Spending Review: Reaction to Osborne statement
- 20 October 2010
- From the section UK Politics
Chancellor George Osborne has delivered his Spending Review statement. Here is a round-up of reaction:
GEORGE OSBORNE, CHANCELLOR
Today's the day when Britain steps back from the brink, when we confront the bills from a decade of debt.
To back down now and abandon our plans would be the road to economic ruin. We will stick to the course. We will secure our country's stability.
This coalition government faced the worst economic inheritance in modern history. The debts we were left threatened every job and public service in the country. But we have put the national interest first.
We made the tough choices. We protected health and schools and investment in growth. We've reformed welfare and cut waste.
We made sure we're all in this together and we've taken our country back from the brink of bankruptcy. A stronger Britain starts here.
ALAN JOHNSON, SHADOW CHANCELLOR
Today is the day that an abstract debate about spreadsheets and numbers turns into stark reality for people's jobs and services. Their pensions, their prospects, their homes and their families. It's our firm belief that the rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term and for prosperity in the longer term. We believe we can and should sustain a more gradual reduction, securing growth. I don't believe that the Prime Minister or the Chancellor sufficiently understand the worries and concerns of families up and down this country - and I think those worries will have multiplied considerably as a result of his statement today.
ED BALLS, SHADOW HOME SECRETARY
This Spending Review is taking huge risks with the public's safety, crime and national security.
Deep cuts of 20% to police funding will be impossible to achieve without massive cuts to the numbers of police on the street and programmes to fight crime and anti-social behaviour.
They go way beyond what can be achieved through efficiency savings and better procurement. Cuts to the funding of border controls and counter-terrorism policing risk weakening our defences against threats to our national security. The Home Secretary has abjectly failed to fight the corner of the police in these Spending Review negotiations.
KEN CLARKE, JUSTICE SECRETARY
In the past 13 years expenditure in this department has exploded. The prison population has been allowed to increase exponentially. Spending on offender management has increased since 1997 by 67% in real terms, but there has been too little reform. It falls to us now to make the tough decisions that put spending back on an intelligent, sustainable level, and contribute to the reduction in government spending which will get this country back on the road to prosperity.
DANNY ALEXANDER, CHIEF SECRETARY TO THE TREASURY
Spending cuts overall do affect everybody - I'm not trying to disguise that. It is going to be difficult for a lot of people. But the cumulative effect of the spending cuts we've announced today, and some of the new spending on the pupil premium, the investment in education we've announced along with the welfare changes and the tax measures - give a picture which I think is broadly progressive.
ANGELA EAGLE, SHADOW CHIEF SECRETARY TO THE TREASURY
I don't think that there's any way that a Labour government would have made choices that mean that children are actually bearing more of a burden in this deficit reduction than bankers - that's just not something that we would have done. What we have to do is secure the economic recovery and the way to get the deficit down as well as make prudent cuts in public expenditure is actually to grow the economy. Now there's no sign in the statement the chancellor has made today of anything resembling a growth policy, just a job cutting policy.
SIMON HUGHES, DEPUTY LEADER LIBERAL DEMOCRATS
Liberal Democrats can be clear that the spending review contains many important decisions clearly aimed at making the big but necessary reductions in public spending as fair as possible.
The Government is also clearly determined that new investment should deliver lasting green growth - and bring an end to the greedy, dangerous and insecure economic expansion of recent years.
There will be difficult times ahead in many households and communities and it would not be right to jump to conclusions about what the effect of today's decisions will be either nationally or locally. Liberal Democrats in national and local government will never give up our work to deliver a fairer society and make sure public services are always provided to protect the poor, the needy and the vulnerable.
STEWART HOSIE, SNP WESTMINSTER TREASURY SPOKESMAN
George Osborne has pulled the rug from under recovery with these reckless cuts, and risks plunging the country back into recession. It is bitterly disappointing that the Chancellor has ignored the cross-party case made by the governments of Scotland, Wales and Northern Ireland to protect growth in the economy and so set the course for sustainable public finances. The Chancellor would have us believe that there is no alternative to his hard and fast cuts, and that is just not the case. The strong GDP figures published by the Scottish Government today show that Scotland is on the road to recovery, but underline what is at risk if Scotland's recovery choked off by irresponsible cuts from Westminster.
ELFYN LLWYD, LEADER PLAID CYMRU UK PARLIAMENTARY GROUP
It's going to be a very serious three or four years ahead of us. Actually, what we're looking at in Wales is about £2.9bn over three years which is quite a large percentage of the overall cake as it were. Once you've plunged the knife in very deeply, there's no drawing back. If it had been done slightly more gently, and should it need a faster rate then that could be applied in due course.
