View from the House.

View from the House.

In 1997 Labour took the electoral decision to stick to Ken Clarke’s ‘eye-wateringly tight’ spending plans for two years despite the buoyant economy. And, despite the hype, the first Comprehensive Spending Review added little to that until this year.

As a result, contrary to what you may have heard, Labour has overseen a decline in the proportion of GDP spent on public services, even excluding social security.

In the last Tory year in office, investment in public services was 29.1% of GDP. It currently stands at 27.1% of GDP.

After the second CSR is taken into account, in 2000/1 (general election year) this still only improves to 28.2%. The ‘#19bn’ for education and ‘#21bn’ for health in the first CSR was over-hype, and has been quietly forgotten by Labour’s spin doctors.

So, the irony is the new ‘#43bn’ bonanza has not only been accumulated for three years at the expense of hospitals and schools, but these announcements only just begin to bring public spending levels as a proportion of GDP back to those inherited from the conservatives.

So much for ‘bonanza’. Of course, a growing economy means it is more in absolute terms, but most of that is taken up in real wage growth. So class sizes and waiting lists are worse, not better, whilst pensioners still only get 75p.

CSR II proves Labour could have helped our much beleaguered health service, our worn out teachers, our tired old school buildings and the public transport system long before now. And with a social security underspend of #2.5bn last year, they could have increased the miserable 75p state pension, not spent it on national debt repayment (our debt is already the lowest of any G7 country).

As it is, Labour is going to have to win back a cynical electorate who has seen record ‘giveaways’ announced – but seen no real change. The Conservatives, however, have an even harder job – explaining how they can cut #16bn as promised, when Labour are spending less as a percentage of GDP than either Thatcher or Major.

– Matthew Taylor is Treasury spokesman for the Liberal Democrats.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource