UK Chancellor to unveil details of austerity drive

UK Chancellor to unveil details of austerity drive

The UK coalition government’s austerity drive will get under way in earnest today when Chancellor George Osborne unveils some of the biggest spending cuts ever attempted in the Western world.

Mr Osborne is expected to warn of a “hard road” ahead as he details £83bn (€94bn) of reductions to tackle the deficit, which will see nearly 500,000 public sector jobs culled over the next four years.

Departments are facing budget cuts averaging 25% as part of the long-awaited Comprehensive Spending Review (CSR), with the Ministry of Justice and Department of Work and Pensions set to be among the hardest hit.

Unions reacted with fury after it emerged that more than 14,000 jobs could go at the MoJ alone, most of them front-line prison and probation workers. Legal aid and the courts are also expected to be targeted.

At the DWP, there is speculation that ’universal’ handouts such as child benefit and winter fuel payments could be limited to save money, on top of a major crackdown on sickness and housing benefit.

The Secretary of State, Iain Duncan Smith, is believed to have promised big savings to get the Treasury to agree to fundamental reform of the welfare system in the longer term.

Ministers have also forced the BBC to take over funding the World Service, which was previously bankrolled by the Foreign Office.

Commuters are braced for sharp rises in train fares as the Department for Transport withdraws rail subsidies, and thousands of police officers could go as the Home Office trims costs. Meanwhile, the social housing budget is likely to be more than halved to save billions of pounds.

David Cameron announced yesterday that the Ministry of Defence had been spared the worst of the pain, with an 8% reduction in real terms by 2014-15.

However, that relatively modest reduction still leaves Britain unable to mount another operation on the scale of the Iraq invasion, or the current campaign in Afghanistan.

Some 17,000 armed forces and 25,000 civilian posts are due to be axed, as well as a host of significant military assets.

The least affected is thought to be the Department for Education, which has secured an overall 5% reduction.

Even the NHS and Department for International Development, which are protected from the curbs, have been ordered to make sizeable efficiency savings to ensure that cash is not wasted.

Mr Cameron has previously warned that the cuts package, designed to eradicate the Government’s structural deficit by the end of the parliament, will be “life changing” for everyone in the UK.

But there have been suggestions that much of the most painful slashing will be “backloaded” until later in the spending review period – by which time the economic recovery should be entrenched.

Ministers will be at pains today to stress the austerity measures are “fair” and “progressive” to protect the poorest – a key demand of Lib Dems.

But the challenge Cameron's government faces in selling that message was underlined last night with a poll suggesting only 10% of people thought the rich would bear the main burden.

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