Brown admits big spending cuts needed to reduce debt

LIVERPOOL - 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 Trades Union 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."

He continued to accuse the Tories of planning to slash frontline services by introducing "across-the-board public spending cuts".

Although 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 £500 million ($1.16 billion) 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 Commercial 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."

Union bosses had tried to unite members behind Brown, warning that there was a growing prospect of a Conservative landslide at the next election.

But the Prime Minister's downbeat message saw many senior union figures break ranks. 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.

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."

Brown also confirmed that a 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".

George Osborne, the shadow Chancellor, declared his party had won the argument on the economy as Brown admitted cuts would be made, saying Labour had waved "the white flag".

- INDEPENDENT