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Call for £50bn public spending cut to ease UK debt crisis
11.09.09
Plans to tackle the UK's debt "crisis" by saving £50 billion of public spending through measures such as a pay freeze on the state pension, abolition of the identity card scheme and a 10% cut in non-frontline staff in the NHS and schools were put forward.
The Institute of Directors and the TaxPayers' Alliance outlined 34 specific measures inspired by the "dire state" of public finances.
The two groups called for the reduction or removal of "unproductive" items of Government expenditure which did not work or were not essential.
Suggestions included targeting spending on free bus passes for the elderly and disabled on those who genuinely needed it; a one year freeze on the state pension; a one year pay freeze across the public sector; abolition of child benefit and the child trust fund while increasing child tax credit, and abolition of free TV licences.
There was also a call for a 10% reduction in the size of the civil service and a similar reduction in non-frontline staff in the NHS and schools.
Miles Templeman, director general of the Institute of Directors, said: "The UK is in the middle of a Government debt crisis and our report sets out tangible proposals to cut the deficit.
"Businesses are right now making savings and cutting back on costs to get through the recession and there is no reason why the public sector should not have to do the same.
"Any cut in spending naturally has the potential for some pain, but our list shows that large sums can be saved without hurting vital services.
"We hope this will start a serious public debate about the best ways money can be saved and whether the state needs to withdraw from certain activities it can no longer afford."
Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "Families and businesses have had to tighten their belts with the onset of the recession, so it is now time for the Government to follow suit.
"It is absolutely essential that public spending is reduced to rebalance the nation's finances.
"After years of simply spending more and assuming the taxpayer will pick up the bill, the situation has changed.
"These proposals offer practical, reasonable ways to save large amounts of money and politicians in Westminster would do well to take them on board.
"Taxpayers cannot afford to sustain the current rate of spending, and they want to see an end to their money being spent unwisely."
Margaret Eaton, chair of the Local Government Association, said: "Local government is the most efficient part of the public sector and made savings of more than £3 billion between 2004 and 2007.
"Councils up and down the country are working hard to cope with a perfect storm of falling income and increased demand for services brought about by the recession.
"At this time of repossessions and redundancies, even more people need the vital support that only councils can provide.
"Town halls are taking decisive action to protect local people and businesses from the worst effects of the recession."
She added: "The tough economic outlook is forcing councils to take a look at almost every aspect of their finances.
"Thousands of council jobs have been cut in recent months and it is expected more will go over the course of the next year.
"Local government has delivered the lowest council tax rise for over a decade and is continuing to make big efficiency savings."
TUC general secretary Brendan Barber said: "We should be grateful to the Institute of Directors and TaxPayers' Alliance for spelling out exactly who the victims of public expenditure cuts will be.
"They explode the idea that cuts can be just painless efficiency savings and reveal that the victims will be pensioners, children, students, the poor and parents.
"Particularly striking is the absence of any cuts in the welfare state for the super-rich such as tax relief on the huge pensions that top directors pay themselves."
Reader views (6)
Why touch pensions when they waste billions yearly on quangos?
Oh, I forget, Brown likes raiding the pensions pot.
- Roger, Surrey
The money has run out and cuts will have to be made.
- Very Very Angry At Paying Tax For Mp'S Expeses, Home Counties
Miles Templeman, director general of the Institute of Directors, said: "Businesses are right now making savings and cutting back on costs to get through the recession".
I would like him to list all of the bankers, directors of quoted companies, and directors of other major companies who have had their salaries cut. Indeed many of them have not only received increases to basic salaries, they have also received bonuses of more than 50% of their salaries and increases in their pension entitlement, even while their companies profits have tanked.
Equally, I bet that Mr Templeman's salary and benefits have not come down.
On past form the motto of the Institute of Directors should be "ask not what you can do for your country but what the country can do for the IOD." They remind me of WW1 generals urging their troops to make sacrifices and not show cowardice, but from the safety of the headquarters where the main risk to their health was from overeating.
- William, London
I hope that this 50 billion cuts are aimed at the lower working class,and not at the middle,and higher classes.
- Raymond, Streatham
If things are as bad as described, how come our present outgoing Govt has not done anything about it?
They are behaving like reckless borrowers using as many credit cards as possible, eventually declaring bankrupt and then hope to wipe out the debts altogether?!!!
- Dt, London
".. the 'dire state' of public finances."
Socialism at it's very "best". All that money spent on buying votes to stay in power and now the country has a far far greater debt than after WWII.
"We are not going to return to the days of boom and bust." Now whose mantra was that, let me think?
- Frank, Home Counties, England.
