Do not be mistaken by the Left's rhetoric, these spending cuts are not strong enough, but they are a start. The Financial Times for instance is trying to paint these as some sort of mega cuts, but 4.5% cut over 5 years isn't exactly earth-shattering But, with a strong left-wing movement in Britain, as well as the hard left Liberal Democrats having significant influence in the new government, the current cuts are really all that are politically feasible. And I believe that on the whole, these cuts will work out well for the Coalition. It will restore at least some confidence to the markets, and possibly to job creators too, in spite of the tax increases that will hit over the next few years. Personally, I would have liked to see more cuts to welfare, cuts and reform to the NHS (which has remained untouched), less cuts to the military and less tax increases (which will only prevent growth).
I have an article coming out over the next few days which specifically cover the military cuts, but in the mean time I would like to focus on something that caught my eye that not many media outlets have picked up on. We have seen that NHS spending has been ring fenced, and this has been debated by many. But, today it was announced that International Aid has been increased by a stunning 33% and Climate Change funding (whatever the hell that consists of) has been increased by a hefty 18% - you can find an easy to read graph of all the cuts etc here.
Now, I'd be pretty annoyed had they not been cut, but for the budgets to be increased!? It is quite clear that this is a total fop to the Liberal Democrats. No conservative with any understanding of immigration would support a massive international aid budget. The only way to get countries out of poverty is to encourage market growth, not to support big government programs and fund state sponsored dictatorships. There is no country that has been lifted out of poverty by international aid, not one. In addition, when you are giving some of that aid to India - a nation that has its very own nuclear weapons program - you know your policy is broken. Yet this is not being tackled.
Climate Change - well, unfortunately, whether or not you believe in Climate Change or not, this is nothing more than economic stimulus for supposed "green jobs". As we have seen in both America and Britain, this doesn't work. True green jobs, like almost every job, is created by the private sector, not by tax and spend policies subsidising pointless industries. Again, conservatives know this, left-wingers don't, so why on Earth have we increased the budget?
The spending cuts tell us a lot about the strength of this coalition. It shows that they have managed to get spending cuts through, but they have had a hell of a lot of compromises to make to the left in order to get them through. Increases in Climate Change budgets and International aid are enormous concessions, as are enormous cuts to the military budget. In addition, even with these moderate spending cuts, we are beginning to see a massive backlash from vested interests in the unions and public sector - it is not going to be easy
If the Coalition wants to try and push forward a conservative agenda that is going to put Britain back on the right track (so to speak), it is going to have to fight tooth and nail for it, and with the gaggle of "centrist" Tories and hard-left Liberal Democrats, I just can't see how they are going to do that.