Gordon Brown admits government spending must be cut

GORDON BROWN has admitted that Labour would be forced to rein back spending drastically if re-elected. The prime minister, who had insisted on contrasting Labour “investment” in public services with Conservative cuts, said yesterday that “hard choices” on spending would be required.

“We won’t flinch from the difficult decisions that will be necessary,” Brown told a meeting of G20 finance ministers and central bankers in London.

Britain, he said, would halve its budget deficit over the next five years, though he insisted Labour could achieve its reductions without undermining public services. The strategy would be “front line first”.

His comments chimed with those of Alistair Darling, the chancellor, who has urged Brown to adopt a more realistic line on spending. In an interview with The Times yesterday, he said there would have to be “much tighter public spending” to cut the budget deficit.

A Labour MP yesterday called for a cap on public sector pensions to help bring down the budget deficit. Terry Rooney, chairman of the Commons work and pensions committee, said such pensions should be capped at an annual £50,000.

“Some people who are earning £200,000-£250,000 a year can see a pension in the range of £150,000,” he said. “I think most people would think that that was excessive.”

The First Division Association, which represents senior civil servants, reacted sharply. “I do not accept that there is a problem with sustaining public sector pensions,” said Jonathan Baume, its general secretary. “There is no doubt that civil servants accept lower salaries in the knowledge that they have an entitlement to a stable pension.”

Brown’s call for G20 governments and central banks to persist with emergency measures until economic recovery is established was backed by the meeting, held at the Treasury.

The finance chiefs of the world’s biggest advanced and emerging economies said expansionary measures should remain for now.

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