20 October 2010
Tom Clougherty, executive director of the Adam Smith Institute gives his initial reactions to the spending review:
“I’m delighted that the Chancellor has stuck to his guns, and laid out plans to eliminate the structural deficit by the end of the parliament. Politically, this may be difficult, but economically, it is absolutely vital.
“It is important to remember though that severe as some of these specific cuts are, the overall impact of the spending review is modest. Health spending is protected, while areas like social security and debt interest payments – which the review’s cuts will not affect – are set to surge.
“In cash terms, government spending will continue to rise over the term of the government. In real terms the overall cuts only amount to a couple of percent.
“We need to realize that this is just the beginning. It is vital that the government goes on from here to carry out a radical, comprehensive reform of the public sector, since only that will make cuts sustainable in the long term.
“We also need a hard-headed, positive agenda for economic growth. Now the spending review is out of the way, the government’s attention must turn to these issues.”