London: UK government departments have been told to plan for budget cuts as high as 40 per cent as Chancellor of the Exchequer George Osborne seeks to cut a record deficit, Transport Secretary Philip Hammond said.
Hammond, speaking on BBC 1 television's Andrew Marr Show, confirmed a report in the Observer newspaper that the Treasury had ordered most ministers to draw up scenarios for spending reductions of 25 per cent the figure specified by Osborne in last month's budget and 40 per cent over four years.
Prime Minister David Cameron's coalition government of Conservatives and Liberal Democrats is proposing spending cuts and tax increases totalling £113 billion (Dh414 billion).
This would slash a deficit of 11 per cent of economic output. Osborne was due to set budgets for each department in a spending review in October.
"What we're not going to do is slice 25 per cent off every department," Hammond said.
While no department would have to reduce spending by the full 40 per cent, "some departments may see cuts a bit higher than 25 per cent", he said.
Education Secretary Michael Gove and Defence Secretary Liam Fox had been asked to prepare plans for cuts of 10 per cent and 20 per cent, Hammond said. The only departments exempted are health and international development.
Big changes
The Institute for Fiscal Studies, a London independent research group, said the cuts to public spending would be the deepest since the Second World War and some departments would face reductions of a third. There would be 610,000 jobs cut in the public sector in the next five years as the squeeze was implemented, the government's new Office for Budget Responsibility said last week.
Hammond said as far as his own department was concerned, "we will not have so much money to spend" on road and rail projects.
"We will have to look at our priorities," he said.
In response, Rail, Maritime and Transport union general secretary Bob Crow said: "With cuts of up to 40 per cent in the transport budget, we are looking at thousands of job losses amongst the staff who operate and maintain services, with dire consequences for passenger safety as corners are cut,"
"It is crystal clear that modernisation and upgrade works will be axed," he said.
