The time bomb ticking beneath this coalition

Oct 18, 2010
The Mole

The Mole: If Osborne's cuts misfire, tens of thousands will be out of work for no reason

Is the trickle - becoming a flood over the weekend - of leaks and claims and counter-claims about Wednesday's public spending review just the norm when the axe is about to come down? Or has this been one of the best stage-managed horror shows in government history?

One cynic who bent the Mole's ear yesterday believes even the controversial defence cuts have been choreographed for the sake of the Phew. As in 'Phew, it's only an eight per cent cut, not the 10 per cent they were threatening'.

The same with tuition fees. First it was mooted that they might rise so high that only the sons and daughters of millionaires could ever contemplate tertiary education in future. Now it'll still be bad, but not as horrible as we first thought. Phew again.

Was my friendly cynic being fanciful? Perhaps. But one thing's for sure in the Mole's view - the leaking of the decision to scrap child benefit for higher-rate taxpayers was stage-managed to the hilt.

Why? Because after Black Wednesday it's finally going to become apparent just how damaging these cuts will be for ordinary, non higher-tax-paying voters.

For some, it could be months before the cuts filter through to pay cuts and job losses.

But whenever the penny drops, the government will be able to tell the lower-paid: "Look, We're all in this together - even the better-off have been hit! We took their child benefit away!"

It appears inevitable now that the lower-paid are going to be hit mercilessly by the coalition government's decision to cut £83bn over four years.

On the welfare front, it has been leaked over the weekend that the really big child benefit cut - saving £3bn a year as opposed to the mere £1.2bn saved by stopping child benefit for the higher-paid - will be made by lowering the current age limit of 19 to 16.

Then there's the revelation that almost the entire £8bn social housing budget is to be cut.

Both of these are a kick in the teeth for lower-paid families. But it's the upcoming jobs crunch that is really going to hurt this sector.

The media have tended to present Wednesday's expected cuts in cash terms - 12 per cent off police budgets, for instance, or £2bn off the Ministry of Justice spend. But almost invariably each of these cuts means lost jobs.

The Police Federation believe as many as 40,000 police officers will lose their jobs. In the prison service, 15,000 jobs are at risk.

And so it goes on. One hundred magistrates courts will close. Great - less chance of that speeding charge ever coming to court. Yes, but how many clerks of the court and ushers will be out of work as a result?

The budget for the Arts Council is to be drastically cut. About time too, you might say. Yes, but 100 of the 820 organisations currently receiving funding will lose their grants. Curators, receptionists, librarians - many of them in their first jobs out of university - will be thrown out of work.

Scores of quangos are to be cut - excellent news, was the Mole's first reaction. Yes, but quangos employ secretaries and researchers as well as fat cats.

It is at local council that the biggest cuts are expected, with vast reductions in funds from central government. Thousands of low-paid council workers - many of them of them women - will be asked to take reduced pay or face redundancy. Others won't get the choice.

The Office for Budget Responsibility has estimated that 600,000 public sector jobs will be gone between now and 2015, when this government faces re-election.

And then there's the private sector, where jobs will be lost because the government is not ordering so many office supplies, let alone strike aircraft. Accountants (yes, there'll be fewer of those needed, too) estimate that almost as many jobs again will go in the private sector as a result.

No wonder the coalition spin doctors have been managing expectations, desperate to create an impression that we're all in this together.

If Cameron and Osborne can pull this off, bully for them. But at the first hint that their measures are harming economic growth, Labour, currently taking a cautious line on the cuts, will pounce. 'I told you so' will never have been sung so loud.

More important for the Tories and Lib Dems' electoral hopes, the narrative will change.

When each of them broke campaign promises - the Lib Dems on tuition fees, the Tories on child benefit - they set off a time bomb. Labour will be able to say that not only did they mismanage the economy, they lied too.

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