Meet the godfather of the cuts

Canada's Paul Martin eradicated his country's deficit by harsh reductions in public spending. Matt Chorley meets the coalition's inspiration

One might expect the godfather of public spending cuts to have an air of menace about him, hunkered down in his lair slicing away at treasured services. But to meet Paul Martin in a smart suite at the Grosvenor Hotel gives little away about his work eliminating Canada's $42bn budget deficit in the 1990s.

The genial 72-year-old former prime minister is in demand, dispensing in a soft Canadian drawl advice to anyone looking to erase the red ink from their national finances. He refuses to confirm that he has held informal talks with ministers on how to eradicate Britain's £151bn deficit, but the coalition is clear that what happened across the Atlantic a decade and a half ago is the inspiration for their plan to reach fiscal equilibrium.

Mr Martin insists the Government has no choice but to cut – and cut hard. "If you look at Greece you really begin to understand this. The reason for doing it is 100 per cent economic." He says social programmes can only be protected in the long term by removing "this sword of Damocles that's hanging overhead – which is this deficit".

"Once you've measured your cloth, you cut it and proceed," he says, in one of many warnings to the Tories and Lib Dems that there can be no rowing back when the going gets tough. "You've got a huge deficit and in my opinion you have no choice but to deal with it."

Opponents of the UK's four-year plan to cut £81bn from public spending may not like it, but Mr Martin has a reputation for ruthlessness that belies his grandfatherly manner. From 1995-98, as finance minister, he reduced public-sector spending in Canada by a fifth, which included cutting the budget of the industry and transport departments by 55 and 40 per cent respectively. A deep deficit became a surplus.

Unlike the coalition's pledge to protect the NHS and overseas aid from cuts, Mr Martin insisted as a fundamental principle that there could be no ring-fencing. But he believes the coalition's decision to increase foreign aid funding through the Department for International Development has been "recognised throughout the world" and will pay "huge dividends" for the UK, not least in attracting business and influencing public policy in Africa, where he has a special interest including a project to protect forests in Congo.

As Canada was cutting spending, it was also tightening bank regulation, meaning it was spared the worst of the financial collapse that saw Britain's banking sector teeter on the edge. "Economic downturns are going to happen, but an economic downturn that has at its core a bank failure is the difference between a windstorm and a tornado," Mr Martin says now. He believes the G20 has a "crucial" role to play in enforcing tighter regulation. To reach a global deal, the "psychology of the West" must change, he says, but so too must the psychologies of China and India, which have "got to recognise that with their growing economic strength come growing economic responsibilities".

He backs President Obama's tax on the banks and the bailouts, while heaping praise on UK politicians, including Mr Cameron and Labour's Ed Miliband. "I think you're actually very well served by your political leaders." Those on the sharp end of the coalition's axe, which bears Mr Martin's fingerprints, may not agree.

The process of cutting may be similar but the "circumstances are very different", he says. Britain is reining in spending in an age of global austerity, although going it alone, as Canada did, has its own problems. "People said, why us? Why is nobody else dealing with it?" He spent 18 months trying to win public support for cuts. The jury is still out on whether the coalition did the groundwork to persuade voters here of the need for spending reductions.

While "fundamentally" Mr Martin has no regrets about the work to balance Canada's books, he says: "There were some areas where I think we may have cut too much, and as soon as we eliminated the deficit, I immediately began to repair it." This could be a warning to Mr Osborne. Research funding was so badly hit in Canada that Mr Martin later set up endowment funds to ensure no one could repeat his mistake. Once back in the black, he also introduced record increases in funding for health and education.

After eradicating the deficit, Mr Martin then forced out Jean Chrétien to become Prime Minister. If George Osborne is following the Canadian plan to the letter, David Cameron could also be facing the chop.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
video
Life and Style
tech
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SQL Report Analyst (SSRS, CA, SQL 2012)

£30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

Application Support Analyst (SQL, Incident Management, SLAs)

£34000 - £37000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Embedded Software / Firmware Engineer

£40000 - £45000 per annum + Pension, Holiday, Flexi-time: Progressive Recruitm...

Developer - WinForms, C#

£280 - £320 per day: Progressive Recruitment: C#, WinForms, Desktop Developmen...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform