The UK must “stay the course” on efforts to reduce the deficit but up to three-quarters of the austerity measures necessary have already been set out, Danny Alexander has claimed.
The Chief Secretary to the Treasury, speaking on the eve of George Osborne’s setpiece Autumn Statement today, said “several tens of billions” more savings were needed to eradicate the deficit by 2017-18 but it was a “smallish” effort compared to measures already announced.
The run-up to the Autumn Statement has been dominated by forecasts that the government will fail to meet its borrowing targets, in part because of lower-than-expected revenues from tax.
Mr Alexander, the Chancellor’s Liberal Democrat deputy in the Treasury, said it was essential to “finish the job” of repairing the country’s finances after the general election.
Speaking at the Institute of Civil Engineers in Westminster at the launch of the National Infrastructure Plan, containing details of £466 billion of privately and publicly-funded schemes, Mr Alexander said the investment would not be possible without keeping control of the nation’s finances.
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He said: “In this parliament we have made decisions on public expenditure right the way through to the end of the year 2015-16. That’s overall decisions on deficit reduction that amount to about £120bn, so it’s a significant effort we are making to try to get the country back on the right track.”
He warned: “There will be further work to be done on completing the job, finishing the job of eliminating the structural deficit. That will be several tens of billions of pounds more.
“But in the context of what we have done so far this parliament, it is a further effort but it is a smallish – it’s maybe another third or so. A quarter of that effort that needs to be carried on in the years up to 2017-18 which is when we have said we want to eliminate the structural deficit by.
“In a sense, as a country we have to finish that job. It’s the work that is underpinning the strong economic recovery we are seeing. We are seeing the strongest economic recovery in the UK anywhere in the European Union. So we have to stay that course. To deviate from it would be to undermine one of the foundations of the economic recovery that we have been seeing.”
Mr Alexander’s assessment of the scale of the effort needed in the next parliament was in marked contrast to the independent Institute for Fiscal Studies, which has estimated that spending cuts after 2015 will be of a similar scale to those achieved prior to the election.
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