GORDON Brown will this week unveil plans to cut billions of pounds of government spending in a desperate bid to stave off tax rises ahead of the next General Election.
Brown promises cuts - but it's not enough
Posted by Ian at 9 35 PM on Saturday, November 28
But behind the scenes he is fighting a furious battle against Chancellor Alistair Darling who has told him Labour MUST raise taxes ahead of the General Election to deal with the current financial crisis.
Last night the Tories revealed a leaked copy of “The Case for Smarter Government”, prepared by Treasury Chief Secretary Liam Byrne.
The document, to be published on Tuesday, unveils plans to shave £9 billion a year from the cost of central government.
In the December 9 Pre Budget Report, the Chancellor is also determined to unveil further spending cuts to almost every government department.
He is also expected to raise VAT back to its 17.5% level and impose large tax increases on alcohol, cigarettes and other areas.
Gordon Brown has agreed these rises but is now fiercely opposing cuts to spending across departments and tax rises.
Treasury officials have been working on plans to raise VAT to 20%, lower the threshold for the top rate of tax and impose a one of tax on bank profits.
They also plan to abandon some expensive government spending plans and cut department budgets.
But Downing Street want to push up spending in vote-winning departments like Health and Education - a move that could spark a war on Whitehall.
Last night a senior Treasury source told the News of the World: “If we go out there and say we can carry on spending at the current level and not raise taxes we will be laughed out of office.
“Downing Street and others agree there needs to be some bad news in the Pre-Budget Report but so far they have been unwilling to grasp the whole picture.”
However, today’s leaked copy of planned government cuts do show that radical pruning is planned.
Up to 70,000 London-based civil servants will be moved out of Whitehall to “regional clusters” across the country.
The only civil servants to stay in London will be the ones who work directly for government Ministers.
Some government departments - including the Department for International Development and the Foreign Office - would be merged.
It states: “bringing procurement and back-office standards up to the very best could release £9bn per annum by 2013/14”
The report admits that the civil service is full of waste, duplication and red tape.
It says: “Over the past decade, the private sector has consistently been ahead of the public sector on driving down back office costs, innovating to make the most of new technology and using new management practices to drive out efficiency.”
The document admits that the size of the Senior Civil Service has gone up since 1997: “There are now 4,300 Senior Civil Servants compared to 3,100 in the mid 1990s.”
Treasury officials will be furious that the Tories have managed to obtain such a sensitive document - it was only approved by the Cabinet on Wednesday.
Shadow Chief Secretary to the Treasury Philip Hammond said: “This leaked document reveals a desperate last minute attempt to copy ideas the Conservatives have been talking about for months on transparency, decentralisation and improving public services.
“But the details reveal that Labour have been going in the wrong direction over the last twelve years, with the document cataloguing the extent of their failure in Government.
"This document has been leaked to us because people in Government are concerned by the hollowness of this empty last-minute exercise.
“This is not a serious piece of work, but an exercise in political posturing, with the blanks due to be filled in to fit Labour's story on the day.
“We are putting it in the public domain ahead of the PBR because we believe it's important that people see just how bad things are."