CAROLINE LUCAS, GREEN PARTY LEADER
This is a budget to destroy 500,000 jobs in the public sector, according to the government's own estimates. And the knock-on effects will be at least as many jobs lost in the private sector. When those public sector workers find themselves out of work they will, along with disabled people, feel the full force of the additional £7bn worth of cuts in welfare spending, on top of the £11bn of cuts announced in June. The housing benefit regime will become much more harsh, risking a rise in homelessness. They will also find that the loss of public services that this budget represents will massively disadvantage them, and all the most vulnerable people in society who rely on those services.
BORIS JOHNSON, MAYOR OF LONDON
With Crossrail, the Tube upgrades, a world-class bus service, every penny of the £9.3bn Olympic investments that you heard the chancellor mention earlier on today - I believe we have won the government commitment to London's infrastructure that the people of London need. And we should be in no doubt that the fight and the arguments are not over - and I will continue to stick up for this city, and above all for the poorest and the neediest in this city.
KEN LIVINGSTONE, FORMER MAYOR OF LONDON
George Osborne's Comprehensive Spending Review comprehensively squeezes middle income households in London and attacks the poorest, with women shouldering the biggest burden. It is a Tory list of shame that will hit London hard: police spending cut, rail fare increases, increased graduate debt, higher rents for tenants, benefit caps that will hit London hardest, thousands of jobs lost, and local government forced to carry out cuts to services that people rely on.
RICHARD LAMBERT, CBI DIRECTOR GENERAL
The chancellor has got the strategic direction of this spending review right. He has stayed the course outlined in the June Budget, with economic growth a top priority. We particularly welcome the extra £2bn a year on capital spending, and the focus on areas that support growth. These include transport and other infrastructure, education and science, and the low-carbon economy. The spending cuts, though painful, are essential to balance the UK's books and build its future prosperity. Now the Government must deliver its promised savings by re-engineering public services.
BRENDAN BARBER, TUC GENERAL SECRETARY
Ministers have chosen scrapping child benefit for higher rate tax-payers as their token raid on the better off. But it's a peculiar and incompetent hit. Rather than targeting the really wealthy, the biggest impact is on those earning around the higher rate tax threshold. They may be better off than average, but I doubt that many think they are super-rich. And this is part of a pattern across all income bands of taking money away from women and children, including the 300,000 female public sector workers set to lose their jobs. The government says those with the broadest shoulders should bear the most of the burden. But this cut surgically targets a group who may be somewhat better-off but spares the super-rich.
BARONESS MARGARET EATON, LOCAL GOVERNMENT ASSOCIATION
This spending review will hit councils and the residents they serve very hard and will inevitably lead to cuts at the front line. These are some of the biggest cuts in the public sector and we have to be honest about their impact. Town halls will now face extremely tough choices about which services they can keep on running. These cuts will cause real pain and anxiety for millions of people who use the services councils provide, from keeping children safe to ensuring that streets are clean. Councils will do all they can to minimise the effect of these cuts and will build on their record of delivering new and better ways of doing things. But savings on this scale are bound to hit services upon which people rely.
GRAHAME MAXWELL, ASSOCIATION OF CHIEF POLICE OFFICERS
The scale of the cuts announced today, to come into force over the next five years, will have a significant impact on policing across the country. Although an overall budget for the police service was announced today, each individual police force will be affected differently and it will be some weeks before each force is informed of its own settlement. The cumulative effects of cutting police budgets year on year will translate into reductions in police officers and staff, in each force depending on financial circumstances. There will be a need for honest conversations between politicians, the public and the police about how policing meets this challenge.
HARRY FLETCHER, PROBATION AND FAMILY COURTS UNION, NAPO
The reductions in budgets to the Ministry of Justice will make it impossible for the component parts to carry out their statutory duties. The reduction in probation resources will necessitate a reduction in caseloads. The behaviour of court report writers and sentencers will change if there are no probation programmes. The courts will impose additional short custodial sentences, not less. The severe cuts to legal aid, both criminal and civil, will mean some individuals will have minimal or no representation in court. The overall result of the cuts will mean that the prison population will not fall, but will rise significantly in the medium and long term. Ironically the cuts therefore will result in greater expenditure.
FRANCES CROOK, HOWARD LEAGUE FOR PENAL REFORM
Simply slashing jobs and opening the prison gates is not an option. There is an opportunity to strategically reduce prison numbers, while changing the way we respond to crime and people who commit offences. But if the Ministry of Justice approaches the next few years as a simple cost-cutting exercise, then that opportunity will be lost and the justice system will be left unable to cope and effectively crippled for the foreseeable future.
