Four year plan for spending cuts will not be derailed says minister

THE UK Government's package of cuts will "stay on track" for the next four years regardless of short-term shocks to the economy, the Transport Secretary Philip Hammond has warned.

• Transport Secretary Philip Hammond. Pic: Getty

Mr Hammond said departments will be given "clear and firm" budgets to cut the deficit by 2015, and that there would be no "cliff edge next year".

His comments came as a row erupted over the controversial cuts programme, which Shadow Chancellor Alan Johnson said would be "fundamentally" worse than those made by Margaret Thatcher's government in the 1980s.

Alex Salmond stepped-in to the row yesterday, with a spokesman for the First Minister saying that the UK Tory-Lib Dem coalition government's cuts were "far too quick and far too deep".

Meanwhile, Mr Hammond's comments were also at odds with those of Energy and Climate Change Secretary Chris Huhne, who said the planned 83 billion cuts could be reined in if circumstances altered - amid fears that Britain is still vulnerable to a double-dip recession.

But the Transport Secretary claimed that the cuts were "manageable".

Mr Hammond added that "all the indicators" suggested the UK economy would continue to grow over the course of the parliament and that unemployment would fall year-on-year.

He said: "The plans that the Chancellor will set out on 20 October will set out a pattern of reduction for departments over the four years of the spending review.

"Our view has always been that fiscal policy should be set for the medium term, and monetary policy should be used to deal with any short-term shocks."

Mr Hammond also hit back at claims from the newly appointed Shadow Chancellor about the government's cuts.

Mr Johnson said: "Even if double dip doesn't happen, the way this coalition is implementing these changes will fundamentally alter our community and lead to a situation where we spend years trying to repair the damage.

"If you think of Thatcher in the 80s, the most she cut was 10 per cent, and we are still feeling the effect of that in Hull, the city I represent."

Mr Hammond said that Mr Johnson was "not the obvious choice" in the shadow cabinet for the Treasury post, given the current focus on the economy.

He said: "He must tell us what he is going to do, because that's what we need to hear from Labour."

He also spelled out how he said the coalition government would impose the cuts.

Mr Hammond said: "Departments will reduce their spending over a period of four years.

"So if a department is reducing its spending by 25 per cent overall, it won't be 25 per cent in year one. It will be maybe 6 per cent in year one, and 6 per cent in year two. So these are manageable cuts over a period of time."

But a spokesman for the First Minister criticised Mr Hammond's comments and called for a "rethink" over the cuts. Mr Salmond's spokesman said: "There needs to be a re-think, reflecting the warning of the three devolved administrations last week in our Joint Declaration - encompassing five political parties - that the UK Government are proposing cuts which are far too quick and far too deep."