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Comprehensive Spending Review: reaction and analysis

Key reaction to the chancellor's statement on the Comprehensive Spending Review

 

For reaction from parliament click HERE.

On air:

Labour

14:10 Alistair Darling, BBC News: "I’ve always been clear that the argument is not whether you reduce the deficit, it is the rate you do it. You run the risk of derailing that recovery and it makes it very much more difficult to reduce the deficit... You can’t say at one and the same time he’s taking action tougher than what we would have taken and then say he is cutting less."

14:20 Douglas Alexander, Sky News: "They've got a basic pitch which is to say that today's choices were both necessary and fair ... were clearly of the view that if you imperil jobs and the chance for economic growth  you have a worse chance of getting the deficit down.

"When you're freezing the working tax credit, that's a disincentive to get people off benefits and into work... I think its ridiculous that this government has chosen to take more money from child benefit than from the banks."

14:50 Angela Eagle, BBC News: "There’s no sign in the statement of anything resembling a growth policy. This takes a huge and risky gamble when the world economic situation is actually very uncertain... I don’t think there’s any way that a Labour government would have made choices that would have had children paying more than bankers."

15:05 Angela Eagle, Sky News: "I can tell you what we wouldn't do, we wouldn't be taking such risky steps toward recovery. The Irish finance minister was praised for cutting fast and deep... I am saying there are big gambles that the chancellor has taken today and he is playing fast and loose."

15.31 Stephen Timms, BBC News “The problem is with jobs and the economy, half a million public sector jobs to go another half a million in the private sector.  What happened was a big worldwide economic crisis, an adjustment is required that is certainly true.

“The argument is about the pace of it…This is going too fast and too deep."

15.44 David Blunkett, BBC News “The things that are not noticed are local government services. Area-based grant for instance only goes to the most disadvantaged communities, withdraw that and, in Sheffield’s case, that’s 18% of the budget, one in five of every pound spent. Then cut 7.1% from the budget and you can see the ramifications are absolutely horrendous.  

“Defending education spending sounds extremely good, except it’s in cash terms, in the next four years there’s going to be an 8-10% drop in the amount spent on each pupil.”

16.10 John Denham, BBC News "John Denham, BBC News: "Well I think if you look across government the review is reckless. A lot of public sector jobs to go, and private sector jobs would go too. Huge damage to people’s jobs and livelihood. This government is saying they would rather hit children than hit the banks. In his speech we heard the poor would be hit the hardest. Benefit cuts would hit the poorest hardest.""

16: 17: Stephen Timms, Sky News 
"A million jobs in total and no plan about how we can make the British economy grow. I am very worried that we could be back in the days of 3 million claiming Jobseeker's Allowance."

16:40 Ed Balls, BBC News: "This is reckless for public safety, a 20% cut to central budgets for police, I’m afraid that Theresa May has abjectly failed to stand up for policing, for public safety. They’re taking risks for the economy, also cutting police numbers; this is a very dangerous time for public safety. There’ll be fewer police officers, fewer Police Community Support Officers – I think it’s really reckless. We can see some departments have won - Theresa May has failed policing, she has lost.  There’ll be a scaling back of neighbourhood policing, this will be a retreat from tackling crime."

16:43 Chuka Umunna, BBC News: "[On 20% Labour cuts claim] This is a myth being peddled by the chancellor, he’s taken the figures in the budget red book in June, where we set out dept expenditure limits of about £379bn, and in the June budget the Tories was 10bn less. They’ve come out with this figure imagining that we haven’t moved on since March. In reality there is at least a £20bn gap between us."

16: 45 Andrew Tyrie, BBC News
"The overall strategy though seems to be generally accepted right across the political spectrum. The fact is Labour were committed to sharp cuts on spending. There’s no consensus about the pace or in fact when that should start... There’s a risk with economic policy which ever direction you go."

16: 50 Ed Balls, Sky News  "This is not only a spending review which puts jobs at risk it’s also one which puts the safety of our communities at risk. To see public safety be put in jeopardy in this way, I’m afraid it’s only the Labour party who are sticking up for public safety. On the issue of policing Teresa May has failed completely".

