A Tory government 'would struggle'
23 April 2009
Should the Conservatives form the next government they are really going to struggle to get public finances back on track, despite their pledges to be sufficiently "fiscally prudent" to be able to correct what they consider to be the mistakes that the Labour government has made, according to Colin Talbot, professor of public policy and management at Manchester Business School and regular contributor to Public Servant magazine.
In his Whitehall blog, Talbot said it was unrealistic to expect spending cuts to be able to turn around the "horrendous" rise in public sector borrowing which will be £175bn in 2009-10 then £173bn, £140bn, £118bn and £97bn in the next four years.
Talbot said: "If [the Tories] were to halt the rise in national debt if they come to power next year – when it will already be at 56 per cent of GDP – they would have to somehow cut enough to offset the projected £173bn borrowing for that year out of spending budget of £702bn as currently planned by Labour. That is a 25 per cent cut. This is self-evidently ridiculous."
Talbot said that former Tory leader Iain Duncan Smith was talking along the lines of cutting £50bn to £60bn a year from public spending, getting on for 10 per cent. Even this, he said, which would be politically almost impossible to achieve, would not halt the rise in the national debt. And it should be noted that these figures are based on government projections about growth in the economy from next year that the Tories say are unrealistic. If they do prove overly optimistic, Talbot said, the debt problem will be even worse.
He went on: "All this should [be] set against the Tories' rhetoric about fiscal conservatism and how they would take the tough decisions. I think not, or at least not on this scale. Taking a tougher stance on public spending may well be a defensible policy choice or even desirable (although I would not personally recommend it), but saying you can even start to rebalance the books and halt the rise in public debt without tax rises too is nowhere near credible.
"Saying you can actually halt the rise in the medium term just by cutting public spending would be pure fantasy."