Yesterday in the Liaison Committee I questioned the Prime Minister about spending cuts. I was not surprised by his evasive answers, but it was somewhat depressing to hear the usual combination of stonewalling and red herrings.
I note that a report by the Centre for Cities think tank says that some of our cities are so dependent on public sector jobs that they will soon face “significant cutbacks”. From 2011 to 2014, they say, around a quarter of a million jobs, and maybe more, could be lost. It is not cheering to learn that two thirds of the 1.2 million new jobs created in our cities under this administration are paid for by the tax payer.
What this means, as the report makes clear, is that many cities are economically dependent on vast injections of government spending.
Below is an edited paraphrase of my encounter with the Prime Minister, of which a full transcript is not yet available.
EL: Should there be an open debate about where cuts should fall?
GB: Our first priority is to get growth and employment into the economy and therefore there is a need to spend now.
EL: I know that one shouldn’t believe everything that one reads in the papers, but what about the Sunday Times article which claims that senior civil servants are drawing up plans for cuts of up to 20% in public spending?
GB: I agree that one shouldn’t believe all one reads. The article is ridiculous. We’re only 15 months into a 3 year spending review and we’re not sure of the future so we can’t choose which departments to cut at this stage.
EL: Peter Mandelson has recently made comments that cuts will be necessary within the public sector. Given that he is in effect your right-hand man do you agree with him?
GB: I would emphasise to you our plans for asset sales and efficiency savings. It would be wrong to say in July 2009 what cuts may be needed in the future and where they need to be.
EL: How much are we spending this year in Afghanistan?
GB: £3 billion, on top of the defence budget.
EL: But, for example, in 2002 we spent £19 million buying up poppy crop in Afghanistan. Is there a cost benefit analysis of the progress made in Afghanistan? And regarding the renewal of Trident, will there be any cost-saving reduction in that programme?
GB: We have identified £9 billion in efficiency savings across all government departments within back room services in order to get money to front line public services. [Also reiterated that there are to be asset sales but didn’t specify which assets.]
EL: Not everything can be paid for by efficiency savings.
GB: The families of our soldiers in Afghanistan won’t welcome news about cuts when their boys are out fighting.
EL: With respect Prime Minister that isn’t relevant to the question.
GB: We have made announcements on tax increases and also on reductions to capital spending.