Monday, October 03, 2011

George Osborne's secret millions

The Chancellor, George Osborne (Con), has repeatedly argued that there is no money left: we must tighten our belts, we're all in this together, and welcome to an age of austerity. The argument is that the Labour Party has broken the piggy bank and spent every penny. (In today's Conservative party conference speech, Osborne says there isn't a penny more to spend.) We must now learn to live on much less so that economic prosperity might return.

These are tough words followed by tough actions. The UK will see some of the biggest cuts in public spending in a generation. Most of these cuts will be implemented shortly -- so the pain is getting closer and no longer on the horizon. We are told that there is only a plan A and no plan B. The government is supporting austerity measures because it has to and not because it wants to.

But is this true? The Labour Party has made repeated claims that the Tory-led cuts are being made too fast and too deep. The austerity measures are not driven by economic necessity, but political ideology.

So what evidence do we have that there's no money left?

First, the government's new school reforms - enabling the creation of academies and free schools - has cost far more than originally predicted.

Secondly, we have seen that the London riots have caused about £35 million of damage - and that the government has promised to help with these costs.

Thirdly, the government's higher education policy - surely, the worst such policy I've ever known - will actually cost the government much more than the current system. The government expects 20-30% of students to be unable to pay their loans in full.

Fourth, the government has found £250 million that it will pay to councils to ensure weekly bin collections.

Finally, Osborne has said that he has found a further £805 million to pay to councils (representing a 2.5% rise) if these councils do not raise council taxes for the forthcoming financial year.

Welcome to George Osborne's secret millions. There is money left in the bank after all, money that has been used to fund policies that cost the taxpayer far more than the policies that have been replaced.

Yet more evidence that ideology, not economics, is driving government reforms. So where has Osborne found his secret millions? Is there more? Time will tell.

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