TORY Chancellor Osborne confirmed yesterday that the coalition government was pressing ahead with the most savage attack on the working class since the Second World War.
In his statement on the coalition’s Comprehensive Spending Review, Osborne confirmed plans first announced in the Emergency Budget in June to eliminate the ‘structural deficit’ of £109 billion within the space of the next four and a half years.
The spending cuts and ‘reforms’ involved will destroy the Welfare State and make at least 490,000 public sector workers unemployed.
‘There are choices. And today we make them,’ Osborne said.
‘We have chosen to cut the waste and reform the welfare system that our country can no longer afford.
‘We have, at £109 billion, the largest structural budget deficit in Europe.
‘We are paying, at a rate of £120 million a day, £43 billion a year in debt interest.’
Although Osborne said total government spending would rise from ‘current expenditure’ of £651 billion to ‘£693 billion in 2014-15’, a huge chunk of government spending will be handed over to the banks in interest and debt payments.
‘Debt interest payments will reach £63 billion in 2014-15.’
He said as a result of the government’s spending cuts that, ‘Debt interest payments will be lower by £1 billion in 2012, then £1.8 billion in 2013 and £3 billion in 2014 – a total of £5 billion over the course of this Spending Review.’
Osborne continued that ‘The Spending Review is underpinned by a far-reaching programme of public service reform,’ he said. . .
‘Quangos will be abolished. Services will be integrated. Assets will be sold. And the administrative budgets of every main government department cut by a third.’
Osborne said that ‘the best estimate’ in terms of the job cuts that will result from the cuts remained the one set out by the Office for Budget Responsibility.
‘They have forecast a reduction in headcount of 490,000 over the Spending Review Period,’ he said.
He declared: ‘We will give GPs power to buy local services, schools the freedom to reward good teachers, and communities the right to elect their police and crime commissioners,’ said Osborne.
He added: ‘There will be overall savings in funding to councils of 7.1 per cent a year for four years.’
This means almost 30 per cent cuts in councils.
The most savage attack on councils comes on council housing.
New ‘social tenants’ will have to pay 80 per cent of the market rent.
Meanwhile, the Fire Service has been told it must agree to ‘substantial operational reform’.
He continued: ‘The Ministry of Justice’s budget will reach £7 billion by the end of the four year period – with average savings of six per cent a year.’
Osborne added: ‘I can today announce that the state pension age for men and women will reach 66 by the year 2020.
‘Raising the State Pension Age is what many countries are now doing, and will by the end of the next Parliament save over £5 billion a year.’
Osborne continued: ‘The Work and Pensions Secretary is setting out proposals, with my support, to replace all working age benefits and tax credits with a single, simple Universal Credit.
‘We will also be seeking substantial savings from the rest of the £200 billion benefit bill, on top of those already identified in the Budget.’
Labour Shadow Chancellor Alan Johnson said the cuts were being made too fast.
He said there was ‘cheering’ on the Tory benches at ‘the deepest cuts to public spending in living memory’ and added: ‘To some Members (of Parliament) opposite, this is their ideological objective, for many this is what they came into politics for.’
Johnson said the cost in jobs was more like a million and TUC General Secretary Brendan Barber also said: ‘The reality is that there’s almost certainly going to be the same number of job losses in the private sector too as a result of the cuts.’