George Osborne has revealed he needs to make cuts to government spending equating to 50p in every £100 by 2020, adding that this was “not a huge amount in the scheme of things”.
The chancellor insisted the government must “act now so we don’t pay later” in an apparent move to brace the British public for a bleak budget on Wednesday.
Speaking on BBC1’s Andrew Marr Show, Osborne warned the world was a more uncertain place than at “any time since the financial crisis”.
“That’s why I need to find additional savings equivalent to 50p in every £100 the government spends by the end of the decade because we have got to live within our means to stay secure, and that’s the way we make Britain fit for the future,” Osborne said.
Asked about claims the government is facing an £18bn black hole in its finances, he replied: “Eighteen billion pounds is the sum of money that has been revised off our nominal GDP. In other words, that’s a number out there last year because inflation was lower.
“It’s a real number in the sense that all around the world every western country, and indeed in big emerging countries like China, Brazil, Russia, people are looking at economic prospects and thinking they are not as rosy as they were just a few months ago.”
According to the most recent public sector finance figures from the Office for National Statistics, central government expenditure for the financial year to date, April 2015 to January 2016, was £574bn. If related to that figure, the 0.5% savings Osborne alluded to would equate to around £2.9bn.
His comments came at the same time as an equally ominous editorial written by the chancellor was published in the Sun on Sunday, in which Osborne says “the hopes of a stronger global recovery have evaporated”.
Pressed by Marr on whether he would raise the level of fuel duty, Osborne would not be drawn but made vague allusions to his party’s manifesto commitments.
“I’ll set out the decisions on duties like fuel duties in the budget ... I’ll set out the tax rates in the budget,” he said. “On fuel duty we had a manifesto commitment there and we’ve pencilled in fuel duty plans going forward.
“What I would say is every time we can help our economy be more competitive, we do: that’s why we’ve cut business taxes, that’s why we’ve helped working people by raising the personal allowance.”
This article was written by Jamie Grierson, for theguardian.com on Sunday 13th March 2016 11.33 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010