Public spending cuts are needed. Both this year and next, the British government will be borrowing more as a percentage of GDP than any other government among the OECD’s 30 member states. With private debt equalling £1.457 trillion in July 2009 — equal to one year’s GDP — as a result of rampant borrowing over the last decade, an increasingly large proportion of government debt must be funded by overseas investors. These investors will demand higher interest payments on Treasury bonds if the state of our public finances worsens, or if they think the government is unserious about at least attempting to lessen its debt.

For a long time now, it’s been the case that government spending could be significantly reduced without affecting frontline services. The Taxpayers’ Alliance’s 2006 book ‘The Bumper Book of Government Waste’ lists many amusing examples of largess — such as the holistic therapists paid £18,000 a year each by Peterborough prison for providing inmates with aromatherapy, reiki, reflexology, acupuncture, head massages and shiatsu treatments. Such stories popped up sporadically in the Mail and the Telegraph, but owing to economic “good times” there was no sustained pressure on the government to justify its spending.

But now the public are aware of our economic plight, and probably more receptive to the idea of spending cuts and restructuring public services than at anytime in recent memory. Brendan Barber and the TUC may not like it, but it looks — for the time being at least — as if the simple Labour mantra of contrasting their “investment” in public services with Tory “cuts” to schools ‘n’ hospitals no longer resonates with voters.

The public may be willing to swallow their medicine, but how much will the next (presumably) Conservative government dole out? Many Conservatives will want a significant retrenchment of spending, but it’s hard to envisage Cameron and Osborne being that radical. It will be interesting to see Conservative spending proposals in the coming months. Our livelihoods may depend on them.