What Proportion of Government Cuts Were Labour Committed to?

The debate surrounding the proportion of government cuts that Labour was committed to has been a topic of contention. Lord Ashdown and Theresa May offered contrasting figures, leaving many confused about the truth of the...

The debate surrounding the proportion of government cuts that Labour was committed to has been a topic of contention. Lord Ashdown and Theresa May offered contrasting figures, leaving many confused about the truth of the matter. In this article, we will delve into the statistics and shed light on the actual ratio of cuts proposed by both parties.

Labour's Commitment to Government Spending

To understand the scale of Labour's commitment to government cuts, we must first examine the spending plans outlined by the previous Labour government and the current government. According to the budget announcements, the previous Labour government planned to spend an average of £693 billion over the next four years, while the present government aims to spend an average of £660.4 billion over the same period. Lord Ashdown's claim of Labour being committed to cutting £16 for every £17 spent seems to be reasonably accurate.

What proportion of Government cuts were Labour committed to? Image Source: Image Link

The Distinction Between Cuts and Tax Rises

However, it is essential to differentiate between changes in government spending plans and actual cuts. Alterations in taxation policies can either mitigate or exaggerate the impact of cuts. Simply using government expenditure as a proxy for 'the cuts' can be misleading. Therefore, we need to analyze the specific cuts proposed by the last two governments.

Over the 2011/12 to 2014/15 period, the Labour government announced an average annual reduction of £29 billion in spending, while the present government expects to cut £51 billion. Consequently, Labour's cuts amount to approximately £9.67 in every £17, which is about 56.9% of the Coalition's cuts.

What proportion of Government cuts were Labour committed to? Image Source: Image Link

The Significance of the Time Frame

The disparity between the figures provided by Lord Ashdown and Theresa May is also influenced by the time frame in question. If we focus solely on the cuts made in the current financial year, then Theresa May's claim holds true. The Coalition plans to reduce spending by £22 billion, whereas Labour had not intended to make any cuts during this period. Thus, the Coalition's cuts amount to approximately £7 in every £8, aligning with May's statement.

It is worth noting that May's claim specifically refers to cuts in 2011/12 and not the overall comparison of government and opposition cuts.

Complications and Conclusion

While the figures may hold true based on the parties' previous plans, it is important to consider the ever-changing economic circumstances and the evolving fiscal policies of both the Government and the Opposition. Labour's new economic duo, Ed Miliband and Ed Balls, have indicated a preference for raising more money through taxes and making fewer cuts.

Moreover, the reliability of budget forecasts has been questioned in the past. The Institute for Fiscal Studies highlighted the 'hole' in spending plans during the last election, suggesting that the Conservative plans implied £92 billion of cuts, while Labour's plans suggested a £82 billion retrenchment. Coincidentally, this suggests that Labour's cuts would be almost exactly 7/8ths of the Conservative plans.

In conclusion, due to the constant flux of economic circumstances and the ever-changing fiscal plans of both the Government and Opposition, pinpointing an exact ratio to describe the relative size of cuts proposed by each party is exceedingly challenging. While Theresa May's claim regarding the ratio of Labour cuts matching £7 in every £8 cut by the Coalition is substantiated when considering the Opposition's plans as they stood during the past election, it may not align with their present economic policy. Lord Ashdown's claim of a 16:17 ratio refers to projected expenditure without accounting for changes in taxation policy and cannot effectively describe the level of cuts.

Therefore, it is crucial to examine the nuances of each party's plans, their economic policies, and the volatile nature of the economy before drawing definitive conclusions.

1