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Rt. Hon. Sir Alan Beith MPLiberal Democrat Member of Parliament for Berwick Upon TweedWorking for you and the Berwick upon Tweed Constituency all year roundin Northumberland and in Westminster |
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Vince Cable launches 'Tackling the Fiscal Crisis: A recovery plan for the UK'
September 15, 2009 10:45 AM
Liberal Democrat MPs Vince Cable, Sir Alan Beith and Nick Clegg are working hard on ideas to help our economy.
Today the Liberal Democrat Shadow Chancellor Vince Cable launches a pamphlet published by the independent think tank Reform setting out proposals for tackling the fiscal crisis.
In the pamphlet, he argues that there should be no "ring fenced" areas of spending and that all existing spending should be justified.
He claims that the situation is very probably more serious than the Government's proposals for a fiscal tightening of 6.4% of GDP over eight years suggest. He argues that a fiscal consolidation of 8% of GDP over five years is more realistic, with the emphasis on controlling public spending, not higher taxes.
Nine specific areas of potential savings are identified as a start to a radical programme of reform. The main proposals are:
- zero growth overall for public sector pay (saving £2.4bn a year), a 25% reduction in the total pay bill of staff earning over £100,000 and a salary freeze and end of bonuses for the civil service (saving £200m a year)
- tapering the family element of the tax credit - saving £1.35bn
- a radical review of public sector pensions with the view to moving to higher employee contributions and later retirement ages. There is currently a £28bn subsidy to unfunded schemes
- scrapping several major IT systems including the ID card scheme (£5bn over 10 years), Contactpoint (£200m over five years), the NHS IT scheme (£250m over the next five years) and the proposed 'super database' (£6bn)
- curbing 'industrial policy', including scrapping Regional Development Agencies (£2.3bn annually) and ECGD subsidies (£100m annually) and reducing (by at least half) the Train to Gain and Skills Councils' budgets (£990m together a year)
- reforming the National Health Service, by reducing the centralisation and over-administration - starting by scrapping Strategic Health Authorities (£200m a year) - by strengthening commissioning and with 'supply side reform' - in particular tariff reform could save around £2bn a year
- curbing the centralisation in education, by cutting national strategies and scrapping quangos - saving around £600m a year
- reducing the amount of waste in the defence procurement process, including scrapping the Eurofighter and Tranche 3 (£5bn over 6 years), the A400M (total cost £22bn), Nimrod MRA4, the Defence Training Review contract (£13bn over 25 years) and the Trident submarine successor (£70bn over 25 years)
- examining possible future public sector asset sales, including some aspects of the Highways Agency (land value of £80bn) and intangibles such as spectrum, landing rights and emissions trading
Commenting, Vince Cable said:
"The time for generalities is over.
"Instead, we need serious proposals for cutting public spending and tackling the UK's budget deficit.
"The priority is to move the economy out of recession but there is also a need to restore fiscal credibility and to allow Government to focus its resources where are they are most needed.
"We need to debate when, how and where the cuts will come.
"Undoubtedly more are required to meet the exacting fiscal disciplines but asking the British public for their vote at the next election means being upfront from the outset about what Government should and should not be spending its money on."
Reform is an independent, non-party think tank whose mission is to set out a better way to deliver public services and economic prosperity. It believes that by liberalising the public sector, breaking monopoly and extending choice, high quality services can be made available for everyone.
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