What proportion of Government cuts were Labour committed to?

10 May 2011

"For every £17 the coalition is now cutting, Labour was committed to cutting £16." Lord Ashdown, BBC Question Time, 5 May 2011

"Had Labour been in government, it would be cutting £7 for every £8 that we are cutting." Theresa May, House of Commons, 9 May 2011

With Labour making gains at last week's local elections with the pledge to be "your voice in tough times," the Opposition's economic plans have come under renewed Coalition scrutiny.

The Coalition partners also promised to put greater distance between their two parties after the election results, although the different interpretations of the gap between Labour and the Government's fiscal consolidation plans offered by the Lib Dems' Paddy Ashdown and the Home Secretary is unlikely to be what they had in mind.

But what is at the heart of the confusion, and do either of the figures proposed tally with what Labour has actually proposed?

Government spending:

A glance at the spending plans outlined by the last and present governments (as outlined in the last three Budgets) might seem to suggest that Lord Ashdown is correct.

The previous Labour government detailed plans in its March 2010 Budget to spend an average of £693 billion over the next four years. This compares to the £660.4 billion that the present government plans to spend on average over the same period (as announced in the March 2011 Budget).

£660.4 billion is 95.3 per cent of £693 billion, which in turn is £16.2 of every £17 spent; the statistic quoted by the former Lib Dem Leader.

Cuts and tax rises:

However changes in government spending plans are not necessarily the same thing as government cuts, meaning Lord Ashdown shouldn't use government expenditure as a proxy for 'the cuts'.

This is because the impact of changes to taxation can mitigate or exaggerate any cuts being made.

So what sort of ratio are we left with if we specifically compare the cuts proposed by the last two governments?

Over the 2011/12 to 2014/15 period, the Labour government announced an average annual reduction of £29 billion in spending, whereas the present government expects to cut £51 billion. Labour's cuts are therefore 56.9 per cent of the size of the Coalition's, which is approximately £9.67 in every £17.

The importance of the time frame:

The 61.9 per cent gap is also approximately £5 in every £8 spent by government, some way short of Theresa May's estimation. So has the Home Secretary also slipped up in her calculations?

Not necessarily. If the analysis is limited to the cuts carried out in the current financial year, the Home Secretary's numbers stack up.

While the previous Government aimed to make £14 billion of cuts by the end of 2011/12, the Coalition plans to have reduced spending by £22 billion. However these are cumulative totals, so to calculate the amount cut in the current financial year, we must deduct the cuts from 2010/11. Whereas the Coalition expect to have reduced spending by £5.5 billion in that year, Labour did not plan to make any cuts at all. This leaves £16.5 billion of cuts to be made in 2011/12 by the Coalition against £14 billion planned by Labour for the same period, or approximately £7 in every £8.

Whether it is clear from Ms May's statement that she is referring specifically to cuts in 2011/12 rather than in general is moot, however on this basis it is accurate.


While the numbers behind Ms May's claim may be sound on their own terms, whether or not the comparison still holds water is more contentious.

While Labour's new economic pairing of Ed Miliband and Ed Balls have announced that they wouldn't depart from the spending plans announced in March 2010, they have indicated that they would seek to raise more money in taxes and make fewer cuts.

Furthermore the reliability of the Budget forecasts themselves has been called into question.

At the time of the last election, the much-respected Institute for Fiscal Studies compared the budgetary measures announced by all parties with the economic assumptions that underpinned them to find the 'hole' in their spending plans; the implied cuts that would be necessary but which had not been set out.

The IFS analysis suggested that whereas the Conservatives plans implied £92 billion of cuts, the Labour equivalent suggested a £82 billion retrenchment. Coincidentally, this would also mean that Labour's cuts would be almost exactly 7/8ths of the Conservative plans.


The fact that both economic circumstances and the fiscal plans of the Government and Opposition are in a state of constant flux means that identifying a firm ratio to describe the relative size of the cuts proposed by each is close to impossible.

While Theresa May's claim that Labour cuts would have matched £7 in every £8 cut by the Coalition stands up to serious scrutiny if we use the Opposition's plans as they stood at the last election, this position may have been overtaken by the Opposition's present economic policy (although without further detail, it is difficult to say with any certainty).

Ms May does however gloss over an important caveat to her claim: the ratio only rings true for the current financial year, and is not indicative of the total cuts planned by both Government and Opposition.

Lord Ashdown's claim that the ratio is 16:17 actually refers to projected expenditure without accounting for changes to taxation policy, and therefore it can't properly be used to describe the level of cuts.

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