17.05 Douglas Alexander, BBC News "Our argument is straightforward, if you have lengthening dole queues you have rising welfare costs rather than falling welfare costs. As the IFS have confirmed, once again, as we saw in the budget, we’ve had measures that are deeply regressive in their impact on the poorest in society.  We would support action that’s being taken against the banks, it is just wrong that the Conservatives have decided to take twice as much money out of Britain’s families than out of Britain’s banks.

Nobody’s denying that there would have been difficult choices facing any government, but we have a Conservative government that continues to hold to a theology that says that unemployment is a price worth paying. We have a fundamental disagreement on unemployment." 

20:20 Rachel Reeves, BBC News “The real question is about the timing. Do you make huge cuts now before the recovery has really taken place or do you wait to make sure the recovery is embedded and then also about the debt... Some of the cuts today, in the transport budget, in the housing budget. The cuts are so large my fear is that they’re going to be self defeating and they’re actually not oging to bring down the deficit. Five-hundred thousand job losses in the public sector and then PWC says as a result they’ll be 500,000 jobs lost in the private sector because their so intertwined.

“What I really worry about is young people, people loving school and college and university this year and in the next. Where are they going to get a job? There’s not going to be jobs in the public sector. It’s certainly not going to be painless. "

18.50 Liam Byrne "Today’s budget is a body blow to Birmingham. The government’s plan to go hell for leather for big cuts almost overnight could see over 12,000 people in Birmingham lose their jobs. It is huge gamble with Birmingham’s future."

Coalition


14:10 Philip Hammond, BBC News
: "The figures clearly showed they intended a 20% reduction in the budgets of departments that were not ringfenced... We have been able to make the impact on our frontline departments less than they would have been under Labour’s proposals."

14:16 Danny Alexander, BBC News: "Spending cuts overall do affect everybody, but the cumulative effect of the spending cuts we’ve announced, along with the welfare changes and the tax measure give a picture which I think is broadly progressive.

"We’re seeking to make substantial reforms of policy, the justice settlement is a very good example of this – much more emphasis on rehabilitation, much more emphasis on getting people away from a life of crime."

14:35 Danny Alexander, Sky News: "I think if I was an ordinary Lib Dem voter I would feel proud that the Lib Dems have stepped up to the plate and are putting the country's finances back in order."

15.31 Francis Maude, BBC News:  "Committing to a lot of spending on transport infrastructure, expanding the regional growth fund, but the key thing is a credible programme for budget deficit elimination which will keep interest rates down... Interest rates have fallen today in the markets because the markets trust what the government has done."

On departmental cuts: "The reason we've been able to do this is because we have taken very tough, but fair, decisions on welfare reform...we have been very robust with welfare reform... The second thing we've done is be extremely tough with cutting out waste."

 

16: 10 Eric Pickles, BBC News  On redundancies "We’re going to go through the process, we’re going to do our best to try and ensure we can do it by natural waste and by voluntary redundancy. I wasn’t left with an awful lot of choice, John [Denham] cut our budget by 50%, I arrived with a 1.5bn housing capital project with no money to pay for it. The two frontline services which really matter are schools and care for the elderly – schools are going to enjoy an increase in funding and we’ve managed to find £2bn for care for the elderly.  We are sending out a very clear message to them [local authorities] – in the way that we’ve not protected Whitehall, we expect them not to protect the town hall and not hit frontline services."

16.17 Michael Fallon, Sky News "We've taken child benefit away from higher rate tax payers. All of these reforms are designed to get people off benefit. We are not squeezing the poorest but we are getting ore incentives in the system. This statement today invests in the future - instead of paying this huge bill in the future that they racked up....The forecast is that unemployment will go down."

16: 20 Sir Menzies Campbell, BBC News “The way in which we will justify [the cuts] is by pointing to the efforts made already to make savings. I understand there is going to be quite a lot of emphasis on growth in the coming weeks and that makes a lot of sense politically... If we get it right then we will put Britain back on a stable economic footing.”

16:52 Simon Hughes, Sky News
"The crucial issue first off is, we know there has to be massive reductions, we know that the chancellor has actually come under that figure that they proposed, the question now is how can we manage that while preserving the key services? There is an issue about housing benefit which we have to come back to....There is a need to make sure that in welfare distribution the people at the bottom are protected."

