Instant view: Britain unveils billions in spending cuts

LONDON (BestGrowthStock) – British finance minister George Osborne unveiled billions of pounds worth of spending cuts on Wednesday.

RICHARD LAMBERT, DIRECTOR-GENERAL, CBI

“The Chancellor has got the strategic direction of this spending review right. He has stayed the course outlined in the June budget, with economic growth a top priority.

“We particularly welcome the extra 2 billion pounds a year on capital spending, and the focus on areas that support growth. These include transport and other infrastructure, education and science, and the low-carbon economy.”

STEVE LANG, HEAD OF CLEAN ENERGY, ERNST & YOUNG

“It wasn’t as bad as it could have been, with the government still confirming its commitment to mainstreaming green energy and encouraging growth in the sector.”

“One billion pounds for the green bank was more than some feared but it still about a quarter of what’s needed to have a big impact on green energy and growth”

JOHN WALKER, NATIONAL CHAIRMAN, FEDERATION OF SMALL

BUSINESSES

“It is now vital the government puts a Small Business Programme for Growth into action immediately … Small firms are at tipping point and lack the confidence to take on the 500,000 people that will be made redundant as a result of these cuts.

“So it is up to the government to incentivize the small business community — through extending the National Insurance Contribution holiday to existing firms and cutting VAT to five per cent in the construction sector.”

IAIN HASDELL, PARTNER, KPMG

“Today’s CSR announcement confirms that the future for local government is one of dramatic challenge that will severely test the financial viability of some councils.

“I am expecting this challenge to be beyond some councils, which will run out of cash at some point in the next four years, in much the same way as parts of the public sector health economy did in the middle of the last decade.

“Central government is likely to have to effect financial rescues of a small number of local councils later in this Parliament.”

BRENDAN BARBER, GENERAL SECRETARY, TUC

“The Chancellor has announced eye-watering cuts that will have a desperate impact on communities, business and hard-pressed families. But he has not had the guts to spell out the detail.

“The biggest tragedy of all is that the spending review is likely to fail on its own terms. These cuts will depress the economy by causing a million job losses and undermining business and consumer confidence.”

RICHARD CAPIE, DIRECTOR, CHARTERED INSTITUTE OF HOUSING

“There are some new flexibilities around rents and borrowing which are very positive steps, but in reality we’re in the midst of a housing crisis, with less than half the homes we need being built every year, so cutting investment in new housing by 75 percent is a body blow for first time buyers, low income households, and the construction sector.”

DAVE PRENTIS, GENERAL SECRETARY, UNISON

“For CSR read Cuts Strangle Recovery. The Tories’ (Conservatives) ideologically driven no hope, no ideas, cuts agenda is poisoning the country’s chances of recovery, infecting the public sector and costing 425,000 jobs in the private sector.”

BRITISH BANKERS ASSOCIATION

“Financial services currently contribute around 24 billion pounds in taxes every year so we are pleased the Chancellor said he wishes to balance taxation with the attractiveness of the UK as a global financial center and the need to retain jobs.”

DEREK SIMPSON, JOINT GENERAL SECRETARY, UNITE

“This is not a spending review – it’s a massacre. It’s totally perverse to claim that cutting half a million jobs and razing our public services to the ground is good for this country.

“No matter how often they repeat that their actions are fair, this government is making a political choice to attack the public sector and, by doing this now damaging the whole of the economy long into the future.”

STEPHEN ROBERTSON, DIRECTOR GENERAL, BRITISH RETAIL

CONSORTIUM

“These are serious plans to tackle the budget deficit and will remove some of the uncertainty which was driving down consumer confidence.

“Beginning to deal with the deficit now is right. Delays would just store up more pain for later, risking increased borrowing costs, higher taxes and more job losses.”

“Retailers need the government to communicate exactly how the cuts will be delivered as soon as possible so that they can make investment plans.”

