Now we have the truth. Our Generals have said that Gordon Brown cut defence spending, a former head of the MOD said that Gordon Brown had cut defence spending. The only person claiming that Gordon Brown did not cut defence spending - is Gordon Brown himself. And guess what? Gordon is lying again. Here is a video made by the "fact check" team at C4 News:Don't forget that these cuts took place while our troops were fighting two wars.Hat tip Iain...

Any remaining pretence that the Lib Dems are on the centre-left has been smashed by Nick Clegg's nauseating praise for Margaret Thatcher in the Spectator today (http://www.guardian.co.uk/politics/2010/mar/11/nick-clegg-praises-margaret-thatcher).There's a useful way to work out exactly where the Lib Dems are on the political spectrum, which is to look at the proposed mix of tax increases and public spending cuts the three main parties are proposing for tackling the deficit. These are:Labour: 33% tax rises, 66% spending cutsConservative: 20% tax rises, 80% spending cutsLib Dem: 0% tax rises, 100% spending cutsAs a graph...

Labour would have you believe that to remove the "stimulus" from the economy would put in jepoardy the recovery. That is unless debt-funded spending is continued, this country will slip back into recession.Let's think about what this means, here in the real world for a minute.This recovery is about spending in the economy and it has been funded until recently by freshly printed money. This source of funding has run out, and the UK is reliant now on the debt markets to provide the "investment in public services" that the taxpayer for the moment is unable to. Or to put it another way, the Chinese tax-payer is funding Gordon's spending spree.The other people who are funding the spending spree are the banks, who are forced, by law to buy more government debt as capital against which they...

Are the cameras rolling?Even by his own shameful standards, Brown's performance yesterday at the Chilcot enquiry was a shocker:“Every request that the military commanders made to us for equipment was answered. No request was ever turned down. We had a rising defence budget... The spending review of 2004 was welcomed by the chiefs of our defence staff. They were satisfied at the end of the review that they had the resources they needed.” Unsurprisingly, our retired military leaders beg to differ. Lord Guthrie, ex-chief of the defence staff, says:“He cannot get away with saying I gave them everything they asked for, that is simply disingenuous... To say the outcome of that process was ‘welcome’ is frankly hyperbole.” Former head of the Army General Sir Richard Dannatt...

A nifty piece of double-speak came out of Community Secretary John Denham's briefing just now.He was rolled out to shoot-down stories flying around about council spending cuts. They were “confused”, Denham told us as we waited to be enlightened.Public services would not be cut – they would be protected, even improved. But they would probably not get any more funding.There would be less money around past 2010/11, but at the same time the "innovative" way services were managed would mean they were improved.Two councils, for example, could share a chief executive (i.e. sack one), share backroom operations (i.e. sack lots of people) use the internet more instead of people (bet no-one’s thought of that yet) and streamline etc...In other words – services would be protected through...

Britain faces 'savage' public spending cuts unless a start to reducing £178bn fiscal deficit is made, says George OsborneBritain will face "savage and ­swingeing" public spending cuts and a loss of economic sovereignty unless a start to reducing the record £178bn fiscal deficit is made this year, George Osborne warned tonight.In an intensification of Tory warnings of the need for spending cuts – in the face of Labour claims that the party is diluting its plans – the shadow chancellor warned that financial markets will panic unless a "credible" plan to reduce the deficit is introduced this year.Osborne pledged to make what the Tories are calling "in-year" public spending cuts by the summer if the party wins the election, in contrast to Labour, which plans to maintain real-term rises...

There has been much talk in recent months of the need to cut public spending and regular readers will know that I support Conservative plans to reduce the deficit faster than Labour plans to do. However, I am concerned at suggestions that the axe could fall heavily on defence spending whoever wins the next General Election. There are two aspects that need to be differentiated. One is the level of defence spending itself and the second is the fact that under this Government commitments have been made that greatly exceed the currently planned defence budget. Just to deal with the second issue there will have to be some painful decisions and adjustment in programmes. These will be manageable without damaging Britains defence capabilities as long as the defence budget is not cut in the coming...

