Clarke warns over Budget tax cuts

The Chancellor, Kenneth Clarke, yesterday warned the Cabinet they would have to make deeper cuts in their budgets if he is to find room for tax cuts in his November Budget.

He reviewed the Autumn figures with the Cabinet before chairing a meeting of the EDX spending committee of the Cabinet to apply the cuts to some of the budgets, including roads, prisons, and defence.

Michael Portillo, the Defence Secretary, is fighting demands for cuts in defence spending. Ministers have warned the Treasury that further cuts will hit the military's front-line capability, breaching a government commitment.

The Chancellor will today review the tax and spending figures, including the Inland Revenue and Customs and Excise, at Dorneywood, his grace and favour residence in the country.