18.45 Simon Hughes, Sky News  "The bottom 10% of households don't suffer the most. If you take everything into account, tax changes, benefit changes, it becomes obvious the people at the top will be making the the most sacrifices. We want things that will get the economy and create jobs

"The other message that really shone from today is that the spending on NHS is protected, education has increased, these measures help young people and families."

"People will judge us by our deeds and will see many of the things the Lib Dems highlighted in the election. Fair tax system, fair education and best start for kkids, that is happening. We are dealing with that unfairnes and will be judged on that"

17.34 Danny Alexander, PM "If you look overall at the deficit reduction plan the poorest are least hard hit in the overall. It is not those at the bottom of income distribution."

17.50, Justine Greening, BBC News "The biggest risk to public services is the fact that debt interest is going through the roof. We have to get that under control if we don’t we will have challenges protecting frontline services. If you look at the balance, it does fall on the 20% richest people in our country over the coming five years.  It’s fairness about opportunity, a key part of today was saying that we still want to see expenditure on schools rising, we still want to protect spending on the NHS,

The scale of our challenge is so big, all of us, every single person is going to have to bear some of the brunt of cleaning up this huge mess that we’ve been left by the Labour party."

18.40, Justine Greening, Sky News "It is not easy to get this analysis right, but I think we have done it right. If you look across it, you will see it is the richest 20% who will be bearing the brunt of this. Over the last decade we became to weighted on the public sector, and not enough on the private sector. We know we have to be able to help business create jobs and that is what we helped do.



Experts and unions

14:55 Carl Emmerson (IFS), BBC News: "The benefit cuts impact those in the bottom half of the income distribution more than the top. The cuts to public services impact those in the bottom half of the income distribution more than the top... It’s progressive because of the tax measures Labour set out that they decided to keep... The richest 2% are shouldering a very big part of the burden – that’s clearly the case in terms of the policies which Labour set out and the government is choosing to continue."


15:12 Brendan Barber, BBC News: "I think this is really a bit of wishful thinking, we can be pretty clear that these cuts are going to lead to those job losses…These promises of jobs in the future frankly I just don’t think they look remotely credible.

"We’ve got misery today but, I’m afraid, moonshine tomorrow."

15:15 David Frost, British Chamber of Commerce, BBC News: "If we look at the second quarter of this year there were over 300,000 jobs created. If the government gets out of the way it will do that and create the jobs and help the economy... The private sector is capable of doing it."

15.45 David Frost, Sky News "What business has been saying quite clearly and relentlessly over the past few months is they wanted to see these cuts made... what business has quite clearly said is yes we are capable of creating these jobs.

"The economy has to be rebalanced, there is no easy option to doing this and this is the start of this process."

15:51 Digby Jones, BBC News “Business will take three good things out of this. When I say ‘good’ I mean if you expected Armageddon and only got half of it that's 'good'….  I think over four years, you need a private sector that’s going to mop them up, but we’ve got to create the jobs in the places where the redundancies are, you’ve got to have wealth created in Scotland and Wales and Northern Ireland. 

“I think there’s something going here which is good for Britain. Cuts put a foundation down that says we’re serious. Even the pessimists are going to have to agree this is not double-dip territory.” 

16:18 Brendan Barber, Sky News “These forecasts of job creation to help fill the gap caused by the result of these job loses, I simply do not think are simply not credible.

“We are going to make the case and build public support for real pressure on the government to change their course.  I don’t think up til now people have really realised what the impact of these cuts is going to be.  It’s all been rather theoretical, economists debating these issues and so on, big numbers. Well over the next few weeks and months we are actually going to see the grim reality as budgets get cut in all sorts of services right across our communities and job start disappearing too.”

16:19, CBI head Richard Lambert: "He did do what he could to protect that spending that will generate jobs and generate growth for the future. In the last 3 months the economy has created 140,00 jobs roughly, and the natural turnover in the public services in about 8%, quite a lot of those people will be retiring anyway. The coalition is going to be talking a lot in the next few weeks about growth prospects for the economy."

