Half a million jobs to go as Chancellor unveils cuts programme
HEALTH survived but welfare took a hit as the new Chancellor George Osborne unveiled radical cuts to public spending – to be rolled out over the next four years – in hiis Comprehensive Spending Review.
His speech to the House of Commons painted a grim picture of the biggest programme of public sector cuts seen in this country in a generation.
With health spending deemed untouchable – it was the welfare budget, cut by £7bn – which bore the brunt of the £83bn worth of cuts, which Mr Osborne confirmed will lead to nearly 490,000 public sector job losses over the next four years.
In what was undoubtedly the biggest economic and political balancing test of George Osborne’s brief career in Government, the Chancellor said his statement was focused on ‘reform and fairness’ and bringing the economy ‘back from the brink.’
Labour and trade unions reacted angrily, claiming the cuts were too deep and would plunge the economy back into recession.
Mr Osborne pledged more action on banks’ profits – with legislation for a new permanent levy coming before the House of Commons tomorrow, to ensure they take their share of the pain.
- “The Chancellor is getting a dab hand at making tough announcements”, says TheBusinessDesk.com’s editor David Parkin.
Public investment, the Chancellor pledged, would remain, but in areas with strong growth prospects – transport, the green economy, scientific research and education.
To make: “Britain a leader of the new green economy”, Mr Osborne said £1bn would be invested in a carbon capture project, £200m in offshore wind farms and £1bn would be put into the promised green investment bank.
Key transport schemes will get the go-ahead, including expansion of the M62, electricification of rail between Manchester, Liverpool, Preston and Blackpool and a revamp for Birmingham New Street.
The new Mersey suspension bridge will also go-ahead.
Among the many welfare reforms was a hike in the retirement age. The state pension age will reach 66 by 2020, saving more than £5bn a year by the end of the next Parliament.
He said in his speech, which lasted one hour and three minutes, that a war on waste in Whitehall would generate £6bn in savings – double original forecasts.
Key announcements by department:
Communities and Local Government – annual budget: £33.6bn, cut of 7.1%
Culture, Media and Sport – annual budget: £2bn,19 quangos to go. 15% cuts in core programmes but free museum entry to remain. BBC licence fee to be frozen for next six years – equivalent to 16% savings over the period.
Defence – annual budget: £46.1bn, Cuts of 8% cut over four years
Energy and Climate Change – annual budget: £3.1bn, cut by 5%
Environment, Food and Rural Affairs – annual budget: £2.9bn – reduction by 8%
Foreign Office – annual budget £2.2bn, 24% cut in funding over four years
Health – annual budget: £106.4bn, spending to rise
Home Office – annual budget: £10.2bn, 6% cut
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