Brown tells TUC: public spending cuts are coming

PM targets 'low-priority' budgets, insisting NHS is safe

(REUTERS)

Government projects will have to be scrapped and some budgets slashed if Britain's record debt levels are to be halved over four years, Gordon Brown said yesterday, as he admitted for the first time that Labour would have to cut public spending.

In a change of gear that many will regard as the beginning of a long election campaign, the Prime Minister used his keynote speech at the TUC Congress in Liverpool to deliver the tough message to union bosses. But he maintained that a Labour government would protect frontline services from the axe. He said the cuts would come as the recession ended.

"Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets," he said. "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."

In a speech of just over half an hour, he continued to accuse the Tories of planning to slash frontline services by introducing "across-the-board public spending cuts". He added: "These would be the wrong choices at the wrong time for the wrong reasons, because they have the wrong priorities for Britain."

Though there was a clear hardening of his language, few details emerged on the areas likely to be cut should Labour win another term. Only one new measure was announced as the Prime Minister unveiled a plan to save £500m over three years by ending Whitehall's generous early-retirement scheme. "It's a scheme that's often as much as six times annual pay," he said. "These high costs prevent us giving other people jobs and this is not the best way to spend public money."

It provoked a furious reaction from Mark Serwotka, head of the Public and Commerical Services civil service union, who accused the Prime Minister of "robbing his own workers". He said he would be taking legal action against the move. "The speech confirmed my worst fears," he said. "It was lacklustre and he did not take the opportunity to show that he is different from the Tories. His plans to rob £500m from his own workers is a scandal."

Union bosses had been trying to unite their members behind Mr Brown during the congress, warning that there was a growing prospect of a Conservative landslide at the next election. Brendan Barber, the TUC general secretary, rallied to the Prime Minister's support last night. "This was a jobs versus cuts speech, and he chose jobs," he said. "Unions are naturally concerned about the best way to tackle the deficit once we have real recovery. But again the Prime Minister made clear that there will be a real choice at the next election."

But the Prime Minister's downbeat message saw many senior union figures break ranks. His speech was greeted with only a partial standing ovation from delegates. Dave Prentis, leader of Unison, also said he had concerns. "This speech had been billed as the death knell for public services, but instead he gave a guarantee that taxes would be increased and public services maintained," he said.

"But there were certain phrases within the speech, as there often are in a Gordon Brown speech, which do ring alarm bells, such as dealing with inefficiencies and getting rid of waste." Downing Street sources suggested that the Prime Minister had deliberately used the speech to deliver a "difficult message" to unions. "We didn't come here for standing ovations," said a No 10 source.

John McDonnell, the left-wing Labour MP, described Mr Brown's speech as "unconvincing and disappointing", adding that his party had become unrecognisable from the Tories. "He has offered people an indiscernible choice at the forthcoming general election," he said. "Underlying everything he said was the confirmation of Mandelson's policy that the economic crisis created by the banks will be paid for by cuts to services to ordinary people."

Mr Brown also confirmed that a manifesto pledge to increase paid maternity leave to a year had been shelved until after the next election, saying it was now only an "ambition to extend it further". However, he said that, from April 2011, men will be given the right to take up to three months paid paternity leave during the second six months of their child's life, if the mother has returned to work.

"No Tory government has ever given a single day of paternity leave," he said. "Labour believes in giving couples more freedom, dads more rights, and children more time with the two people who love them most."

George Osborne, the shadow Chancellor, declared that his party had won the argument on the economy as Mr Brown admitted cuts would have to be made, saying Labour had waved "the white flag". However, he also hinted that the defence budget could be slashed by a future Conservative government. He said that break clauses drawn into the contracts for two new aircraft, the Eurofighter and the Airbus A400M military transporter, were among the areas that would be re-examined by the Tories. Vince Cable, the Liberal Democrat Treasury spokesman, called for both Labour and the Tories to be more honest about what they would cut. "The time for generalities is over," he said.