Spending review: The finishing touches
The coalition’s senior figures are putting the “final touches” to the comprehensive spending review at Chequers, the prime minister’s country residence.
Prime minister David Cameron and chancellor George Osborne are meeting with the Liberal Democrats’ deputy prime minister Nick Clegg and chief secretary to the Treasury Danny Alexander as they prepare for what is likely to be the most significant week in British politics until the next general election.
Media reports had suggested ministers were considering retreating from the hardline approach outlined in the emergency Budget – but Mr Osborne today pledged that action needed to be taken immediately to address Britain’s public spending deficit.
“We have to see this through. The course we set out in the Budget is the one we have to stick to. Because people in this country know we were on the brink of bankruptcy,” he said on BBC1’s The Andrew Marr Show.
“I didn’t create this situation, our Labour predecessors did that, but I do have to sort it out… we have to do it now.”
The coalition appears in a strong position going into the spending review, with a poll by ComRes for the Independent on Sunday and the Sunday Mirror suggesting 45% trust Mr Cameron and Mr Osborne to steer Britain’s economy through the downturn.
Only 30% of respondents suggested the cuts would be fair, however, while 47% suggested hundreds of thousands of public sector jobs was not a price worth paying for tackling the deficit.
Poll shows public perverse on cuts
Labour’s fresh opposition team of Ed Miliband and Alan Johnson were only trusted by 23% of voters. The shadow chancellor told The Andrew Marr Show that his predecessor Alistair Darling had had the “right prescription” for the economy of halving the deficit in four years.
He refused to outline specific alternative proposals for many policy areas, however, explaining that Labour policy had been “set in aspic” since the general election because of the Labour leadership campaign.
“On every different department, the difference between us on scale is enormous,” Mr Johnson said.
“It’s the difference of about half again because we wouldn’t cut as deep and we wouldn’t cut as quickly.”
Johnson ‘reformulating’ Darling’s approach
Much attention has been focused on the coalition’s welfare reform plans, as ministers bid to cut the £5.2 billion bill for welfare fraud and administrative errors by a quarter.
Proposals expected tomorrow will see a team of inspectors deployed to use high-tech data tracking techniques to expose benefits cheats.
Penalties, from a £50 fine for mistakes on a form which could “reasonably have been avoided”, to the three-strikes rule for repeat offenders, will also be rolled out.
No holds barred in benefits clampdown
Child benefit, already set to be scrapped for those earning over £44,000, could be hit further by being withdrawn for children over 16, according to reports.
Mr Osborne refused to confirm whether this was the case, but added: “What I have sought to do is make sure we are getting as much as we can out of welfare and waste in government in order to ensure there are real increases in healthcare, schools, provision for early years, and in the big infrastructure investments that will help our economy grow.”
The chancellor admitted the £37 billion annual defence budget had been the most difficult to address, after a lengthy struggle with defence secretary Liam Fox.
The Ministry of Defence is now expected to face cuts of as little as eight per cent. Mr Osborne all but confirmed the two new aircraft carriers will go ahead, saying it was more expensive to cancel them than continue with their construction.
Mr Osborne said the comprehensive spending review’s measures were “staggered” through a four-year period but defended the severity of the measures, saying they had provided a one per cent monetary stimulus helping the economy.
“I’m not prepared to go back into the place we were five months ago, on the brink of bankruptcy, on the edge of an economic abyss.”
“The plan is complete. We’re putting the final touches to it today.”
