Lean Government: How to make cuts without wounding low earners

Wednesday 7 October 2009 Public Finances and the Economy

The fringe event addressed how to make cuts in the post-recession recovery without wounding low earners. The chair was Jenni Russell, the Guardian and the speakers were David Willetts MP, Clive Cowdrey, Resolution Foundation and Mike Emmerich, Manchester’s Commission for the New Economy.

Clive Cowdrey set the scene for the discussion by explaining the origins and role of the Foundation and outlining the findings of the recent Low Earners Audit. He stressed the importance of cuts that are careful and cautious in order to ensure that the recently improved position of low earners is not damaged. Jamie Bartlett, Demos, explained that the public sector has been improving by learning lessons from the private sector and warned that salami slicing and cutting budgets can produce false economies. Mike Emmerich, Manchester’s Commission for the New Economy, followed Jamie, by highlighting three ways in which he believed low earners could be reached: devolution, de-regulation and delivery.

David Willetts MP, addressed cuts and capital markets. He argued that it isn’t necessary to make all the cuts in one year but whoever is in government does need a plan to keep the market stable. He outlined some Conservative policy proposals, explaining how these would benefit low earners and highlighted support in-work as an important means of boosting incomes for low earners. However, he argued that tax credits were overly complex causing distress for families and stressed it was crucial that the functionality of tax credits is reformed so that they work for low earners.