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Where can public sector spending be reduced?

Despite the fact that Lord Mandelson and Gordon Brown are unwilling to use the term "cuts" in relation to public sector spending there is no doubt that there are significant cuts on the way. Indeed, Lord Mandelson has already highlighted a number of areas under his control that could see a reduction in investment which would have a minimal impact on the overall economy.

The four areas are targeting benefits, shared contributions, decentralisation and a bonfire of the quangos. These are all areas of public service spending which the Conservative party has also highlighted and it will come down to how much each party is willing to reduce from the various budgets at a time when the UK budget deficit continues to rise. Despite various scare stories from the Labour Party, a recent poll suggested that the vast majority of UK voters believe the Conservative party would be able to handle public-sector investment better than the Labour Party.

This is a significant setback for Gordon Brown and Lord Mandelson who have until now believed the difference between the Conservative party and the Labour Party on public sector services would be enough to give them a fighting chance in the next general election.

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