending. It must have been a refreshing change for them to be able to harness people’s love of public services, rather than trying to do them down all the time. But, in the process, the No campaign have given us a great way to campaign against the cuts.

Thanks to Clifford Singer of The Other Taxpayer’s Alliance, the creative force behind the MyDavidCameron.com phenomenon, we have transformed these iconic images into arguments against the coalition’s programme. And, now the referendum is over, we’ll keep using these posters to remind the Tories of popular support for our services.

In the meantime, I’ll be writing to the TaxPayers’ Alliance to ask if they’ll join with the Fabian Society to call for higher spending on maternity units and soldiers’ equipment, rather than their current focus on even deeper cuts to corporation tax.

Kate Hudson is the general secretary of the Campaign for Nuclear Disarmament (CND)

As the government cracks under pressure on forest sales and housing benefit for the long-term unemployed, further revelations on Trident replacement spending are adding to their headaches.

Last month a Freedom of Information (FoI) request exposed Ministry of Defence plans to purchase so-called ‘long lead’ items for building Trident replacement submarines. That would be all very well if construction had been agreed, but as the government announced last autumn, the ‘main gate’ decision on whether to go ahead or not will not be taken until after the next election - 2016 in fact.

The current work on the submarines is supposed to be concept and design work, but the items listed in the Freedom of Information report include nuclear reactors to propel the new subs, hydraulics, air purifiers, turbo-generators and bits of the hull.

Of course, defence secretary Liam Fox downplayed the significance of this news, indicating that these were just routine ordering procedures without any particular importance and that ‘technically’ parliament can say no at any point. The most recent revelations, following Fox’s response to a query from Jeremy Corbyn MP, was that what seemed to be bits of the hull in the FoI report, was in fact steel for constructing the entire hull.

When Corbyn asked whether “steel for the substantial construction of the hull structure of the first boat of the Trident replacement programme will be made as a long-lead purchase prior to main gate”, the minister replied:

 ”Yes. The specialist high strength steel needed for the hull structure for the first boat is included as a long-lead item in the Initial Gate Business Case for the programme.”

Never mind the unauthorised expenditure on costly items at a time of swingeing government spending cuts, this is actually political dynamite for the coalition. In fact, it is a slap in the face for the Liberal Democrats, who fought for - and thought they had won - a delay in the decision on whether or not to replace Trident until 2016.

That agreement, outlined in October’s Strategic Defence and Security Review, allowed the Lib Dems to say, in a letter from the party president to its members:

“Trident will not be renewed this parliament - not on a Liberal Democrat watch.”

This rather begs the question of who knows what about these MoD purchases. Is the MoD pursuing its own track, irrespective of the political agreement and process set out by the coalition government? Or is the coalition government pulling the wool over everyone’s eyes, including those of the vast majority of Liberal Democrat members who oppose Trident and expect their leadership to come up trumps on the issue?

Clearly many people at the highest levels have taken the 2016 decision point at face value. Only last week, cross party defence heavyweights Des Browne, Sir Malcolm Rifkind and Sir Menzies Campbell launched the Trident Commission to investigate the need or otherwise for nuclear weapons in Britain’s security - to help inform the debate and decision in 2016.

Someone, somewhere, is jumping the gun; they need to be reined in.

New estimates of inflation by the Office for Budget Responsibility mean that the NHS and schools budget will fall in real terms over the spending review period. The Government had promised a 0.4 per cent increase in NHS funding over the spending review period and year-on-year increases in the schools budget.

The OBR forecast on 29 November (Table 3.6) predicted higher inflation than in its June 2010 forecast (Table C2). This means inflation is set to be at a higher level than the cash increases in NHS funding. New analysis by the House of Commons Library show the real terms cut.

In an exchange with John Healey in the Commons yesterday, Health Secretary Andrew Lansley denied that there was a real terms cut:

“No I don’t accept that for a minute. At the Spending Review we set out what met our commitment. I am very clear – I just told him – that revenue funding for the NHS will increase in real terms and it will do so because we did not listen to the advice of that party opposite, which in the run up to the Spending Review was to cut the NHS budget.

We didn’t do that, we were committed at the Spending Review to an increase in real terms. The GDP deflator will move from time to time but the commitment we set out was clear and will continue.”

Labour’s Health spokesman, John Healey, said today:

“This is hard proof that the Government is breaking its promise to protect NHS funding.”

“Andrew Lansley needs to come clean and explain to the public why the government has broken the promises it made on the NHS – promises that were at the heart of the Tory election, central to the Coalition Agreement and repeated at the Spending Review.”

The Spending Review also promised a real terms increase of 0.1 per cent in each year of the Spending Review for the 5 to 16s school budget. This will also become a cut over the spending review period if the OBR’s new forecasts prove correct.

Update 16.40

Last nights Channel 4 analysis of NHS funding using the latest predictions from the Office for Budget Responsibility has corroborated Left Foot Forwards findings, confirming:

“what looked like a tiny real-terms rise in NHS spending now looks like a tiny real-terms cut.”

Therefore there is no certainty that there will be a real-terms funding increase in Government spending on the NHS.

Do health services really justify a ring-fenced budget? Last week the Institute for Public Policy Research (IPPR) published its alternative deficit reduction plan, including proposing the NHS should not be “protected”. This would enable a smaller and slower reduction “of 10 per cent rather than 15 per cent” in all spending areas, including health, supported with a better balance of cuts to tax rises.

The plan follows Will Straw’s deficit reduction proposals on Left Foot Forward last month, which included an 8.1 per cent average departmental reduction by 2013/14, including health spend.

On one level any spending reduction is sustainable – but what are the consequences? The government have promised a real terms increase year on year and under Labour NHS yearly increases between 1999/2000 and 2010/11 averaged 6.7 per cent per year, compared to an average annual increase of 3.5 per cent since 1948.

