Huffpost UK Politics

Governments Wrong To Ringfence Departments, Says Former Canadian Finance Minister Paul Martin

Posted: Updated:

Governments should not ring-fence specific departments such as the NHS and international development from cuts, according to the architect of the spending cuts in Canada during the 1990s.

Paul Martin, the centre-left finance minister who scaled back public spending in his country to the level it was at in 1951, said in an exclusive interview with Huff Post UK that ring fencing was not the right way to reduce deficits: “If everybody is going to have to give than everybody better give. You can’t have exceptions.”

Commenting on a report by Margaret Thatcher’s favourite thinktank the Centre for Policy Studies, which recommended the coalition’s cuts should go further and take inspiration from the Canadian model, Martin said instigating unprecedented spending cuts protected his country from financial crisis.

Martin, who was Canadian prime minister between 2003-6, said Canada “cut spending in absolute terms”. By contrast in Britain government spending is set to increase in notional terms over the next five years.

The CPS argued the coalition could learn lessons from Canada’s “bold series of spending cuts” and should cut spending in real terms.

“The Canadian situation, there are many similarities [with Britain],” Martin said. "Our situation was certainly dire and we were one financial crisis away from the tipping point. “

And Martin said if Britain could learn anything from Canada’s experience in the mid 1990’s, it was not to inflict austerity measures more than once.

“Do not it two or three times and apologise and say we didn’t do enough. I had spent a year talking to the Canadian people.

“My commitment to them was that we are going to do it once and we are going to solve the problem. That is absolutely crucial. People will sacrifice if they think sacrifice is going to pay off.

“If you ask people to sacrifice and then you find out that sacrifice has been in vain, then you’re in trouble.”

The former leader of the Canadian Liberal party also spoke out against general across-the-board cuts of 5 or 10% across the board, saying the government had to focus on “priorities”.

“We basically said 'we’ve got priorities’ and while we’re going to cut everybody nonetheless we’re going to do this as a way of strengthening government by focusing on our priorities.”

In the run up to the 2010 budget, it was briefed that George Osborne has taken inspiration from the Canadian model, with senior Conservatives studying how the country went about tackling the deficit and even using the idea of a 'star-chamber' where ministers' claims were examined and budgets agreed.

The CPS however, have said that the government needs to be "bold". Director Tim Knox told Huff Post UK: "We haven't had an austerity budget yet. Spending has not been cut in the sense that Paul Martin achieved. There's a lot of rhetoric about savage cuts in the UK but if you look at the numbers the cuts are fractional. We do need some much deeper cuts that have so far taken place, it will be painful.

"The coalition have developed a narrative of savage cuts but have not made those savage cuts. They've attracted the political flack without actually doing the thing which they seem to be getting unpopular for. Overall spending has not been cut in the UK, the numbers say that."