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Spending review 2013: panel verdict	Spending review 2013: panel verdict
2013-06-26 15:50:04 UTC	2013-09-23 05:41:30 UTC (3 months later)
Polly Toynbee: 'More of the same toxic tonic'	Polly Toynbee: 'More of the same toxic tonic'
If George Osborne's marvellous medicine worked, there would be no cuts in 2015: that's what the chancellor promised two years ago. The pain of the deficit disease would be cured. But growth is flat, debt still accumulating, borrowing more not for investment, jobs and homes but just to stay alive. Now the chancellor spoons out more of the same toxic tonic, as if doubling the dose would work better.	If George Osborne's marvellous medicine worked, there would be no cuts in 2015: that's what the chancellor promised two years ago. The pain of the deficit disease would be cured. But growth is flat, debt still accumulating, borrowing more not for investment, jobs and homes but just to stay alive. Now the chancellor spoons out more of the same toxic tonic, as if doubling the dose would work better.
He does it with a quack's panache, deceitfully. £50bn more in capital spending! No, that turns out to be a fraud. The capital budget stays flat, same as the year before. Who in the Treasury allowed him to present the figures so dishonestly? As for the claim that the million lost public sector jobs are being replaced by three times more in the private sector, every report shows part-time, low-paid, temporary, insecure, zero-hours work replaces the secure, adequately paid, decent conditions of public service. The taxpayer pays the difference, as tax credit costs rise to bridge the gap for families can't live on what they earn. Public sector pay will dwindle further, frozen then cut as pay progression is axed.	He does it with a quack's panache, deceitfully. £50bn more in capital spending! No, that turns out to be a fraud. The capital budget stays flat, same as the year before. Who in the Treasury allowed him to present the figures so dishonestly? As for the claim that the million lost public sector jobs are being replaced by three times more in the private sector, every report shows part-time, low-paid, temporary, insecure, zero-hours work replaces the secure, adequately paid, decent conditions of public service. The taxpayer pays the difference, as tax credit costs rise to bridge the gap for families can't live on what they earn. Public sector pay will dwindle further, frozen then cut as pay progression is axed.
Cuts fall on the weak, cuts fall again hardest on poorest cities and watch out for the new redistribution of school funds draining from needy to leafy places. His boast that "broadest shoulders bear the burden" is no truer than "we're all in this together". As the share of income taken by the richest goes on rising – 14% to the top 1% – of course they pay more tax, painlessly. While those falling out of work will have to borrow to get their family through their first unemployed week. The marvellousness of George's medicine is that it tastes Mary Poppins supercal for the rich but it's arsenic for the bottom half – again.	Cuts fall on the weak, cuts fall again hardest on poorest cities and watch out for the new redistribution of school funds draining from needy to leafy places. His boast that "broadest shoulders bear the burden" is no truer than "we're all in this together". As the share of income taken by the richest goes on rising – 14% to the top 1% – of course they pay more tax, painlessly. While those falling out of work will have to borrow to get their family through their first unemployed week. The marvellousness of George's medicine is that it tastes Mary Poppins supercal for the rich but it's arsenic for the bottom half – again.
• Polly Toynbee is a columnist for the Guardian	• Polly Toynbee is a columnist for the Guardian
Jonathan Portes: 'The government is muddling through'	Jonathan Portes: 'The government is muddling through'
Today's spending review is, in macroeconomic terms, a non-event. In 2008-09 and 2009-10, public sector net investment averaged about £50bn, or 3½% of GDP. In what is now widely recognised as a disastrous policy error, that was cut in half in two years. And, despite today's much over-hyped increases, and some very welcome commitments to important transport projects, the government's own figures make quite clear that only a tiny fraction of that cut has been restored. Net investment looks set to average less than £30bn a year over the next five years. This perpetuates a historic, and entirely unnecessary, mistake. Conditions could not possibly be more propitious for investment: we can borrow at the lowest interest rates in the UK's recorded economic history; there is high unemployment and plenty of spare capacity; and we have a chronic shortage of housing supply and a creaking infrastructure. Recent research by NIESR suggests that spending more on productive infrastructure would boost growth both in the short and long term, while making the public finances more rather than less sustainable.	Today's spending review is, in macroeconomic terms, a non-event. In 2008-09 and 2009-10, public sector net investment averaged about £50bn, or 3½% of GDP. In what is now widely recognised as a disastrous policy error, that was cut in half in two years. And, despite today's much over-hyped increases, and some very welcome commitments to important transport projects, the government's own figures make quite clear that only a tiny fraction of that cut has been restored. Net investment looks set to average less than £30bn a year over the next five years. This perpetuates a historic, and entirely unnecessary, mistake. Conditions could not possibly be more propitious for investment: we can borrow at the lowest interest rates in the UK's recorded economic history; there is high unemployment and plenty of spare capacity; and we have a chronic shortage of housing supply and a creaking infrastructure. Recent research by NIESR suggests that spending more on productive infrastructure would boost growth both in the short and long term, while making the public finances more rather than less sustainable.
