The Tories will reduce UK public spending to Estonian levels
IMF forecasts show that Britain could join a tiny group of European countries that have shrunk the size of their states dramatically. But it needn’t be this way.
In the main parties’ election manifestos published this week, public spending is still public enemy number one. The Conservatives insist that a further £12bn in cuts to the welfare budget must be found over the course of the next parliament. If it isn’t, they warn, then the hordes of so-called skivers who receive unemployment benefit, child support, or disability benefits will keep draining Britain dry.
When Rachel Reeves, the shadow work and pensions secretary, told the Guardian that Labour “is not the party of people on benefits” it was a potent illustration of how ingrained the idea of social security being synonymous with sponging off the state has become. The welfare state was once the insurance you got out for what you put in.
There is a lot at stake if the public spending cuts proposed by the coalition for the next parliament are introduced – and not just for poorer and marginalised groups. According to the latest International Monetary Fund estimates, proposed UK cuts to public spending between 2015 and 2019 amount to 3% of GDP. If fully implemented, these would have profound repercussions. One of the less discussed of these is that the UK would join a tiny group of advanced economies – including Estonia, the Slovak Republic, and Ireland – that have shrunk the size of their states dramatically following the 2008 crash and which are all now seen as economic losers.