http://www.timesonline.co.uk/tol/news/politics/article7129248.ece
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From The Times
May 18, 2010
Message to new minister: ‘There’s no money – good luck!’
Suzy Jagger, Roland Watson
The new Treasury team accelerated moves to reduce the national deficit as they seized on an ill-judged joke from a departing minister to brace the country for deep cuts.
George Osborne, the Conservative Chancellor, and David Laws, his Liberal Democrat deputy, used their first joint appearance to make common cause of an aggressive timetable for cuts, savings and spending targets.
To underline the extent of the task, Mr Laws made political capital from a letter left for him on his Treasury desk by Liam Byrne, his Labour predecessor.The note — dated April 6, the day that Gordon Brown called the election — read: “Dear Chief Secretary, I’m afraid there is no money. Kind regards — and good luck! Liam.”
Mr Byrne said yesterday that the letter had been intended as a joke.
But Mr Laws, breaching the confidentiality that normally covers such advice to successors, used it at the press conference to warn the country, and fellow Liberal Democrats in particular, of the pain to come.
“Labour have left the nation’s finances in an utterly ruinous state and we face a colossal task ahead of us,” he wrote in an e-mail to the party’s federal executive seen by The Times.
In a sign of the pressure that Lib Dems in the Cabinet feel to justify their actions, Mr Laws presented himself as a brake on potential Tory excesses when it came to cuts. He said that, however tough the decisions ahead, “I will always put social justice at their heart”.
He added that he had already rejected some proposals put forward by Treasury officials for cuts that would damage key services or harm those on lower incomes. “This is not merely a coalition of competent accountants,” he said. It would not be easy to protect the poorest from the actions that are necessary. “But there is more chance of it being achieved with Lib Dem presence in HM Treasury than without it.”
His comments came as he and Mr Osborne demonstrated their determination to tackle the £163 billion deficit:
· Mr Laws will reveal next Monday where the axe will fall on the £6 billion cuts promised by the Tories this year;
· He will also rule as early as next week on whether he will claw back any of the millions spent by Labour this year, and how much;
· Mr Osborne will lay out the scale of overall spending cuts for the coming three years in a Budget on June 22, well before the 50-day deadline that he set himself in the campaign.
· Ministers across Whitehall are combing through every spending decision made by Labour this year to see which can be reversed amid Tory claims that the outgoing Government indulged in a pre-election splurge.
Under the audit, at least four projects devised by Lord Mandelson to help to bolster the car and nuclear industries may be scrapped. Loans of £270 million to Vauxhall, £20 million to Nissan and £90 million to Sheffield Forgemasters, and guarantees worth £379 million to Ford, will all be reviewed.
Mr Osborne has created a new Office for Budget Responsibility to provide independent growth and borrowing forecasts in place of Treasury figures over which the Chancellor had control. This was to repair a system under which, he claimed, Labour fixed the figures to fit its Budget.
Alistair Darling, the former Chancellor, responded angrily to the charge. “The suggestion that Treasury civil servants colluded with us in publishing anything other than accurate figures is just wrong.”
Mr Darling, who is stepping down from Labour’s front bench, added: “The Conservatives and Liberals are playing the oldest trick in the book. What do you do when you are a new government? You blame your predecessors. It is straight out of Yes Minister. It looks like they are going to have to put taxes up, they want to make pretty heavy cuts in public expenditure and they are naturally looking to blame someone else.”
Bob Crow, the general secretary of the RMT union, branded the measures “fiscal fascism” — giving the Government a taste of the kind of rhetoric it will face as it pushes through the toughest public spending cuts in generations.
Mr Osborne insisted that failing to act quickly would be disastrous. “If we don’t get on top of our debt, every family in Britain will be poorer and the dreams of millions of young people will be dashed. Mortgages will be higher, businesses will go bust and debt interest will become one of the largest items of government spending.”
‘Sorry about the mess’
· Reginald Maudling cheerfully told James Callaghan, who took over as Chancellor after Labour’s 1964 election victory: “Good luck, old cock, sorry to leave it in such a mess.” Callaghan thought his predecessor meant the office in No 11. He later realised that Maudling was talking about the economy
· When Peter Thorneycroft resigned as Chancellor in 1958, after losing a quarrel about spending with Harold Macmillan, the Prime Minister, he took his entire Treasury team with him. “I believe that living within our resources is neither unfair nor unjust, nor, perhaps, in the long run, even unpopular,” he told the Commons. Macmillan dismissed the move as “a little local difficulty”.
· While outgoing US presidents routinely leave detailed letters for their successors, there is no equivalent in Britain. John Major simply left Tony Blair a bottle of champagne and the note: “It’s a great job — enjoy it”
· Alistair Darling also left a letter and a bottle of wine for George Osborne last week. The contents of the letter, and the type of bottle, are private
· President Clinton’s staff removed the “W” keys from many of the White House keyboards as they handed it over to President George W. Bush in 2001
