Readers may already have noticed an excellent new report – How to Save £50bn – which was jointly published by the Institute of Directors and the Taxpayers' Alliance last week. The logic behind its call for spending cuts is impeccable and, I would have thought, difficult for anyone to disagree with:
The UK faces a massive fiscal crisis, with borrowing going through the roof.
If the economy does not recover as well as the government forecasts, the deficit will be even worse than anticipated.
Failure to bring borrowing under control could lead to the UK losing its AAA credit rating, which would have serious knock-on effects on Sterling and interest rates.
Higher taxes could smother economic recovery, which would make reducing the deficit even more difficult.
Public spending grew more quickly in the UK between 2000 and 2007 than in any other OECD country. That's why we have a structural deficit.
We need both long-term reforms and short-term spending cuts to tackle the deficit.
Governments can bring spending under control if they really commit to it: look at Canada in the 1990s.
The report then goes on to make 34 separate recommendations for reducing public spending, which would save just over £50bn in total. I've pasted a full summary of their proposals below (click here if you can't see it).
This IoD/TPA report is an important contribution to the debate on public spending, and one that I hope policymakers will take seriously. The ASI is working on a similar project at the moment, which focuses a bit more on capital expenditure. We are planning to publish it early next year.