Govt Departments Agree To 30% Spending Cuts

Cabinet ministers who have so far settled with the Chancellor are Transport Secretary Patrick McLoughlin, Environment Secretary Liz Truss and Communities Secretary Greg Clark, who have each signed up to an agreement similar to that accepted by Mr Osborne for the Treasury itself.

The departments will likely be expected to cut on day to day spending over the next four years via a combination of low worth programmes that are closing and efficiency savings.

Full details of the capital settlement, as well as the result of the local government settlement, will be announced in the spending review on November 25 2015, the Treasury said.

The chancellor has asked most government departments to come up with savings of up to 40% by the end of the current parliament. “There is no economic security, there is no national security, there is no opportunity, when you lose control of the public finances”, Osborne will say.

“There is still so much more to do – we are still spending too much”, Osborne will add. “That’s why, at the Spending Review, we will meet the democratic mandate we were given by the British people this year: to bring the deficit down, finish the job and get Britain back into surplus”. “But we know we haven’t abolished boom and failure”. Let me put it another way: if our country doesn’t bring the deficit down, the deficit could bring our country down again.

Their comments appear to be squarely aimed at ministers like Mr Duncan Smith, who is reported to be furious at plans by Mr Osborne to take £2 billion to soften the blow from the cuts to tax.

Foreign Secretary Philip Hammond has been forced to play down claims that Work and Pensions Secretary Iain Duncan Smith is on the brink of resignation in a bitter row over spending cuts.

“Our priority is for farming businesses to be productive and profitable and we are concerned that cuts of up to 30% could damage frontline delivery services that underpin this aim”, he said.

The huge £217bn Work and Pensions budget is a key target for Mr Osborne’s attempt to balance government spending by 2018/19 and he promised to slice £12bn from the welfare bill at the election.

Mr Duncan Smith, is reportedly battling against Mr Osborne’s plans to raid his department’s Universal Credit benefit, as a means of reducing the scale of the cuts to tax credits.

In his speech to Imperial College London, Mr Osborne will make clear that he if he fails to cut spending it will risk national security, mortgages will soar and taxes will increase.

The Chancellor is said to be looking at cutting the amount of Universal Credit – single benefit that bundles together the six main welfare payments: jobseeker’s allowance, working and child tax credits, housing benefit, income support and employment and support allowance.