Yesterday morning, the Chancellor 'Boy' George Osborne briefed his Cabinet colleagues on research showing that every government department, other than health and international development, would have to cut spending by between 15 and 20 per cent annually.For SPVA, with operating costs of around £114 million for 2010/11, a 20% cut would require around £22 million in savings. And that is, it has to be remembered, 20% year upon year. So, £22 million this year, £18 million next year, £14.8 million the year after that...
However, these proposed cutbacks may now be seen as far too modest, with the Fitch credit rating agency study suggesting that departments might need to reduce spending by between 25 and 30 per cent annually! So add another £10 million a year to that being considered by the cabinet!
This warning is significant as Fitch's rating, in effect, sets the interest the Government must pay to borrow money. Britain's rating is currently at AAA level. The other international credit ratings agencies, including Standard & Poor's, are closely monitoring the situation in this country. "Much, much more needs to be done," said Moritz Kraemer from Standard & Poor's.
Funnily enough none of these agencies nor indeed any of the cabinet ever mentions that £125 billion a year of tax revenue goes uncollected from corporations and individuals lucky and rich enough to avoid it. Instead, those of us who pay our tax and NI on time, all the time, will be burdened with the responsibility of paying down a huge debt accruing on the near trillion pounds we have loaned to the banking and finance sector, and upon which we, rather than they, pay the bulk of interest.
We thought he said, "we are all in this together"?
Maybe that should have been, "Arbeit Macht Frei".
