The impact of the coalition’s plans on Britain’s debt

When considering the impact of the coalition’s spending plans it’s worth noting the impact they claim it will have on the Britain’s debt. There are 3 key figures to consider:

• The total public debt. I.e. the total amount the government owes. According to the June budget, the official public sector net debt stood at 53.5% of GDP in 2009/2010 and was projected to rise to 74.4% of GDP by 2014/2015, had we stuck to the previous government’s plans. Under the coalition’s plans, the figure for 2014/2015 is just under 70% of GDP by 2014/2015, peaking at just 70.3% the previous year and falling to 67.4% by 2015/2016. In other words, even with the additional reductions in planned spending and increases in tax, the UK’s debt as a proportion of GDP will still grow for the next 4 years.
• The budget deficit. This is the shortfall between total public spending and tax revenues for any given year. Again according to the June budget, the public sector net borrowing stood at 11% of GDP in 2009/2010, and was projected to fall to 4% of GDP in 5 years time under the previous government’s plans. Under the coalition’s plans, the deficit is projected fall to 1.1% of GDP by 2014/2015, and the “cyclically adjusted” deficit is project to be eliminated that year and go into surplus in 2015/2016.
• The interest paid. This the minimum amount the government has to spend to service the debt (more needs to be spent to reduce it). This figure was projected to rise from £30.3 billion in 2009/2010 to £67 billion by 2014/2015 under the previous government’s plans. It is now project to rise to £63 billion in 2014/2015 and £66.5 billion in 2015/2016.

Thus the difference between the coalition’s plans and the previous government’s plans is that the former would see the deficit eliminated and the debt as a percentage of GDP starting to fall by 2015/2016, where both would still be increasing under the latter. And these figures are all dependent on economic growth projections being realistic. If growth is slower than expected, then eliminating the deficit within the current timescales will require even larger reductions in planned spending or bigger increases in taxation than we’ve seen thus far.

On the size of the coalition’s spending cuts

The home page of the TUC‘s campaign against the coalition’s spending cuts describes the campaign as being “against the Government’s deep, rapid cuts in public spending” (emphasis added). A blog called “A Thousand Cuts”, dedicated to critiquing the coalition’s plans has “The slashing and burning of Britain’s public services” as it’s sub-title. The BBC claims the Institute of Fiscal Studies described the cuts as “longest, deepest, sustained period of cuts to public services spending at least since World War II”.

In other words, we’re being told by various sources that the cuts to public spending are going to be larger and more severe than we’ve seen in recent decades. But what are the numbers behind these claims?

The Adam Smith Institute (ASI) summarises the figures on total managed expenditure as follows:

Year	TME (£ bn)	Nominal change (%)	Real change (%)
2010-11	696.8
2011-12	699.8	+0.43	-1.54
2012-13	711.0	+1.60	-0.39
2013-14	722.0	+1.55	-0.44
2014-15	737.5	+2.15	+0.14
2015-16	757.5	+2.71	+0.70

Meanwhile they summarise current spending (covering the vast bulk of “front line services”) as in the following table:

Year	Current Ex. (£ bn)	Nominal change (%)	Real change (%)
2010-11	637.3
2011-12	651.1	+2.17	+0.16
2012-13	664.5	+2.06	+0.06
2013-14	678.6	+2.12	+0.12
2014-15	692.7	+2.08	+0.08
2015-16	711.4	+2.70	+0.69

From these tables we see that under both measures of spending, the budgets will increase in nominal terms every year, and current spending will increase overall in real terms. Note that these figures come from the budget documents themselves and assume inflation of 2%. The ASI conclude:

Now, OK, these are not exactly big rises – but nor are they swingeing cuts that will (a) have any significant effect on the economy or (b) on the public services-using population at large. What the coalition’s spending plans really amount to is a five-year, real terms freeze of current expenditure, combined with three years of significant falls in capital expenditure. The overall impact of that is a a very small, real terms drop in TME (roundabout 1.5%) between now and 2015-16.

