This Wednesday will see the Chancellor’s Autumn Statement which will set also set out the government’s Spending Review for this parliament. The Spending Review will set department budgets for each financial year from 2016/17 to 2019/20. Day-to-day spending is planned to fall by £18 billion (6%) between 2015/16 and 2019/20 in real terms. The NHS, defence, some education spending, and the international development budget are all protected from spending reductions, meaning that greater efficiencies and savings will be needed elsewhere.
George Osborne certainly an unenviable task but it would be disingenuous to pretend that government spending does not need to reduce from the current level. The last Labour government wrecked the government finances for a generation, recklessly leaving the budget deficit at a record level of 10.2% of GDP. The Coalition government made steady progress reducing the budget deficit to 5.0% of GDP, but there is clearly more to do if we as a nation are to get on top of the public finances and actually start paying back the national debt, so as to reduce interest payments on our debts and have more money for public services for the long-term.
We currently spend more on interest payments on our national debt than we do on defence. That is an unsustainable position which is why the Conservative government are planning to turn things around by bringing the budget back into surplus by 2019. What concerns me is that if we don’t bring the public finances into positive territory while the economy is doing well, any future economic shock that results in damaging the public finances could mean we never balance the budget, meaning the debt gets ever higher and the interest payable ever greater.
Jeremy Corbyn’s increasingly left-wing Labour Party will tell you that we should ‘fight austerity’ and that we should not reduce public spending. This is at best delusional and at worst dishonest. They would take us down the Greek path with much greater pain later on. It is common sense to face up to difficult decisions rather than being forced to have greater financial problems later on.
Councillor Duncan Crow, Leader of Crawley Borough Conservative Group
25th November 2015