Liz Truss’s top economic adviser wanted to freeze grants for Scotland

Mr Sinclair
Mr Sinclair

Liz Truss’s chief economic adviser recommended freezing grants to the Scottish government to save money.

Matthew Sinclair, a former staffer at the Taxpayers’ Alliance think tank, called for widespread cuts across government departments in his book, How to Cut Public Spending (and Still Win an Election).

The book is now out of print and is not available online, but a copy seen by The Telegraph contains several radical measures to cut public spending, including halving the number of free bus passes for the elderly and disabled and abolishing the Government Equalities Office (GEO).

Mr Sinclair was appointed as the Prime Minister’s top economic adviser last month and was influential in the writing of the Chancellor’s mini-Budget.

His 2010 book argued that since many public spending decisions are devolved, grants made to the Scottish, Welsh and Northern Irish governments should be reduced in real terms to force them to make savings of around £1.4 billion.

Mr Sinclair argued for departmental spending cuts in England but suggested similar savings should be made in devolved administrations.

“Freezing the current grants to Scotland, Wales and Northern Ireland for one year offers a substantial saving, and also means that no services are necessarily subject to cuts,” he wrote.

“Instead budgets received will have to be handled more carefully, with any unnecessary spending eradicated.

“Considering the differing levels of spending autonomy enjoyed by the devolved assemblies, a general freeze will allow each nation to make its own decision over what is priority and what is not.”

Abolishing the GEO

Mr Sinclair also suggested that the GEO, which is responsible for managing policy on gender, racial and LGBTQ equality, should be abolished to save £70 million.

“The GEO … represents the institutionalisation of political correctness,” he said.

“Its targets are arbitrary and unreasonable, driven by a peculiarly activist ‘equality’ agenda that itself threatens to undermine the important gains made by women and minority groups over recent decades.

“The insistence that central government … know what is best for every employer in the country is misguided and obstructive to businesses trying to survive the financial crisis.”

The book says free bus passes for the elderly should be means tested and only given to those who “genuinely need it”.

“While the aim of ensuring that pensioners and the disabled are able to get around is most laudable, the free bus passes scheme – available regardless of income – is poorly targeted,” he said.

Halving the number of passes would create a saving of £438 million on 2010’s budgets, he said.

Defending the top one per cent

In another passage on higher-rate taxpayers, Mr Sinclair said the top one per cent of earners had been unfairly criticised and pay a higher proportion of tax.

“Today the top one per cent of income earners contribute around 24 per cent of total income tax, the top 10 per cent around 53 per cent and the top half of earners pay around 88 per cent,” he said.

“The lowest 25 per cent of earners pay less than 3 per cent of total income tax, and have done for the last decade.

“This evidence weighs heavily against the idea that the ‘rich’ don’t pay their ‘fair’ share.”

Mr Sinclair suggested several other cuts to departments, including freezing the Home Office’s budget and reducing the amount of paperwork completed by police to compensate, and cutting non-front-line staff in schools and the NHS by 10 per cent.

Ms Truss was criticised by many MPs, including her own ministers, after announcing a cut to the top rate of tax for the highest earners in the mini-Budget last month.

She has since cancelled the policy amid concern it would not win a majority in the Commons.

Downing Street was contacted for comment.