Tories accused of planning £80bn cuts in spending

The Tories were accused of planning spending cuts of up to £80bn yesterday as the party was rocked by figures showing that it suffered its worst performance for seven years in this year's by-elections.

Labour and the Liberal Democrats seized on remarks made by Howard Flight, the Shadow Chief Secretary to the Treasury, that the Tories wanted spending cuts of up to 20 per cent, despite him making clear that he was referring to bureaucracy, not health and education budgets. Cuts of 20 per cent from current annual Government spending would total £80bn, MPs pointed out. Oliver Letwin, the former shadow chief secretary to the Treasury, was ridiculed during the 2001 general election campaign when he advocated spending cuts of just £20bn.

Mr Flight said in an interview that would propose cuts to Iain Duncan Smith, the Tory leader, next month. "I am digging through current spending, finding opportunities for cuts. There is waste going on all over the place," he said.

The Liberal Democrats said Mr Flight's proposals had to be seen in terms of £65bn annual spending on health, £55bn on education, £24bn on defence and £100bn on social security. Steve Webb, Liberal Democrat work and pensions spokesman, said: "The idea that you can make cuts like this without decimating public services is economically illiterate." Paul Boateng, the Chief Secretary to the Treasury said: "Howard Flight has let the cat out of the bag."

The analysis of council by-election results for 2002 showed that the Tories suffered their worst performance since 1995. Instead of gaining seats, the party lost five seats, while the Liberal Democrats gained 32, their largest increase since 1994. Labour lost 15 seats. Supporters of Mr Duncan Smith fear his leadership will be challenged if the party does badly in next May's local elections. To lower expectations, a target of just 30 extra seats has been set although the party would normally expect to make hundreds of gains mid-term.

Mr Duncan Smith will try to regain the initiative today by focusing on education in a speech to local constituency association chairmen.

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