I’m not so certain the cuts will be quite as small as that in real terms. Current official measures of inflation are significantly higher than 2%. According to the BBC, the Consumer Price Index was last measured at 3.1% whilst the Retail Price Index (which used to be the main official measure of inflation) was measured at 4.7%. At 3.1% inflation, the current expenditure of £637.3 billion would rise to £742.40 billion by 2015-16 in real terms. The projected £711.4 billion would thus represent a 4.18% cut in spending in real terms rather than a 0.69% increase. At 4.7%, the £637.3 billion would rise to £801.82 billion and the projected £711.4 billion would represent a more significant 11.27% cut.

All of these figures are a far cry from the picture of “deep, rapid” cuts or “the slashing and burning of Britain’s public services” offered by some. Of course, a freeze or small reduction in spending represents a major shift compared to the constant increases in spending under the previous government. Also, it may be that within individual departments there will be more severe cuts than this picture represents since e.g. health spending is being protected.

Nevertheless what we’re actually getting is something in between a freeze and a modest reduction in total spending in real terms.

The DNA database and Mark Dixie

Update: The Times also has a useful look at Labour’s claims on this issue.

The Labour Party continue to portray Tory plans to restrict the retention of DNA of those charged, but never convicted, of a crime as somehow being “soft” on criminals, citing the case of Sally Anne Bowman who was killed and raped by Mark Dixie:

Gordon Brown MP, Prime Minister and Leader of the Labour Party, and Alan Johnson MP, Labour’s Home Secretary, will today make a campaign visit to highlight the vital role that DNA plays in tackling violent crime and why Labour has been fighting Tory plans to downgrade the DNA database.

At the visit in Stevenage the Prime Minister and Home Secretary will be joined by Linda Bowman, whose daughter Sally Anne was murdered in 2005.

Sally Anne’s murderer Mark Dixie was convicted through use of the DNA register, having been arrested but not convicted in a pub brawl.

The problem with this line of attack is that the Tories’ plans would not have made any difference in Mark Dixie’s case. When he was arrested his DNA was taken and compared to samples from the Sally Anne Bowman case. There was no need to have his DNA on the database to do that. There was thus no need to retain DNA for those never charged or never convicted to solve similar such cases. All that’s needed is to have a database of DNA collected from crime scenes and to have a policy of checking arrestees’ DNA against that of old crime scenes.

Such an approach is surely a far more proportionate use of DNA, far more respectful of privacy whilst at the same time more focussed on solving crime than retention of the DNA of those never charged with a crime in the first place, or those who have charges dropped or are acquitted.

Meanwhile, Genewatch point out that many of Labour’s other claims about the DNA database have to be taken with a large dose of salt.

How to shoot yourself in the foot in election advertising

The Labour party are trying to put voters off from voting Tory with this:

Being compared to Gene Hunt, one of the most popular characters from recent TV shows, is actually likely to boost Cameron’s chances, not hinder them. It has also opened up an obvious Tory response:

Ouch!

Tory Peer in bid to limit officials’ right to enter homes

[Hat Tip: Big Brother Watch]

The BBC reports:

It may sound like a Monty Python sketch – but an ancient law allowing people on private land without a warrant if they are following a bee might still apply.

The law, aimed at protecting honey supplies, is one of 1,208 powers of entry in dozens of different Acts of Parliament unearthed by a Tory peer.

Lord Selsdon recently launched a fresh bid to curb wide-ranging powers for officials to enter private homes.

He called for a code of practice to put strict limits on entry powers for all cases except those involving suspected serious crime or terrorism.

Introducing his Powers of Entry Bill in the House of Lords, Lord Selsdon said he had been pursuing the issue for more than 30 years but was not going to let it drop as “it has got into my blood”.

On the Tories and future transfers of power to the EU

In his speech outlining his party’s new post Lisbon treaty policy on the EU, David Cameron pledged that no more powers would be transferred to the EU without a referendum:

Never again should it be possible for a British government to transfer power to the EU without the say of the British people.

If we win the next election, we will amend the European Communities Act 1972 to prohibit, by law, the transfer of power to the EU without a referendum.

And that will cover not just any future treaties like Lisbon, but any future attempt to take Britain into the euro.

He also pledged that any attempt to use the Lisbon Treaty’s “self amendment” clause would require approval by Parliament:

But people will rightly say that the Lisbon Treaty does not just transfer powers to Brussels today.

