Kennedy: Scrap thirty ministers to save £5bn

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Charles Kennedy pledged to scrap eight government departments yesterday - including the Office of the Deputy Prime Minister, John Prescott - and to abolish the jobs of 30 ministers in a massive overhaul of government.

The Liberal Democrat leader set out his programme to "slim down" and restructure Whitehall, which he said would lead to savings of £5bn a year.

The radical proposals to curb the "nanny state" include scrapping the Department for Culture, Media and Sport, and the offices of Scotland and Wales. He said the Department of Trade and Industry should also be abolished and replaced with a new Department of Consumer Protection and Enterprise. Mr Kennedy said he wanted to see cuts in government subsidies to industry.

"It's time to sound the death knell for the old departments set up to defend the interests of producers - departments which have only succeeded in presiding over the decline of the industries which they have tried to serve," he said in a speech to the Social Market Foundation. That would mean axing that corporatist relic, the Department of Trade and Industry. Many of the industrial subsidies which it oversees could be cut. Many more of its functions could be decentralised."

Mr Kennedy also called for the abolition of the Department of the Environment, Food and Rural Affairs, which was set up by Tony Blair after the foot-and-mouth crisis. He said he wanted to replace it with a department for Environment and Transport.

He said the cuts could lead to savings of 1 per cent in total government spending. The cash could be channelled into funding for teachers, nurses and the police.

"By the time of the next election, 1 per cent will be equivalent to savings of around £5bn a year - enough, for instance to fund over 150,000 extra nurses, teachers and police every year," he said "Altogether, we believe that by both restructuring and slimming down central government and by cutting back on less productive spending programmes, we can secure significant savings."

Mr Kennedy said big savings would not be made "by cutting down the number of paper clips" and would have to involve some hard choices. "We don't believe that significant amounts of money can be found for education and health simply by cutting out waste and fraud," he said, in an apparent criticism of the Tories' plans to cut public spending.

"We are talking about fundamental change. It is a change which goes to the heart of our philosophy as Liberal Democrats - a philosophy which rejects the nanny state in favour of an enabling state - a state which allows individuals to make the most of their lives and their talents."

But the Government called Mr Kennedy's proposals "a menu without prices".

Paul Boateng, Chief Secretary to the Treasury, said: "No one will trust what he says on the economy or public services because he has failed to provide any details of the savings they say they will find and no clear costings for their policies."

He said: "How would they find £5bn worth of savings without hitting frontline services? What extra support for business would be cut? What extra investment in regional development would face the axe? What public services ... would be slashed?"