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The Coalition: Our programme for government
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Reducing the deficit
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#64224
The first priority is to reduce the deficit and restore economic growth. Action will be taken to accelerate the reduction of the structural budget deficit.
"
Dealing with the deficit
and continuing to ensure the economic recovery is the most urgent issue facing Britain. We must tackle the deficit to restore confidence in our economy and support the recovery.
The Government will significantly accelerate the reduction in the structural deficit it inherited, which is the largest since records began. The Governor of the Bank of England has welcomed the Government’s plan. A credible plan to deal with the deficit will help the independent Bank of England to keep mortgage rates lower for longer.
Government will save over £6billion from spending during this financial year. These savings have been found by cutting waste and low value programmes across Government and stopping low value programmes. The savings will be delivered fairly, and will not affect the quality of key frontline services. Savings in health, defence and international aid will be reinvested in front line services on those departments, and spending on schools, Sure Start and education for 16-19 year-olds will be protected. In line with the coalition Government agreement, the majority of the £6.2billion savings will be used to reduce the deficit. £500million will be reinvested in targeted support for further education, apprenticeships and social housing. The importance of taking action this year is underlined by recent events in the Eurozone; failure to take action would put the recovery at risk.
An emergency Budget on 22 June will set out a comprehensive and credible plan to eliminate the bulk of the structural deficit over the course of the Parliament. The Government has created an independent Office for Budget Responsibility, putting the UK at the forefront of international best practice on fiscal transparency. It will provide new forecasts of growth and borrowing in the emergency Budget.
The main burden of deficit reduction will be borne by reduced spending rather than increased taxes. The Treasury will undertake a full Spending Review, reporting in the autumn following consultation with all tiers of Government and the private sector. NHS spending will rise every year and the Government will meet the 0.7% target for aid spending."
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