It allows further powers to be transferred in the future, because it contains a mechanism to abolish vetoes and transfer power without the need for a new Treaty.

We do not believe that any of these so-called ratchet clauses should be used to hand over more powers from Britain to the EU.

Furthermore, we would change the law so that any use of a ratchet clause by a future government would require full approval by Parliament.

Note that he is not pledging that power transfers arranged via the ratchet clause would require a referendum.

Cameron agrees to repealing the Identity Cards Act

YouTube – David Cameron – Repealing The Identity Cards Act

This is unequivocal!

What David Davis is talking about.

In his resignation speech, David Davis talks of the “slow strangulation” of fundamental freedoms. The articles in this blog already document some of this. You can follow some of the links under the topics list in the side bar on the left or otherwise search the blog for articles of interest.

However more documentation can be found over at Magna Carta Plus. The latest article provides some pointers to get you started.

Tory peers cave in and let the Identity Cards Bill become an Act

Tory peers have accepted an amendment to the Identity Cards Bill allowing people renewing passports to opt out of getting an ID card until 2010. However they still have to register on the system, which means this “compromise” is nothing of the sort. So much for the Tory party defending civil liberties.

More details here.

Michael Howard on ID cards & further ID related links

I was going to do a critique of Michael Howard’s piece on ID cards in the Telegraph.However, Stephen Robinson writing in the Telegraph, has done such a good job I decided it better to refer people to it instead:

If you like the idea of all this and can afford the £400 or so it will cost your extended family (the Tories could have said), then vote Labour and help Charles Clarke, the new Home Secretary, get one over all those he accuses of “liberal woolly thinking”. On the other hand, if you are sceptical of grandiose government in general, and of ID cards in particular, the Tories might have said, then vote for us.

Mr Howard might have added that he would take the billions that Labour will spend on this scheme, and use it to improve border controls, to put more police on the streets, and bolster the security services.

He might have pointed out that we face a real and immediate terrorist threat and that ID cards will not be fully operational for at least seven years, even assuming the technology works. The Tories might have remarked on how America’s Department of Homeland Security, no slouchers in the war on terror, have no plans for a national ID card, but prefer to concentrate their efforts on border control and intelligence.

They might have mentioned that the real terrorist threat we face might actually come from within the pool of 26 million short-term visitors to British ports and airports every year, and that, if none of these foreigners needs an ID card, then why should your elderly parents in Cheltenham?

The Tories might, heaven forbid, have said they would not raise or spend the billions the ID scheme would cost because Conservatives believe in small government and want to cut taxes, not raise them.

But Mr Howard could not bear the thought of looking “weak on terror”, so preferred to make his front-bench team seem ridiculous yesterday in forcing them to fall in line behind a scheme that will cost billions, make us no safer and ultimately prove highly unpopular. He has deprived millions of people like me with an innate scepticism towards government of a real choice next year. At the very moment when one senses that voters are growing uneasy at the controlling instincts of New Labour, the Tory front bench has endorsed Big Government on stilts. (Emphasis added)

Also, a few more critiques of Charles Clarke’s defence of ID cards have appeared. The ever excellent Spy.org.uk has produced a good critique here.

Henry Porter also provides a good critique in Friday 17th’s edition of the Guardian. A particularly good passage reads:

To be anonymous, to go privately, to move residence without telling the authorities is a fundamental liberty which is about to be taken from us. People may not choose to exercise this entitlement to privacy, or see the point of it, but once it’s gone and a vast database is built, eventually to be accessed by every tentacle of the government machine, we will never be able to claw it back. We are about to surrender a right which is precious, rare even in western democracies, and profoundly emblematic of our culture and civilisation.

A further point Porter raises is that we currently have many ways of identifying ourselves if we wish. The point of the ID card is for the government to identify us.

That is why the ID cards bill contains e.g. £1000 fines for failing to notify the govt of a change of address and other similarly draconian requirements on people to fill forms in correctly. It is also why there will be an audit trail recording every use of the card, enabling the government to monitor all our lives in incredible detail, as stated in my earlier article.

Spy.org.uk have also produced a clause by clause analysis of the ID cards bill that is well worth reading. Spy.org.uk has become an immensely useful resource on all things civil liberties, privacy and surveillance related.