Liberal Democrat Shadow Chancellor, Vince Cable has launched a pamphlet published by the independent think tank Reform setting out proposals for tackling the fiscal crisis.
In this pamphlet, he argues that there should be no “ring fenced” areas of spending and that all existing spending should be justified.
He claims that the situation is very probably more serious than the Government’s proposals for a fiscal tightening of 6.4% of GDP over eight years suggest. He argues that a fiscal consolidation of 8% of GDP over five years is more realistic, with the emphasis on controlling public spending, not higher taxes.
Nine specific areas of potential savings are identified as a start to a radical programme of reform. The main proposals are:
* Zero growth overall for public sector pay (saving £2.4bn a year), a 25% reduction in the total pay bill of staff earning over £100,000 and a salary freeze and end of bonuses for the civil service (saving £200m a year)
* Tapering the family element of the tax credit – saving £1.35bn
* A radical review of public sector pensions with the view to moving to higher employee contributions and later retirement ages. There is currently a £28bn subsidy to unfunded schemes
* Scrapping several major IT systems including the ID card scheme (£5bn over 10 years), Contactpoint (£200m over five years), the NHS IT scheme (£250m over the next five years) and the proposed ‘super database’ (£6bn)
* Curbing ‘industrial policy’, including scrapping Regional Development Agencies (£2.3bn annually) and ECGD subsidies (£100m annually) and reducing (by at least half) the Train to Gain and Skills Councils budgets (£990m together a year)
* Reforming the National Health Service, by reducing the centralisation and over-administration – starting by scrapping Strategic Health Authorities (£200m a year) – by strengthening commissioning and with ‘supply side reform’ – in particular tariff reform could save around £2bn a year
* Curbing the centralisation in education, by cutting national strategies and scrapping quangos – saving around £600m a year
* Reducing the amount of waste in the defence procurement process, including scrapping the Eurofighter and Tranche 3 (£5bn over 6 years), the A400M (total cost £22bn), Nimrod MRA4, the Defence Training Review contract (£13bn over 25 years) and the Trident submarine successor (£70bn over 25 years)
* Examining possible future public sector asset sales, including some aspects of the Highways Agency (land value of £80bn) and intangibles such as spectrum, landing rights and emissions trading
Commenting, Vince Cable said:
“The time for generalities is over.
“Instead, we need serious proposals for cutting public spending and tackling the UK’s budget deficit.
“The priority is to move the economy out of recession but there is also a need to restore fiscal credibility and to allow Government to focus its resources where are they are most needed.
“We need to debate when, how and where the cuts will come.
“Undoubtedly more are required to meet the exacting fiscal disciplines but asking the British public for their vote at the next election means being upfront from the outset about what Government should and should not be spending its money on.”
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doesn’t this propose a cut for the investment in st athan? good to see the lib dems taking money out of the welsh economy
The official response:
“Vince Cable is suggesting that along with other major defence spending the DTR needs to be looked at as to whether it is providing value for money as we will do across all government spending, this does not mean that we will necessarily scrap DTR/ST Athan. Vince’s pamphlet is not a Liberal Democrat document and is published through the think tank Reform. Our fully agreed proposals on dealing with the deficit will be in our manifesto.”
mathew,
there isn’t any money.
isn’t that the point.
Better to cut something that hasn’t happened yet than to ACTUALLY cut existing public services and the jobs that are contained therein.
Just seems to have picked out big numbers without thought, with regard to the DTR the forces will still need to be trained at the many exsisting expensive schools across the country , unless of course there won’t be an armed force left to train.
Indeed – although this is really just a list of areas where savings could be found. I imagine most areas that most politicians are saying they would cut would not mean every bit of the programme is ended, as some of them may have vital functions. The same is true for defence training procurement.