My Chopper Is Bigger Than Yours

I've just caught up with Darling's post-putsch interview yesterday - the one where he suddenly started boasting about the size of his cuts. With the demented Brown now (supposedly) safely straight-jacketed, and the odious Balls finally chained up in the cellar, Darling feels able to flash his chopper in public:

"The next spending review will be the toughest we have had for 20 years ... to me, cutting the borrowing was never negotiable. Gordon accepts that, he knows that...

Many departments will have less money in the next few years. [The cuts] are utterly totally non-negotiable ... We had a very constructive meeting on Wednesday about what we needed to do and wanted to do in the Budget. I have always been clear you have to level with people. We are talking about something like a �57 billion reduction in the deficit through tax increases and spending cuts."

 �57bn, huh? Want to show us the whole thing, big boy?

Well, maybe not... but his is definitely bigger than George's:

"I think we will be tougher... The Tories say they want to go further faster, but they still have to explain away their additional expenditure on marriage tax breaks and inheritance tax for example. We are more realistic. We are not carrying baggage that is unaffordable..."

Wow! If you want real cuts, vote Labour!

And you know, watching Cam on with Marr this morning, it's a boast that might just stick.

Yes, Cam gave us his usual line about how he's going to be super-tough on spending, but there was no substance. He still won't give any more detail than the �7bn cuts George came up with last October (see this blog), and he still won't touch the �110bn health budget or the �8bn aid budget (together 16% of total spending). Compared to no-shit Darling Mk II he sounded distinctly light in the trouser department.

Which is grossly unfair of course, because Darling's macho �57bn cut is not new: it's what he already factored into his ludicrously Panglossian Pre-Budget Report (PBR) just before Xmas. And the details of those cuts were shrouded in just as much wibble as anything Cam has come out with.

All we've really got to go on is the breakdown tortuously derived by the indispensable Institute for Fiscal Studies from the PBR totals. And here's their summary chart (cuts expressed as percentages of GDP):

So focusing on 2014-15 (the final year of the published PBR projection) the IFS estimates that Labour's cuts amount to just over 3% of GDP. Since in that year, projected GDP is �1841bn, that presumably equates to Darling's �57bn figure. And as we can see, it comprises roughly one-third tax rises - including the new tax on jobs - roughly one-third unspecified capital investment cuts, and roughly one-third unspecified current spending cuts.

In other words, despite the tough new talk, Darling hasn't actually delivered the tough new walk. We are still in the position of being promised spending cuts, without having any idea what specifically will get cut - ie the difficult bit.

Still, he is at least now talking the right language. Plus of course, he's still got the March Budget to prove he's not just Brown's wuss.

Outflanked on fiscal rectitude by Labour? It scarcely bears thinking about. Surely it's now time for Dave and George to gird up their fiscal loins and get serious.

PS Lest anyone imagine Tyler is warming to Labour's economic policies, he isn't. And here's why: in the 12 years they have been in power, GDP has grown by just 2% pa (1997 Q2 to 2009 Q3); in the corresponding 12 previous Tory years it grew by 2.6% pa (1985 Q1 to 1997 Q2); over 20 years a 0.6% pa growth shortfall cumulates to a total sacrifice of well over one year's GDP. There's just one small snag: to reap such Tory economic benefits, you need a Tory government that pursues Tory economic policies.