The cuts have started to bite – and the government is only just getting started. Yesterday Chief Secretary to the Treasury Danny Alexander announced that the government was axeing £2bn worth of projects and suspending another £8.5bn worth.
These cuts are supposedly to reduce the deficit – but the total saved will be a trifling 0.05% of public expenditure.
The highest profile casualty of the cuts was the £80m loan to Sheffield Forgemasters to enable it to become a world-class manufacturer of key heavy forgings for new nuclear power plants. More analysis of this decision here.
The cuts to programmes to help the unemployed back to work also deserve special attention.
The Future Jobs Fund, designed to create 150,000 jobs – gone.
Recruitment subsidies for people claiming Jobseekers Allowance for six months – gone.
The extension of the guarantee of work or training for young people who were unemployed for six months into 2011/12 – gone.
The guarantee of a job, internship, volunteering placement or work experience for the long-term unemployed – gone.
This amid rising unemployment and a crisis of youth unemployment. And replaced with? Nothing, for now at least.
A full list of the cancelled and suspended projects, with explanatory descriptions for each, is here on the BBC.
And there’s more to come in next week’s emergency Budget, followed by the real mass bloodletting in the Comprehensive Spending Review this autumn.
Meanwhile, the Telegraph reports this morning that child tax credits are to be axed for the ‘middle classes’. There are compelling arguments to be made for means-testing benefits and restricting them from the well-off – but according to the Telegraph’s report, the proposals will restrict child tax credits from far more than just well-off families.
The suggestion is that families earning a combined income of more than £30,000 – or perhaps even as low as £25,000 – will no longer be eligible for the benefit. That will affect two million families. Two parents each earning £12,500-£15,000 cannot possibly be described as middle-class under any description – they are well below the national average earnings, and if they live in high-price London they are probably feeling the pinch.
Well, now the government looks set to pinch them a lot more. Get used to it, folks.