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The Big Sleep - Man ying on pavement asleep
Last updated April 2015

The Big Sleep

Dominic Fox raises concerns about an epidemic of sleepwalking, affecting unfortunate villagers in Kazakhstan - and UK voters

The Guardian reports that for the last two years the residents of a village in northern Kazakhstan have been falling into unexplained bouts of sleep. The mysterious illness has sent residents into comas, sometimes lasting for days on end. “I was going to town on 28th August”, Viktor Kazachenko explained. “I came round on 2nd September. I understood on waking up in the hospital that I’d fallen asleep.” No cause for this freakish outbreak is forthcoming, but I predict you may start feeling the symptoms soon enough. Probably sometime between now and May 7th.

Firing off his final budget of this Parliament, the chancellor was handed a pre-election boost after a jump in self-assessed tax receipts triggered the smallest monthly deficit in seven years, putting him on course to meet his full-year target. British workers paid £4.2bn in self-assessed income tax in February, a whopping £1.8bn more than the same month last year according to the Office for National Statistics. It helped to reduce overall government borrowing by £3.5bn to £6.9bn in February, lower than the £8.5bn forecast by economists.

Determined to deflate his party balloon, the rotters at the Institute for Fiscal Studies demanded he specify how he planned to cut welfare spending by £12bn in the next parliament, and warned the poor had lost most from the coalition’s benefit changes of the past five years. Britain’s leading experts on tax and spending also said the pickup in living standards hailed by the chancellor in his budget was the slowest in modern history and “no cause for celebration.”

The IFS director, Paul Johnson said: “It is now almost two years since he announced his intention of cutting welfare spending by £12bn. Since then the main announcement has been the plan not to cut anything from the main pensioner benefits. We have been told about no more than £2bn of the planned cuts to working-age benefits. And, remember, apparently the ‘plan’ is to have those £12bn of cuts in place by 2017-18. It is time we knew more about what they might actually involve.”

The IFS analysis was as usual detailed and forensic. First, a bit of good news for George, on the cost of living crisis. “Average household incomes have just about regained their pre-recession levels. They are finally rising, and will probably be higher in 2015 than they were in 2010 and possibly higher than their 2009 peak”.

Secondly on the public sector spending “rollercoaster” identified by the Office for Budget Responsibility. The spending projections were widely reported as a hair-raising ride but the IFS thought that “even under a majority Conservative government, annual cuts in public service spending will not turn out much more dramatic than those we have seen over this parliament.”
The third concerns our old friend, inequality, which suggests a more critical tone. “Looking at the period of consolidation as a whole, the richest have been hit hardest”. But “looking only at changes introduced by the coalition the poorest have seen the biggest proportionate losses”.

The idea that local government has been able to absorb substantial cuts without significant detriment to the levels of service provision has been widespread, according to the Joseph Rowntree Foundation. Local authorities in England lost 27 per cent of their spending power between 2010/11 and 2015/16 and the poorest places and the poorest people are being the hardest hit, with those least able to cope with service withdrawal bearing the brunt of service reduction. JRF adds that this raises major questions over the anticipated level of cuts in the next spending period.

Danny Alexander, the Liberal Democrat chief secretary to the Treasury, took a novel act of political theatre by standing at the Commons dispatch box to set out an alternative fiscal plan to George Osborne’s budget a day later. The Lib Dem proposals would allow the next government to reach balance on the current account by 2017-18, and impose higher tax rises and slower cuts in spending than those set out by the Conservatives. The plan also allows for spending to rise faster than the Tories propose between 2017-18 and 2019-2020.
Trying to ascertain the Labour stance on this question is at time of writing nigh on impossible, and this can only be intentional. The Guardian ponders on what the party might offer as an alternative: higher taxes and living with more debt for longer. “These are both things that Labour knows that it will have to do, and which it is refusing to rule out, but it is coy about the first and has taken a Trappist vow in relation to the second”.

Under intense pressure to say something, Conservative treasury minister David Gauke said the party would not spell out all its welfare cuts until after the general election. “We will set it out nearer the time which will be after the election.” He said such cuts were normally agreed as part of a wider spending review. That rather looks to be the position of all the parties right now.
Politicians in the next parliament will have to grapple with some mighty big issues. Which taxes to raise? At what rate should we pay down public debt? And, not least, the level of public spending on welfare and public services that its citizens can expect. At present we are sleepwalking towards the ballot box. Will this campaign wake us up?

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