October 13, 2009 at 06:41 AM
George Osborne played bad cop to David Cameron's good cop in Manchester. His speech announced between £7 - £16 billion in spending cuts - a good start, but he has got a lot further to go.
His aim should be to balance the public finances by 2015. He should reveal plans to return to fiscal health earlier than Labour, concentrating on spending cuts and efficiencies, rather than tax hikes. He needs to base his revenue assumptions on realistic growth targets as well.
Spending cuts are necessary, but should come alongside reform of the public sector. This must involve the sale of state-owned assets - and services. Third party providers must replace the state as the deliverers of non-core services.
Central spending must prioritise green transport and carbon-reducing or neutral infrastructure investment. Crossrail must go ahead. And George Osborne must address the elephant in the room - public sector pensions. He would give his elbow more power if he were to make widely available the forecast pensions liabilities of the nation, over the next forty years, thereby making the solution - a drastic capping of the benefit - self-evident.
He made a good start this time last week - much more to do.
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