UK spending cuts

Labour and the unions in NZ keep decrying the Government for freezing the budgets of most state agencies. They think borrowing $250 million a week is not enough, and it should be more.

What they do not understand is that if you do not get debt and spending under control, then you end up with the type of deficits in the UK (and US) which require more dramatic surgery, as reported here:

The only departments not included in the Treasury trawl will be health and international development, which have been “ring-fenced” for the current Parliament. Education and defence will also escape lightly.

Alexander has told the Education Secretary, Michael Gove, and the Defence Secretary, Liam Fox, to plan for two scenarios – cuts to budgets of 10 per cent at best and 20 per cent at worst over four years.

All other departments – including the Home Office, the Department for Work and Pensions and the Department for Transport – have been ordered to produce plans showing the impact of cuts of 25 per cent, and at worst 40 per cent.

So the best case scenario is a 25% funding cut and the worst case is a 40% cut.

Makes a freeze look rather benign, doesn’t it.