Cuts? Regulation needs to be cut

The cuts in spending are going to feel very unpleasant indeed. Rising interest costs, resulting from past expansions in public debt, are going to crowd out other parts of the budget. It is proving difficult to curb the cost of transfers, such as benefits and pensions, and this combines with the ring-fencing of health and development spending to leverage the cuts in unprotected departments. But, as I show in my report published today by the Centre for Policy Studies, the stark reality is that the spending clock is only being turned back to 2008-09, not to the dark ages.  

In fiscal year 2014-15 the government plans to spend £758bn, equivalent to £647bn at 2009-10 values. That figure is indeed lower than the out-turn for Labour’s last year in office – but not by very much, since £669bn was spent during 2009-10. In fact, the proposed spending reductions actually unwind just £22bn of the £230bn real-terms increase which occurred between 1999-2000 and 2009-10.