Chancellor orders ministers to find 6% of cuts to slash spending by another £3.5bn

[dutchman]

Foreign aid, the NHS, schools and defence will escape the next round of cuts



Ministers were last night ordered to draw up plans for a fresh round of spending cuts of up to 6 per cent as Chancellor Philip Hammond prepares for next week’s Budget.

Treasury chief secretary David Gauke wrote to Ministers yesterday asking them to draw up plans for new cuts of up to six per cent in their departmental budgets as part of plans to slash a further £3.5 billion a year from public spending.

Britain’s foreign aid budget will be exempt from the cuts, as will the NHS and schools. The target of spending two per cent of GDP on defence will also be maintained.

All other departments have been asked to come up with proposals for cutting spending by between 3 and 6 per cent.

The cuts will come into place in 2019/20, four years after George Osborne promised the huge budget deficit left behind by Labour would be eradicated.

Announcing the ‘efficiency review’, Mr Gauke said: ‘We are committed to a modern, high-quality public sector that delivers the services people need in the most efficient way possible.

‘There has been considerable progress, but there is further to go and the whole of government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayers money.’

The decision to press ahead with the new cuts, which were originally pencilled in by Mr Osborne last year, signals Mr Hammond’s determination to tackle the deficit.

It comes despite booming tax receipts which have led some to call for Ministers to ease up on austerity measures after years of cuts.

Bumper tax receipts last month have put Mr Hammond on course to beat the deficit target of £68 billion when he unveils the Budget next week. Economists believe the deficit could come in £12 billion lower, at £56 billion.

But Government sources say Mr Hammond remains concerned that the size of Britain’s deficit is unsustainable and needs to be brought down as quickly as possible.

He has told MPs and Ministers pleading for extra spending: ‘There is no pot of money under my desk.’

Despite strong economic growth, he is also said to remain nervous about the potential impact of Brexit on the economy.

Labour MP Louise Haigh condemned the decision to press ahead with the cuts last night, saying Ministers were ‘prepared to sacrifice the country and economy to their ideology’.

[rebbonk]

This is really going to hurt some people