HELEN LONGWORTH, ACTING DIRECTOR OF UK POVERTY, OXFAM

“Forcing people to live below the bread-line should never be a tactic to encourage them back into employment … “We need to stop blaming the poorest and look up to the richest in society to pay their share.

“Signs from local authority cuts announced so far are that once again the poorest people in the country are being made to pick up the bill.

“If the government wants to show their leadership in ‘fairness’ then they should impose a Robin Hood Tax on the banks that caused the financial crisis in the first place.”

IAN SIMPSON, HEAD OF TRANSPORT, DELOITTE

“It’s better than had been feared. I think there had been a fear that it was going to be very significant, very much greater cuts than that and I think they’ve certainly tried to protect capital where they can to soften the blow.

“I mean what was interesting was the emphasis on trying to put some of the money into the North of England as well, to try and make it look like it’s not all going into the South East although a significant proportion through Crossrail, Tube upgrades and M25 widening, a significant proportion is still going into the South East of England.”

ALAN JOHNSON, FINANCE SPOKSEMAN, OPPOSITION Labor PARTY

“Spending does have to be reduced but the frontline services on which people rely must be protected.

“There is an alternative approach. The Chancellor finished by suggesting that their cuts were the same as ours … This is even more utter, complete nonsense.”

BOB CROW, GENERAL SECRETARY, RMT RAIL UNION

“While the bankers, spivs and speculators are preparing for a return to mega-bonuses this Christmas, for the vast majority of British people this spending review means attacks on living standards, jobs and the public services we rely on.”

“We will need community protests and combined and co-ordinated action to fend off these cuts and we should look across the Channel to the kind of resistance being mobilized by the French trade unions, which enjoys overwhelming public support, as an example of how to repel austerity cuts.”

KITTY USSHER, DIRECTOR, INDEPENDENT THINK TANK DEMOS

“Cutting so much so quickly has always been a gamble, but the stakes are now rising by the day. The economy has started wobbling because people fear how the Spending Review will impact them.

“The public sees the need for cuts but not the speed at which they’re being done. Osborne risks alienating people and slowing the growth that is essential for recovery if he doesn’t now focus all his efforts on rebuilding confidence.”

GEORGE BUCKLEY, ECONOMIST, DEUTSCHE BANK

“From a macro perspective, they’ve obviously kept the spending cuts very similar to what they said they were going to do.

“I think the markets should be reasonably happy with this. The Treasury will be hoping that this improves confidence now that it’s all out in the open and that there’s no more issues about where the spending cuts are going to come from.”

ANDY BROWN, SUPPORT SERVICES SECTOR ANALYST, PANMURE GORDON

“The overall cut wasn’t as aggressive as originally thought. The NHS comment was the interesting one, and seeing productivity improvement. To do that they would have to involve the private sector in one form or another. But it is a damp squib to start off with.”

GAIL CARDEW, HEAD OF PROGRAMMES, THE ROYAL INSTITUTION

“It is encouraging that the science budget will be maintained given the critical role that research and innovation will play in the UK’s economic recovery over the next decade.

“While it is still a cut in real terms, this decision is a significant vote of confidence in the UK’s scientific community and the contribution it makes.”

PHILIP SHAW, ECONOMIST, INVESTEC

“The macro implications of what the Chancellor has said so far are relatively small. The public spending is marginally higher in 2014/15 than envisaged at the budget because of higher capital spending.

“But from a very top down perspective, there aren’t many big changes and we await further details on individual departments.”

ROSS WALKER, UK ECONOMIST, ROYAL BANK OF SCOTLAND

“The headline numbers are essentially unchanged from the June emergency budget. There is no fiscal slippage, which is a good thing.”

STEPHEN LEWIS, CHIEF ECONOMIST, MONUMENT SECURITIES

“We knew much of the headline figures already and the market had already discounted this. We still need some more precise details.”

(Compiled by Paul Hoskins)

Instant view: Britain unveils billions in spending cuts