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Tories making 'monumental mistake' with lopsided cuts, says Nick Clegg Tories making 'monumental mistake' with lopsided cuts, says Nick Clegg
(35 minutes later)
Nick Clegg has warned that George Osborne is in danger of making a "monumental mistake" after the chancellor said that around half of a further £25bn in spending cuts after the next general election would come from the welfare budget. Nick Clegg has warned that George Osborne is in danger of making a "monumental mistake" after the chancellor said that about half of a further £25bn in spending cuts after the next general election would come from the welfare budget.
In a sign of how coalition relations will remain fractious until the election in May 2015, the deputy prime minister said that the chancellor's plans to target cuts on the working age poor were lopsided and unbalanced. In a sign of how coalition relations will remain fractious until the election in May 2015, the deputy prime minister said the chancellor's plans to target cuts on the working age poor were lopsided and unbalanced.
Speaking at his monthly press conference in Whitehall, Clegg said: "You've got a Conservative party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state – for ideological reasons just cut back the state.Speaking at his monthly press conference in Whitehall, Clegg said: "You've got a Conservative party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state – for ideological reasons just cut back the state.
"Secondly – and I think they are making a monumental mistake in doing so – they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor.""Secondly – and I think they are making a monumental mistake in doing so – they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor."
Signalling how he will waste no time in lambasting Tory plans over the next 16 months, Clegg later added: "I literally don't know of a serious economist who believes that you only do it from that lopsided, unbalanced approach. Almost all serious economists say you have some kind of mix." Signalling how he will waste no time in lambasting Tory plans over the next 16 months, Clegg later added: "I literally don't know of a serious economist who believes that you only do it from that lopsided, unbalanced approach. Almost all, serious economists say you have some kind of mix."
The deputy prime minister criticised his cabinet colleague after the chancellor warned of another £25bn of cuts after the next election, targeting council housing for the better-off and housing benefit for under-25s. In a grim message to start the new year, Osborne said Britain was facing a year of hard truths in 2014 as there were more cuts to make and the economy still had big underlying problems. He said he expected the biggest chunk of the savings – around £12bn – to come from welfare in the two years after the election, as it would be an odd choice to leave this "enormous budget … untouched". The deputy prime minister criticised his cabinet colleague after the chancellor warned of a further £25bn of cuts after the next election, targeting council housing for the better-off and housing benefit for under-25s. In a grim message to start the new year, Osborne said Britain was facing a year of hard truths in 2014 as there were more cuts to make and the economy still had big underlying problems. He said he expected the biggest chunk of the savings – around £12bn – to come from welfare in the two years after the election, as it would be an odd choice to leave this "enormous budget … untouched".
Benefits for the young and people of working age would be considered before any cuts to pensioner benefits such as free bus passes and television licences, the chancellor said. The move forms part of Osborne's pledge to run a budget surplus by 2019 if the Conservatives are returned to power at the next election.Benefits for the young and people of working age would be considered before any cuts to pensioner benefits such as free bus passes and television licences, the chancellor said. The move forms part of Osborne's pledge to run a budget surplus by 2019 if the Conservatives are returned to power at the next election.
The Treasury currently spends £1.9bn on housing benefit for 350,000 people under the age of 25, of whom around half have dependent children. In a speech in the Midlands on Monday morning, Osborne said there was still a long way to go before recovery as he set out a five-point plan to help the economy. "We've got to make more cuts – £17bn this coming year, £20bn next year, and over £25bn further across the two years after. That's more than £60bn in total." The Treasury spends £1.9bn on housing benefit for 350,000 people under the age of 25, of whom about half have dependent children. In a speech in the Midlands on Monday morning, Osborne said there was still a long way to go before recovery as he set out a five-point plan to help the economy. "We've got to make more cuts – £17bn this coming year, £20bn next year, and over £25bn further across the two years after. That's more than £60bn in total."
Osborne built on previous warnings about the need to intensify austerity, on top of billions of pounds of existing cuts, even though the economy appears to be turning a corner. In the speech, he said the job of fixing the economy was "not even half done". "That's why 2014 is the year of hard truths," he said.Osborne built on previous warnings about the need to intensify austerity, on top of billions of pounds of existing cuts, even though the economy appears to be turning a corner. In the speech, he said the job of fixing the economy was "not even half done". "That's why 2014 is the year of hard truths," he said.
