Andrew Marr: The government can't deliver the spending cuts the UK needs

11 October 2022, 18:17

The government cannot deliver the spending cuts that a top economic think tank says it needs to steady the economy, Andrew Marr has said.

Opening LBC's Tonight with Andrew Marr, the presenter said that he did not believe the government would be able to get through parliament the £69 billion in spending cuts that the Institute for Fiscal Studies has recommended.

"So, after a long time away - too long, to be frank - at long last the Commons is back and Liz Truss is talking to her new cabinet, in Number Ten, in person," Andrew said.

"And along comes the IFS, the Institute for Fiscal Studies, with a sort of welcome back to school present for the prime minister.

"Now, the IFS has a special constitutional status in this country – a bunch of people who, all sides have agreed, basically know stuff. People who, in a world where we trust nobody, politicians have agreed are generally speaking, trustworthy and right.

"So, what was their present to Liz? An innocently titled report on the public finances which said that to stabilise Britain’s soaring debt in 5 years time, £62 billion pounds of cuts would be needed - even if the government reversed all the tax cuts that wouldn't be enough. The markets, remember, insist that the sums must add up.

"To make themselves crystal clear the IFS explained that these new cuts would involve refusing to uprate benefits by inflation; and taking 15% out of all the departmental budgets except health and defence."

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Andrew said: "In one of the greatest flourishes of understatement since Emperor Hirohito declared in 1945 that the war had developed 'not necessarily to Japan's advantage', the IFS said 'such spending cuts could be done but would be far from easy.'

"Well I'm going to go out on a limb here and say I disagree with the IFS. I don't think these spending cuts could be done. I don't think they can get them through Parliament.

"And by the way I don't think the Chancellor can reverse his tax cut plan either, without resigning. Opposition MPs agree. So do many Tory MPs."

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Andrew added: "Now the Chancellor isn't an idiot. He is trying to soothe and buy himself time until that all important statement of how the books will be balanced comes out at the end of this month.

"But it's hard to see what he can now actually do. The markets are not in a forgiving mood. The situation in the financial system is deeply worrying – more of that later.

"And the Labour Party is preparing for a snap general election. Sir Keir Starmer today announced he was moving the party headquarters to Waterloo, replacing his chief of staff, and forming a new team for the fight ahead.

"He told Labour staffers, 'the government's collapse has given us a huge chance. The instability means they could fall at any time. because of that we need to get onto an election footing straight away.'"