Friday, 24 April 2009

Guardian editorial on the financial crisis & cuts in spending

Guardian editorial on the financial crisis and the likely cuts in spending - 'Public services: The rise and fall of the state.'
"Some have argued that we should cut public services," Alistair Darling said on Wednesday, before adding "immediately". That one word add-on to Labour's standard attack on the Tories was perhaps the most telling moment in his whole budget speech, an implicit concession that the two frontbenches are now agreed that there will be big cuts to services. The dispute between the parties is no longer if but merely when the axe will fall. [...]

The single biggest slug of public money goes on paying the public wage bill, and nurses and teachers will soon feel discouraged if their salaries fail to keep pace with the general standard of living. Indeed some will vote with their feet, at which point pupils and patients will feel the effect. The second great tranche of the cash goes on state benefits, easily the most expensive of which is the retirement pension. This will only add to the pressure since - starting next year - the ageing of society will pick up pace, as the baby boomers start to reach pensionable age. And all the while, new cancer drugs and other technologies will be adding to the pressure on services. [...]

True, there are some things, notably Trident and ID cards, which this newspaper would be keen to see scrapped. But although each of these misguided projects has a total price tag in the low tens of billions, the year-on-year costs consume a minuscule share of the state's overall budget.[...]

Many secondary fields of state spending, such as housing, have already been cut to the bone. Other cuts around the edges - imposing museum charges or privatising the BBC, for example - might soon be on the agenda, but would impoverish public life without fully fixing the public finances.

In large part, at least, the savings are likely to come from those items of spending whose relative importance has grown non-stop since the second world war - health, education and social security.

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