DEREK BARNETT, THE POLICE SUPERINTENDENTS' ASSOCIATION
I am confident that we have the will and determination to tackle bureaucracy, find better ways of working with the rest of the criminal justice system, and improving the use of technology. We must explore all such avenues before staffing levels are cut. However, successful policing depends upon good partnership working with local authorities, and the wider criminal justice system and as they too will face cuts in their budgets, we will watch carefully to see how funding for community safety, prisons, probation and courts impacts upon policing. The overriding message to our communities must be that while we continue to seek to protect policing budgets, our priority remains protecting the public.
LINDA LEE, LAW SOCIETY PRESIDENT
While the figure of £350m - cut from Legal Aid - is less than some had feared, losing this amount of money from the system will inevitably prove to be a significant blow. It is a basic feature of a democratic society which supports the rule of law that vulnerable people have access to legal advice and representation to secure justice. The legal aid budget has remained static for the past six years. It is in no state to deliver yet more cash savings and it is the vulnerable who desperately need this front line service who will suffer.
IAN MULHEIRN, SOCIAL MARKET FOUNDATION
The government has made a fanfare of its plans to make work pay. But freezing working tax credits and reducing financial support for childcare will see many low and middle income working parents substantially worse off at the end of each month. This doesn't fit with the government's rhetoric. Working tax credit was introduced to make it more financially rewarding to return to work. For parents on modest incomes this will be a major blow to their incentives to work.
PROFESSOR JOHN APPLEBY, THE KINGS FUND
The NHS has got the bare minimum and I'm not sure you can say it is a real terms increase. There is an element of double counting to the social care promise. It is money the NHS is giving to other services. I'm not saying social care doesn't deserve it, but it is not money the health service can spend on what it wants to and if you take that out of the budget it is no longer a real rise.
BEN STAFFORD, CAMPAIGN TO PROTECT RURAL ENGLAND
This government has set itself a high bar by pledging to be the "greenest ever". Significant cuts to the main environmental departments will not make clearing that bar any easier. Inevitably, many rural people will face hardship as a result of these cuts. We await further detail, but subsidised rural bus services are likely to face challenging times, thanks to the combination of a 20% cut in bus subsidy grant and a 28% cut in local authority funding. CPRE and other organisations lobbied the government hard on the importance of environmental stewardship schemes through which farmers are able to look after the landscape features and wildlife on their land. We welcome the announced 80% increase to the Higher Level Stewardship scheme over the funding period.
DAVID FROST, BRITISH CHAMBERS OF COMMERCE
Business has been absolutely clear on this - the deficit has to be tackled no matter what and this starts the process. But I have to say this is nowhere near as draconian as it could have been. Public expenditure will rise from £702bn to £740bn a year by 2014, so it's not as though there's going to be huge swingeing cuts. These plans are now in place, now what we've got to ensure is growth, and we were particularly encouraged by the Chancellor on this, the third leg of his speech today - that there was a focus on capital expenditure, on transport - vitally important for the future - keeps jobs in the private sector, keeps jobs in construction, and more importantly invests for the future.
PAUL KENNY, GENERAL SECRETARY OF THE GMB UNION
After this review, the broadest shoulders will still have the fattest wallets. The price for George Osborne's day of reckoning will be paid by the economy, in the public and private sectors, and those unemployed, for a decade to come. In a well leaked, well crafted ideological speech, arrogantly delivered, the demise of public services and the welfare state was laid out in front of us. As this plan unfolds and its impact is felt in homes and communities up and down the country, the Tory/Liberal authors will find life increasingly difficult at the ballot box.
MATTHEW SINCLAIR, DIRECTOR TAXPAYERS' ALLIANCE
It's great news that the Government is going ahead with necessary spending cuts to get the deficit under control and that politicians are finally setting out clear plans to deal with the fiscal crisis. Many wasteful programmes are being cut and that will mean savings for taxpayers now and in the future. Unfortunately a number of measures that would save significant amounts of money while minimising the impact on services haven't been taken, like a freeze in the International Development budget or pay cuts for the best paid public sector staff. Sensible and necessary cuts have been announced today but more can be done to deliver good value for hard pressed taxpayers.
MARTIN GREEN, ENGLISH COMMUNITY CARE ASSOCIATION
Whilst the review highlights some new funding, our concern is that some of this is not ring-fenced. The challenge for everyone in social care is to coalesce to ensure that the extra £2bn that was identified for our sector is not taken to subsidise other areas of local government.
RICHARD HAWKES, CHIEF EXECUTIVE OF SCOPE
Despite the continuing rhetoric that spending cuts will be fair the chancellor's announcements today are anything but. Local government will lose 28% of its funding over the next four years, compared to just 14% reductions to the royal household, and this will hit disabled people and their families particularly hard. This assault on the most vulnerable is characterised by the callous removal of the mobility component of DLA for people living in residential care, which will simply increase dependency and mean many people will literally become prisoners in their own homes. Disabled people and their families do not have "broad shoulders" so why are they bearing the brunt of these cuts?
