The new coalition government in the UK has been accused by welfare groups and trade unions of a confused, cynical and heartless approach to massive public spending cuts.
Downing Street this morning rushed to soothe fears over an announcement from the Chief Secretary to the Treasury and the Chancellor's team asking government departments to draw up plans to slash their budgets by a staggering 40 per cent - much higher than the already draconian 25 per cent announced in the June budget, preparatory to the spending review in October 2010.
Treasury officials have now insisted the 40 per cent figure was a “top end assumption” and that most departments will have to implement less brutal cuts. - though independent estimates suggest 30-35 per cent is now likely.
“This is not a significant shift from what we said at the time of the Budget. Our plans imply cuts of 25 per cent in unprotected departments. Some will have to cut by more, others by less,” an aide to Osborne was being quoted by City journalists as saying last night (4 July 2010).
But trade unions, charities and groups concerned with employment and social welfare say that the government is trying to soften up the public for more drastic cuts by touting figures that would suggest a massive withdrawal of the state from whole areas of life in Britain and presage a wave of privatisation by stealth even larger than that carried out by Margaret Thatcher in the 1980s.
The Tory-Liberal coalition is being accused of beginning an ideologically-driven war on the public sector.
Ed Balls, one of the Labour leadership contenders, commented: “These reports will send a chill down the spines of millions of public sector workers and millions of people who rely on our vital public services.”
The General Secretary of the Rail, Maritime and Transport union, Bob Crow said: “With cuts of up to 40 per cent in the transport budget, we are looking at thousands of job losses amongst the staff who operate and maintain services with dire consequences for passenger safety.”
Under current plans, which have yet to be spelt out in detail, spending on health will be sustained in real terms; the international aid budget has been ring-fenced and education and defence will have to reduce their budgets by between 10 and 20 per cent. That implies unprotected departments will need to save 33 per cent on average - higher than claimed in Mr Osborne's budget.
Some close to the Treasury say that the 40 per cent hike reflects mistakes in calculation made in the run-up to the budget.
The Green Party and others advocating a 'Green New Deal' say that the cuts are not just unfair but unnecessary - and damaging.
Yesterday, the doyen of economics correspondents, William Keegan, writing in the Observer, said that comparisons with the 1932 public debt crisis were wildly inaccurate in terms of scale, structure and timing - and that the danger of a hugely deflationary approach was long-term stagnation rather than a 'double dip' recession.
Welfare and education groups are equally concerned with the impact on children and the most vulnerable in society. The government plans to save £1 billion a year by halting the rebuilding of 700 schools.
The National Housing Federation says it fears that housing benefit cuts for long-term job seekers could create up to 200,000 homeless people. It called the cuts, combined with policies that will push up private rents, "catastrophic, disturbing and unfair."
There is also outrage over plans by the government to slash long-standing public sector redundancy and compensation schemes, following its failure to persuade the High Court to back its interpretation of payoff terms.
Mark Serwotka of the Public and Commercial Services Union (PCSU), who is seeking an urgent meeting with the Cabinet Office, said such moves would be an "outrageous abuse" of law and governance.