Sean O'Grady: In Chancellor's 'Axe Factor', which cut will you vote for?

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What would you rather see closed – your local library or the swimming pool? Although no Simon Cowell, George Osborne has unveiled "the axe factor" and warned of "tough decisions ahead". Like contestants in a TV talent show, different government programmes, from nursery education to training schemes for the unemployed will, in effect, be offered to the public for their verdict.

No one is quite sure which arm of the state will be acclaimed as the new Susan Boyle, or if the Department for Work and Pensions will unexpectedly turn jobseeker's allowance into the new Jedward. In any case the Government has already decided some of the winners: the ring-fenced areas such as overseas aid and NHS spending, and a potentially expensive commitment to restore the earning link for old-age pensions.

What was absent from the great national debate Mr Osborne launched was the option of raising taxation, and in particular VAT. Most City experts believe that a hike in VAT from 17.5 per cent to 20 per cent is a near certainty to be announced in the emergency Budget in two weeks' time: few think that the Government has much chance of accelerating the reduction in the deficit without this and other revenue-raising measures.

Such is the scale of the crisis that the choices the public will have to make are inevitably unpalatable. Should child benefits disappear? Or that hole in the school roof stay leaky for another year? Or should our nuclear deterrent to be cancelled? Or a longer wait to get granny into a care home?

Coalition ministers hope that carrying the voters and the unions along with harsh but unavoidable decisions will make political sense. The problem is that ring-fencing spending on the NHS, overseas aid and the armed forces and restoring the earnings link for pensions leaves little room for manoeuvre.

The Institute for Fiscal Studies predicted cuts of up to a third in departmental budgets which have not been ring-fenced – and that was on the Labour government's plans. Additional cuts of around a fifth will be required in some departments: but the notion of cutting the transport budget by half is silly.

The danger is that the £60bn in annual cuts now being searched for – 10 times the size of the cuts announced recently – may be politically and practically impossible to find, even without the union resistance that is likely to follow.

So before long the national consultation on spending cuts may be amended. Ministers may end up asking the public whether they would like to see higher student fees or VAT on books. Museum charges or grubbier parks? A fee to see the GP or fewer social workers for child abuse cases? Do we want to sell municipal golf courses or the remaining school playing fields to the developers?

Tough decisions indeed.

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