16:35 Dave Prentis, Unison BBC News "There’s been a propaganda war going on for a few weeks now, I think it’s still a bit wrong to put – local government services are going to lose roughly a third of the money going into local government. There is no way that many of our local services can come way from such a deep cut, it’s not dealing with waste, it’s actually cutting back on local community services.

We know that the government is already looking for £20bn savings [in the NHS] and spending £3bn on an ideological reorganisation to privatise the NHS. It’s pie in the sky. There’s no detail whatsoever about how these jobs are going to be created. The rich in our society are doing very well, banks have never done better –we’re not all in this together… We could have had a better balance between tax and the cuts we’ve had."

16:39 Mark Serwotka, PCS BBC News "I think we should try to harmonise and aspire for a fairer society, We’re going to see services cut everywhere, far from being fair this is really a cabinet stuffed full of millionaires asking the poorest and the most vulnerable to pay a terrible price. This was a choice made today, a political choice to undermine the welfare state and the public sector, not an economic choice.

16:39 CBI head Richard Lambert, Sky News "What Mr Osborne did today was simply flesh out the story he told us back in June. Confidence is supported by growth friendly policies, and we’ve seen a bit of that but we could do with more. Unemployment will rise a bit over the next twelve months, I think it is near its peak, at least I hope it is."

17.20 Will Hutton, chief executive of the Work Foundation, BBC News It’ll be devastating, you can’t take £83bn out of an economy and expect there not to be a real hit.  My God, police, social housing, legal aid, some of the cuts in welfare, these are devastating. We have millions and millions of areas wehre what we have been accustomed to over the last 30, 40 years is going to change, so it is dramatic. Within all this difficulty they’ve held the science budget up, infrastructure spending held again, the green investment bank – there’s the elements of a growth strategy here, which underneath it all could be built on.

19.40 Mark Serwotka, PCS head, Sky News “There are more people on welfare, we have a problem with the tax gap. Our view is if you now make that situation worse by putting 500,000 public sector workers and
a further 500,000 private sector workers on the dole, that’s hardly going to help us boost the economy.

"We’re told the private sector will replace all these jobs but for people who lose lose their jobs now, hoping that something will be created in years to come is no comfort whatsoever. The people who caused the crisis, the millionaires you see on TV, the cabinet members, everyone else. They don’t really have a clue."

19.25 Simon Reed, Police Federation, Sky News "Simon Reed  I’m reading here pretty much a quote from the spending review book today, it says that there will be a 14% reduction in police budget over the next four years, according to my sums that is about 3.5% a year, surely that can be lost simply by cutting bureaucracy?

"Well that’s a really tough settlement. We’ve seen since 2004 we’ve reduced bureaucracy, we’ve made some efficiency savings of £1.5 billion but now we’re talking just in sheer terms of cash so we estimate £1.2 billion by the end of this period and that can only come now from staff

"So we know forces have a recruitment freeze on officers, we churn about 5,000 officers a year so we’re probably talking losing, by the end of this time, 20,000 officers and that’s going to have a big impact. Let’s have no doubt about that, that’s going to have a big impact and that doesn’t include staff officers that we lose as well. So this is a tough tough day for policing."

Others

15:59 Plaid Cymru MP Elfyn Llwyd, Sky News: "It will impact on the private sector too. Economists would tell you this a very very dangerous game. I know you think we whinge in Wales but a report today said Wales were underfunded 1.4bn per annum. Along with the cuts we are going to be in for a rough ride."


15.59 SNP MP Stewart Hosie, Sky News: "What is the impact, the real impact of the welfare changes? It will take some time to work out the real consequences. For Scotland, for Wales and the rest of the country. I am extremely concerned on how this could affect Scotland."

16: 54 John Swinney, SNP MSP, BBC News "We’re facing a fall in our public expenditure of £1.3bn and the difference and the reason why the numbers are more significant than we expected is that the UK government has affected a very substantial extra £150m reduction in our capital budget. We’ve just had data this morning which shows the Scottish economy beginning to recover from the recession, but with an 800m reduction in capital spending, which is 25% of our capital expenditure in one year, that’s a body blow, it puts at risk at least 12,000 jobs in Scotland".