Osborne believes that unless tough action is taken to cut record £178bn fiscal deficit, Britain could lose AAA ratingDavid Cameron and George Osborne are drawing up plans to impose real-terms spending cuts that would see Britain's public services slashed by billions of pounds during the next parliament.Senior Tory sources have told the Guardian that the party leadership is determined to press ahead with cuts that go dramatically further than Labour's plans for an overall spending freeze –already likened to a return to the 1970s – from next year.Cameron is under pressure after declaring last week that a Tory government would not introduce "swingeing" spending cuts in its first year in office.Labour claimed that the Conservatives had been forced to accept the need for continuing public...

The weekend's reports that the Conservatives are rowing back frantically on the subject of cutting public spending are just another sign that they haven't really got a grasp on how to run an economy. Alternatively, you could argue that it's a sign that they haven't got a clue about how to win an election other than keeping their fingers crossed that Labour will continue to find new and interesting ways to shoot themselves in the foot. As I noted last month, cutting public spending isn't that easy. If it were, everyone would do it. It isn't necessarily popular either, at least when specifics have to be announced. Everyone is in favour of less public spending, with the criticial exception of those aspects they benefit from. And in the face of a slight drop in Conservative...

A moment of sympathy, please, for Tory leader David Cameron as he tries to steer a middle ground as the UK falteringly exits recession. On the one hand, he needs to keep happy his shadow chancellor George Osborne and the die-hard right-wingers at ConservativeHome who are desperate to start cutting public spending now: Spending cuts need to be extensive and immediate. … We also need to get the pain out of the way as quickly as possible. Waiting until Years 2 or 3 of any Conservative government to cut spending will harm the chances of re-election. And on the other hand, there is common sense and financial reality, which says don’t cut public spending too soon or else risk triggering a double-dip recession – something Mr Cameron seems to understand, but be reluctant to act...

Over at the Financial Times Nick Clegg has pledged to be straight with the British public about the state of the nation’s finances, and the public spending cuts the Lib Dems will make – called on the other two major parties to do likewise. At the moment, he says, Labour and the Tories are treating fiscal discipline like a “political football”: Gordon Brown is determined to keep spending, whatever the risks, to create a dividing line with the Conservatives. David Cameron is determined to insist on immediate cuts, whatever the risks, to create a dividing line with Labour. It has become a political game of chicken, each waiting for the other to blink first. This point-scoring must end: the country needs a rational plan. Significant cuts are necessary. But the hawks...

Nick Clegg was slated when last year he called for 'savage cuts'. Last week Labour woke up to the idea that we cannot go on spending the way we are without either increasing the amount of tax we pay or cutting spending. Now it seems that the Conservatives have realised the inevitable, that big spending cuts are necessary. But, being Cameron's Conservatives, they cannot stop there. They want...

• Chancellor and Mandelson spell out election priorities• PM's core vote strategy rejected in policy shiftThe chancellor, Alistair Darling, and the business secretary, Lord Mandelson, yesterday signalled a shift in government strategy when Darling warned that Britain faces the toughest spending round in 20 years if Labour is re-elected.Mandelson pointedly insisted that Labour is a national party that represents people in every part of the UK – an implicit rejection of any core vote strategy.Darling also disclosed that he discussed the coming budget with Gordon Brown on Wednesday, in the middle of the backbench plot to oust him, but insisted he never considered withdrawing his support from the prime minister.His remarks assert his authority over the schools secretary, Ed Balls, and,...

Conservatives hit back after chancellor launches offensive claiming David Cameron's party had only explained how it would pay for £11bn of £45bn in spending pledgesLabour and the Conservatives were today locked in the first big squabble of this year's general election campaign as the Tories described claims by the chancellor, Alistair Darling, that they had a £34bn black hole in their spending plans as "a dodgy dossier full of lies".In one of the morning's press conferences that laid out some of the battleground of the long campaign – to culminate in an expected polling day on 6 May – Darling said the Conservatives were trying to fight the election "on a nod and a wink".He issued a 148-page document laying out what he said were Tory weaknesses on spending, with £45bn in spending...

