David Cameron challenged by senior MPs over cuts


David Cameron has been challenged on the impact of cuts on defence and welfare by a committee of senior MPs.

During a grilling by the liaison committee's 33 MPs, the PM said defence cuts had been the "most difficult".

Labour's Margaret Hodge suggested cuts to housing benefit could lead to "social unrest".

The PM said it was more likely unrest would result from taxpayers' anger at how much they were paying for claimants to live in expensive homes.

The prime minister faces twice-yearly grillings by the liaison committee - which is made up of the chairmen of all the Commons committees.

In his first session since becoming PM, Mr Cameron was quizzed for two-and-a-half hours on a range of topics from Ireland's debt crisis, to university tuition fees, social housing, Afghanistan and Northern Ireland.

But much of the session was taken up by questions about plans for £81bn of spending cuts.

The government wants to eliminate the structural budget deficit over the course of this Parliament - Labour had pledged to halve the deficit over four years.

Labour chairman of the public accounts committee Mrs Hodge asked if Mr Cameron would be looking for further cuts, if planned savings could not be made. She said only 40% of planned "value for money" savings made in the last comprehensive spending review were made .

Mr Cameron said the government was "not planning for failure" and the savings had to be achieved.

He said when previous efficiency savings had been demanded "there wasn't quite the same need to find them": "We are in a different situation because departments really can see that, in some cases, their base lines are being reduced."

But he added central government policies - like freezing public sector pay, changes to public sector pensions and reviewing procurement - would help them save money.

He said if they had stuck to Labour's plans "then at the end of of the parliament we would still have a structural deficit of around 3% ... after all the pain of cuts, the situation would still be getting worse.

"We have got to get to a situation where within this Parliament we have effectively dealt with the worst part of the problems."

She also challenged him on the impact of housing benefit changes - which include capping payments and changes to the way it is calculated. She said that would mean that poorer people would be forced out of central London into areas like her Barking constituency where "there is already pressure and social unrest" in part due to a lack of affordable housing.

"Is social unrest a price worth paying, and the impact that can have with the extreme right?," she asked.

Welfare sanctions

Mr Cameron said she should ask people on between £20,000 and £30,000 a year whether they were happy to be paying towards people whose rent bills were up to £50,000 a year in central London.

"I think that is more likely, frankly, to lead to social unrest when people find out how much money they're paying in taxes for people to live in houses they couldn't dream of living in themselves."

Labour MP Anne Begg, chairman of the work and pensions committee, asked what the "rationale" was behind plans to cut housing benefit by 10% to people on Jobseekers' Allowance for more than a year.

She said it was possible someone could apply for many jobs but remain unable to find one - "That would be the first time in welfare history in this country where sanctions are being brought against someone who has done everything the government has asked of them."

Mr Cameron said the idea was to "sharpen the incentives to work" and said 90% of people on JSA got a job within a year and the government's "work programme" would help the others to do so. He said none of the changes were "easy" but everyone accepted that the housing benefit bill had to be tackled.

He added housing benefit would not be "radically reduced": "All we're going to be able to do is stem the increase and perhaps a modest reduction."

He has also faced questions about the defence review - including the decision to scrap the UK's Harrier fleet and keep the Tornado. Conservative MP Bernard Jenkin asked if it was true that that decision was taken at the last minute.

Mr Cameron said the reason it was taken late was "this was the most difficult decision at the heart of the defence review". He said although it would have been an easier decision to explain to keep the Harriers and scrap the Tornado, it would have been "the wrong decision".

The Tornado was the "more capable aircraft" - more effective as a "ground attack aircraft" and currently in use in Afghanistan - the government had wanted to support troops in Afghanistan, he said.

The prime minister also said he accepted the need for rapid decarbonisation of Britain's electricity supply over the next 20 years to meet long-term targets on climate change.

Asked whether he endorsed projections by the advisory Committee on Climate Change that carbon emissions from electricity generation should fall by 80% between now and 2030, he said: "Basically, yes".

The committee evisages a major switch to electricity for heating and transport. "If we don't decarbonise electricity we've got no hope of meeting all the targets that we are all committed to," said Mr Cameron.

He acknowledged that this meant bills might rise faster than they would otherwise.

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