Press releases

13:42 Demos: "The public sees the need for cuts but not the speed at which they’re being done. Osborne risks alienating people and slowing the growth that is essential for recovery if he doesn’t now focus all his efforts on rebuilding confidence.”

13:43 Campaign for Better Transport: "We are appalled at the Government's plan to allow rail fares to rise so far above the inflation rate. Hard-working commuters who depend on the train face paying over £1,000 more for their annual season ticket by the time of the next election. These eye-watering rises are unacceptable at a time when we should be growing the railways in order to tackle congestion on our roads and reduce carbon emissions in line with Government targets."

13.57 Labour release full text of Alan Johnson's reply to Osborne “Today is the day that an abstract debate about spreadsheets and numbers turns into stark reality for people’s jobs and services. Their pensions, their prospects, their homes and their families."

14:21 Taxpayers' Alliance: "It's great news that the Government is going ahead with necessary spending cuts to get the deficit under control and that politicians are finally setting out clear plans to deal with the fiscal crisis. Many wasteful programmes are being cut and that will mean savings for taxpayers now and in the future. Unfortunately a number of measures that would save significant amounts of money while minimising the impact on services haven't been taken, like a freeze in the International Development budget or pay cuts for the best paid public sector staff. Sensible and necessary cuts have been announced today but more can be done to deliver good value for hard pressed taxpayers."

14:44 Labour: "Taking just the £2.4bn of welfare reforms that we have already explicitly accepted, and the £7.5bn increase in capital spending, that means that the gap between the Government and Labour’s departmental spending cuts is actually at least £20bn." 

14:58 British Chambers of Commerce: "While difficult, the Review could have been far worse for business. Spending on many of our key priorities, such as infrastructure, did not suffer the scale of cuts previously anticipated."

15:02 PCS "The government’s comprehensive spending review will put hundreds of thousands of public sector workers out of work and is an unprecedented attack on the welfare state, public services, communities, jobs and benefits"

15.12 The Liberal Magazine “This Review marks the culmination of the Conservative project to dismantle the liberal infrastructure of the welfare state – and it signals the beginning of the end for the Liberal Democrats”."

15.24 NUT "The cuts announced in the Government's spending review are a retrograde step and will have a devastating impact on vital public services, including education."

15.36 Ed Balls "This Spending Review is not only reckless and dangerous for jobs and the economy but is taking huge risks with the public's safety, crime and national security."

15.46 CSJ  "This is a spending review of reforming ideas to strike at the heart of the nation's damaging deficit. The Chancellor is right to argue that failing to tackle the deficit will only hit people, particularly the poorest, more severely in the long-term."

16:00 Liberal Democrat ministers Paul Burstow, Andrew Stunell, Steve Webb, Nick Harvey and  Lynne Featherstone.

17: 26 Simon Hughes “Liberal Democrats can be clear that the spending review contains many important decisions clearly aimed at making the big but necessary reductions in public spending as fair as possible."

17:59 The Green Party "Green Party leader Caroline Lucas MP has called George Osborne's comprehensive spending review a "budget to destroy a million jobs" - and has again argued that the worst cuts could have been avoided by an alternative policy based on a fairer tax regime."

18:00 Andy Burnham "George Osborne's words are already unravelling. The small print shows that he has sold out our children. The much vaunted pupil premium turns out to be a complete con."

Blogs

13:51 Iain Dale: "But the fact that at the end George Osborne was able to announce that instead of the 20% average cuts Labour announced in their budget his cuts amounted to an average of 19% rather shot Labour's fox. We all know that if Labour had been in power now, they would have had to announce similar cuts in spending. We know that. They know that. So their attacks on 19% cuts will ring rather hollow."

14:24 Will Straw: "Health spending will rise to £109.8 billion by 2014-15. In real terms, the rise from the new baseline delivers a 1.3 per cent rise. But compared to the baseline set out just four months ago, the rise turns into a cut of 1.5 per cent.

"What has happened to the missing £3 billion this year? If these are the the administrative savings, why have they not been reinvested in the NHS?"

14:27 Dave Hill: "You can be sure that TfL already has a full cost-cutting programme in mind. You might also wish to draw certain political conclusions from what Boris will certainly present as a decent transport settlement for London, given the economic circumstances. It is that David Cameron doesn't want Londoners to throw Boris out of City Hall in 2012. Put another way, he doesn't want a former Mayor Johnson returning to the House of Commons any sooner than necessary."

