If Labour enters power in 2015, with a binding target to eliminate the current deficit by 2020 and to reduce the national debt as a proportion of GDP, it will need to enact dramatic reform of the state. As policy review head Jon Cruddas noted in his speech on “one nation statecraft” in June, “Labour will inherit a state that in many areas has reached the limit of its capacity to cut without transformational change to the system.”
This means devolving power downwards from Whitehall and reorienting services such as the NHS around prevention rather than just cure. It could also mean an even more radical step: abolishing entire government departments. Several shadow cabinet ministers have told me that they are actively pushing the idea as a means of saving money and of enhancing Labour’s fiscal credibility. One influential member cited the Scotland, Wales and Northern Ireland Offices and the Department for Culture, Media and Sport as examples of those that could be cut entirely, with DEFRA also vulnerable. I’m told that shadow chief secretary to the Treasury Chris Leslie is exploring the proposal as part of Labour’s zero-based review of public spending but that there are “interests that need to be appeased”. Those who currently shadow the relevant departments may, understandably, be less keen on the idea.
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