Cameron: Budget problems worse than thought

In a major speech in Milton Keynes this morning, Prime Minister David Cameron said the budget problems are even worse than thought and has laid the blame with the former Government.

His speech, which comes ahead of the emergency budget on 22 June, issued a stark warning about the painful spending cuts which his Government is to implement in the years to come.

While many have urged the Government to delay making spending cuts until the economy is stronger, Cameron cited crisis-hit Greece as an example of the risk of failing to take action quickly.

“I want this government to carry out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country,” he said.

“This government will not cut this deficit in a way that hurts those we most need to help, that divides the country, or that undermines the spirit and ethos of our public services,” he added.

However, there were no clues as to where further spending cuts will be made.

There is speculation that welfare and public sector pay bills are high on the Government’s list for cuts.

Child tax credits for wealthier families are also expected to be curbed.

A rise in VAT has not been ruled out but the Government has already said the majority of its savings will be made by cutting current expenditure rather than hiking taxes.

However, Mr Cameron highlighted that the emergency Budget later this month will be followed by a “proper debate” involving as many people as possible about detailed three-year spending plans later this year.

Despite the gloomy outlook, Mr Cameron said: “Britain will come out stronger on the other side”.

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