Spending review: The age of austerity begins
By Alex Stevenson and Ian Dunt
George Osborne has presented the comprehensive spending review (CSR) to parliament, opening the gates on the most devastating period of cuts in recent British history.
Today’s announcement precipitated an unprecedented change in the British economy, with average cuts of 19% confirmed across government departments.
Spending review: As-it-happened
That is less than the 25% the chancellor had predicted in the emergency Budget, but its impact is still likely to be damaging. Mr Osborne confirmed today that 490,000 public sector workers are likely to lose their jobs by the end of the spending review process.
The Cabinet Office, Law Officers’ departments, the Department for Communities and Local Government, the Treasury and the Department for Energy and Climate Change were the hardest hit ministries, all suffering cuts of at least 30%.
Spending review sketch: Shock in the Commons
But Mr Osborne had good news for the health and education departments, which received real-terms increases of 0.4% and 0.1% respectively.
“This coalition government faced the worst economic inheritance in modern history,” the chancellor told MPs.
Spending review: Winners and losers
“The debts we were left threatened every job and public service in the country. But we have put the national interest first. Made the tough choices… and taken our country back from the brink of bankruptcy.”
Labour’s new shadow chancellor Alan Johnson called the coalition government “deficit deceivers” in his response, attacking the Conservatives and Liberal Democrats for supporting the cuts ideologically.
“We’ve seen people cheering the deepest cuts to public spending in living memory,” he said, adding: “Today’s reckless gamble with people’s livelihoods runs the risk of stifling the recovery.”
Labour support seemed subdued during the chancellor’s statement, however, as the spending review did not appear as drastic as had initially been feared.
Spending review: George Osborne statement in full
Mr Osborne landed a political blow on the opposition by saying the 19% average departmental cut was less than the cuts suggested by a Treasury submission from the Labour party.
As expected, the spending review included a four per cent annual cut to police forces over the next four years, but funding for counter-terrorism and the intelligence services was maintained at present levels.
Spending review: Alan Johnson statement in full
A raft of cuts to existing benefits was implemented, with the Department for Work and Pensions facing resource savings of 26%.
As expected, international aid was ringfenced, while the science budget remained untouched.
But money for the royal family took a hit, with the chancellor announcing plans for fundamental reform of the monarchy’s funding.
Deputy Liberal Democrat leader Simon Hughes insisted that the review contained enough measures to protect the “poor, the needy and the vulnerable”.
Spending review: Political responses
He added: “Liberal Democrats can be clear that the spending review contains many important decisions clearly aimed at making the big but necessary reductions in public spending as fair as possible.
“The government is also clearly determined that new investment should deliver lasting green growth – and bring an end to the greedy, dangerous and insecure economic expansion of recent years.
“There will be difficult times ahead in many households and communities and it would not be right to jump to conclusions about what the effect of today’s decisions will be either nationally or locally.”
In the aftermath of the review’s publication, opposition parties rushed to highlight some of its more painful repercussions.
One-to-one nursing care for cancer patients, free prescriptions for long-term conditions and the guarantee of one-week cancer tests all looked set to hit the scrap heap.
Scottish National party (SNP) work and pensions spokesperson Dr Eilidh Whiteford highlighted the removal of the mobility component of disability living allowance (DLA) from people living in residential care, which is used to hire or lease a mobility car at an affordable price.
The removal was “one of the cruellest cuts within the CSR”, Dr Whiteford said.
“Removing this allowance is a hammer blow to people’s independence as well as their pockets. It will effectively mean some people can no longer get out and about and will be confined to their residential care home.”
The CSR is at the heart of the coalition government’s deficit reduction agenda.
The chancellor is aiming to eliminate the structural deficit and reduce national debt as a proportion of national income by 2015/16.
He told MPs these goals remained on schedule to be completed a year earlier than planned.
