Monday, February 16, 2004
The Tories start a debate
Posted by David Smith at 07:45 PM
Category: Thoughts and responses

Oliver Letwin, the shadow chancellor, has set the economic ball rolling with this speech proposing that a future Conservative government would seek to reduce the share of government spending from 42% to 40% of GDP. Nothing too radical in this you might think, nor is there.

I'll return to Letwin's speech later but for the moment it raises some key questions:
1. What's the appropriate level of government spending? Many, myself included, would argue 40% of GDP is still too high.
2. Can a reduced spending share be accompanied by increased spending on priority areas like health and education? The answer to this is yes - a reduced spending share can stlll mean more spending. But the focus is narrow - the Conservatives seem to have got themselves locked into a position (established by Labour) where this spending has to come from the public sector.
3. Why the emphasis on cutting waste in government spending to make the sums add up? That looks to laymen and experts alike as a cop-out.

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