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Senior ministers to oppose more welfare cuts Senior ministers to oppose more welfare cuts
(7 months later)
The work and pensions secretary, Iain Duncan Smith, is forming a common front with the Treasury chief secretary, Danny Alexander, to oppose further welfare cuts in a spending review this summer due to set out departmental spending limits in 2015-16, the first year after the election.The work and pensions secretary, Iain Duncan Smith, is forming a common front with the Treasury chief secretary, Danny Alexander, to oppose further welfare cuts in a spending review this summer due to set out departmental spending limits in 2015-16, the first year after the election.
There is a growing mood in parts of Whitehall that George Osborne will not be able to complete the spending review before June as planned, and will be forced to delay it owing to the scale of objections to further cuts coming from the Home Office, the Ministry of Defence, the business department and now the work and pensions department.There is a growing mood in parts of Whitehall that George Osborne will not be able to complete the spending review before June as planned, and will be forced to delay it owing to the scale of objections to further cuts coming from the Home Office, the Ministry of Defence, the business department and now the work and pensions department.
The chancellor has said he needs to identify a further £10bn cuts for 2015-16.The chancellor has said he needs to identify a further £10bn cuts for 2015-16.
Alexander, speaking on the byelection campaign trail in Eastleigh, said: "In the autumn statement, we made some difficult decisions on welfare, absolutely the right decisions. What remains is departmental spending.Alexander, speaking on the byelection campaign trail in Eastleigh, said: "In the autumn statement, we made some difficult decisions on welfare, absolutely the right decisions. What remains is departmental spending.
"We've got no plans at all to go back to the welfare budget as part of that process. What I'm focused on is finding that £10bn or so from within the spending the government departments do."We've got no plans at all to go back to the welfare budget as part of that process. What I'm focused on is finding that £10bn or so from within the spending the government departments do.
"I've got no plans to reopen the welfare issue. We agreed significant measures in the autumn and we're legislating for those at the moment. The balance has to be found from departmental budgets. Everyone's got to play their part." It is the first time the Lib Dem chief secretary has been as explicit as this, his aides confirmed."I've got no plans to reopen the welfare issue. We agreed significant measures in the autumn and we're legislating for those at the moment. The balance has to be found from departmental budgets. Everyone's got to play their part." It is the first time the Lib Dem chief secretary has been as explicit as this, his aides confirmed.
It is understood that Duncan Smith is also adamantly opposed to any further welfare cuts, saying there are no more easy options. He has pointed out that Osborne had not been able to secure the cuts he had wanted, and the current focus should be on implementing the very complex measures already agreed including universal credit, the personal independence payment and squeeze on benefits for people in work.It is understood that Duncan Smith is also adamantly opposed to any further welfare cuts, saying there are no more easy options. He has pointed out that Osborne had not been able to secure the cuts he had wanted, and the current focus should be on implementing the very complex measures already agreed including universal credit, the personal independence payment and squeeze on benefits for people in work.
The axis of Duncan Smith and Alexander leaves Osborne facing a daunting task since he has also ruled out any cuts in 2015-16 to health spending, schools, overseas aid and defence equipment.The axis of Duncan Smith and Alexander leaves Osborne facing a daunting task since he has also ruled out any cuts in 2015-16 to health spending, schools, overseas aid and defence equipment.
Total real departmental current spending was cut 10.8% in the first four years of the spending review, but non-protected departments are experiencing cuts closer to 30%.Total real departmental current spending was cut 10.8% in the first four years of the spending review, but non-protected departments are experiencing cuts closer to 30%.
The home secretary, Theresa May, the business secretary, Vince Cable, the defence secretary, Phillip Hammond, and the justice secretary, Chris Grayling, have all said they are opposing further cuts to their budgets in 2015-16.The home secretary, Theresa May, the business secretary, Vince Cable, the defence secretary, Phillip Hammond, and the justice secretary, Chris Grayling, have all said they are opposing further cuts to their budgets in 2015-16.
The defence ministry faces cuts of nearly £700m, about 2%, in 2015-16 if the chancellor sticks to his plan of maintaining the distribution of pain he imposed in the first spending round. The business department is also likely to be squeezed, with probable cuts of just over £1bn – nearly 7% of its budget in 2015-16.The defence ministry faces cuts of nearly £700m, about 2%, in 2015-16 if the chancellor sticks to his plan of maintaining the distribution of pain he imposed in the first spending round. The business department is also likely to be squeezed, with probable cuts of just over £1bn – nearly 7% of its budget in 2015-16.
In an unusual step Cable unfurled the flag of revolt in the Financial Times this week: "If you are going to get out of this prolonged crisis we need to invest more in innovation, skills, science and business support.In an unusual step Cable unfurled the flag of revolt in the Financial Times this week: "If you are going to get out of this prolonged crisis we need to invest more in innovation, skills, science and business support.
"I can't envisage circumstances where government support for those things will be reduced in the next spending review period," he said."I can't envisage circumstances where government support for those things will be reduced in the next spending review period," he said.
Cable is pressing the chancellor to allow increased borrowing for capital investment in housing, and for this borrowing not to come from cuts to current spending.Cable is pressing the chancellor to allow increased borrowing for capital investment in housing, and for this borrowing not to come from cuts to current spending.
He has made this demand repeatedly, but is now ratcheting up the pressure, arguing that the government is very likely to lose its triple-A credit rating anyway.He has made this demand repeatedly, but is now ratcheting up the pressure, arguing that the government is very likely to lose its triple-A credit rating anyway.
He believes if there is no action by the time of the March budget, and Osborne instead waits for the go-ahead of the new governor of the Bank of England, Mark Carney, in the summer, it will be too late to affect the growth figures ahead of the election.He believes if there is no action by the time of the March budget, and Osborne instead waits for the go-ahead of the new governor of the Bank of England, Mark Carney, in the summer, it will be too late to affect the growth figures ahead of the election.
Cable senses that the arrival of Carney would provide the political cover for Osborne to change tack by introducing a new growth target, the nominal GDP target.Cable senses that the arrival of Carney would provide the political cover for Osborne to change tack by introducing a new growth target, the nominal GDP target.
One source said: "It is very fluid. There is a lot of tension over the spending review, and it is possible the timetable will slip, or we just will not be able to agree."One source said: "It is very fluid. There is a lot of tension over the spending review, and it is possible the timetable will slip, or we just will not be able to agree."
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