Instead, the government has once again chosen to muddle through; the deficit is neither rising nor falling significantly, and the economy is neither slumping nor yet growing fast enough to significantly reduce unemployment. The government has long since abandoned the fiscal framework set out in the 2010 budget, which promised a deficit half its current size by now and a reducing debt ratio from next year. So there is neither a coherent short-term macroeconomic framework, nor much in the way of a medium-term growth strategy, although some measures – such as further moves towards pooling local budgets – are welcome. Things could be worse – and elsewhere in the EU, they certainly are – but they could also be a lot better.	Instead, the government has once again chosen to muddle through; the deficit is neither rising nor falling significantly, and the economy is neither slumping nor yet growing fast enough to significantly reduce unemployment. The government has long since abandoned the fiscal framework set out in the 2010 budget, which promised a deficit half its current size by now and a reducing debt ratio from next year. So there is neither a coherent short-term macroeconomic framework, nor much in the way of a medium-term growth strategy, although some measures – such as further moves towards pooling local budgets – are welcome. Things could be worse – and elsewhere in the EU, they certainly are – but they could also be a lot better.
• Jonathan Portes is director of the National Institute of Economic and Social Research	• Jonathan Portes is director of the National Institute of Economic and Social Research
Melissa Kite: 'The starting gun has been fired for the next election'	Melissa Kite: 'The starting gun has been fired for the next election'
If you didn't like Austerity when it was launched three years ago, you were never going to like the sequel, Austerity 2 – Cutbacks Full Throttle. The chancellor tried to make another round of Whitehall savings for 2015 and beyond sound attractive and consumer-driven. When he promised to deliver "high-quality public services at a price we can afford", he sounded like he was channelling an advert for Allied Carpets or DFS. Maybe that is no bad thing.	If you didn't like Austerity when it was launched three years ago, you were never going to like the sequel, Austerity 2 – Cutbacks Full Throttle. The chancellor tried to make another round of Whitehall savings for 2015 and beyond sound attractive and consumer-driven. When he promised to deliver "high-quality public services at a price we can afford", he sounded like he was channelling an advert for Allied Carpets or DFS. Maybe that is no bad thing.
"We need to get more for every pound we spend of taxpayers' money." That sort of phrase is music to Tory ears. Osborne claimed that Britain was now spending £6bn a year less to service debt, and that the deficit is down by a third. This depends on which way you look at the figures.	"We need to get more for every pound we spend of taxpayers' money." That sort of phrase is music to Tory ears. Osborne claimed that Britain was now spending £6bn a year less to service debt, and that the deficit is down by a third. This depends on which way you look at the figures.
What is indisputable is that government spending will continue to fall in real terms. The latest £11.5bn cuts will be paid for partly through the loss of automatic pay rises for police, teachers and nurses and 145,000 fewer civil servants. "Reform, growth and fairness are the principles," he said, although one doubts whether police, teachers and nurses will see it that way.	What is indisputable is that government spending will continue to fall in real terms. The latest £11.5bn cuts will be paid for partly through the loss of automatic pay rises for police, teachers and nurses and 145,000 fewer civil servants. "Reform, growth and fairness are the principles," he said, although one doubts whether police, teachers and nurses will see it that way.
Osborne's main claim was this: "Britain is moving out of intensive care and from rescue to recovery." As always, the devil was the detail. For example, why did the chancellor release a picture of himself putting the finishing touches to his statement while eating a huge, lavishly garnished burger and chips? Answer: because he thought this demonstrated the concept that "we are all in this together." He thought it looked thrifty. It probably didn't occur to Osborne, heir to the Osborne and Little wallpaper empire, that there are people who can't afford a gourmet burger for elevenses. But there we are. He's trying.	Osborne's main claim was this: "Britain is moving out of intensive care and from rescue to recovery." As always, the devil was the detail. For example, why did the chancellor release a picture of himself putting the finishing touches to his statement while eating a huge, lavishly garnished burger and chips? Answer: because he thought this demonstrated the concept that "we are all in this together." He thought it looked thrifty. It probably didn't occur to Osborne, heir to the Osborne and Little wallpaper empire, that there are people who can't afford a gourmet burger for elevenses. But there we are. He's trying.
Responding, Ed Balls looked red-faced and angry. His accusation was that Osborne had already asked for what was needed, in terms of cuts, and should not have asked for more. He had broken his pledge to the British people not to squeeze them any harder than he had to. "It doesn't have to be this way," Balls raged. One sensed that the starting gun had well and truly been fired for the next general election.	Responding, Ed Balls looked red-faced and angry. His accusation was that Osborne had already asked for what was needed, in terms of cuts, and should not have asked for more. He had broken his pledge to the British people not to squeeze them any harder than he had to. "It doesn't have to be this way," Balls raged. One sensed that the starting gun had well and truly been fired for the next general election.
