Spending cuts ‘draconian’, says Cable

Sir Vince Cable

Planned government spending cuts could combine with a weak global economy to create a “lethal combination” of factors, hitting UK growth, says former Business Secretary Sir Vince Cable.

Speaking to the BBC, Sir Vince called the plans “draconian”, accusing George Osborne of “overreaching” himself.

He said the savings targets were “politically motivated”.

Mr Osborne says the cuts are designed to improve public finances, making the UK “more resilient, safe and secure”.

Government departments including Transport and Local Government have provisionally agreed to cut their spending by 30% on average over the next four years.

Negotiations are continuing with other departments to deliver savings of between 25% and 40% by the end of the current Parliament.

‘Ridiculous and damaging’

Sir Vince presided over 25% cuts in the Department for Business, Innovation & Skills.

But in an interview ahead of the government’s Spending Review and Autumn Statement, the former Liberal Democrat MP said he was “even more concerned about the damage that will be done” than when he was in the coalition.

“The cuts are much, much deeper than we envisaged,” he told BBC Radio 5 live’s Wake Up to Money.

“When we were in the coalition, we had a responsible, measured approach to cutting the deficit.

“But now the amount of deficit reduction is twice as big as we considered in the coalition to be necessary for the economy.”

Sir Vince also described the chancellor’s approach as “draconian”.

“It’s like saying that somebody who is overweight gets down to a normal weight and then you say well, continue your slimming until you are half your normal weight.

“It gets to a point of being ridiculous and damaging,” he added.

Pressure ‘on poor’

Prime Minister David Cameron says the Spending Review is about putting the security of UK families first.

“By making the further savings we need over the course of this parliament, we can prioritise what matters for working families – schools, the NHS and our national security,” Mr Cameron told the recent CBI annual conference.

However, Sir Vince claims the motivation for the planned savings is instead “predominately political”.

“They are clearly determined to push their agenda, which is cutting back the state,” he said.

He also thinks the cuts are being loaded on the poor.

“All of the pressure is going on the working poor because of the cuts to tax credits.

“The problem with the Conservative government is that they will not do anything that disadvantages older people, particularly well-off older people – people of my generation.”

Asked how he would balance the books, Sir Vince said that the government should ask the wealthiest pensioners and property-owners to pay more and should consider raising the rate of corporation tax.

Sir Vince now says he is worried about the consequences of the forthcoming Spending Review.

“You have monetary fiscal policy and overseas demand all weak.

“That is creating a lethal combination of negative factors that could drag the economy back down.

“There is a real danger of pushing the economy down, rather than maintaining the growth which we came out of the coalition with.”

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