As part of the FT’s expert election panel, our three contributors will occasionally be giving their thoughts on the big election news story of the day. Today, we asked for their thoughts on efficiency savings and the war on cuts. Get to know our panelists in their video introduction.
Miranda Green, former press secretary to Paddy Ashdown:
At last we have got past the idea of efficiency savings as a “Yes, Minister” idea fit only for ridicule and now have an idea of what it means in reality. Perhaps from this we will see how much cutting the public can stomach in return for tax cut promises: David Cameron made his position sound eminently reasonable on Thursday by arguing, in words of one syllable, that waste you cut tomorrow might as well be cut today. But we now see that public sector job freezes will also mean private sector job losses as suppliers have to renegotiate etc – real pain for real people. It was clever to suggest savings from cutting runaway pay for top public sector managers (which is very unpopular and can be a big story in local newspapers when an appointment is made). Very little traction for the Lib Dems on all this as they end up alongside Darling on NI while attacking the Tory record on VAT. They need to be working harder to sound different and distinctive to lift what is a very good starting point in the polls.
Charles Lewington, former press secretary to John Major:
The cat’s out of the bag! Reducing public debt will cost public sector jobs and will play havoc with the P&Ls of private contractors who supply government, particularly the IT sector. Cue, affected shock from the Chancellor of the Exchequer who has himself warned that spending cuts will be worse than under Margaret Thatcher.
In the seven years after Geoffrey Howe’s deflationary budget in 1981, the public sector workforce shrank by 12%. The experience of Sweden’s deficit reduction program in the 1990s was that state employees knew pain was on the way but needed to know that job losses would be fairly distributed and there would be a major investment in re-skilling. Earlier this week, the FT identified the influence of the public sector “voting bloc” particularly in the north-east and north-west where the Tories need to secure at least 25 marginals to win power. That “bloc” will need more reassurance from David Cameron after today.
Matthew Taylor, former director of policy, No 10:
Having got its response to the views of businesspeople about NICs wrong, Labour needs to be careful how it responds to talk of job losses in the public sector. The danger would be if Labour seems to be saying it is wrong to cut public sector jobs even if these jobs are pointless. The public sector is there to provide services to the public not as a job creation scheme. Instead Labour needs to do two things; first to demand that the Conservatives described specifically the areas in which they would get rid of agency staff, renegotiate contracts and freeze appointments. I suspect that once we get down to specifics it will become clear that there is rarely such a thing as a pain-free cutback. Second, Labour needs to argue that all the things Gershon is recommending it was doing anyway as part of its own efficiency drive and that the Conservatives still have to explain where they are going to get the extra billions of savings. Of course this is all smoke and mirrors. I suspect the Tories’ hopes for government rest on the assumption that their victory would spur extra growth and that this – rather than fictional efficiencies – will be what brings down the deficit.
Jim Pickard
Kiran Stacey