Slash spending to fund tax cuts, demand Tories
STATE spending must be slashed further to pay for tax cuts, senior Tory MPS insisted yesterday.
They called on the Chancellor to stop appeasing the Liberal Democrats and use the Budget to make the ‘moral argument’ that l ower s pending c an boost growth.
David Ruffley, who sits on the Treasury select committee, said George Osborne could save £1billion by abolishing the business ministry run by Vince Cable of the Liberal Democrats.
‘The Chancellor of the Exchequer has played a very skilful hand but he has been constrained by the forces of conservatism in the Coalition, the Lib Dems,’ he added.
‘We need to call their bluff, reopen the spending round and pay for funded tax cuts.
‘I have one totemic proposition – and that is we should, as a metaphor for the public spending cuts, get rid of the Department for Business, Innovation and Skills.
‘And in the same way I think we should look at the Department for Culture, Media and Sport as well.’ That ministry is run by Jeremy Hunt, who is a Conservative.
Andrew Tyrie, the Tory chairman of the Commons committee, said the Chancellor should use the Budget next month to announce that he aims to bring government spending down to 40 per cent of national output.
It is currently around 43 per cent, six points higher than the level Labour inherited in 1997.
Mr Tyrie dismissed the Lib Dem argument that austerity measures, while necessary, are regrettable. ‘No 10 and No 11 need to make the broader case on the need for a smaller state,’ he said.
‘We need to move well beyond this sorrow approach.’
He added: ‘We need to say we want to get this down because it’s the right thing to do for the country.
‘It’s morally the right thing to do. We will be giving people greater control over their lives and it’s going to bring us a bigger long-term growth rate.’
The demands came as the Free Enterprise Group of 36 MPS, most of them from the 2010 general election intake, held a growth forum yesterday at the Institute of Economic Affairs. In a sign that the Chancellor wants bold ideas from Tories to combat Budget lobbying from the Lib Dems, Mr Osborne’s Parliamentary aide Sajid Javid used his speech to take a potshot at the Liberal Democrats.
He suggested that his party’s Coalition partners would not follow the Government’s longterm financial plans that call for further spending cuts after the next election.
‘At least one party [will be] arguing that we are going to have to make more cuts,’ he added.
Demanding radical changes in regulation, Kwasi Kwarteng MP, who organised the event, said the Coalition couldn’t ‘ just bumble along’.
His Tory colleague Priti Patel said the Government ‘ should stop dancing round the handbags’ and ‘ wake up and smell the coffee’ about the need to slash red tape on business.
Mr Ruffley pointed out that the Chancellor’s current plans – touted as the deepest cuts in British history – mean only that total government expenditure in 2014/15 will be reduced to the levels seen in 2009/10.
It would take a further two years for Mr Osborne to cut spending to 2008/9 levels.
Mr Ruffley said: ‘ I did not notice the world fall in when we had those spending levels. I didn’t notice the fabric of Britain collapse.
‘I think there’s a lot of fat still to be pruned.’
He also voiced the concerns of many MPS that the Chancellor should make it a priority to offer tax cuts to business.
A Comres opinion poll for the Independent newspaper suggests that there is public support for Budget tax cuts, if there are any, to be aimed at business rather than individuals in order to get the economy moving.
Some 58 per cent of voters backed this approach compared with 32 per cent who disagreed.
And they backed the demand from the Conservatives that any tax cuts should be funded by spending cuts – rather than come from more borrowing as Labour has advocated.
But most voters were against spending money on any tax cuts. By a margin of 59 per cent to 31 per cent, they said the Chancellor should use any spare money to reduce the deficit instead.