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LibDems' Cable says "painful" cuts needed
LONDON (Reuters) - Government borrowing is so high that "painful and difficult" cuts are needed over the next five years to restore stability to the economy, Liberal Democrat shadow chancellor Vince Cable said on Tuesday.
There should be no "ring-fenced" areas of spending and big budgets in health, welfare, defence and education must be tackled, he said.
His proposals, set out in a document for the Reform think tank, go further than existing Liberal Democrat policy and are more specific than any measures raised by Labour or the Conservatives.
"The time for generalities is over," said Cable, a former chief economist of oil giant Shell whose political star has risen in the fall-out from the credit crunch.
"Instead, we need serious proposals for cutting public spending and tackling the UK's budget deficit."
His proposed cutbacks include:
-- Ditching a 5 billion pound upgrade for the Eurofighter jet, the 22 billion pound A400M transport plane, and the successor to the Trident nuclear submarine, which would cost 70 billion pounds over 25 years
-- Zero growth overall for public sector pay to save 2.4 billion pounds a year, a 25 percent reduction in the total pay bill of staff earning over 100,000 pounds and a salary freeze for the civil service
-- Raising employee contributions to public sector pensions and having later retirement ages
-- Scrapping education quangos to save 600 million pounds a year
-- Removing strategic health authorities to save the National Health Service 200 million pounds a year.
"We need to debate when, how and where the cuts will come," said Cable.
"Undoubtedly more are required to meet the exacting fiscal disciplines but asking the British public for their vote at the next election means being upfront from the outset about what government should and should not be spending its money on."
Restoring order to public finances is emerging as the central issue in the run-up to the election.
Public sector net debt is more than 56 percent of GDP, the highest since records began in 1974.
(Reporting by Tim Castle; Editing by Steve Addison)
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