Spending cuts could lead to 'worst strikes for decades'

Published on Sunday 4 July 2010 19:02

THE coalition government yesterday defended proposals to slash some departmental budgets by up to 40 per cent amid threats from the unions of years of industrial unrest and resistance.

• Transport Secretary Philip Hammond

Tory Transport Secretary Philip Hammond admitted that if unprotected Whitehall departments faced an average of 25 per cent in cuts then some would have to suffer far more than originally.

However, Mark Serwotka, head of the Public and Commercial Services Union, whose 300,000 members include many civil servants, said such cuts could lead to the worst industrial unrest for years.

"They will face resistance the like of which we haven't seen in this country for decades," he said.

The clash came as the Scottish Government denied speculation that it is preparing to make an astonishing 4.4 billion of savings in the next budget, 15 per cent of the current spending of 30.4bn.

The potential 40 per cent demanded by Lib Dem Chief Secretary to the Treasury Danny Alexander of cuts to Whitehall departments exceeded the worst-case scenario outlined by the leading economic independent think tank, the Institute for Fiscal Studies, which had suggested that budgets might be slashed by up to one third.

Only health and international aid would be protected from cuts, with education and defence also seeing lower reductions.

However, Mr Hammond, a former opposition Treasury spokesman whose transport department may see some of the harshest reductions, said departments were unlikely to see full 40 per cent cuts.

"What we are not going to do is just slice 25 per cent off every department," he said. "We will look at the menu of options for each department. I don't expect any departments will see a 40 per cent cut, but some departments may see cuts a bit higher than 25 per cent."

Former Labour minister Ed Balls, campaigning to become party leader, said the cuts would "send a chill down the spines of millions".

"These plans risk a double-dip recession," he said.

Questions remain over what will happen to the Scottish budget with the SNP administration in Holyrood already under fire for delaying savings and storing them up for next year.

Last night Scottish ministers poured cold water on claims that they might need to find 4.4bn of savings next year alone, almost three times the previous estimate of 1.5bn.

But a spokesman for finance secretary John Swinney said: "There is no doubt that Scotland's budget is going to suffer significant Westminster cuts over the next few years as a consequence of Labour's extraordinary mismanagement of UK finances.