HELEN DENT, CHIEF EXECUTIVE, FAMILY ACTION
Vulnerable and low income working families will be left thinking they're the ones being left to turn around the deficit super tanker. While we welcome the extension of free childcare for two year olds, taken together the measures in this Spending Review will have a considerable impact on families. Unfortunately many of the announcements make it difficult for work to pay and our research shows that the welfare caps will disproportionately affect couples and in some cases could cost the Treasury more. We'd hoped George Osborne would throw families a life jacket, instead he's making it all the more difficult for them to keep their heads above water.
PAUL EVERITT, SOCIETY OF MOTOR MANUFACTURERS AND TRADERS
Across industry, businesses have had to take difficult decisions on how to make best use of limited resources and we welcome government taking a similar approach to ensuring long term stability for the economy. While some measures will require even tighter budgetary control, industry is supportive of decisions that promote our products and the UK as an attractive place to do business.
MILES TEMPLEMAN, INSTITUTE OF DIRECTORS
We strongly support the Government's determination to stick to its overall plan of reducing public spending quickly. The only way we get a private sector recovery underway is through macro-economic stability, and this will only be achieved with sustainable public finances. Opponents of today's spending reductions need to wake up to that fact. The alternative is a tax hike which would damage the economy in both the short and long term.
DR PETER CARTER, ROYAL COLLEGE OF NURSING
We welcome the government's commitment to a real-terms increase in NHS funding. However, the reality is that this small increase at a time of soaring demand and the rising costs of health care, will still feel like a cut. The NHS in England is already being asked to make £20 billion of efficiency savings and today's Spending Review is likely to lead to further strain on healthcare services as job losses mount up and benefits are squeezed.
JOHN WALKER, FEDERATION OF SMALL BUSINESSES
We all know we are living in an age of austerity and that these cuts will affect us all. But our members understand that to reduce the public sector deficit, these cuts had to be made. The small business community continues to have a vital part to play in driving a credible recovery and taking on new members of staff to help tackle unemployment, so it is now vital the Government puts a Small Business Programme for Growth into action immediately.
DAVID ORR, CHIEF EXECUTIVE, NATIONAL HOUSING FEDERATION
The fact that the housing budget is being cut by 60% is deeply depressing - and shows that providing affordable housing is no longer a government priority. Cuts on this scale will come as a devastating blow to the millions of low income families currently stuck on housing waiting lists. The harsh reality is that because of these cuts, the new social homes this country so desperately needs can now only be built by dramatically increasing rents for some of the most vulnerable and poorest in our society.
MARTIN COOKE, ERNST & YOUNG
With 490,000 jobs set to go in the public sector, as well as tens of thousands more in industry, the human cost of the chancellor's statement today casts a long shadow over the Coalition's moves to restore order to the public finances. Yet this new era is likely to be defined not just by cuts but by unprecedented experimentation and innovation across the public sector. With money drastically limited, and as these extensive job losses begin to bite, one thing is for sure, doing more with less.
BOB CROWE, GENERAL SECRETARY OF THE RMT
The massive increase in rail fares will drive people off the trains and onto the roads and it looks like the profits of the private rail companies will be ring fenced while upgrades are kicked into the long grass, forcing passengers to pay through the nose to travel on creaking, overcrowded services.
DEREK SIMPSON, GENERAL SECRETARY UNITE UNION
This is not a spending review - it's a massacre. It's totally perverse to claim that cutting half a million jobs and razing our public services to the ground is good for this country. No matter how often they repeat that their actions are fair, this government is making a political choice to attack the public sector and, by doing this now damaging the whole of the economy long into the future. There is no evidence that public sector workers who lose their jobs will find alternative work in the private sector. In fact these cuts will destroy nearly as many private sector jobs as public sector ones."
STEVEN LAW, PRESIDENT R3 INSOLVENCY PROFESSIONALS
We calculate that 148,000 small businesses are at risk of failure, but of course not all businesses will lose all of their public sector work. Our members predict that 2011 will be a difficult year for small businesses and factors such as loss of public sector work will see company insolvency numbers start to rise, potentially making 2010 the year of the calm before the storm. Although numbers have decreased over the course of this year, insolvency practitioners are expecting 27,540 corporate insolvencies in 2011.
REACTION FROM AROUND THE UK
The BBC's David Gregory in the West Midlands says: "After more than 15 years of planning, reviews and many false dawns, at last the expansion of the Midland Metro in Birmingham is finally going ahead. Not much comfort though for those in Herefordshire, Shropshire and Warwickshire, who depend on newly threatened rural buses."