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It's the poor who suffer not the rich - For the Inverness Courier
LAST week's Spending Review was the result of a hugely detailed, deliberate and careful process that I have overseen within government over the last five months.
Throughout that time I have been acutely aware that every decision we took, every option we considered, would have a direct impact on people.
I would not have gone down this road unless I was totally convinced that this course of action is necessary to rescue the British economy from the perilous position it is in. We inherited a country with the largest budget deficit in Europe. Of every £4 we spend, £1 is borrowed - we are living beyond our means. Those who want to delay are arguing for us to pay ever more debt interest - and to pay interest on that interest too. That would mean more cuts in the end - more pain over a longer period of time.
Within our plan, we have made some important choices. We have given top priority to spending on the National Health Service and to schools - with additional funds to support the most disadvantaged children - and to investment in our infrastructure that will support economic growth. We have made much bigger savings in the costs of central government and in the welfare budget. These are the right choices for long-term growth and fairness.
It is critical that we do all we can to support growth in the private sector over the next few years - to create the jobs and economic growth. Some people seem to think that it is a choice between dealing with our deficit or supporting economic growth.
It is a false choice. Deficit reduction is the essential precondition for sustainable growth - you can't have one without the other. We only need to look across the Euro area to see the consequences of delaying action, and saving the tough decisions for another day. As the CBI rightly said, the alternative - to do nothing - "would have damaged the economy for years to come".
By investing in infrastructure, in education and skills, in green technologies we have made important choices that will help people make the best of their lives and support economic growth. The Highlands is one of the areas we have chosen for a major pilot of superfast broadband, a technology that has the potential to transform our economy locally.
Every area of public spending has to make a contribution to finding savings. None is more painful locally than the outcome of the Strategic Defence and Security Review. The decision not to proceed with Nimrod is the right one given the nature of the threats that we face today, but it leaves huge uncertainty facing RAF Kinloss in Moray.
No decisions have yet been made on closures. The MoD is reviewing its bases to see where closures need to take place and whether locations can be put to other uses, including the possibility of accommodating British troops who are returning from Germany. There are no guarantees, but it is important that a strong case is presented and listened to in government.
People in Scotland will have to wait to hear the precise impact of spending reductions because those decisions are yet to be taken by the Scottish Government. I hope ministers in Edinburgh will follow the example of Highland Council and be very open about the options that are on the table. I also hope that they will seek, as we have, to protect spending on vital transport infrastructure - which matters to much in the Highlands - and on schools.
None of this process has been or will be easy. I understand that some people are angry about some of the decisions we have made. But I hope in time people will recognise that these are the right decisions, made for the right reasons, in order to regain control of our economic destiny. When countries lose control of their finances, it's not the rich who suffer most. It's the poor.
Posted on: 26/10/2010
