Wednesday, October 20, 2010

Osborne prepares to unveil cuts

Chancellor George Osborne prepares to unveil the biggest programme of spending cuts in the UK

Chancellor George Osborne is preparing to reveal the biggest programme of cuts in the UK for decades, in his long-awaited Spending Review. Average budget reductions of 25% to most Whitehall departments are expected alongside welfare cuts, following months of negotiations with ministers. Reports suggest nearly 500,000 public sector jobs will go by 2014-15. Labour leader Ed Miliband said the government were taking "an irresponsible gamble with our economy". He said: "There is an alternative. What the government should be doing is putting in place a plan to reduce the deficit but also protect jobs and growth in our country. "People will be very fearful about what is being announced today, fearful for their jobs and fearful for many of the services they rely on up and down the country." On Tuesday 8% cuts to the defence budget were outlined separately in the strategic defence review. Overall 42,000 jobs - in the Ministry of Defence and in the armed forces - are to go by 2015. Mr Osborne will outline cuts in other departments which could range between 25% and 40% - with the exception of health and international development - in addition to welfare cuts. 

Mr Osborne, who attended a Cabinet meeting on Wednesday morning to discuss the Spending Review, has already announced plans to stop child benefit payments to higher rate taxpayers. There had been reports it could be cut altogether for children once they reach the age of 16, rather than 18 as at present, but sources have told the BBC that will not happen. Chief Secretary to the Treasury Danny Alexander was photographed carrying the Spending Review on Tuesday - two pages of which were visible to photographers. It stated that tackling the deficit was "unavoidable" and there would be an "inevitable impact" on state workers. While it said the wage freeze and flexibility over hours would help minimise redundancies, it suggested a forecast that there would be 490,000 fewer public sector workers by 2014-15 had been adopted by the government. Thousands of protesters gathered in Westminster on Tuesday to lobby MPs ahead of the announcement. Dave Prentis, general secretary of the Unison union, said the coalition government was "taking a chainsaw to our public services... not because of a deficit, but because of an ideology". The chancellor and Prime Minister David Cameron finalised the Spending Review package in a series of meetings with deputy PM Nick Clegg and Danny Alexander at Chequers at the weekend. It follows lengthy negotiations with cabinet colleagues over the summer. BBC political editor Nick Robinson said Mr Osborne would outline percentage cuts in certain departments and there could be some illustrations of projects that have had to be abandoned and details of overall numbers of prison places to be cut. But he said details of which specific jobs and services could be axed were unlikely. The document Mr Alexander had been photographed with had shown that if there were voluntary agreements on public sector pay and hours, job losses could be reduced.


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