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4 April 2011

Tory minister: Thatcher only “dreamt of” our cuts

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

By George Eaton

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.

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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.

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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.