Matt T

UK politics

Two stories that don't seem to have got much blog coverage are the UKIP being ahead of the Liberal Democrats in a poll on voting intention for the European elections (in today's Telegraph), and Oliver Letwin's admission that he wants government spending to be reduced to 30% of GDP, from a projected 42% by the time of the next election.

First, the UKIP beating the Lib Dems. As usual, Anthony Wells does the hard work and tells us what it means. And it looks like it means the UKIP are ahead of the Lib Dems.

The reasons for this seem quite clear. First turnout is going to be absymal. The lower the turnout the higher the UKIP (and Tories') share of the vote. The reasons for this aren't hard to fathom, and if they are say the word 'head bangers' a few times, which should make it clear, if perhaps unfairly. Second and related, about 10% of the electorate seem prepared to vote for the UKIP in a European election, but not in a general election. Thus it's a protest vote too.

So the Lib Dems could come fourth. This is not historically unheard of - in 1989 the Green Party took 15% of the vote with the Libs (then called the Social & LD) on only 6.3%.

Second, Letwin's "gaffe" as it is being called. Basically in a private meeting he is said to have said that his aim is to reduce public spending to 30% of GDP, but at the moment electoral considerations don't allow it. I should note that he denies this, saying that he was literally just saying that electoral considerations wouldn't allow it, without giving an opinion, and in any case philosophically the Conservatives wish to increase spending on the NHS and education.

Taking his denial and ignoring it, it is interesting to note how 30% of GDP could be achieved as opposed to 40% (say). First internationally it's worth remembering that this would be a very low total, in fact basically the lowest, below the US & Japan (once you add regional spending in). Second, historically it's a very low figure too. It has never been anywhere near 30% post World War II. Third, in terms of actual pounds we're talking a cut of just under a third, or about £167bn (spending in 2005/2006 planned to be £500bn).

The obvious targets are the largest. They were (forecast) on the department expenditure side, £77bn for the NHS, £46bn for local government, £33bn for defence, £31bn for education, £22bn for Scotland and £12bn for transport, On the annually managed expenditure (demand-based, not fixed) then social security is the largest by far at £121bn, with £15bn for income support/jobseekers allowance, £22bn for debt service.

Starting with the largest then, almost half of this is pensions, with Income support, Housing benefit, Child benefit and Incapacity benefit making up a similar amount together. Housing benefit could probably be cut a bit, but at £13bn even a 50% cut wouldn't get very far towards your total of £167bn. A better option might be to privatise the state pension, and make large contributions to private pensions compulsory, which you could then use to pretend it was no longer public spending. However it's not clear the public would accept compulsory private pensions where individiuals contributions didn't go solely to their future pension.

On the spending side the obvious target is the NHS, but along with education the Conservatives have said they won't cut this for the time being. Even after that time it would be hard to imagine huge cuts. However again the most likely option seems a semi-privatisation, which would allow spending to be shifted to the private sector whilst maintaining it in the NHS.

posted by Matthew @ 5/24/2004 12:14:00 PM Comments: 0