Everyone knows that there will need to be deep cuts in public spending in the next few years. For the Labor government, based in part on classic Keynesian theory, they have stood by their position of spending their way out of this crisis. For their political opponents, the Conservatives, it is a matter of reducing waste, bringing down public spending and attacking inefficiency. They do not believe there should be more public spending. This will be the political battleground in the next election, likely by June 2010. Both of the main parties have been very careful about what they say will need to be cut.

In fact, Labor has largely said that at the moment nothing should be cut. Selling off assets, therefore, is one largely politically unproblematic way of bringing in quick revenues to plug the gap before the real decisions need to be made, in about another year or two.

In the UK, talking about cutting health or social security spending is always sensitive. Someone once said that for British people, the National Health Service, set up in 1947, providing health care free at the point of delivery to all people in the UK, was as close as we will ever get to a national religion. Even Margaret Thatcher did not attack it, but allowed continuing increases in funding. The Conservatives and Labor will, therefore, not be able to make huge changes to the budget in this area, despite its enormity, without a devastating backlash. Education, too, will be difficult. It is regarded as a key area for public investment.

Indeed, the UK is a knowledge-based economy. Without high levels of education, therefore, it cannot continue to be competitive here. Losing that is a risk that no serious government in the UK can take. While universities are meant to raise more of their own funding, it is unlikely to take them away from fundamental reliance on state funds. There will be some savings, but nowhere near enough to make much difference.

For defence and international affairs, there are current commitments in Afghanistan, although these are being reduced. Gordon Brown has already announced that the UK will only be taking two, not three as was originally planned, Trident submarines. The leaders of Britain's armed forces have complained about how underfunded they are. Further cuts, it is argued, will make the UK's defensive capacity weakened, and almost wholly lack in credibility.

The sale of assets is, at most, symbolic. The Channel Tunnel was laden with debt from its construction. The Dartford Crossing, linking the southern and northern parts of the periphery road around London, will need massive new investment in the coming decade in order to keep pace with the amounts of cars using it at the moment. It is already an infamous bottleneck, and has been estimated to cost the economy $60 million a year in lost time and disruption. The other assets are small beer. The simple fact is that the government has little left it can sell off.

The one real likely target of massive public spending cuts will be therefore almost certainly, under whichever party wins an election in the coming year, the massive social security budget. That means further reform in an area that has already been attacked many times before.

Having 3 million unemployed in a working force of 30 million is an immense financial burden. There will likely be a further tightening of conditions for who gets government aid, with people out of work expected to optimize their own assets, and new programs set up to get people back to work as soon as possible and off the state's books. Just how possible this is in a time of economic stagnation, which seems likely at least in the next two years, is debatable.

Governments will have to take a view, too, on how they can achieve this without creating an economic underclass that are effectively disenfranchised and a potential source of dissatisfaction, instability and crime. Crime levels have already risen in the UK as the economic crisis has gone on. The knock-on costs of these on society in terms of security, the imprisonment of people and wholly submerged communities beyond the pale of the law, are significant.

In terms of tax revenues, the consensus in the UK since the time of Margaret Thatcher, has largely been to reduce levels of tax as much as possible. But once more, this is likely to change. Tax levels for all kinds of income will need to be raised. One economist has calculated that British taxpayers will be paying back the debt taken on as a result of the latest crisis until 2032. The governor of the Bank or England, Mervyn King, echoing the famous words that Winston Churchill spoke during World War II, said that "never has so much been spent by so few and paid for by so many." A few key bankers have been blamed for irresponsible lending and imprudence, at least in the UK. There is great public anger at their role in bringing on the crisis, even though some commentators have pointed out that the general public was only too happy to enjoy some of the benefits of this unsustainable period.

In the next five years, there are going to be very hard political decisions in the UK, about public finances. People know it is going to be a tough time. The one bright spot is that at some point, what will almost certainly be highly profitable banks now in the public sector, will be sold for a huge profit back into the private sector. That at least should raise some revenue.

But for the time being, the room in which to move is very small. Politicians in the UK will need to have the courage and communication skills to tell the British people what is happening, why it needs to happen and where it is leading. From present evidence, there are few with these skills. British people will just have to hope that, if they don't have them now, they learn them pretty quickly.

The author is a senior fellow at the Royal Institute of International Affairs in Britain

(The viewpoints in this article do not necessarily represent those of Beijing Review.)