September 22, 2010 / 2:14 PM / 9 years ago

Alexander sees significant further welfare cuts

LIVERPOOL, England (Reuters) - The government will make significant cuts to its welfare budget on top of the 11 billion pounds already planned, Treasury Chief Secretary Danny Alexander said on Wednesday.

Treasury Chief Secretary Danny Alexander during an interview with Reuters at the Liberal Democrat Party's conference in Liverpool,September 22, 2010. REUTERS/Phil Noble

Alexander has a key role in drawing up the coalition government’s detailed plans to cut a record peacetime budget deficit of 11 percent of gross domestic product to almost nothing in five years. He did not put a figure on the scale of the additional cuts.

A spending review to be unveiled in October will reveal where the axe will fall, with most departments facing cuts of around 25 percent in their budget.

In an interview with Reuters at the Liberal Democrat party conference in Liverpool, Alexander said it was essential to reduce the annual 192 billion pound welfare bill as any savings would ease the pressure for cuts elsewhere.

“There are significant areas where we can make significant savings in the welfare budget, and that will certainly be an important part of the overall approach to public expenditure that we take on October 20.

“It’s an area that I think will deliver significant additional savings over and above what we have already announced in the budget,” said Alexander, a Liberal Democrat and Chief Secretary to the Treasury in the Conservative/Liberal Democrat coalition government.

Chancellor George Osborne said in his budget in June that welfare spending would fall by 11 billion pounds by 2014/15.

Earlier this month Osborne told the BBC he would unveil “several billion pounds” of extra welfare cuts. The BBC said it would amount to a further 4 billion pounds, but Osborne has not confirmed or denied that figure.

The Liberal Democrats have seen their popularity plunge since joining the coalition with the larger Conservatives after a general election in May.

Analysts forecast their poll ratings will fall further once the public appreciate the scale of the spending cuts to be announced in October, putting pressure on the party and threatening the unity of the coalition.

Alexander, however, said he believed the public accepted the need for reductions in state spending.

“I think there is a real understanding amongst the people of this country that these are things we have to do, that the country was left in an economic mess by the previous government and that we have to clean up that mess.”

Trade unions say the deficit plan is too severe and have called on the coalition to think again, threatening large scale strikes against the cuts.

But Alexander said the coalition was determined to carry out its deficit reduction plans over the course of the parliament, which is due to have a fixed five-year term.

“The Liberal Democrats and the coalition are totally committed to seeing this process through over the next five years,” he said.

“We have to take these actions to give our country the ability to go forward with strength and growth and prosperity in the future. These decisions are unavoidable.”

Editing by Susan Fenton

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