Page last updated at 21:19 GMT, Thursday, 16 July 2009 22:19 UK

Brown defends spending policies

Gordon Brown
Mr Brown said the government had acted to shorten the recession

Gordon Brown has said "tough choices" will be needed on public spending but denied that officials are planning for swingeing cuts after 2011.

The PM told a committee of MPs "major" efficiency savings were needed to get money to frontline public services.

But he said claims that civil servants were drawing up plans for 20% cuts in some areas were "ridiculous".

The International Monetary Fund has warned more "clarity" is needed on spending to ensure economic recovery.

Appearing before the Liaison Committee of senior MPs, Mr Brown faced calls for the government to engage in an "open debate" about spending choices and the likely need for cuts after the next election.

Spending commitments

Mr Brown said the "profile" of public spending would change after 2011 as the government had brought forward money to help the UK get through the recession.

He said it be "wrong" to determine spending commitments for 2011 onwards due to the uncertainty about the length of recession and unemployment levels.

He said his first priority was to steer the economy back to growth and to reduce unemployment - which rose by a record 281,000 to 2.38m in the three months to May.

There will be tough choices and we will make them
Gordon Brown

Ministers had identified £9bn of efficiency savings in back-office functions and income from this process and the sale of assets would be channelled towards frontline services, he added.

"There will be tough choices and we will make them."

Asked about the transport budget and whether it would be cut as ministers try to get to grips with spiralling debt levels, Mr Brown said £700m in capital spending was being brought forward for road and rail projects to support jobs.

"We are re-profiling expenditure. A lot of that expenditure will take place this year and next year. That is the right thing in the recession."

Recovery uncertain

He denied this would result in longer-term cuts in major infrastructure projects such as Crossrail, saying these were "moving ahead".

Meanwhile the IMF, in its annual assessment of the UK economy, has warned the "speed and strength of the recovery remain highly uncertain".

Gordon Brown's dishonesty is becoming an embarrassment for the whole government
George Osborne
Shadow chancellor

While welcoming plans to change banking regulation and noting some "moderately encouraging" early results from quantitative easing - it warned there were still some "sizeable" vulnerabilities - such as a sharp increase in government borrowing.

"To limit ... risks and increase resilience to shocks, the authorities need to commit to a credible plan to reverse the deterioration of the fiscal position in the medium term and build a broad public consensus around a concrete consolidation plan," it said.

The IMF said a Comprehensive Spending Review would be "an opportunity for committing to concrete expenditure measures" - Lord Mandelson has suggested there would not be a CSR until after the next election, although the chancellor has suggested there could be one.

Debt crisis

Mr Brown's appearance before the committee came as the head of the civil service, Cabinet Secretary Sir Gus O'Donnell, warned in an interview with the Times about future public spending levels.

Asked whether he agreed with a Canadian policy which saw spending cut by 20% - and some departments being harder hit than others - he said: "You could envisage a situation where you go for deeper dives on this, most certainly."

The business secretary Lord Mandelson and Chancellor Alistair Darling have both said public spending would be tighter than in the past.

Shadow chancellor George Osborne said: "Gordon Brown's dishonesty is becoming an embarrassment for the whole government.

"His claim that cuts can be avoided is now openly challenged by the cabinet secretary and the chancellor."

He added: "When the country needs a strong, united government to deal with the debt crisis, we have instead a divided cabinet and a prime minister who is no longer listening to his senior civil servants."

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