Coalition says 40 per cent cuts unlikely
THE government yesterday tried to soothe fears over the biggest spending cuts in a generation, after the chancellor asked departments to draw up plans to slash their budgets by a staggering 40 per cent.
George Osborne has asked the cabinet to prepare a package of cuts that would be implemented if their departmental budget were reduced by 40 per cent, alongside a second package designed for a 25 per cent reduction.
Yesterday, Treasury officials insisted the 40 per cent figure was a “top end assumption” and that most departments would have to implement less brutal cuts.
“This is not a significant shift from what we said at the time of the Budget. Our plans imply cuts of 25 per cent in unprotected departments. Some will have to cut by more, others by less,” an aide to Osborne said.
And Transport secretary Philip Hammond said it was unlikely that any Whitehall department would actually see its budget reduced by 40 per cent.
He added: “I don’t expect that any departments will see cuts as high as 40 per cent but some departments may see cuts higher than 25 per cent and some departments may see cuts a bit lower than 25 per cent.
The Labour party and the unions seized on the 40 per cent figure as proof the Tory-Liberal coalition was about to wage an ideologically-driven war on the public sector.
Ed Balls, the Labour leadership contender, said: “These reports will send a chill down the spines of millions of public sector workers and millions of people who rely on our vital public services.”
And RMT general secretary Bob Crow said: “With cuts of up to 40 per cent in the transport budget we are looking at thousands of job losses amongst the staff who operate and maintain services with dire consequences for passenger safety.”
Spending on health will continue to rise in real terms; the international aid budget has been ring-fenced; and education and defence will have to reduce their budgets by between 10 and 20 per cent. That implies unprotected departments will have to save 33 per cent on average.