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Cameron giveaway for savers 'would put Crossrail at risk'
Joe Murphy, Political Editor06.01.09
A FIERCE spending row erupted today in the wake of David Cameron's pledge to cut taxes on savings.
Labour claimed a slew of projects could be jeopardised by the Tory vow to slash Whitehall costs to pay for the giveaway.
No10 wheeled out its big guns to try to repel the attempt to seize the economic agenda from the Prime Minister.
Transport Secretary Geoff Hoon led the charge, claiming that if the cuts were applied to all departments equally it would mean £840million off future transport plans, enough to endanger the £16billion Crossrail link between the east and west of the capital. MrHoon told the Evening Standard: "When London and the economy need a boost, the Conservatives want to make cuts that would threaten the future of Crossrail.
"As Boris Johnson has said, sustained investment in London's infrastructure, particularly transport, is vital."
Shadow chancellor George Osborne said Labour's claims were "pathetic", adding: "Labour must be the only people in Britain to think that at this difficult time we should not be reducing wasteful spending in Whitehall." However, the Tories are refusing to say where they would find savings.
The dispute is a foretaste of the likely battle lines of the next election. It flared after Mr Cameron promised £4.5 billion of tax cuts to savers and pensioners, funded by a £5 billion reduction in the planned growth in spending. His announcement opened a clear gap between the two parties, with Labour wedded to the Prime Minister's strategy of borrowing and spending.
This morning, the Tory leader sent his shadow cabinet to tour the major cities of Britain to sell the bold initiative to voters.
But Labour issued a document claiming that lower spending growth would mean £800 million less for housing, £240million less for local councils, £160 million out of planned spending on police and counter-terrorism and £300million less for children's services such as the Sure Start centres.
Reader views (12)
Tax cuts on interest only benefit those who have savings to gain interest on, whereas the VAT cut benefits those who pay VAT, i.e. EVERYONE. Therefore it's a much fairer way of using any money available for an economic stimulus.
- Stewart Stacey, Birmingham, England
Crossrail is a £16billion (yes billion) taxpayer funded grand scheme to benefit developers and the City even thought they pay the least conribution for a scheme not wanted in London. Crossrail mimicks the central line and benefis the City and Canary Wharf who paid the least. Crossrail removes the chance of the Northern Line upgrade and results in increased fares. Crossrail is a laughable transport solution that serves big developers and has been hyped up. Crossrail should not be propped up by taxpayers money at any time let alone when real human beings in London and elsewhere in the UK are suffering directly because of politicians that serve the City and the banks rather than the people that elected them. Wasteful schemes while engineered by Ken Livingstone, Brown and his poodle Blair have been largely followed by spineless Cameron and Boris. It is no longer a joke and real alternative to the existing stupid politicians is really needed.
- Vk, London, UK
NeuLiebour scaremongering. There are no end of loony left projects that can be binned and excessive, wasteful spending that can be cut to pay for tax cuts far beyond those proposed by Cameron.
What we really need is a governing party with some backbone that is not tied to the dogmatic idiosyncracies of the Islington dinner set.
- Keith Lonsdale, Doncaster
The point for savers is that reduced income from their savings results in reduced expenditure.
If the Tax is removed on savings Interest (which should be increased), then this would be a far bigger incentive to spend the extra, rather than a miserable 2.5% reduction in VAT
- Cap, london
Buff Hoon surely has more than the "missing" £840 million kicking about, after Manchester told him exactly where to stuff his congestion charge - he said "no C-charge, no £1.6 billion investment/bribe for trams and stuff".
Feeble lies from Labour, as usual.
How about £250k-a-time less for Cabinet Meetings in Labour marginals outside London?
- Andrew, London
We should make work what we already have first, all this corssrail is fancy and expensive thinking and not needed if the other transport would work properly. Expanding beforehand is no use.
- Jacqueline, Hampstead, London
So let me see if I understand: £12 billion blown on VAT cuts: no impact on public spending. £4 billion reduced expenditure: London descends into chaos.
Ummm... no.
- Jonathan Berry, London UK
You could save many billions by scrapping the following projects that nobody except this government wants or needs.
Pointless and damaging diversity industry
Ditto the government translation services
DNA database
ID database
Telecomms snooping database
- Ian, London
When people call for tax cuts paid for by cutting public spending it is always someone elses public spending that needs to be cut. Cutting Tax dodges for Public Schools is not acceptable and Clarkson would not want the motorways to be pitted with potholes. More police are wanted to combat knife crime and more cleaners in hospital to defeat MSRA. But give us Tax cuts instead.
- T Oates, Farnham England
Osborne is no match for the Labour thugs. He has to be replaced -- even though he and Cameron were Eton buddies and are now close friends. Hague is the only Tory front bencher able to stand up to Gordon's thugs, and give back as good as (or better than) he gets. At this critical economic time, Hague should be made Shadow Chancellor. If Cameron really wants to be Prime Minister, he should move Osborne to another post and give finance to Hague.
- Phil Jones, London UK
Surely large scale cutbacks in the government, and using the 'savings' to promote people taking money out of the economy to save, would be a disaster. Less government spending and more money being 'saved' would result in a shrinking of the economy, and deflationary depression. Has Cameron consulted any economists about this?
- John, Banbury
Labour's claims here are a loads of rubbish. It would be possible for the government to save tens of billions of our money by cancelling the ID cards programme, the failing new NHS computer system, uneccessary goverment advertising and the proposed extra Heathrow runway.
All of that money could go into tax cuts. There are so many useless Labour initiatives that it would be easy to cut the flab from government ot fund tax cuts.
- Liz, London
