Government spending: The axe factor

AS a radical rethink on government spending looms, Hamish Macdonell asks prominent figures where the cuts should fall.



The first thing I would do is drop ID cards. They are a complete waste of money and won't help the fight against terrorism one bit.

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Then there is the issue of Trident. I would like to see if there is a way of extending the life of the system.

If we are just keeping it to be a member of the big boys' club then it is a waste of time, but I would be reluctant to get rid of it altogether.

We should also ask whether we need two new aircraft carriers. They seem to be going ahead because of jobs rather than anything else. We need something to keep our place in this uncertain world but do we need two new aircraft carriers? I would also reduce the number of aircraft on order. That can also be increased if the situation improves.



I would like to see the government maintain spending on capital projects but cut spending on public sector salaries.

There should be a freeze on salaries for a number of years. That is what we have been doing in the private sector.

The public sector will have to be downsized, no question about that, but a salary freeze would soften the worst effects.

I also think the government should take a very focused look at re-engineering the public sector. Public sector productivity has gone down by 3.2 per cent while it has gone up by 10 per cent in the private sector, so there is plenty of scope for efficiency savings.



I would like to see an end to all the daft legislation, the silly things that attempt to micro-manage our lives, which control GP contracts, and the patient questionnaires. But my primary interest is in mainstream clinical resources.

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The key thing about the health service is you receive according to your need and give according to your ability in taxes. I wouldn't want to change that basic principle but I think we have to look at some of the areas where we have given universal benefits, particularly given the threat to front-line services.

We have to look at the fundamental things – free care for the elderly, free prescriptions – and ask: should more affluent middle-class people contribute more, if the alternative is cuts in services for those who need them most.



Education is definitely something that should stay because that's the future. But there is plenty of work to be done and people who can do it and those people are on the dole.

If they are getting 100 or 200 a week and are sitting at home, get them out tidying up their estate, cleaning the streets.

People in work fall into a rut and it's the same on the dole. Everybody needs to have self-esteem, I am a great believer in that. I think we should get those who are on the dole to work a bit for it, that way we can save money and get some of the jobs done which would be first in line to be cut.



There is one cut that should be made and that is to cut Trident. I have always believed that.

Other than that, there are issues around taxation and tax evasion. I am not saying taxes should rise but we should be doing more to ensure those who don't pay the taxes they should are made to do so.

But I don't start from the position that we need to bring in these cuts now or that we have to eradicate the deficit to this timescale.

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I don't buy into the argument that we are in some sort of sovereign debt crisis. We are not in one and we are actually doing quite well on that front.

We need to take all this at a pace that will not damage the recovery or risk a double-dip recession and we must do so at a pace which ensures that frontline public services are maintained.



Fixing the government deficit is more than addressing costs. Boosting revenue is also vital. For Scotch whisky this means supporting exporters.

The excise system is delivering lower revenue for the public finances. Excise duty rates on Scotch whisky have risen by over 20 per cent since 2008, yet government receipts from spirits dropped by 49 million last year. The Chancellor should immediately abolish the excise duty escalator, freeze duty on Scotch whisky, and modernise the alcohol tax system so that all drinks are taxed on the same basis according to alcohol content.



We must make sure that this consultation on spending cuts is a real consultation.

Since the Scottish Parliament was established, we have had hundreds of consultations but they have never moved from consultations to real participation.

So the question is not what I would cut but whether we have the right mechanism in place to make sure the views of the people are heard and taken into account.

As far as the cuts are concerned, I would want to safeguard Scotland's expenditure, I am with Alex Salmond on that.

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But it is very important that we get much greater tax-raising powers, fiscal powers, into Scotland itself, rather than tinker with the block grant.

If the Scottish Parliament had fiscal autonomy it would have borrowing powers which it would have to exercise responsibly and that would make Scotland responsible.



It will comes as no surprise that I think education is one of the areas George Osborne should stay well away from. Removing places from colleges and universities simply displaces people on to benefits and means that coming out of the recession we're not placed to compete in the high skilled sector that many a commentator would agree is the only place Britain's economy can compete in.

"On where to cut, the coalition are set to get it right in cutting initiatives such as widely discredited ID cards which would have hit international students hardest, but likely to get it drastically wrong with the Trident replacement.

"But it's not all about cuts. Britain does not have the highest or most progressive tax system. Surely raising taxes for those who can afford it rather than cutting services for those who can't, would be better for society as whole? Schools, colleges and universities are going to be the economic engine out of the downturn. Cutting them would be a very dangerous false economy, damaging the prospects for our country but silently writing off the prospects for countless millions of lives."



Parents have been seeing the impact of budget cuts in their children's schools in small ways but the rumble of concern is steadily getting louder.

Most local authorities are already working to the legislation – for instance reducing school transport to the statutory minimum – but this is merely tinkering at the edges. If the core service of education is to be preserved (and surely there is no argument about that?) then the obvious thing is a fundamental review of how we organise our education services.

Thirty-two local authorities, all with the backroom functions needed to deliver education in our schools – is that sensible or efficient? Stringent cuts will force difficult choices but it now appears inevitable that there will be rationalisation through the merger of local authorities or at least shared services. Whatever is to happen, the sooner the better, as we need to ensure that frontline services are maintained – for the good of our children and for the good of the country.



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In hard times, the mind is focused on what is fundamental. As a lawyer, I argue that a fair justice system and the rule of law are those fundamental necessities in a democratic society. We need to ensure there is fair access to the courts, and legal aid should not been be seen as a soft touch for cuts. Now is the time to consider if the position on Trident should be reviewed. I would urge the government to include Trident in the Strategic Defence and Security Review, saving billions of pounds.



As the Chancellor prepares for his emergency Budget, our advice to him would be to get the basics right first. The scale of the challenge in tackling the deficit is immense and must not be underestimated. If the government is to rise to this challenge, it should subject each and every department to fundamental scrutiny, including health, education and social services. There must be no ring-fencing and no sacred cows. In addition, the Chancellor must recognise that around half of public sector spending is accounted for by staff costs. The costs of public sector employment must be reduced by rationalisation and by placing public sector pension entitlements on a par with the private sector by moving away from final salary schemes and towards more contributory systems. Businesses have risen to the challenge of delivering better services with fewer resources. It is time for government to do likewise.



My starting point would be that, if you just concentrate on cuts, you would be making a fundamental error.

There has to be a mixture of cuts in expenditure and increases in taxes.

Cuts are very difficult because, while you might want to cut capital expenditure now, you might find in years to come that it was a mistake and that a school should have been rebuilt or refurbished when you had the chance.

There is always fat that can be trimmed from the public sector but remember, a lot of the extra costs were imposed by parliamentarians who wanted more regulation, more monitoring and all of that.

As for taxes, there is scope to look at corporation tax and capital gains tax. I know the government is moving towards that – despite resistance from inside the main party – but this is something that should looked at. There is an obvious anomaly with people being able to convert income into capital investment and pay half the tax rate they did before.



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Get rid of the House of Lords and, while we are about it, get rid of that whole panoply, the Royal Family, the aristocracy, the civil list and the honours. Commanders of the British Empire? Orders of the British Empire? Members of the British Empire? Scrap the whole lot of them. We don't want an empire so we certainly don't need commanders of an empire.