Opinion: There’s a £60 billion hole in the budget

Indeed, there is a hole in the budget which stands at approximately £60 billion.

These are not Margaret Thatcher’s Tories, despite what they may claim. Say what you will about her, but she believed that tax cuts were a “reward” for fiscal restraint. To put it another way, she favoured sound money: no cuts nor spending which could not be paid for.

As an accountant, I respect the idea of a balanced ledger. I don’t know what ledger the Tories are presently using. I saw a calculation that suggested £60 billion represents half of today’s education budget. Would we be happy with that level of cuts to schools? Do we think our hospitals need less resources? Are we happy with how carers are treated? Do we think that the police have enough officers and equipment?

One of the first rules of accountancy is that for every debit there is a credit. If you cut taxes that indicates you are not spending money somewhere else, or alternatively you are not balanced, which leads to markets being spooked, higher rates of interest on debt, and large sums to be paid in future budgets and by future generations.

We have been here before, during the so-called austerity imposed by the Tory-led government in 2010. What we found was that their conception of accountancy was incorrect: they thought by cutting spending that somehow economic activity would be restored via the magic of confidence in their rectitude.

It didn’t work, because the markets saw through it: it is not possible to get rich by making most potential customers poorer and less secure.

Similarly, by making only a few at the top richer now, and by making the vast majority still more poor and less secure will only be doubling down on failure.

Think about our city: we have had substantial cuts to local transport. These reductions made it more difficult for our residents to get into the city centre, to buy goods and services.

It increased the likelihood that businesses would fail. While local government may pat itself on the back for having saved money, they helped no one, least of all themselves. A business that fails is one that does not pay tax. The more businesses that fail, the more likely a city will be hollowed out. Then what will they do for revenue?

On a national level, not only are they thinking about such cuts, but we are doing them not in the name of rectitude but to provide tax cuts to a narrow group of wealthy people.

I am a reasonably successful person. However, I realise that my success is reliant on providing services that others need. Most of my clients are businesses. If the cuts impact their customers and strip away any semblance of stability and security, they will be less successful. Then those who are wealthy and successful will only be those who earn their living without the public, i.e., those who have already accumulated wealth rather than those working to earn it.

This is the economy of a feudal state, with a few barons while the rest of us scramble for crumbs off the table. Hopefully the Tories will think again. However, I doubt it.