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Monday
Sep142009

All Public Spending Is Under Review, Says Mandelson

Business secretary Lord Mandelson says the government is looking at every spending commitment to reduce the massive deficit from bailing out the banks and economy during the recession.

No government project is safe as Lord Mandelson explained money would be switched from low to high priority spending and controversial multimillion projects like introducing ID cards and the new Trident missile system may be shelved. The government is aiming to reduce the spending deficit from £175 billion to about £87.5 billion in four years.

The government is concerned opposition parties are expected to make the handling of the recession and public spending big issues for the forthcoming general election.

"There are various ways to go about accepting that we are entering a period of public spending restraint, in which we've got to be wise spenders, not big spenders.,” said Lord Mandelson

"I simply don't accept, as the Tories and some of their friends in the media would have us believe, that the Labour approach to this boils down to the same thing. I believe there's a real choice." 

"They believe in smaller government and a smaller state. That's why they are rather salivating about wielding the axe." 

The government would be "stepping up efficiency savings", he said. 

The Lord Mandelson’s comments came as the TUC's annual congress starts in Liverpool, with unions warning that cuts could mean mass public sector redundancies. 

Traditionally, Labour governments have received extensive financial and political support from the unions at election time, but threats to jobs and services may undermine this relationship.

Lord Mandelson avoided the word "cuts" to describe the government's approach to public spending. 

"It will mean switching resources from lower to higher priority areas which do meet the new challenges. I can't be clearer than that,” he said. "Everything is going to have to be examined.”

Asked about whether Trident and ID cards would be cancelled, Lord Mandelson said it was not certain "that the assumptions that some people are making about that those big projects would offer would actually come about in reality. 

"I've seen some rather different figures related to the savings that would arise from cancelling those projects which don't make the contribution that some people imagine." 

 



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