You are:

Debunking the myths about the need for spending cuts

Myth

The national debt:

“The hole in the public finances was so great and the debts were so large, and people at home know, if you have got a debt problem, you have got to deal with it."

George Osborne, MailOnline, 23rd June

Reality

The national debt in 2010 was £145bn.  Undeniably large but, as a proportion of wealth (Gross Domestic Product) is lower than in 250 of the last 300 years and lower than in any year between 1916 and 1972.

Myth

Public services have to be cut to manage the debt:

“Obviously, cuts are essential, and Labour profligacy has made them more so”.

Mary Riddell, Telegraph, 24th May

Reality

In 1948 the debt, as a proportion of GDP, was 214%.  In 2010, it is 53.5% - exactly one quarter of the size. 

In 1948, rather than cutting public services, the Labour government created the most cherished public service we have – the National Health Service.

Myth

The public sector must share the pain:

“Painful though it may be, the public sector is going to have to take some of the same medicine the private sector has already swallowed. It must trim jobs and costs in order to help put our economy back on track”

David Frost, The Times, 7th June

Reality

As much as 64p from every £1 in salary paid to a public servant is spent on local goods and services in the private sector.  A 25% cut in jobs will immediately create a £236m hole in the north west economy (excluding any local multiplier effects).

Myth

“We’re all in this together”

David Cameron to Tory Conference, 8th October 2009

Reality

23 out of 29 Cabinet Members are millionaires- as are a further 15 Tory MP’s, while  the architects of the recession have their snouts firmly back in the trough with the FTSE 100 Directors enjoying an average  22.5% increase in bonuses to £550,000.

Myth

Front line/back office:

“There'll be no cuts to frontline services under a Tory government”.

David Cameron, BBC Andrew Marr Show, 2nd May 201

Reality

The first announcement following the Budget was made by Justice Secretary, Ken Clarke who described plans to close 103 Magistrates’ Courts and 53 County Courts.  This will cause delays in the justice system and force court users to travel further to access services.

Myth

We can’t afford this many civil servants
“Such is the bloated state of the public sector and the extent of the government’s overdraft that redundancies will be required”

Harry Phibbs,  MailOnline, 16th June

Reality

Taking in to account the tax they would pay while in work and the benefits they would claim if out of work, a civil servant paid the UK average wage, comes at a net cost to government of just £3,700 per year or £1.92/hour.

Myth

Pensions:

“Britain risks default unless Government cuts public sector pensions”

Edmund Conway, Telegraph, 3rd June

Reality

According to the TUC the cost to the government of providing tax relief on private sector pensions is £37.bn/year.  The cost of public sector pensions is £4bn/year and the average public sector pension is less than £4,500/year – hardly gold plated.