Political

Economic statistic of the week: how the cuts compare

Courtesy of a written answer in Parliament, we have a top-level comparison of how the previous Labour Government’s spending plans for the end of this Parliament compare with what the Coalition Government is now planning.

Against the benchmark of what public spending would have been if welfare rules and the like had been left unchanged and other public expenditure increased in line with inflation (i.e. DEL spending increased in line with inflation, AME spending based on no rule changes), Labour was planning to cut spending by £56 billion.

By contrast, the Coalition Government is planning to cut spending by £81 billion. The difference between these two figures is made up of:

Higher efficiency savings: £7 billion
Welfare and related savings: £18 billion
Lower national debt interest payments: £3 billion

… but also higher departmental spending (DEL) by the Coalition compared to Labour’s plans of £2 billion.

Two things strike me about this comparison. First, how much of the difference in spending plans comes down to welfare changes. Second, how little we still know about what Labour would cut. Under Labour’s plans, the non-welfare and related spending would have been slightly lower than the Government is planning and yet Labour now opposes many of the other cuts and changes. So quite what was Labour planning to cut?

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