Monday 24 November 2014

PM speech aims to calm Tory nerves

Published 04/03/2013 | 17:51

Philip Hammond cautioned that any 'significant' reductions in the defence budget would 'erode military capability'
Philip Hammond cautioned that any 'significant' reductions in the defence budget would 'erode military capability'

David Cameron is set to attempt to calm Conservative nerves with a major speech on the economy later this week, it has emerged.

The speech on Thursday, at an undisclosed venue in the north of England, will aim to drive home the Prime Minister's message on the need to stick to the course on economic policy, aides said.

It comes amid increased squabbling within the coalition Government over spending plans, with Defence Secretary Philip Hammond going public with a call for welfare to bear a greater share of austerity pain. His comments were the latest in a series of increasingly open signs that Cabinet ministers are digging their heels in over plans for a fresh round of cuts in the March 20 Budget.

Tory backbenchers unsettled by their party's third place in the Eastleigh by-election have also upped the pressure on Chancellor George Osborne by warning that Britain is on track to become a "basket case" unless tougher action is taken on Government debt.

Mr Hammond told the Daily Telegraph over the weekend that a number of Conservative Cabinet ministers believed "we have to look at the welfare budget again... if we are going to get control of public spending on a sustainable basis".

He also cautioned that while "modest" reductions were still possible in the defence budget beyond 2015, any "significant" cutbacks would "erode military capability".

However, the Prime Minister's official spokesman insisted the benefits bill would not be up for grabs in negotiations over the 2015-16 spending review.

The spokesman told a daily Westminster media briefing: "In the context of reports around the budget-setting process for the year 2015/16, I would remind people that the Autumn Statement for 2012 has already announced £3.6 billion worth of additional welfare savings for the year 2015/16.

"The Government has already set out additional welfare savings. If new and specific proposals were to emerge, then they would need to be considered."

The spokesman pointed out that the spending review was looking at departmental expenditure limits, rather than the annually managed expenditure thread - which includes almost all benefits.

Press Association

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