• Melissa Kite is a contributing editor of the Spectator	• Melissa Kite is a contributing editor of the Spectator
Sue Marsh: 'These cuts are taken directly from the most vulnerable'	Sue Marsh: 'These cuts are taken directly from the most vulnerable'
It doesn't really matter what George Osborne said today. The damage was done in the last comprehensive spending review, but if you weren't affected, you wouldn't know. Cuts to local budgets are already totally unsustainable. The vast majority is being squeezed from social care budgets, the social fund and public transport. These cuts are taken directly from the most vulnerable of all. But it's just numbers. No one seems to care. If already eye-watering cuts don't mean anything to people, then an arbitrary 10% more won't either.	It doesn't really matter what George Osborne said today. The damage was done in the last comprehensive spending review, but if you weren't affected, you wouldn't know. Cuts to local budgets are already totally unsustainable. The vast majority is being squeezed from social care budgets, the social fund and public transport. These cuts are taken directly from the most vulnerable of all. But it's just numbers. No one seems to care. If already eye-watering cuts don't mean anything to people, then an arbitrary 10% more won't either.
This is policy for "others". There are sections of society this government feel safe to hurt again and again. They don't vote Conservative and the public don't really like them very much. The unemployed, the sick or disabled, the poor or desperate. Hurt them and keep hurting them. Ignore the social consequences, the pain and suffering. Never mind that it hasn't improved the economy anyway, that swingeing cuts have only led to falling growth and so, falling tax receipts and higher debt. Never mind that austerity is a laughing stock. Just keep cutting and hurting and failing. It suits the ideological masterplan.	This is policy for "others". There are sections of society this government feel safe to hurt again and again. They don't vote Conservative and the public don't really like them very much. The unemployed, the sick or disabled, the poor or desperate. Hurt them and keep hurting them. Ignore the social consequences, the pain and suffering. Never mind that it hasn't improved the economy anyway, that swingeing cuts have only led to falling growth and so, falling tax receipts and higher debt. Never mind that austerity is a laughing stock. Just keep cutting and hurting and failing. It suits the ideological masterplan.
This CSR will simply add more faceless numbers to the growing list of "others", more of the people nice middle-class families don't care about. Nothing makes me believe we'll care more today.	This CSR will simply add more faceless numbers to the growing list of "others", more of the people nice middle-class families don't care about. Nothing makes me believe we'll care more today.
• Sue Marsh is a disability awareness campaigner	• Sue Marsh is a disability awareness campaigner
Tom Clark: 'The poor will be exposed to inflation as never before'	Tom Clark: 'The poor will be exposed to inflation as never before'
George Osborne stands up, pulls the rug from under the poor, and then mutters something about how he's squeezing the rich more than Labour ever did. It's a familiar pattern now, and I suspect few are listening to the Robin Hood posturing of this baronet-to-be any longer ...	George Osborne stands up, pulls the rug from under the poor, and then mutters something about how he's squeezing the rich more than Labour ever did. It's a familiar pattern now, and I suspect few are listening to the Robin Hood posturing of this baronet-to-be any longer ...
But for anyone wondering how exactly the man who so recently cut top-rate tax for the rich can continue to protest, as he did today, that he is foisting the burden on "those with the broadest shoulders", he is factoring in pension and other tax changes brought in by Alistair Darling – claiming the credit, in other words, for the last administration's policies.	But for anyone wondering how exactly the man who so recently cut top-rate tax for the rich can continue to protest, as he did today, that he is foisting the burden on "those with the broadest shoulders", he is factoring in pension and other tax changes brought in by Alistair Darling – claiming the credit, in other words, for the last administration's policies.
Aside from smirkily delivered one-liners, there is no longer any serious pretence that this is a government that wants to do anything other than balance the books on the backs of the poor. The change in tone from sunny-side-up George, who boasted of British businesses leading the way to recovery, to hard-as-nails George – who explained that the workless will have to wait a week without any cash to keep body and soul together – made that abundantly plain.	Aside from smirkily delivered one-liners, there is no longer any serious pretence that this is a government that wants to do anything other than balance the books on the backs of the poor. The change in tone from sunny-side-up George, who boasted of British businesses leading the way to recovery, to hard-as-nails George – who explained that the workless will have to wait a week without any cash to keep body and soul together – made that abundantly plain.
