The Conservative party has taken the lead in the UK’s glacially slow debate about Britain’s need for public spending cuts. George Osborne on Tuesday set out a grim prospectus that included restrictions on public sector pensions, a public pay freeze, increasing the pace at which the state pension age will rise and cutting tax credits for high-income households.

The shadow chancellor would like us to believe that he is the Iron Chancellor-in-waiting. He has announced, in the run-up to a general election, that he intends to force millions of people to work for longer, and his fighting words have already caused public trade unions to bristle. The risk is that he is now vulnerable to Labour charges that he is keen to axe rather than prune state services.

But this is a gamble worth taking. Mr Osborne has calculated, rightly in our view, that the British electorate is ready to accept pain in the quest for fiscal responsibility. He should be congratulated for his political courage. The opposition Tory party has finally started to move from platitudes on fiscal policy to specifics.

To guard himself against charges of heartlessness, Mr Osborne has swallowed the 50 per cent tax rate proposed by Labour. His core message is that the whole of society – not just the parts that rely totally on the welfare state – must share the burden. The higher rate of tax is unlikely to raise much extra revenue, but it is the political price for an economic necessity.

This speech should, however, be only the first page of the Tories’ prospectus. The effects of these measures– grim though they are – are dwarfed by the scale of the budget deficit. Mr Osborne has announced plans to save £7bn ($11bn) per year by the end of the next parliament, with changes to the pension age – beginning in 2016 – eventually contributing up to £13bn. The budget deficit this year? £175bn.

The rest of the rebalancing, the Tories say, will come from efficiency gains and reform across the public sector. But no conceivable reform will allow cash savings of the magnitude required to allow the Conservatives to ring-fence all public services. It is difficult, from opposition, to set out detailed policy, but sacrifices will need to be made. The public must be told what they will be. Labour can flush this out by explaining how they would balance the books, and their spending priorities. The Tories would have no choice but to respond with their own preferred direction. George Osborne’s speech is the first round in the spending argument. It is not the last word.

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