The Government is committed to "supporting the recovery" and a "credible" plan to reduce the Budget deficit, and ministers emphasise how fragile the recovery is. So immediate spending cuts are ruled out, and tax rises are designed to hit the wealthiest hardest. There is a legislative commitment to cut the Budget deficit by a half in four years with the aim of bringing it into balance towards the end of this decade. Some spending cuts are already being planned, though "frontline public services" – the NHS, schools, and "front-line policing" – are being protected from cutbacks: the schools' budget is one the few areas to see a small real-terms increase. Senior civil service pay will be frozen. Ministers highlight high-profile infrastructure projects such as new high-speed rail links, though overall public investment will be hard hit over the next few years. Along with the other political parties, Labour promises to create "green jobs".
The Tories want "early action" on the budget deficit – within 50 days of taking office. However, David Cameron has said: "It has to be early action, but it doesn't have to be particularly extensive; it just has to be early." They would freeze the pay of top civil servants, but protect the lower paid and "ring-fence" NHS spending. The Financial Services Authority would be reduced to the role of consumer watchdog and most of its important functions given to the Bank of England. Mr Cameron has described the policy of "quantitative easing" – injecting £200bn directly into the economy – as "inflationary". Committed to an independent office for budget responsibility. Cuts in corporation tax, inheritance tax, and the abolition of the 50p tax rate are also pledged.
Want spending cuts but not "too soon" for fear of wrecking the recovery. The Liberal Democrats' Treasury spokesman Vince Cable has identified £15bn in eventual public spending economies so far, including an explicit commitment to cancel the Trident replacement, ending government contributions to the Child Trust Fund and cutting tax credits for high earners, as well as scrapping ID cards. Some 3.6m people who earn less than £10,000 would no longer pay any income tax. In the public sector no one would get a rise of more than £8 a week, and there would be no bonuses. No area of public spending would be ringfenced. Banks to be made to lend more to business and to restrain their bonus payments further. The Lib Dems also promise to pay for interns – any young person completing an internship or work experience – £55 a week for three months, and promote green jobs.Reuse content