Finance News

Think Tank Claims Government Not Delivering Promised Cuts

A centre-right think tank, the Centre for Policy Studies, has claimed that the Government is failing to deliver on its promised public spending cuts, leaving the country to continue down a path of economic ruin.

When the coalition came into office, David Cameron and George Osborne were insistent that they needed to reduce the amount Britain was spending on public services in order to rein in the deficit and limit the amount the country borrows each year.

However, a report from the think tank states that only 6% of the promised spending cuts have been delivered, with the majority of savings so far coming from reduced investment, i.e. cutting the spending on new schools, roads and other infrastructure projects.

They acknowledge that the government have reduced the deficit by as much as 25%, but say they have managed this through reduced investment and tax hikes, rather than by cutting public services as was supposed to be the case.

Philip Davies MP, an influential Conservative backbencher, said that it was time to deliver: “We are constantly being told by the BBC and the Labour Party that the Government is cutting spending too hard and too fast. But the Government hasn’t cut a penny and is spending more than the last Labour Government. It is time to dispel this complete myth. We need to cut spending to get the economy growing and the whole country knows it.”

The study itself states that “government expenditure has continued to rise in real terms, it means that any overall real terms spending cuts have come from cutting capital budgets. It also means that any closure of the current deficit so far has come through tax rises. The risk in the future is that the fiscal situation will only get worse. Few of the cuts that are intended have yet been made, while recent growth and borrowing figures have been worse than forecast in the 2012 Budget.”

With the government now facing criticism from the opposition for cutting too quickly, and from their own backbenchers for not cutting fast enough, it seems they are stuck between a rock and a hard place, somewhere that it will be difficult for them to move out of.