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British PM Brown admits need for spending cuts

Last Updated: Wednesday, September 16, 2009 - 11:36

Liverpool: British Prime Minister Gordon Brown conceded he would have to cut spending in order to tackle Britain`s soaring debt, but promised voters on Tuesday "vital frontline" services would not be affected.

Setting out his position after weeks of speculation, with his Labour party struggling to define a policy course ahead of elections due by June next year, Brown said costs had to be cut even if that meant difficult decisions.
"Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets," the Prime Minister said in a speech to union leaders. It was the first time he has acknowledged the need for spending cuts.

"But when our plans are published in the coming months, people will see that Labour will not support cuts in the vital frontline services on which people depend."

An aide to Brown said details would be published at the time of the pre-budget report, usually held in November. One of the cuts -- of up to 500 million pounds -- will be to the civil service, Brown said in his speech.

Apart from that detail, Labour has given no specifics on where cuts will come. It has also not defined "frontline services," although that is taken to mean health and education. Cuts are expected to be made to defence spending, however.

Brown and Labour, in power for 12 years, are under pressure to trim a budget deficit that is forecast to double to around 12 percent of GDP this year.

The Conservatives, who are widely expected to win the next election, have already said cuts will have to be made to bring the deficit and debt levels down.
Bank of England Governor Mervyn King said on Tuesday a credible plan was needed to make sure public finances were on a sound footing, but added there was still time to do this.

While Brown said spending needed adjusting, he said it was not a foregone conclusion, saying that if economic growth picked up towards the end of this year and early next, it could help.

Ahead of Brown`s speech the Conservatives accused the government of capitulation, saying it was about to go back on pledges not to cut spending. Labour is traditionally associated with higher spending on social programmes.

Labour says any economies to rein in a record budget deficit have to be carefully targeted. They contrast their approach with savage cuts in services they say the Conservatives plan.

Bureau Report

First Published: Wednesday, September 16, 2009 - 11:36
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