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Government to announce 30% cuts to four departments


Chancellor George Osborne is set to announce spending cuts of an average of 30% for four government departments.

The cuts will be introduced over the next four years and are set to affect the transport, local government and environment departments. Additionally, the treasury has also agreed to reduce it’s spending.

Each department has agreed to cut day-to-day spending by 8% each year, through a combination of ‘efficiency savings’ and switching to lower cost programmes.

The government is asking the majority of departments to cut spending by up to 40%, whilst ring-fencing the budgets for other departments such as health and overseas aid, whilst pledging not to reduce investment in infrastructure or increase income tax, VAT or national insurance.

Mr Osborne is expected to say that plans to achieve a budget surplus by the end of this parliament will make the UK economy “more resilient, safe and secure”.
The Prime Minister is set to address business lobbying group, CBI, later today. It is expected that he will push a similar message to the chancellor, by stating that the cuts will protect the security of UK families.

Welfare cuts

The chancellor is hoping to cut £12bn from the welfare budget, but recently suffered a major setback when the House of Lords rejected his proposed reforms.

An agreement has therefore not yet been made with the Department for Work and Pensions to secure the cuts that the government are hoping to make.

It is thought that Mr Osborne is now hoping to reduce the generosity of the Universal Credits system to make £4bn of savings, but he has been met with resistance from the Work and Pensions Secretary, Iain Duncan Smith.

Universal Credits are currently being introduced as a replacement for six existing benefits, which include jobseekers allowance, child tax credits and working tax credits, among others.

However, it has been claimed that the treasury is exploring ways to increase penalties for claimants who take on extra work, prompting speculation that Iain Duncan Smith could resign in protest.

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