Government and Tories cheating the electorate, says PASC chair

25 Feb 10
Both Labour and the Conservatives have come under fire for not being honest about the damage that spending cuts will have on public services
By Lucy Phillips

26 February 2010

Both Labour and the Conservatives have come under fire for not being honest about the damage that spending cuts will have on public services.

At a Commons public administration select committee hearing yesterday, committee chair and Labour MP Tony Wright accused the government and Opposition of ‘cheating the electorate’. He said: ‘The public want to know what is going to happen to public services over the next five years. We are asking them to vote without being told.’

He earlier attacked a statement made by the prime minister in the Smarter Government white paper published last year. Gordon Brown’s promise not to damage public services despite the country’s ‘inescapable fiscal challenge’ was ‘not sustainable’, Wright said. ‘You cannot take £73bn out of the economy to fill a black hole while not doing any damage to public services, can you?’ he asked Chief Secretary to the Treasury Liam Byrne, who was giving evidence.   

Byrne disagreed with Wright’s repeated charges. ‘There will be a degree of pain but it does not damage our ability to deliver public services,’ Byrne said.

Wright, who is standing down as an MP at the election, insisted that damage to public services was inevitable, particularly as experts at the hearing had argued that the fiscal squeeze was ‘on a scale not seen in modern times’. Referring to an article in Public Finance, Wright said the government was denying the impact of ‘big cuts’ on departmental spending. The respected Institute for Fiscal Studies forecast these could be around 13%.

But Byrne said the IFS was making a number of ‘simplifying assumptions’ and the Treasury expected unemployment to come down by more than the economists predicted, adding up to savings of £10bn by 2014. While conceding that ‘there may be some things we have to stop’, Byrne said savings could mainly be achieved through cutting spend on external consultants, marketing and back-office functions. ‘It’s perfectly possible to make careful savings in administration that protects public services,’ he added.

Byrne also revealed that further savings, through greater use of shared services and moving more jobs out of central London, would be unveiled in March’s Budget. More quangos would also come under threat.

The chief secretary to the Treasury also told the MPs that public sector workers would be more willing to accept pay freezes and a squeeze in public spending because their pay rise had risen by 25% in the past ten years, compared with an average rise of 22% in the private sector. ‘This investment makes it easier for us to say to public servants that public spending and their pay will be tougher,’ he said.

On February 24, shadow chancellor George Osborne vowed to be ‘straight’ with the British public over Tory plans to cut public spending. Delivering the annual Mais lecture at Cass Business School in London, Osborne said the Conservatives would ‘not shy away’ from tough decisions on public spending.

In contrast to Labour’s pledge to wait until 2011 to begin addressing the country’s record £178bn deficit, the Tories would start this year. ‘Making an early start, on your own terms, creates the space for better targeted cuts,’ he said.

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