Page last updated at 21:45 GMT, Thursday, 25 March 2010

Darling concedes cuts could be tougher than 1980s

Alistair Darling: "I make no bones about it, it will be a very tough settlement"

Alistair Darling has conceded that if Labour is re-elected public spending cuts will be "tougher and deeper" than those implemented by Margaret Thatcher.

Asked in a BBC interview to spell out how far-reaching future cuts could be, Mr Darling did not reject a comparison with measures taken in the early 1980s.

The Tories have said they would cut spending more quickly than Labour.

Shadow chancellor George Osborne said the comments had "blown apart" Labour's claims that it could "go on spending".

Experts say Mr Darling has postponed the major decisions on departmental spending, and what is widely expected to be substantial cuts in many areas, to a spending review expected in the autumn.

There may be things that we don't do, that we cut in the future
Alistair Darling

The chancellor warned in his Budget speech that this review would be the "toughest in decades".

Asked by the BBC's Political Editor Nick Robinson to accept the Treasury's own figures suggest deeper, tougher cuts than those implemented by the Thatcher government in the 1980s, Mr Darling replied: "They will be deeper and tougher - where we make the precise comparison, I think, is secondary to the fact that there is an acknowledgement that these reductions will be tough".

He added: "There may be things that we don't do, that we cut in the future. We will have to decide what precisely we can do within the [spending] envelope I set."

"What is non-negotiable is that borrowing is coming down by half over a four-year period."

'Not too soon'

Asked whether the cuts would be deeper than under Margaret Thatcher on BBC One's Question Time, Chief Secretary to the Treasury Liam Byrne said: "Yes, they will be.

"But we will do it in a way that protects our priorities and we will do one thing first which is we will not cut public spending too soon, before our economy is back on its feet, growing again."

The Institute for Fiscal Studies, an independent think tank, has noted that total public spending increased by an average of 1.1% a year in real terms over the Thatcher era, at a time when inflation was higher than it is today.

This is almost three times the increase of 0.4% a year that Mr Darling has pencilled in for the next Parliament.

Gordon Brown is basing his election campaign on the claim that Labour can go on spending. That is completely blown apart by Alistair Darling's admission
George Osborne
Shadow chancellor

The IFS went on to observe that "if we subtract spending on welfare and debt interest then we estimate that the rest of public spending would be cut in real terms by an average of 1.4% a year compared to an average increase of 0.7% in the Thatcher era. We have not seen five years with an average annual real cut as big as this since the mid-1970s".

Shadow chancellor George Osborne said: "Gordon Brown is basing his election campaign on the claim that Labour can go on spending. That is completely blown apart by Alistair Darling's admission, under pressure, that Labour's own Budget numbers imply deep cuts."

"But why didn't he admit that yesterday? Twenty-four hours on, this empty Budget has completely unravelled and Labour's failure to act will hit families hard."

Mr Osborne said the Conservatives would set out further details of how they would cut Britain's deficit at a faster rate than Labour before the general election, adding that they would place more emphasis on spending cuts than tax rises.

Lib Dem leader Nick Clegg said the government was being "utterly dishonest".

"Yesterday we had a Budget in complete denial about the difficult decisions ahead. Today AD frightens people up and down the country by saying the cuts are going to be even worse than under Margaret Thatcher."

In his Budget speech, Mr Darling said Labour had been "right about the recovery" and urged voters not to put it at risk by deserting the party.

He told the BBC that he believed the Budget speech would provide a "very good foundation on which to build" as Labour attempt to seek a fourth term in government.

If the Conservatives win power at the election they have said they would introduce an "emergency" Budget within 50 days, which would overturn many of Mr Darling's policies.

Britain's budget deficit remains at a record high but it is £11bn lower than the £178bn forecast by Mr Darling in his pre-Budget report thanks to better than expected tax receipts over the past three months.

Print Sponsor

Observer Poll backs Gordon Brown and Alistair Darling to steer economy through downturn - 32 mins ago
Mail Online UK Brown unveils five key election pledges and vows to keep Darling as chancellor - 3 hrs ago
Spectator The Tories are paying the price for Osbornes mercurial political instincts - 16 hrs ago
Channel 4 News Pensioners 'worse off' after Budget - 21 hrs ago
Morningstar UK Much ado about little - 21 hrs ago

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific