Clegg is wrong: these cuts will be much worse than Thatcher’s

Spending actually rose during Thatcher's premiership.

"There will need to be cuts, cuts that are savage and bold."

Nick Clegg, 19 September 2009

"We're going to do this differently. We're not going to do it the way we did in the 80s."

Nick Clegg, 6 June 2010

Before the election, Nick Clegg made much of his willingness to implement "savage and bold" spending cuts. In an interview with the Spectator, he pledged to reduce the Budget deficit through cuts alone, a position that put him to the right of David Cameron.

Now, with George Osborne's emergency Budget just weeks away, Clegg reassures us that there will be no repeat of the savage cuts of the 1980s, no return to "sink-or-swim economics". But the truth is that the cuts the coalition is planning will be much worse than anything we saw under Margaret Thatcher.

Many on the left, apparently including Clegg, are unaware that, despite her neoliberal ideology, spending actually rose during Thatcher's premiership. While education and health were neglected, spending on defence, law and order and welfare payments (thanks to mass unemployment) continued to grow. Overall, public spending under Thatcher -- from 1978-79 to 1989-90 -- rose by 1.1 per cent a year on average.

And as this IFS chart shows, spending fell in real terms in two years only: 1985-86 and 1988-89.

thatchermajorblairspending

The same body has forecast that the coalition will have to cut non-ring-fenced Budgets by at least 25 per cent to meet its deficit targets. Clegg's platitudes do nothing to prepare voters for the tightest spending squeeze since the Second World War.

The Lib Dem leader may attempt to redistribute wealth through the tax system, but it remains the case that it is those most reliant on the state -- the poor, the young, the elderly -- who will be hardest hit by the cuts.

But on one point he is right: it's not going to be like the 1980s. It's going to be much worse.

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George Eaton is political editor of the New Statesman.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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