Comprehensive Spending Review Reaction

The day of reckoning – postponed

So, after six months of speculation, rows and leaks the country’s necessary but bitter medicine has been prescribed and dispensed.

There were few surprises, a number of worrying political flourishes which reminded me of the former Chancellor who had got us into this mess originally, but also some important strategic decisions such as the continued investment into science and infrastructure that should be warmly applauded.

The process was seriously compromised from the start by the Party’s electoral commitment to ‘protect Health and Overseas Aid’. As a result Welfare, the Home Office, Housing and Local Government have been really clobbered to make up the gap. We’ve probably squeezed our Armed Forces too much too given their existing commitments.

Welfare needed to be addressed, despite the pain this will cause people and families in genuine need, there is too much misdirected money which needs to be reigned in and targeted more effectively to those that really need it. With the country still in dire straits after the worst recession in 70 years there has to be a question as to how achievable some of the proposals are. I applaud the start to tackle the ludicracy of universal benefits, despite the cack handed way it was initially rolled out but l fear the Coalition Government will wither in its determination on this necessary reform.

The key question now is how is the patient going to respond?

I fear not well and ironically the real threat is not the Chancellor’s cuts but interest rates.

Few people can genuinely defend the current Welfare system or budget and with IDS we probably have the best chance for 40 years to reform the current mess but it will be tough. If Cameron didn’t enjoy the debacle over Child Benefit, he’s going to really squirm over the plethora of other measures that will need to be imposed to deliver the draconian savings set out yesterday.

Local Government after several years of squeeze of Gershon efficiencies, is now one of the most efficient parts of the public sector but is being tightly squeezed again. Worryingly infrastructure investment has been savagely hacked – too much in my opinion and many councils will find this unsustainable. Maybe this is where the funding from new houses will play a key role in rescuing them from the impending black hole.

The real elephant in the room is interest rates. Vast swathes of the middle classes have emerged from the last two years almost unscathed due to incredibly low interest rates. Inflation is above the Bank of England’s target, we have a VAT rise due in the New Year which will increase it yet further albeit for a just a year but the current level of interest is unsustainable. Has the Chancellor acted to prevent inflationary pressures? Not enough, and this will be the catalyst for real unrest and political change.


Frank Browne
Conservative Consultant


The death of compassionate Conservatism

The Comprehensive Spending Review is one of the most ideologically loaded decisions of any Government in recent years. This is the true face of the Tory Government - the ‘nasty party’ are back and they have some yellow friends this time!

The impact on the Welfare State and Public Sector of these cuts will be the greatest since the 1945 Post War Settlement. This is what many Tories came into politics to do - rip up welfare and slash and burn the public sector.

The rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term, and prosperity in the longer term. Before Nick Clegg discovered Greece (in the period between the ballot boxes closing and the door of his ministerial car opening) they, like Labour, argued that in the context of reducing the deficit, speed kills. It’s amazing how power has changed everything the Liberals ever believed.

There is nothing fair about Child Benefit changes that leave a single earner on £45,000 losing thousands of pounds, while a family on £80,000 gets to keep every penny. As things stand the government is looking for a bigger contribution to reducing the deficit to come from children than from the banks. That can’t be right.

The poorest 10% will bear a greater burden than the richest – with the middle squeezed, and women are shouldering three quarters of the cuts?

A 75% cut in the social housing capital budget and putting social rents up by 80% to bring them closer to the private market will result in a large increase in homelessness. The landscape of housing will change dramatically as people who cannot afford a home or as a result of these changes even a social home will find themselves excluded and what do we do then – leave families homeless who can’t afford to rent? Developers are going to be forced away from delivering affordable housing and in so doing large parts of our population will find that they cannot afford a home, this will hit social mobility very hard - it will make the poorest poorer.

This whole spending review is about easing the pain on the wealthy, avoiding doing too much damage to the middle class, and hitting the poorest hardest. It is regressive and cruel. In the middle of this political storm are the Liberal Democrats and they have a lot to answer for…it’s amazing how power corrupts principles, I’m sure Nick Clegg’s Conservative Party membership card is in the post.

Dr Paul Harvey
Labour Consultant






The silent partners

Liberal Democrat members will have received a communication from Nick Clegg following the CSR yesterday reassuring them that “Liberal Democrat values and priorities are written through the review, like the message in a stick of rock”.

A stick of rock straight out of the Conservative ‘tuck shop’ presumably - for which Mr Clegg has developed a worryingly sweet tooth in the last 3 months.

Liberal Democrat ministers have had an input into this review. This is beyond doubt - but the principles upon which Liberal Democrats would like to think their leadership base policy programmes and decisions upon are, bar a few exceptions, nowhere to be seen here.

The party’s rhetoric on ‘Fairness’ in particular has not translated into anything substantial. The concept itself needs redefining according to David Cameron, and the Conservatives have put down something of a marker in this regard over the past week.

The Comprehensive Spending Review was never going to be a pleasant experience (though the government’s front bench seemed to enjoy themselves) and, there were some tough but necessary decisions that needed to be taken by the government yesterday.

Cuts to welfare in some shape or form were inevitable and justified. More detail on Duncan-Smith’s plans for the area is long overdue, and any reasonable judgement of welfare cuts must take into account what will replace the current structure.

Investment in education, foreign aid and innovation are all welcome steps of course. Although granting the NHS holy cow status at the outset of this process has inevitably resulted in an over-squeeze of other areas. Whilst ultimately effective as a political tactic, ring-fencing emotive areas may come back to bite the Conservatives as the knock-on effects to other departments (particularly the Home Office and DCLG) begin to take hold over the next year.

What will deeply concern those who consider themselves on the progressive end of the political spectrum is the unrestrained joy with which these cuts were greeted from the government benches yesterday – and not just from the kind of Conservatives who have made it their life’s mission to deal a blow to the ‘nanny state’ (though there was no shortage of those lining the aisles).

It was an unpleasant moment – and one that reveals a deeply entrenched lack of empathy within the government with those who will be made jobless as a result of these cuts. Labour’s handwringing will only carry them so far in the political dynamic we now found ourselves in, and although the impact of these cuts will have a huge impact on the public’s perception of the coalition, the Labour party need to haul themselves out of 1945 and engage in the debate in the meaningful way if they are to present a credible challenge.

Ally Kennedy
Liberal Democrat Consultant