Christina Patterson: Roll up, roll up, for the carnival of cuts

Last week, I went to a lovely conference on cuts. The coffee was good, the biscuits tasty, the venue very swanky indeed. You had to have your bags checked for bombs, but then this was the Stock Exchange. The capital of capitalism, in other words. Who knows who might want to attack the capital of capitalism?

The nice man who welcomed us apologised for the conference's title. "Reducing the deficit and improving public services" does, it's true, lack sparkle, but nobody was looking for sparkle. What we were looking for, in a spirit of rolling up sleeves, and calling spades spades, and wielding axes to fashion silk purses from sow's ears, was cuts. A carnival of cuts. In the public sector. And here, assembled by the think-tank Reform, was a group of experts to tell us how to do it.

The first was Francis Maude, the Minister for the Cabinet Office and Paymaster General. If the prospect of overseeing cuts of £75-odd billion had ever caused him a moment's anxiety, there was no sign of it. Maude had that sheen of calm confidence, born of centuries of breeding, that seems (with the exception of poor Michael Gove) to be the hallmark of the new Government. Coolly, wittily, impressively, he explained how organisations could be "disencumbered", so that order could be installed where once there had been chaos, harmony (to echo the words of the woman he once served) where there had been discord.

Once Maude had swept out, with a team so vast it had me sharpening my knife, Bernard Jenkin, the Chair of the Public Administration Select Committee, told us that it was not just about "doing more with less", it was also about "doing less with less". Alan Downey, the Head of UK Public Sector at KPMG, said we had to stop paying for activity, and start paying for results. Sir Roger Douglas, the New Zealand Finance Minister who reduced a 9 per cent deficit to a 2 per cent one, declared that he'd slashed practically everything – "you name it, we got rid of it!" – and that "it's vital not to blink".

Best of all was Tony McGuirk, Chief Fire Officer for Merseyside, and clearly a stand-up manqué. He had, he told us, taken over the highest spending public service in the country, with the highest death rate from fires in the Western World, and turned it into one of the lowest spending, with one of the lowest rates. "Strike? You'll never notice!" was his motto, as a workforce whose most animated actions were industrial hunkered down at the picket line. People didn't, apparently, and the workforce was cut by 40 per cent without a single compulsory redundancy.

It was brilliant. It was inspiring. It was fun. You could slice and dice and chisel away and what was left would be not just fine, but better! "At Capita," said the chief executive of a company that just happens to be the market leader in business outsourcing from the public sector, "we're optimistic that the cuts are achievable without services being decimated." Well, isn't that great? All-round excellence for peanuts! And all it took was some proper grown-ups to sort it out, some proper grown-ups and the private sector.

There was more good news the next morning. Breakfast again. Crack of dawn again. (What is it with business and breakfast? Haven't they heard of bio-rhythms?) Over delicious fruit salad and yoghurt in another swanky office, this time in the West End, Anatole Kaletsky, editor-at-large at The Times, was, appropriately enough, plugging a new book about capitalism. There wasn't, he told a roomful of employees from "some of the largest and most innovative brands in business" going to be a double-dip recession. "Interest rates," he told us, "will remain virtually at zero for at least the next five years. Mortgages will be very affordable."

"Very affordable"! I tucked into another croissant. Things were looking up! How had I allowed myself to believe the doom-mongers, the nay-sayers and the Nobel prize-winners who were saying it was all a disaster? The economy's looking great! Everything, as on that blessed day when Nick and Dave plighted their troth in the Rose Garden, is looking rosy. What I, in my naïvety, had thought was a problem was actually an opportunity!

I had, it's true, felt a ripple of disquiet during the top-notch entertainment the day before. What, I kept wondering, was going to happen to all the public sector workers whose stupidity, incompetence, sick leave, and indifference to profit had brought the country to its knees? Workers, in fact, that not a single person had mentioned? The private sector surely wouldn't want such dross. Perhaps it was time for Martin Amis's euthanasia booths? Perhaps we could get Capita to run them?

But then I was forgetting the other good news – the 1.3 million new jobs in the private sector. OK, so they're not here quite yet, but our clever young Chancellor (the most popular since records began) says they will be, and he always sounds as if he knows what he's talking about. With more than a million, there must be room for some dross. And the private sector, with its marvellous Midas touch, will soon transform those lazy lard-arses into lean, mean, inefficiency-killing machines.

Is Osborne right? God only knows. Economics, as Bill Emmott, the former editor of The Economist, reminded us over that nice fruit salad, is as much about psychology as ideology. If you subscribe to the state-shrinking, first-cuts-are-the-deepest-but-only-the-beginning-of-a-glorious-cull, model of economic thinking, you'll probably only read, listen and talk to people who share your view and boomerang it back. If you subscribe to the state-maintaining, let's-go-a-bit-steady-here model, you'll probably do likewise. Either is based on an article of faith.

Throw psychology into the mix and it's even trickier. David Cameron is an optimist. He believes that the economic equivalent of The Texas Chainsaw Massacre is an excellent way to let the sun shine in. He thinks society (yes, there is one, and it's Big) is like an English cottage garden. If you cut the weeds and the thistles (state help, bureaucracy, school buildings) then beautiful blooms (charity, responsibility, marvellous "free" schools) will spring up in their place. If you stop bossing people around, they'll stop eating rubbish. If you cut their welfare, and their housing benefit, they'll become employable, and employed.

Optimism certainly has its place, but the hopes and livelihoods of millions of people should, one can't help thinking, be based on a little bit more. It would be nice if a time of what some of us are downbeat enough to call a major national crisis wasn't also a time of ideological war. It would be nice if the "efficiencies" that all those men in suits recommended (some of which sounded rather sensible) could be used to strengthen, and not destroy, the public sector. And it would be nice if the people who know how some of this stuff works, because they've been running it for the past 13 years, were prepared to ditch the bi-partisan warfare, and the knee-jerk attacks on everything, and make some suggestions that might actually help. But they won't, because they want, and need, the whole damn project to fail.

After the conference on cuts, I met a woman in a café. She was, it turned out, Canadian. I told her that their austerity programme was meant to be a model for ours and asked her what it was like. "Well," she said. "A lot of people lost their jobs. A lot of people died in hospital corridors. And a lot of people lost their homes. I've been walking around London all day and I haven't seen many homeless people. In Canada, they're on every street corner."

Every street corner? Oh, dear. Sightseeing's not going to be nearly so much fun. But perhaps, as Cameron, Osborne, Maude and their fellow millionaires in the Cabinet might say, echoing the words of a previous Tory Chancellor, that's a price well worth paying for reform.

c.patterson@independent.co.uk