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Gordon Brown is banking on a surprise saving on welfare bills to help pay for a multi-billion-pound splurge before the election.
A senior government source has told the Standard that unemployment is now expected to rise less severely over the next few years than predicted in the official forecast contained in the Budget last spring. The difference between the two forecasts could be worth several billion pounds to the Treasury, by reducing the amount that has to be set aside to support families hit by the recession.
There have been questions over how the Prime Minister would pay for the spree of announcements in his conference speech. The Institute for Fiscal Studies calculated cuts of 18 per cent would be needed in many Whitehall budgets to meet his promises for extra spending on the minimum wage, child tax credits, elderly care, hospitals, schools and police.
Reports today said the Government wants a pay freeze for senior public servants such as judges and NHS managers to squeeze costs, plus efficiency cuts and asset sales of £75 billion.
Most public sector workers will only get minimal rises and big-ticket defence orders could be scrapped.
Unemployment in the UK is 2.5 million and expected to rise above three million. In his Budget, Chancellor Alistair Darling warned it would take a number of years to come down. Now, however, forecasters say that the recession is less deep than they had feared.
Mr Darling will reveal the size of the gap in his pre-Budget report, due next month, at the same time as he explains how he aims to halve the £175 billion deficit over four years.
Mr Brown today said Labour can win the next election because the public would gain confidence that the Government had handled the recession well.
I think people know that the action we are taking on the recession is still to yield all the results we want but it will take us through the recession, he told local radio.
The International Monetary Fund today predicted the UK economy will expand by 0.9 per cent next year well ahead of the 0.2 per cent growth it estimated three months ago.
Reader views (8)
Sounds like slash and burn to ensure the Tories are left with insurmountable debt problems. The consequences for the nation of such a debt mountain is horrendous and the Tories will have to inflict the pain... Labour are trying to ensure the Tories are a one-term government. Labour are despicable and only have their own interests at heart.
- Ab, London
This sounds like the proverbial wife telling hubby she saved so much by buying three pairs of these new dancing shoes as they were on 'special offer'.
- Threaded, Roskilde, Denmark
Isn't it just a little bit suspicious that this 'spare' cash has been found now that they're talking about the election? Isn't it entirely unsurprising that GB and crew immediately set out to buy votes with their largess? Isn't it entirely predictable that they forcast that everything will be well AFTER the election (that serves two puposes - 1st, it's a promise that they don't have to prove before it is used to con people into voting for them, and 2nd, a stick to beat their successors with, passing the blame, if it doesn't come true as it wouldn't have under them anyway - oh, and a 3rd - it gives them a smoke and mirrors toe-hold in a debate about who was initially responsible for any recovery from Labour's disasters effected by the in-coming Tories (cue Keith Price et al)).
- Rogan, Irving
He seems to be desparate to hang on to his job no doubt so he and his fellow crooks can carry on milking the system for as long as they can get away with it. Anything Labour have promised have been lies so why should they be any different now?
- Mike, London England and once GREAT Britain
Stop all the bonus packages for all government employees forthwith, that all have 1 contract of employment only.
- William, Hay~Heath UK
Reuben you are so right, anybody else would save the money but he is desperate to hang on and to hell with the country.
- Albert Hall, Kettering
Let's take McMitty's freebee handouts and thank him via a collective electorate size twelve kick up the jacksy all the way back to gloomy Fife.
GET THIS NEW LABOUR BUNCH OF CHANCERS, CHARLATANS AND HALFWITS OUT! OUT! OUT!
- Ted, London
Joe Public is NOT taking a blind bit of notice of all this spin and waffle.
LABOUR IS DOOMED.
GORMLESS BROWN IS FINISHED.
HOW CAN A THIRD WORLD BANANA REPUBLIC POLICE STATE CALLED THE UK SAVE MONEY WHEN GORMLESS BROWN IS HAVING TO BORROW £500,000,000.00 EVERY DAY JUST TO KEEP AFLOAT?
- Reuben Camara, Morecambe Compound, EUSSR
