Tory minister: Thatcher only “dreamt of” our cuts

Conservative minister Greg Baker admits: “We are making cuts that Thatcher could only have dreamt of

Finally, a member of the government has admitted what David Cameron and George Osborne will not: that the cuts are worse than anything we saw under Margaret Thatcher. Speaking away from home at an event at the Darla Moore School of Business, University of South Carolina, the climate change minister Greg Barker said:

We are making cuts that Margaret Thatcher in the 1980s could only have dreamt of.

An examination of the data on the subject proves that he is right. As I have repeatedly pointed out, it is a myth to claim that spending was cut under Thatcher. Total public spending rose by 1.1 per cent a year on average and fell in real terms in two years only: 1985-86 and 1988-89.

By contrast, the coalition plans to reduce overall public spending by 3.7 per cent by 2014-2015, an average cut of 0.9 per cent a year. If that figure seems small to you, it's because the government will have to spend more on welfare benefits and debt interest.

But the graph below, which excludes non-discretionary spending, shows that the coalition is planning, in the words of the Institute for Fiscal Studies, "the longest, and deepest sustained, period of cuts to public spending since (at least) WWII". In total, departmental spending will be cut by 11.7 per cent.

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It's for this reason that it was so foolish for Nick Clegg to claim that the coalition would avoid the "savage cuts" of the 1980s. Unlike the Deputy PM, Barker has done his homework.

PS: The local US paper the Daily Gamecock claims that Barker said his colleagues "plan to cut spending by 75 per cent". It's entirely unclear what this figure refers to and, as the newspaper doesn't quote Barker directly, I'd give it a wide berth.

UPDATE: Mehdi rightly points out that Labour shouldn't get too excited. Their cuts would have been worse than Thatcher's as well.

George Eaton is political editor of the New Statesman.

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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.