In real terms spending is actually projected to carry on going up—from £637 billion in 2010-11 to £711 billion in 2015-16—but that still represents the biggest squeeze since World War II. Government departments that are unprotected (all bar the giant health budget and the minuscule amount spent on overseas aid) can expect dramatic cuts in the region of 25% over the next four years.
The spending cuts are nominal ones, and are being measured from the baseline of previous budget estimates, not from actual current spending levels?
You mean there\’s not actually going to be any cuts at all in actual cash terms?
Would ballooning debt interest be a factor in the cuts that are being talked about?
A “cut” is defined in the public sector to be “any increase in expenditure less than I was hoping for”.
Surely he cannot be serious.
If this were the case, we would have lost our AAA rating already, would we not?
No, he’s right.
Budget p102, total spending rises every year. £697bn in 2010-11, then £700, £711, £722, £738, £757.
George meant the OTHER kind of cut: the type that requires an assumed GDP growth in order to be any kind of decrease as a % of GDP.
“as a % of GDP”
What’s GDP at the moment? Sounds like an optimistic growth forecast.
Hugo,
Started to actually do some maths there, but Wat has saved me the bother.
Same idiotic stuff goes on in US. Government never shrinks, just slowing the growth rate is the politician’s definition of shrinkage.
And yes, GDP growth will (in real terms, maybe nominal terms) be flat to negative in US (and GB, too, probably) over the next several years, maybe decades. Only when the economy collapes will they ever wake up. Right now they hope to just strangle the goose to make it lay faster (good luck with that). But, just a little too much pressure on the windpipe (and no one really knows exactly how much pressure it takes) and the goose is dead (and us along with it). God help us all.