Clegg has agreed spending plans with Osborne for the first year after the general election and a target to eliminate the budget structural deficit by 2017-18. But in a taste of one of the main election battles – over the means by which the deficit should be cut – Clegg said it was wrong of the chancellor only to highlight the welfare bill for cuts, although Osborne did not say that the proposed £25bn savings would all come from welfare savings. Clegg also said the chancellor was wrong to play down the need for further tax rises.Clegg has agreed spending plans with Osborne for the first year after the general election and a target to eliminate the budget structural deficit by 2017-18. But in a taste of one of the main election battles – over the means by which the deficit should be cut – Clegg said it was wrong of the chancellor only to highlight the welfare bill for cuts, although Osborne did not say that the proposed £25bn savings would all come from welfare savings. Clegg also said the chancellor was wrong to play down the need for further tax rises.
The deputy prime minister said: "Where the British people want a future British government to be is in the liberal centre ground where you say, yes of course, you need to finish the job of clearing the decks fiscally, of completing the job of filling the black hole – the so-called structural deficit – by the financial year 2017-18. To that extent the Liberal Democrats and the Conservatives are co-authors of fiscal responsibility in setting out that timetable and that plan.The deputy prime minister said: "Where the British people want a future British government to be is in the liberal centre ground where you say, yes of course, you need to finish the job of clearing the decks fiscally, of completing the job of filling the black hole – the so-called structural deficit – by the financial year 2017-18. To that extent the Liberal Democrats and the Conservatives are co-authors of fiscal responsibility in setting out that timetable and that plan.
"But – here is the big difference with the Conservatives – we believe the way in which you finish that job should be done fairly."But – here is the big difference with the Conservatives – we believe the way in which you finish that job should be done fairly.
"There are different ways in which you do that. There is Whitehall waste in spending which you continue to bear down on. There is of course further welfare reform, which will always be driven by the need to sharpen the incentives to work. And, yes, there is asking people with the broadest shoulders to make a contribution. That is why I remain perplexed that the Conservatives still refuse to countenance any change in the tax system to ask people occupying very high value properties to make a small, additional contribution to this effort.""There are different ways in which you do that. There is Whitehall waste in spending which you continue to bear down on. There is of course further welfare reform, which will always be driven by the need to sharpen the incentives to work. And, yes, there is asking people with the broadest shoulders to make a contribution. That is why I remain perplexed that the Conservatives still refuse to countenance any change in the tax system to ask people occupying very high value properties to make a small, additional contribution to this effort."
Clegg's remarks show that the Liberal Democrat manifesto for the next election will include a "mansion tax" on properties worth more than £2m. But the Lib Dems will also include the "triple lock" on pensions – increasing them annually in line with inflation, average earnings or 2.5%, whichever is highest. David Cameron said on Sunday that the Tories would guarantee the triple lock, one of the main features of the Lib Dem manifesto in 2010, until 2020.Clegg's remarks show that the Liberal Democrat manifesto for the next election will include a "mansion tax" on properties worth more than £2m. But the Lib Dems will also include the "triple lock" on pensions – increasing them annually in line with inflation, average earnings or 2.5%, whichever is highest. David Cameron said on Sunday that the Tories would guarantee the triple lock, one of the main features of the Lib Dem manifesto in 2010, until 2020.
The chancellor's negative outlook forms part of his argument that people should vote Conservative to let the party "finish the job", rather than handing control back to Labour.The chancellor's negative outlook forms part of his argument that people should vote Conservative to let the party "finish the job", rather than handing control back to Labour.
However, Labour said more cuts were needed after 2015 because Osborne's "failure on growth and living standards since 2010 has led to his failure to balance the books".However, Labour said more cuts were needed after 2015 because Osborne's "failure on growth and living standards since 2010 has led to his failure to balance the books".
Ed Balls, the shadow chancellor, said the social security bill is rising under Osborne, but the best way to get it down for the long-term is to get people into work and build more homes. Ed Balls, the shadow chancellor, said the social security bill was rising under Osborne, but the best way to get it down for the long-term is to get people into work and build more homes.
"The Tories should back our compulsory jobs guarantee for young people and the long-term unemployed. And in tough times it cannot be a priority to continue paying the winter fuel allowance to the richest five per cent of pensioners," he said."The Tories should back our compulsory jobs guarantee for young people and the long-term unemployed. And in tough times it cannot be a priority to continue paying the winter fuel allowance to the richest five per cent of pensioners," he said.
"What we need is Labour's plan to earn our way to higher living standards for all, tackle the cost-of-living crisis and get the deficit down in a fairer way.""What we need is Labour's plan to earn our way to higher living standards for all, tackle the cost-of-living crisis and get the deficit down in a fairer way."
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