8 Apr 2010

Tories bask in business leaders’ support – but questions remain

I give day 2 of the Electionomics Debate to Labour.

This fight back is obviously relative to the punishment meted out from the Tories by the letter-writing skills of business leaders last week, but the nerdish rigour of Labour’s dossier on Tory NICs plans was impressive.

Clearly, the Conservative plan is to use the cover of a few dozen important businessmen as a shortcut towards giving their plans a veneer of fiscal credibility. I think the fact that businessmen like cutting taxes on business only takes you so far.

I think it is a fact that the Conservatives have banked Labour efficiency savings that they had previously derided. And then they have argued they can make even more. If efficiency savings are a flaky way of making spending cuts, then the Conservatives are even larger, and are mathematically more questionable.

I don’t mean to say that this proves the Conservatives aren’t capable of making these cuts, and I can see why business leaders, such as Sir Stuart Rose say, that it would be better to cut spending and prevent National Insurance going up.

The great con of ‘efficiency cuts’ though, is that these cuts can be made painlessly, with no impact on frontline public services. Now, to their credit, the James report which the Tories commissioned in 2005 contained 177 pages of detailed suggestions about cuts that could be made department by department.

Everything from a costed reform to Legal Aid to £8m from the overlapping of Sports governance administration, and a 15 per cent cut to civilian MoD staff. For every department there was a quantified assessment of whether the Tory James Review figures were additional or overlapped with the Gershon (then Labour) efficiency savings.

For example in 2005, David James identified that £217m of Education efficiencies overlapped with existing government plans. Almost nothing was scored in year 1. An extra £12bn of annual savings, above government plans (the same number as Osborne’s plan) only kicked in after three years.

So what does this all mean? It means that the current Conservative approach is not even a patch on its attempt at the last election. The ‘flimsy four page press release’ that the PM referred to, does have some good ideas. Not all of them overlap with existing government plans.

But they are a set of tactics, rather than identified savings, as outlined by the Tories in the past. The idea that they fund lower taxation through pain free public service spending cuts is totally unproven. Yes George Osborne will cut anyway.

And he did tell me last week that ‘I will not allow Cabinet ministers in a Conservative government to come to me with frontline cuts’. But the four pages do not go anywhere close to showing that these cuts will all be from waste.

Perhaps Gershon and Read can explain more, but they seem to be more elusive than a game of hide and seek with Robin Hood and the Scarlet Pimpernel.