areas of spending and that all existing spending should be justified.
He claims that the situation is very probably more serious than the Government’s proposals for a fiscal tightening of 6.4% of GDP over eight years suggest. He argues that a fiscal consolidation of 8% of GDP over five years is more realistic, with the emphasis on controlling public spending, not higher taxes.
Nine specific areas of potential savings are identified as a start to a radical programme of reform. The main proposals are:
1. Zero growth overall for public sector pay (saving £2.4bn a year), a 25% reduction in the total pay bill of staff earning over £100,000 and a salary freeze and end of bonuses for the civil service (saving £200m a year)
2. Tapering the family element of the tax credit – saving £1.35bn
3. A radical review of public sector pensions with the view to moving to higher employee contributions and later retirement ages. There is currently a £28bn subsidy to unfunded schemes
4. Scrapping several major IT systems including the ID card scheme (£5bn over 10 years), Contactpoint (£200m over five years), the NHS IT scheme (£250m over the next five years) and the proposed ‘super database’ (£6bn)
5. Curbing ‘industrial policy’, including scrapping Regional Development Agencies (£2.3bn annually) and ECGD subsidies (£100m annually) and reducing (by at least half) the Train to Gain and Skills Councils budgets (£990m together a year)
6. Reforming the National Health Service, by reducing the centralisation and over-administration – starting by scrapping Strategic Health Authorities (£200m a year) – by strengthening commissioning and with ‘supply side reform’ – in particular tariff reform could save around £2bn a year
7. Curbing the centralisation in education, by cutting national strategies and scrapping quangos – saving around £600m a year
8. Reducing the amount of waste in the defence procurement process, including scrapping the Eurofighter and Tranche 3 (£5bn over 6 years), the A400M (total cost £22bn), Nimrod MRA4, the Defence Training Review contract (£13bn over 25 years) and the Trident submarine successor (£70bn over 25 years)
9. Examining possible future public sector asset sales, including some aspects of the Highways Agency (land value of £80bn) and intangibles such as spectrum, landing rights and emissions trading
Heather Kidd said today ” Vince has had a history of getting the economy right. I put my full support behind these measures as I am convinced that they will deliver for the British Economy and get us back on track. There is real detail here- can the other two parties match that? Probably not”