Milton Friedman said… “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, ‘How do you hold down government spending?’ Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”...

We are seeing some signs that the economic recession is lifting. Does that mean that people are going to rush out and start spending their money freely again? Of course not. There may be an increase in some of the types of items that people will buy in 2010 but for the most part we’re all going to stick to the trend of living frugally. In fact, according to a recent survey, some consumers plan to continue cutting back even more on certain areas of their consumer spending. The survey is an America survey conducted by AlixPartners which reveals insight into the planned spending of the average American consumer. However the results of the survey are applicable to global consumerism in first world countries where all people are still spending money and yet trying to do so frugally. Some...

How much money do you plan on spending on Christmas this year? If you add up all of your holiday spending then what would the total come out to? If you were to break down that spending what percentage would go to gifts, to decorations and to food and drinks for the Christmas season? Have you already spent more than you wanted to so far for Christmas 2009? And how do you think that your spending compares to what everyone else is spending this Christmas season? According to a report by American Express, the average shopper is expected to spend approximately £468 on Christmas this year. That is broken down as follows: · £260 on Christmas presents and gifts for people for the holidays · £67 on decorations for the home and Christmas cards for people · £141 on various food and beverages...

Oh dear. Alistair Darling and Ed Balls seem to be at loggerheads, after Ed Balls pushed for a £2.6 billion increase in his department's funding. Joe Murphy has the story HERE. Balls really does seem to be all over the place on spending. It wasn't that long ago he reckoned he'd be cutting his department's spending by £2 billion, rather than increasing it. You don't think he could now be playing political games, do you? Perish the thought...In June, Balls said he could see spending rises for schools and hospitals…In an interview on Radio 5 Live, Ed Balls came close to committing Labour to increasing spending on health and education from April 2011: ‘If we can get the economy right - as I believe we are doing - I think we can see spending rising on health and schools in real terms...

Milton Friedman once said… “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, ‘How do you hold down government spending?’ Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”...

Inspired by Phil's post on minor parties election spending I thought I'd geek it up and take a dip into the third party election spending for the European elections earlier this year.Third Parties are organisations or individuals who incur spending during the election but are not running candidates that can back or oppose specific candidates but usually raise specific issues. The summary of the spending is as follows; Name of Third Party England (£) Wales (£) Scotland (£) N. Ireland (£) Total Expenditure Board of Deputies of British Jews 30,656.27 2,066.72 1,722.26 34,445.25 ANIMALS League Against Cruel Sports 865.8 144.45 288.8 144.45 1,443.50 Vote Cruelty Free 1,629.20...

Robert Barro and Charles Redlick argue there is little evidence that government “stimulus” does much to stimulate the economy.  They conclude: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real...

The big issue facing the party is how we deal with the crisis in the public sector finances and balance the undoubted need to cut the structural deficit with our commitment to a fairer and greener society.Vince Cable MP last week published a pamphlet setting out his thinking on the issue.As one would expect Dr Cable takes the issue seriously and argues that we should too. He believes that we may need to reduce Government spend by as much as 8% of GDP over five years and that we need to set out very specific plans about how we will do this.This would inevitably mean massive cuts in Government spending which would have a major impact on the country.He rightly argues that Labour's plans undersetimate the scale of the problem, that they rely too much on reducing capital spending rather than...

I thought David Cameron’s message this week was worth reprinting on here in full… On Tuesday, after months of denying it, Gordon Brown finally admitted that spending had to be cut. So at last he is catching up with reality. The public spending debate can often get bogged down in the language of deficits, forecasts and balance sheets but it really is this simple: Britain’s in a debt crisis. We’re borrowing far, far too much money. And unless we cut public spending, we’re all going to pay the price – with higher taxes, higher interest rates and lower confidence in our economy for the long-term. So why on earth has it taken the Government so long to realise this? For months, we’ve been telling them that they need to get a grip on our national...

