Vince Cable has warned that when it comes to cuts after the next election, no area of the public sector should be ring-fenced, including the NHS. Speaking at the Fabian Society event “What Not To Spend”, at the Fabian New Year Conference 2010, he said that most difficult decisions after the election will be based on spending, not tax, and that cuts can be made to bureaucracy and inefficiencies in the NHS without affecting frontline services.
“The question is, how should public spending be tackled? In terms of ‘when’, we agree with government and disagree with Conservatives. We think we should be guided by economic criteria, not a political timetable,” he said.
Cable called for cuts to fall across “swathes of government administration, which are top heavy.” He proposed raising the tax threshold to relieve the tax burden on the poor, closing the tax loopholes for the rich and cutting public sector pay.
He added: “What should happen? We think it is wrong, economically and politically, to ring-fence spending and say cuts should fall everywhere else. This includes the NHS. The private sector has been far-sighted and reasonable, and the public sector should follow.”
Janet Daley, political columnist for the Daily Telegraph, agreed that central government has grown too big, and advocated government spending by individuals, suggesting a voucher system as a way to achieve “an enlightened and democratically empowered system”.
“Public spending has tended to entrench power of the state and disempower individuals. This is a problem for people on the left and the right, this leviathan state. We need government spending by individuals. We have to confront the possibility of creating mechanisms by which government money is spent by people,” she said.
Nigel Stanley, Head of Campaigns and Communications at the TUC, suggested that a driver for the economic crash was an unequal economy, and that a new kind of political settlement is necessary, in which those who gained in the boom years give back. He agreed that cuts are necessary, and should focus on plans such as ID cards and Trident.
He said: “Dealing with the deficit now is wrong thing to do. We have structural deficit now. When we get out of recession and into growth will still have a structural deficit. Setting an arbitrary timetable is not a good idea. Timetables for reducing the deficit strike me as a bit of target culture gone wrong.”