Government unveils plans to slash public spending
Prior to Wednesday’s Pre-Budget Report, Prime Minister Gordon Brown has outlined plans to slash public spending by £12 billion over four years – 25% more than originally thought a few months ago.
Mr Brown will endeavour to show how Labour plans to slash the UK’s budget deficit by half.
In a speech today, the PM will say ministers have earmarked £3 billion in additional efficiency savings since the Budget in April. £1.3 billion of this will be achieved by streamlining central Government.
In his speech, Mr Brown is expected to say the Government will be “relentless” in its quest to save money and take the “tough decisions” needed to realise the savings.
“The proposals we are setting out in this plan, which is just one element of our efforts to reduce the deficit, will go further than we have ever gone before in streamlining central Government,” he is expected to say.
In addition, it emerged over the weekend that the Chancellor, Alistair Darling, is expected to announce a windfall tax on British banks.
The measure is one of many being planned by Mr Darling to target high earners. Other measures include increasing the number of people liable to pay inheritance tax, as well as an increase in capital gains tax.
Meanwhile, the Chancellor Alistair Darling is also expected to admit on Wednesday that the annual budget deficit will now exceed £175 billion – primarily due to falling tax receipts as a result of the recession.
However, the Conservatives have been critical of the Government’s spending cuts and accused Labour of not revealing the full extent of cuts needed to control Britain’s ballooning debt.