With the battle lines drawn around future public spending plans the start of the Liberal Democrat Conference sees Nick Clegg issue a brutal warning about the future. He tells the Guardian that bold and even "savage" cuts in government spending will be necessary to bring the public deficit down after the next election.He sets out plans that include a long-term freeze in the public sector pay bill, scaling back future public sector pensions, and withdrawing tax credits from the middle class. It is a direct challenge to the party's grass roots many of whom are prepared to give the leadership latitude on this issue but nevertheless do have some red lines over which they will not cross. What is important here is that Clegg and Cable respect those red lines so as to take the party with...

After Gordon Brown and his incompetent bunch of ministers were caught out lying to parliament over spending cuts, it seems their preferred method to excuse their disgusting behaviour is to tell more lies. Peter Mandelson has been rolled out to do his "look into my eyes, not around the eyes" routine. There is no lie that Mandelson will not tell - no matter how unbelievable. His latest is to accuse the Tories of trying to create a "false impression" of government spending plans. Can you believe the sheer gall of the man?Apparently Mandelson told Reuters TV:"It's easy to take a leaked document, to selectively lift from that figures that are provided by officials but which don't represent ministerial plans."The Tories did not selectively lift figures from this document - they took the full...

As poll finds half of voters think 'literally anyone' from Labour ranks would make a better leader than Brown, PM will acknowledge need to reduce spendingGordon Brown will today seek to brush aside poll findings questioning the quality of his leadership with a major speech to the TUC in which he will for the first time acknowledge the need for "cuts" in public services.The prime minister will say he will have to reduce spending in some areas to protect frontline staff. For the first time, he will admit the need to halve the deficit within four years cannot simply be achieved by higher growth, efficiencies and asset sales.He will say his aim in restraining spending is to protect the vulnerable, and seek to draw a distinction between Labour and the Conservatives over the timing and scale of...

Peter Mandelson's speech this afternoon represents a defining moment. He is clearly trying to reposition his party in the ongoing debate on public spending. His mantra of "wise spending not big spending" is New Labour to its core. It is of course a mantra that anyone could utter, Conservative or Labour. Although he is trying to lead his party to a new position, his interview on Today showed him unwilling to confront the word 'cuts', and cuts there will have to be. Until he and his party face up to that, they won't get anywhere. So he can try to reposition all he wants, but it won't work until he and his colleagues can face the inevitable.Yesterday's Sunday Times poll showed the public have an adult attitude to this whole issue. 60% believe that spending needs to be cut in preference to...

Now, as we all know, if you don't spend lots and lots of money—increasing amounts, in fact—on public services, then they just won't get any better. And, by extension, if you cut spending then public services will get worse, right?But the question is always—better or worse for whom? NuLabour has splurged vast amounts of cash on education, the NHS, etc. and yet there is very little indication that the quality of the outcomes has changed.Sure, the people employed in those sectors have got handsome pay rises but then I don't see why the rest of us should be impoverished because the state is a shit employer—or because people were willing to work for less money than they might.Whilst all nurses are angels and every teacher is a positive saint, but public services do not—in...

Health and overseas aid budgets will not be spared from a programme of public spending cuts that will be rolled out by ministers over the next two months, the Guardian has learned.Gordon Brown and the chancellor, Alistair Darling, agreed the outlines of the new strategy through two lengthy discussions this summer – and it will be billed as a return to New Labour's original commitment to public service reform.Though Labour will not ring-fence any government department's spending programme, it will focus on "protecting activities and priorities" such as education and fighting child poverty.David Cameron, intent on softening his party's harsh image, has said health and international development budgets will not be reduced, a position that has infuriated the Tory right.The first outlines of...

...but slicing is betterFurther to our post on Dave and George's cuts plan, it's worth thinking a bit more about the actual technique of cutting.There are basically only two ways a central government can go about cutting public spending: it can hack, or it can slice.Hacking is the simplest.All that's required for hacking is the head honcho and his finance guy to sit down in a private room with a calculator and a sheet of paper. The head honcho says "we need to cut spending by 50 billion". The finance guy taps the calculator and says "spending is currently 500 billion, so let me see... that means..." tap tap tap "...that means we need to cut spending by 10%... I'll issue the orders immediately".Job done.Well, job done for the head honcho and his finance guy, anyway. They've issued the...