This week, the Government will outline details of £6bn it intends to find in savings for the current financial year. This money will be incorporated into the emergency Budget that will take place within 50 days, which will then pave the way for a comprehensive spending review in the autumn, after which much more momentous decisions on cuts will be announced.
The Government clearly believes there is no time like the present to start work on reducing Britain's enormous £163bn budget deficit. The reasoning of the Prime Minister, and still more of his Chancellor, is that if you are going to have to make the patient take hateful medicine, you may was well start forcing it down as quickly as possible. David Cameron and George Osborne feel furthermore that they need to send an immediate reassuring signal to the financial markets that the Government is serious about cutting the deficit. They may also want to act fast out of concern that their Lib Dem partners could soon lose whatever enthusiasm they now profess for spending cuts.
From a political point of view, the logic of what Mr Cameron and Mr Osborne are arguing for makes sense. The economic case for immediate cuts remains less convincing. The position of this newspaper is that it would be better to delay making cuts until the end of the year, so as not to choke off our weak economic recovery before it has had a chance to gain momentum. That appeared also to be the view of the Liberal Democrats until recently; their conversion to the Tory standpoint on this matter is part of the trade-off that has brought them into government.
The Government should resist the temptation to make a big splash in the emergency Budget and should leave the big decisions to autumn. Before the election, the Conservatives justified their refusal to outline exactly where cuts should fall on the grounds that they could not make such fateful pronouncements until they had seen all the figures, to which they will only have access following completion of the spending review.
They should remember those words. Decisions reached in the autumn, following the spending review, will not be the result of second-guessing. Cuts announced then will also have the advantage of not kicking in before 2011. By then it is legitimate to expect the economy to have picked up a bit and be in a better position to withstand the painful reductions in spending that all the main parties, including Labour, have accepted are inevitable and necessary.