Spending Review: Osborne defends 'fairness' of cuts
- Published on Thursday, 21 October 2010 09:18
- Posted by Scott Buckler
Chancellor George Osborne has defended the "fairness" of his UK spending cuts after Labour claims they were reckless and would hit the poorest hardest
He told the BBC that including Budget measures, the top 10% of earners would be hit hardest but everyone was making a contribution to cutting the deficit.He said "the path to economic ruin" lay ahead if the deficit was not tackled.Labour called the £81bn cuts - the biggest since the 1970s - a "reckless gamble" with the economy.It has been estimated that the measures will lead to the loss of 490,000 public sector jobs, but Mr Osborne told BBC Breakfast he expected many more private sector jobs to be created over the four year cuts programme.
Mr Osborne told MPs on Wednesday that he had acted to restore "sanity to our public finances" and deal "decisively" with Britain's record peacetime deficit.The government says public debt interest repayments now total £120m a day, or £43bn a year.Hours after Mr Osborne's speech, crowds of demonstrators gathered outside Downing Street to protest against the cuts, which the TUC has said will have a devastating social impact.
Mr Osborne is currently in the midst of a round of interviews explaining his decisions in the Spending Review which, according to the Institute for Fiscal Studies (IFS) think tank, represent the deepest six-year period of cuts since the 1970s - not since World War II as previous plans implied.
The chancellor said he had been able to restrict departmental spending cuts to an average of 19% over four years - not the 20% he said Labour had planned - because of "tough but fair decisions to reform welfare, and the savings we've made on debt interest".
- £81bn cut from public spending over four years
- 19% average departmental cuts - less than the 25% expected
- £7bn extra welfare cuts, including changes to incapacity, housing benefit and tax credits
- £3.5bn increase in public sector pension employee contributions
- Rise in state pension age brought forward
- 7% cut for local councils from April next year
- Permanent bank levy
- Rail fares to rise 3% above inflation from 2012.
He unveiled plans to cut a further £7bn from the welfare budget - on top of £11bn cuts already announced - which include putting a time limit on some incapacity benefits and changes to tax credits and housing benefit.He also announced that the state pension would rise to 66 for both men and women in 2020 - six years earlier than planned - and there would be a £3.5bn increase in public sector employee pension contributions.