Why the coalition will struggle to make its cuts

Osborne will have to raise taxes or slash front-line services as “efficiency savings” of £35bn fail

Since last month's Spending Review, political attention has focused on the fairness (or otherwise) of the cuts and the likely effect on the economic recovery. Remarkably little thought has been given to another pressing question: how hard will the cuts be to implement?

Today's report from the Commons public accounts committee attempts to fill this void – and the outlook for the coalition isn't good.

The report warns that only £15bn of the £35bn of savings identified in the 2007 Spending Review have been achieved, and just 38 per cent of those were considered "legitimate value-for-money savings". The Communities department, for instance, which faces cuts of 51 per cent – the largest of any department – has made only £40m of savings against a target of £987m.

Some will undoubtedly portray this as an indictment of the Brown years, but here's the rub: if Whitehall fails to cut spending by £35bn (roughly 3 per cent of departmental spending) how will it ever meet George Osborne's target of £81bn? Faced with this conundrum, Labour MPs fear the coalition will resort to slashing front-line services to reduce costs.

Michael Portillo, once chief secretary to the Treasury, warned Osborne back in July that theoretical savings often fail to materialise in practice. He suggested that the coalition would have to raise considerably more through taxation. After all, during the last significant period of fiscal retrenchment in the 1990s, Ken Clarke split the pain 50:50 between tax rises and spending cuts.

Higher taxes or higher cuts? That is the unpalatable choice facing Osborne.

George Eaton is political editor of the New Statesman.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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