14:40 Peter Oborne: "Lurking behind Osborne’s very detailed (and mostly fair-minded and sensible) announcements are thousands upon thousands of individual tragedies in the shape of lost jobs and falling living standards. Osborne scarcely seemed to acknowledge or be aware of this. He made a traditional Chancellor’s budget speech with a number of niggly and irritating jibes at the opposition. His overall strategy was not to address a collective national problem, but to create a dividing line between the Tory Coalition and Labour."

14:51 David Hughes: "The most telling sight during George Osborne’s speech and Alan Johnson’s response was Ed Balls’ face. Gordon Brown’s consigliere (and ideas man) was almost exploding with frustration that it was Johnson, not him, who was taking on the Chancellor. You could see his point.  Balls’ grasp of economics is unrivalled on the Labour benches and he would have subjected the Chancellor’s speech to a forensic and – Balls being Balls – savage critique because his grasp of the issues and the numbers would have been total. Johnson’s grasp of both was simply non-existent. Instead, the Shadow Chancellor was forced to play the cheeky chappy, trying to cheer up his backbenchers while conspicuously failing to land a single telling blow on Osborne."

14:55 Jackie Ashley: "The biggest losers, though, are public servants. With just under half a million jobs to go in the public sector, it's hard to see how the welfare bill won't be going up, simply to help support many of these people. In Osborne land, these half a million civil servants will simply set up their own small business: in the real world, of course, it's not that easy. This is, truly, a massive gamble – and one that is ideologically driven too."

14:50 Julian Glover: "And it showed when Johnson spoke: a weak, rambling reply not excused by some good jokes. Johnson failed to pick up on anything Osborne had just said. His words were scripted and it showed. Labour is in no state to take the government's claims apart. This allowed Osborne to pull off a quite extraordinary trick: he made the coalition benches feel good about what he had just announced So the government got away with it: like a dentist at the end of an operation telling a patient "now that didn't hurt so much did it?". This was more cold bath than blood bath."

15.08 Nadine Dorries "My worries are about growth, not cuts. This CSR would have been perfect had it cut taxes, done away with the licence fee and committed to stop sending vast sums of money to Europe. Thereby creating an environment for investment and growth in preparation to deal with rising unemployment."

15.28 Paul Waugh "When you take into account the Diamond Jubilee, Royal Household spending drops by £5 million - hence the "14%" (it's 13.8% actually). Although spending will indeed fall, that's nothing to do with Government grant. It is because there aren't any more reserves being used and because the grant is frozen. While budgets such as social housing are slashed by upto 75%, the Queen's budget is actually at a standstill, it seems."

15.31 Ken Livingstone "George Osborne's Comprehensive Spending Review comprehensively squeezes middle income households in London and attacks the poorest, with women shouldering the biggest burden."

15.48 Fraser Nelson "In the end, George Osborne didn't flinch. The Chancellor is a clever political operator – too clever, sometimes – but the result is a cuts package that has surprisingly broad popular support."

17.44 FactCheck, Cathy Newman  Back at the Tory conference, George Osborne said cutting child benefit from higher rate taxpayers would save £1bn per year and got into all sorts of difficulties by doing so. So where has the extra £1.5bn in savings come from?

17.52, FactCheck, Cathy Newman "The pupil premium was the reddest of the Liberal Democrats’ red lines. They fought tooth and nail behind the scenes to preserve it, and in a speech on fairness on Friday, Nick Clegg proudly announced he’d secured an “additional £2.5bn of investment each year” – money paid direct to schools to encourage them to take on children from deprived backgrounds. But have the Lib Dems, once again, been forced to water down one of their most cherished policies?"

18.30 Jeremy Hunt "I am relieved that relative to other departments DCMS did well. Sorting out DCMS's budget was an extraordinarily gruelling process."

18.41 Conservatives "Setting out a four year plan to put public services and welfare on a sustainable footing, the Chancellor prioritised the NHS, schools, security and the infrastructure which will help Britain's economy grow.The choice, he said, was

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