Much of it we've heard before, the most significant announcement was of a social security cap fixed in cash terms – that is to say, a budget which can be eaten up by inflation. At the same time as the chancellor is (perhaps rightly) looking to the new Bank of England governor to engage in bolder monetary policies, which in everyday speak means taking bigger risks with inflation, he has decided that to expose the living standards of the poor to the risk of that inflation as never before.	Much of it we've heard before, the most significant announcement was of a social security cap fixed in cash terms – that is to say, a budget which can be eaten up by inflation. At the same time as the chancellor is (perhaps rightly) looking to the new Bank of England governor to engage in bolder monetary policies, which in everyday speak means taking bigger risks with inflation, he has decided that to expose the living standards of the poor to the risk of that inflation as never before.
• Tom Clark is the Guardian's leader writer on social affairs	• Tom Clark is the Guardian's leader writer on social affairs
Ian Mulheirn: 'Even without further cuts, the NHS is struggling'	Ian Mulheirn: 'Even without further cuts, the NHS is struggling'
By protecting the NHS budget for a fifth year, the chancellor has loaded cuts onto other struggling public services. But given the scale of the savings sought, there was no alternative. Indeed, even holding health spending constant will likely spell the end of the NHS in its current form.	By protecting the NHS budget for a fifth year, the chancellor has loaded cuts onto other struggling public services. But given the scale of the savings sought, there was no alternative. Indeed, even holding health spending constant will likely spell the end of the NHS in its current form.
Keeping up with the rising costs of new treatments and technologies is essential if the NHS is to meet the public's expectations. That's why real health spending growth has averaged 4% per year since 1950.	Keeping up with the rising costs of new treatments and technologies is essential if the NHS is to meet the public's expectations. That's why real health spending growth has averaged 4% per year since 1950.
Whenever spending growth has lagged behind that 4% benchmark, satisfaction with the NHS has collapsed. Despite 3.2% real terms increases from 1979 to 1997, satisfaction levels hit historic lows in 1997, only bouncing back after 5.7% real growth in the subsequent 13 years.	Whenever spending growth has lagged behind that 4% benchmark, satisfaction with the NHS has collapsed. Despite 3.2% real terms increases from 1979 to 1997, satisfaction levels hit historic lows in 1997, only bouncing back after 5.7% real growth in the subsequent 13 years.
Five years of negligible growth in the health budget since 2011 – with a further two likely after the election – will leave the NHS seeking implausible efficiencies of £36bn per year by 2018, if it is to keep providing the service the public expects. To patients, that will feel like a cut of around a quarter.	Five years of negligible growth in the health budget since 2011 – with a further two likely after the election – will leave the NHS seeking implausible efficiencies of £36bn per year by 2018, if it is to keep providing the service the public expects. To patients, that will feel like a cut of around a quarter.
One way or another, by 2020 people will want to spend more money on health. The big question for British politics is whether that will be achieved by raising taxes to restore the NHS, or by private healthcare and the end of the NHS as we know it.	One way or another, by 2020 people will want to spend more money on health. The big question for British politics is whether that will be achieved by raising taxes to restore the NHS, or by private healthcare and the end of the NHS as we know it.
• Ian Mulheirn is director of the Social Market Foundation	• Ian Mulheirn is director of the Social Market Foundation
Gavin Kelly: 'Households face £26bn of fiscal pain in 2016-18'	Gavin Kelly: 'Households face £26bn of fiscal pain in 2016-18'
If the current timetable for deficit reduction is maintained, households should brace themselves for roughly another £26bn of fiscal pain in the years between 2016 and 2018 – whether it comes in the form of extra cuts to public services, another big hit to welfare or new tax-rises.	If the current timetable for deficit reduction is maintained, households should brace themselves for roughly another £26bn of fiscal pain in the years between 2016 and 2018 – whether it comes in the form of extra cuts to public services, another big hit to welfare or new tax-rises.
The much hyped "AME [Annually Managed Expenditure] cap" sounds more like an aspiration for limiting welfare spending rather than any sort of firm ceiling. If the cap were to bite – and therefore reduce levels of spending compared to what would otherwise have happened – then it would be almost bound to pose a major and last minute challenge to the government's flagship universal credit reform which encompasses the key benefits that are in the firing line. Alternatively, it's just a way of saying that the Office for Budget Responsibility is now going to be invited to more closely monitor the pressures on welfare spending.	The much hyped "AME [Annually Managed Expenditure] cap" sounds more like an aspiration for limiting welfare spending rather than any sort of firm ceiling. If the cap were to bite – and therefore reduce levels of spending compared to what would otherwise have happened – then it would be almost bound to pose a major and last minute challenge to the government's flagship universal credit reform which encompasses the key benefits that are in the firing line. Alternatively, it's just a way of saying that the Office for Budget Responsibility is now going to be invited to more closely monitor the pressures on welfare spending.
Today was all about continuing with the current plan. The biggest decisions will be made immediately after the election.	Today was all about continuing with the current plan. The biggest decisions will be made immediately after the election.