–UK Osborne: Tackling Deficit Is Unavoidable
–Public Sector To Shed 490,000 Jobs Through To 2014/15
–Adds Comments On Pension Age Rising To 66, Banking Levy

LONDON (MNI) – The Spending Review, covering the four fiscal years
through to 2014/15, was unveiled Wednesday and revealed the Government
is sticking firmly to its fiscal tightening plans.

“I can further confirm that the current spending totals I set out
in the Budget for each of the next four years are the same as the
current spending totals I set out today. They have not changed. Next
year, current expenditure will be stg651 billion, then stg665 billion
the year after, stg679 billion the year after that, before reaching
stg693 billion in 2014-15,” Chancellor George Osborne said.

“Tackling this budget deficit is unavoidable. The decisions about
how we do it are not. There are choices. And today we make them.
Investment in the future rather than the bills of past failure. That is
our choice,”

“We are going to bring the years of ever-rising borrowing to an
end,” he added.

Osborne said that the fiscal consolidation measures already enacted
was had brought the UK out of the financial danger zone, adding that the
UK now has breathing space in the sovereign debt markets.

“The action we have taken since May has taken Britain out of the
financial danger zone. The immediate reductions to in-year spending to
buy us a breathing space in the sovereign debt storm,” he said.

“To back down now and abandon our plans would be the road to
economic ruin. We will stick to the course. We will secure our country’s
stability. We will not take Britain back to the brink of bankruptcy,” he
added.

Osborne said that spending cuts will mean the government will shed
490,000 jobs over the course of the current parliament.

“They (the OBR) have forecast a reduction in headcount of 490,000
over the Spending Review Period. Let’s be clear. That’s over four years,
not overnight. Much of it will be achieved through natural turnover, by
leaving posts unfilled as they become vacant,” Osborne said.

Turning to the banking sector, Osborne said he understood public
anger over inadequate regulation, adding that legislation to raise a
permanent levy on banks will be published tomorrow.

“I completely understand the public’s anger that the banks that
were so appalling regulated over the last decade, and whose near
collapse wrought such damage on the economy, should now be contemplating
paying high bonuses,” he said.

“We have already decided, in the face of opposition from the
previous government, to introduce a permanent levy on banks. The
legislation will be published tomorrow. Once fully effective, the
permanent levy will raise more net each year and every year for the
Exchequer than the one-year bonus tax did last year,” he added.

Osborne also announced an increase in the state pension age to 66,
starting from 2018.

“I can today announce that the state pension age for men and women
will reach 66 by the year 2020. This will involve a gradual increase in
the State Pension Age from 65 to 66, starting in 2018,” he said.

The Spending Review covers the four fiscal years from 2011/12 to
2014/15. The high profile fiscal goal of the June Budget was to
eliminate the structural budget deficit a year later than this, by
2015-16, with the goal for 2014-15 “to eliminate the bulk of the
structural deficit through plans for additional consolidation of stg40
billion per year.”

The government has pledged to ensure real terms increases in health
spending and to meet overseas aid targets.

–London newsroom: 4420 7862 7492; email:

dthomas@marketnews.com/drobinson@marketnews.com/wwilkes@marketnews.com

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