More cuts mayhave to be made, warn experts

THE deep cuts to spending will hit the quantity and quality of public services, experts warned last night as unions protested amid the threat of major job losses.

The respected Institute for Fiscal Studies (IFS) said that the measures represented the deepest cuts since the 1970s, but warned that it was still “quite possible” that the Chancellor would have to make further spending cuts or put tax in order to meet his target for tackling the deficit.

“The deep cuts to spending announced in the spending review will reduce the quantity and quality of some public services,” said acting director Carl Emmerson. “Should this deterioration prove too great for the Government’s liking then the Chancellor might wish to top up his spending plans.”

In a speech lasting more than an hour, George Osborne said that he had acted to restore “sanity to our public finances” and deal “decisively” with Britain’s record peacetime deficit – and sought to embarrass Labour by revealing the average 19 per cent budget cuts was lower than the 20 per cent Labour had planned.

But in his first set-piece occasion as Shadow Chancellor, Alan Johnson said that the Government’s “rush” to cut the deficit was a “recipe for unemployment”.

“Today’s reckless gamble with people’s livelihoods runs the risk of stifling the fragile recovery,” said the Hull West and Hessle MP. “We believe we can and should sustain a more gradual reduction, securing growth.”

Labour attacked the Spending Review as unfair – hitting families and women the hardest – saying the “squeezed middle” would pay twice as much as the banks, promises on the NHS had been broken and police funding meant taking risks with crime and public safety.

In a letter to activists, Deputy Prime Minister Nick Clegg said the party’s “values and priorities” were at the heart of the spending review.

“Liberal Democrat ministers have been involved every step of the way,” he wrote. “Our values and priorities are written through the review, like the message in a stick of rock. We have had to make some very difficult choices. But the review is one that promotes fairness, underpins growth, reduces carbon emissions and localises power.”

The Lib Dems’ deputy leader Simon Hughes also said the coalition was taking “many important decisions” to make spending cuts as “fair as possible”.

But Mark Serwotka, general secretary of the Public and commercial Services union, said: “This is the largest cut in public service jobs since the Second World War. Civil servants will lose their jobs, have their redundancy payments cut by two thirds with little prospect of securing employment in the private sector as the economy dips again.

“The brunt of this recession is falling on the shoulders of public sector workers and the people they serve. There is no way that this can be claimed to be fair. People will not stand by and be trampled on by this Government. Unions and community organisations will inevitably work together to co-ordinate our resistance.”

Opinion among experts and think-tanks was predictably mixed. The CBI said the cuts were “painful but essential” but Ed Cox, director of ippr north, said: “The severity and speed of the cuts threatens the recovery in Northern England which was hardest hit by the recession and is still struggling to recover.”

Gary Williamson, chief executive of Leeds, York and North Yorkshire Chamber of Commerce, said: “The next step now must be for the Government to develop a clear and achievable strategy for growth, which has private sector success and job creation at its heart.”