Against this a reduction of 8-10 per cent in NHS budget would be unprecedented, implying a major redefinition of its core purpose. Even with supposed protection, however, the chorus of local stories about NHS service cuts is growing. Last week its was NHS South West Essex who announced major service restrictions.

This morning’s Guardian reports:

“A fifth of NHS trusts in England have admitted to closing or considering closing major services — such as accident or emergency and maternity units — since the election.”

There is a pressing efficiency agenda for the NHS, but it is one of productivity rather than cost-reduction. NHS services are driven by demand – and Britain is getting older, and more obese. For example, over the next 10 years the numbers of over 85s will double, and those aged over 100 quadruple.

In addition, new cost-effective drugs are being evaluated and approved by NICE for NHS services. Yet for the last 18 months, the NHS has built into its own planning a top priority of reducing its costs by 15-20 billion pounds, to give itself cover for the twin pressures of public spending downturn and significantly increased demand.

In parallel, the coalition’s social care cuts will leave the NHS with more to do. The two services are interdependent, and as social care – commissioned and funded by Councils – is squeezed, with service definitions not prescribed in law, the NHS will pick up the slack. As the NHS Confederation argues, those missing out on social care will end up needing NHS services.

The Federation said:

“Some will present as emergencies in A&E departments and GP surgeries, others will find themselves trapped in hospital unable to get home, blocking the bed from someone else who badly needs it. Everybody loses: the users of services, those who care for them, the taxpayer and the NHS.  It’s a classic false economy.”

The government knows this is a weakness, and will be arranging some cross-subsidy from health to social care in the Comprehensive Spending Review.

Yet there are clearly major areas of inefficiency that the NHS needs to tackle effectively in an organization costing 100 billion pounds to run. Clinical variation – significant differences in the way that different NHS institutions and communities organise clinical services – could save over 5 billion pounds by matching the top 25 per cent performance, based on NHS calculations.

This is not an overnight task: it often requires new services and capacity before old services are phased out, for example, yet over time is achievable.  Wage costs form around 70 per cent of NHS costs, so extended pay freezes or employment changes offer further scope for savings.  It is this level of detail that Labour’s deficit planning must contemplate.

The reality is that “real terms increases in funding, year on year” sounds good superficially but offers no security for the current scope of NHS services.  After just a few months, it is clear the NHS will receive limited protection from the Coalition.

With the Spending Review just four weeks away, pressure is beginning to ramp up on George Osborne with widespread public dissatisfaction over his cuts and a challenge from his colleague, Boris Johnson, over the strategy. Pre-empting the Labour leadership candidates’ debate on deficit reduction, I gave a presentation to the Reform think tank earlier this week setting out my own deficit reduction plan which avoids the masochistic excesses of the chopper Chancellor.

My slides started with four graphs setting out the true story about the deficit, public debt, and the bond market using figures from HM Treasury, the OECD, and Bank of England. Regular readers of Left Foot Forward will be familiar with the argument on which I elaborate below(*) but the essential point is that while the deficit has to come down, there is no compelling economic case for the pace of retrenchment that George Osborne proposes.

But since the deficit has to come down, how can we do so responsibly? My proposal is to stick to Alistair Darling’s plan to cut the deficit in half over four years but split the impact 50:50 between tax and spending cuts – precisely what Norman Lamont and Ken Clarke did in the 1990s.

This would mean £28.5 billion in tax rises by 2013-14 delivered through the 50p tax rate and fulfillment of Labour’s proposed increases to NICs. I would add to that a mansion tax, the full Capital Gains Tax rise proposed in the Lib Dem manifesto, and a doubling of the banking levy.

On the spending side, there is no need for any of the deeply regressive welfare cuts including to housing benefit, the freeze on child benefit, or tax credit reforms (though I do have some sympathy with making 16 the cut off for child benefit). Instead, I would look for an average efficiency of 8.1 per cent across all Government departments aside from DfID. This would, of course, include the Health department which makes up close to one-third of all departmental spending. A significant chunk of this could come from a 3-year public sector pay freeze (around £8 billion according to the SMF).

Before getting into the broad macroeconomic and specific microeconomic policies that are needed to deliver economic growth, this responsible deficit reduction would reduce growth by virtually half as much as the Tory programme. Using the cautious multipliers estimated by the Office of Budget Responsibility (Table C8 of the Budget), I have calculated that my deficit reduction plan would take just 1.5 per cent out of the economy compared to 2.7 per cent by the Conservatives.

The responsible deficit reduction plan also avoids the ideological and masochistic approach taken by the Tories. There is no need for a regressive VAT rise, no need for huge welfare cuts that will disadvantage the most vulnerable, and no need for 25 per cent cuts from unprotected departments.

Given the proximity of the Spending Review, I’d be very interested to hear your thoughts on this approach.

* Labour should take responsibility for running a slight cyclically-adjusted structural deficit from 2005-07. During this period it was irresponsible to allow spending to continue to rise without a commensurate increase in tax revenues. But most of that small deficit was due to capital spending and, crucially, the Tories backed Labour’s spending plans until November 2008.

The record post-war deficit seen since the recession has been due to the financial crash including bailouts for the banks, increases in spending on unemployment and other benefits, and a falloff in tax receipts. Public spending also appears to have shot up on a percentage scale since GDP has fallen by around 6 per cent.

But Britain is in a good position to absorb this increase so long as the deficit is reduced over the medium term. Labour had brought down public debt after it rose in the mid-1990s. We are well placed internationally to absorb the rise and the bond market shows no signs of raising long-term interest rates. (And, no, this is not due to George Osborne’s policies as our own Duncan Weldon and the Independent’s Ben Chu showed yesterday).

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 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.