London
Sunday
25 April 2010
Editor © Muhammad Haque
KHOODEELAAR! TOLD the London Financial Times so for 6 years and 3 months. Now, at last, the 'FT' shows it has 'cognitive skills' and is now calling for 'semi-scrapping' of CROSSRAIL! That is very crass of the FT. Why not tell the whole truth and call for the scrapping of Crossrail altogether?
"Brutal choices over British deficit
By Chris Giles, Alex Barker and Nicholas Timmins
Published: April 25 2010 22:10 | Last updated: April 25 2010 22:10
The next government will have to cut public sector pay, freeze benefits, slash jobs, abolish a range of welfare entitlements and take the axe to programmes such as school building and road maintenance – or make a set of equally politically perilous choices, according to an analysis by the Financial Times.
Packages of measures such as these are already under consideration in the Treasury and will be needed if further big tax rises are to be avoided as the next chancellor seeks, at a minimum, to halve the deficit by 2014 – a goal to which all the main parties are signed up.
The spending choices are so difficult that senior officials believe that an incoming chancellor may be forced to resort to additional tax increases.
One senior Whitehall official pointed out that the tax burden rose almost 5 percentage points in both the 1980s and the 1990s when Britain last reduced budget deficits that were large, but much smaller than the £163bn of borrowing the government has had to resort to this year.
Without similar increases, it might be difficult to reduce borrowing sufficiently over the coming years, the official said. Under current plans, which include the national insurance increase that the Conservatives say they would largely reverse, a rise in the tax burden of less than half of that is envisaged.
At the very least, Treasury officials believe the next government must bring down the cost of social security benefits to prevent drastic cuts in the areas of government activity that the parties have said they will not protect. “If you take 25 per cent out of defence, you would not have much of an army left,” one official said.
FT costings of a range of the choices that the next chancellor will face show that almost the whole population would be hit as the new government makes £30bn-£40bn of cuts in real terms to halve the deficit.
An online simulator, developed by the FT using government figures, suggests a saving of that scale would require all of the following: a 5 per cent cut in public sector pay; freezing benefits for a year; means-testing child benefit; abolishing winter fuel payments and free television licences; reducing prison numbers by a quarter; axing the two planned aircraft carriers; withdrawing free bus passes for pensioners; delaying Crossrail for three years; halving roads maintenance; stopping school building; halving the spend on teaching assistants and NHS dentistry; and cutting funding to Scotland and Wales by 10 per cent.
The public is braced for this looming era of fiscal austerity, but the case for spending cuts is yet to win over the public sector workers likely to be among the worst affected, a FT poll suggests.